WordPress Plugin Commercialization
I was recently privileged to be sitting with friends and peers at the first private event designed and tailored for the WordPress business eco-system, Pressnomics. Of the various presentations given there was one that was of particular interest, the interview with Matt Mulleneweg. There was one topic in particular that appeared to catch most people’s attention – commercialization of plugins.
Before I start understand that this is all my own interpretation of what was said and in some instances things might have been taken out of context. I also had a follow-up conversation that helped me better understand, I think, the responses given.
Matt shared his belief that plugins that can be commoditized should not be commercialized, but themes are fair game.
He was very clear in the discussion that these are only his opinions and that those opinions are his own and based around the ideals in which he built, and is trying, to build the platform on. I thought over this for a bit and I can’t help but agree, every one of us are entitled to our own opinions and they will always vary based on those things that motivate us as individuals and business owners. I was confused though and so asked for clarification between commercialization of plugins and the products offered by his – Automattic – specifically plugins. I felt it only right to ask, I mean aren’t they commercialized plugins? What was I missing?
The question was simple, although likely a bit convoluted when delivered, and was designed to understand where the division existed:
You state your opinion is nothing more than you opinion and how you don’t believe plugins should be commercialized; yet Automattic, in addition to its hosting services, has a business model built around commercialized plugins. Where do you draw the line between what should and shouldn’t be commercialized?
Most of Matt’s response was what I expected – long, eloquent, yet very unclear or direct. I left a bit unsettled with the explanation and in later discussions realized so did many others, that’s also where I realized how passionate a subject this was.
I was fortunate to have a one-on-one with Matt both in passing and at lunch, that’s where my thoughts are derived from.
Principles and Ideals
I think the crux of the issues most have with this discussion really comes down to two basic things – principles and ideals.
In principle, it really doesn’t make much sense from a business perspective. Any business, small or large, have similarities in the way they were formed – defined a need and built a solution, later monetizing that product, service, etc… It’s the basics of capitalism and one that many take advantage of every day. On the flip side, you have the philosophies and ideals on which the platform was built on. Whether we like them or not, they exist. They are, however, not designed to drive the way we live or run our businesses.
What I understand of the discussion is simple. If a feature can be turned into a commodity then Matt feels it should not be commercialized. If it cannot then it’s ok to be commercialized. These are his founding principles and why you only see certain plugins in the list of Autommattic products. There is nothing wrong with this belief, unless we’re saying that the belief is further exasperated by some unwarranted action, that’d be a different story. But a belief or ideal in it of itself is of not real impact to anyone.
It is one of those things that is engrained in how an individual thinks and in their own beliefs. It’s not really one of those subjects that you can engage in, in the hopes that you will sway opinion. There also isn’t a right or wrong answer to it, only what we take and allow to influence our own opinions and thoughts. So the question that comes to my mind is, why do we care and or allow ourselves to get upset over it? I’m not sure on the answer here. Perhaps some things are best acknowledged and left alone.
On a side note though, on the flight home I was having a conversation with our favorite D to R to E and in it a good point did arise.
Why would you want to build a company around something that can be turned into a commodity? Take WordPress for instance, you build a business around a feature, that feature becomes highly popular and everyone screams for it, that then gets rolled into core. What happens to your business? To say it wouldn’t have an impact on your future projections is unrealistic. Sure, you might keep loyal followers and possibly grow based on some differentiator, but there will be impacts to your future. Then who do you get mad at? Is it the platforms fault that the feature is a commodity or yours that you built a company with a shelf life?
Is that not the beauty of the platform? I am sure Matt has many other opinions around the use of the platform; he’s likely particularly unhappy on how heavily it’s targeted by people to distribute malware or how pedophiles use to easily publish child pornography. These are opinions that most reading this can agree on, I’d say we likely have to learn to appreciate and respect other’s opinions and take them as that, open and honest responses to direct questions. We are our own people with our own ideals, ideals that drive our every-day thoughts and actions.
To commercialize or not to commercialize, that I leave to each of you. I share these thoughts to provoke conversation, not to get into an irrational back and forth on nonsense.
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Without doubt this was one of the most interesting parts of the entire conference.
As WordPress developer, I have no issue paying for premium plugins. I think they strengthen the community in more ways than are quantifiable you, me, or even Matt. I respect open source, but also feel premium plugins are a thriving part of the WordPress ecosystem. They have strong demand in the marketplace and they have an ability to sustain a business. This was demonstrated by the number of premium plugin developers at PressNomics. I believe they also breed competition and they encourage development, which can only strength the WordPress core and provide further growth and stamina to the WP community as a whole.
I agree completely, just last night I was having a back and forth with a friend on twitter and he mentioned this very thing. You’re both absolutely right, there is a need and the market is big enough to support it.
I do wonder though if the idea of commodity might be more a dream then reality, imagine if all the features that plugins enable became a commodity. What would that do the core of WordPress? There is a certain level of balance that has to occur I think.
All in all, thanks for stopping by.
Great post Tony. I think one of the challenges related to commoditization is that we don’t always know which direction it will take. How is one to know if SEO gets to the point that it gets commoditized or if the platform moves towards form-building. When a company starts to build a feature or product, it makes assumptions that it hopes will stay valid over time.
Take our smart friends at WooThemes. They built menu features because they were trying to solve an existing problem in the market. Did they know in advance the feature would get rolled into the core? No. Thankfully, it wasn’t a core way they generated revenue, but that didn’t remove the cost of what they’d built. But they worked even further to roll it into core so that we could all benefit. Then they built some SEO features. Could that have been rolled into the core? Sure. But it hasn’t. Still, they decided to pull it from their codebase to better integrate with Yoast’s plugin. Smart moves but ones that initially were unpredictable. Should Yoast worry that SEO will get rolled in? Who knows. That’s the first challenge – we don’t know in advance what will have a shelf life because we don’t know where the platform will go, where the community will go, and in some cases, our very own success will dictate that it moves in a direction that commoditizes what we’ve built.
I think the other challenge, unrelated to feature shelf lives, is the business aspects unfair advantage. I agree with you that someone else’s belief or personal ideal has little to do with us. Unless it “is further exasperated by some unwarranted action.” And if that action creates an unfair advantage, we get upset. (Cue in the b-roll of news coverage of Microsoft litigation around IE being placed on the Windows desktop at the start of the internet revolution)
As a community we’ve come to figure out ways to have a plugin repository without commercial plugins and still make money on premium plugins. That’s a good thing. But then you hit the home page of the plugin repository and see featured plugins and there’s JetPack. A fantastic plugin with tons of great features, but it works differently than all the other plugins. It takes up different real estate, has a different look, is placed differently, and sells commercialized services (like VaultPress). At that point, the belief that core features shouldn’t be commoditized and that commercial plugins don’t belong in the repository seems a bit self-serving.
That’s when I think people get a wee passionate. Know what I mean?
You bring up an interesting point around JetPack, that does make you raise your eyebrow awkwardly and wonder. Being that I have been playing with JetPack in the recent week I would say that most of the features are actually free. VaultPress was actually denied by the plugin team, unclear on the specifics but I was very surprised about this. That being said, I can definitely understand your point about JetPack being on the homepage.
One thing to note though, if you look at the repo you see that in fact the areas that you see JetPack I believe are generated by some calculation that presents the most popular plugins. That being said, it can definitely give the appearance of being a bit self-serving, but if it is in fact popular should it not be on the home page? regardless of who who built it?
JetPack’s popularity is going to be skewed due to the fact Automattic has deals with various major web hosts to pre-install JetPack on WordPress sites created using one click installs.
While a lot of users certainly use it, we’ve seen a large number of sites while providing support that have it installed but they’ve never set it up and connected it to WordPress.com which means they aren’t actually using it. How do we know? Because the annoying nag it outputs in the admin is in your face.
I always chuckle when I see it because a lot of users don’t realize they can get rid of it by deactivating it… because it was there when they started their WordPress site and they think it is part of WordPress. So they ignore it and deal with the nag.
So it isn’t so cut and dry when you look at the overall picture.
Oh I agree here, unfortunately it really just depends on whether you have a pessimistic or optimistic outlook. I like to be naive and think that everything is on the up and up.. :)
But yes, it is potentially skewed and challenging to look at objectively.. : /
Pessimistic or optimistic outlook has nothing to do with it. It get’s priority location inside the dashboard, priority location in the repository, and it sells commercial services. All while we’re talking about not putting commercial plugins in the repository….Lucy….you have some splainin to do….
Looks like we hit the max-depth here, so this is actually in response to Chris Lema. As much as Jetpack frustrates me, as much as I dislike it’s bulkiness and it’s aggressiveness, I have to disagree with you here. Jetpack is a very functional and very useful plugin without having to pay a penny. The only thing I see in there that you can’t use without paying is Vaultpress. However, that still leaves you with stats, publicize, notifications, enhanced comments, subscriptions, the JS carousel, better post by E-Mail, sharing, after the deadline, Gravatar Hovercards, contact form, shortlinks, custom css, shortcode embeds, some additional widgets (facebook, twitter, image, etc), infinite scroll (if your theme supports it), Photon (which is honestly VERY cool), mobile push notifications, a JSON API, etc. That is to say, the plugin is useful and functional.
Compare that to a plugin like Vaultpress, which is not useful at all without the paid service. That’s where the line currently is for getting into the repo. Even Akismet is a paid service, but you can use it free so it’s useful WITHOUT paying. Similarly the WP-E-Commerce plugin works completely without paying a penny (it includes a couple payment gateways) but you can purchase add-ons and support. Since it works without paying anything, it can be in the repo.
I don’t care for Jetpack, but I do think it meets all the requirements to be in the repo (requirements that were in place BEFORE it was made…none of the requirements were changed to allow it in).
I agree with you here, but I don’t think that is the issue and that was point before. The issue Chris is pointing out is the fact that it appears to be a bit self-serving being that it’s made by Automattic and unfortunately there isn’t very clear delineation between the company and the foundation, at least that’s the impression many have.
There’s this negative perspective that there is favoritism and / or wheels are being greased, but unfortunately I’m not sure there is much to be done there. That was my point before about optimistic or pessimistic, I like to think that none of that is the case that they are on the page rightfully because they have worked their way up through popularity and usefulness, maybe that is naive – don’t know. There is the flip of that which so many are expressing which is, yeah no, not quite there’s some shady shite going on. Neither are things we can talk to, but only speculate. Or can we?
I do see their point and yours around its aggressiveness and why it’s hard to shake the belief that something is not on the up and up..
The point about commoditizing is solid – here’s my take on it: If your product requires no ongoing input from you/your company (in terms of support, updates, hosting, resources), somebody is eventually going to do it for free, and you’ll be left behind. Any functionality in code can be replicated for free by enough people with a little free time.
Code is great, and our businesses all require it – but at the end of the day, we’re not selling code. We’re selling services that require our input and expertise. Without those, anything we build (and charge for) is unlikely to last.
That’s actually a very good point Peter. You’re right, for most premium plugins it does come down to the service offered by the developer. While not a traditional SaaS model, it could fall into that category. Interesting thought…
You nailed it. To put it another way, we don’t sell lines of code, whether it’s distributed or SAAS, we sell solutions to problems. Those solutions are either a vitamin (take this every day and you’ll be healthier in a gradual way) or a painkiller (fix this urgent, painful thing that is occupying my entire mind, now).
My 2 cents: I was really hoping for more pointed questions to be asked by the audience. You understand Sally’s job was to be a good hostess and be polite, not to Bill O’Reilly the guest. For the most part I think Matt tried to answer some of the more sensitive questions, but I do think the questions from the audience and some of the answers Matt gave to Sally’s and the audiences questions could have had more meat to them.
Personally, I think it went well. I don’t think you want it to get to pointed or controversial, that’d likely get uncomfortable for people in the audience that might not be as engaged in some topics. More time to ask would have been good I think, we started to run out of time. I know I for one didn’t want to press on for fear of going on a tangent and not giving an opportunity to ask something.
Although, for a minute there I did think Sally was going O’Reilly on Matt.. I tapped Lisa and said, “Oh boy, here we go… “.. All in all I think it went very very good, and I think that’s how you really want it.. ;)
If you want more meat, give me more time. ;) Just kidding, but more seriously, I’m happy to expand on anything we talked about or didn’t discuss but you think we should of. I need to blog more, and these are topics I enjoy talking and writing about.
Matt’s entirely right. Especially in the longterm, like in a decade, as he suggested.
His comparison of Joomla is accurate. They’ve gone the wrong way. eBay pays it’s entire core team. And their extensions are nearly all Premiums. The development of Joomla is still going strong, but for how long?
A developer simply has to focus beyond the commodity (the code) with 2 things:
1. Support. We’ll always need that.
2. externalize some features as SaaS
Don’t know enough about the Joomla platform, outside of the fact that they have way too many branches and security issues.. :)
While I understand that “the code” might be the commodity in this world just because its a commodity it doesn’t mean you don’t put a price around it.
There was a story I was told once:
A gas company engaged a man and asked him if he could tell them where to put the pipe line. The man said yes. They asked him how much. He said $25,000, they paid him. He flew in, opened a map and told them. They asked why that cost $25,000, he replied $1,00 for the flight, $24,000 for knowing where to put it.
In short, the know how is worth something. It’s like this in every industry, WordPress is no different.
I do leave you with this; if all code was equal, then there wouldn’t be a difference, would there? Would you say that all code is equal?
It’s a high risk approach creating an entire business around a product that can be turned into a core feature. Although short term there is a lot of potential profitability, it does note bode well as a long term business strategy, or at least a strategy without an increased level of risk.
Not saying it can’t be done, and successfully at that, look at Gravity Forms as an example, who doesn’t use them? My take here is as a foundation, I wouldn’t likely build a core business around a product that was platform dependent with the risk of being rolled into the platform at any given time.
I think if we are looking for a stronger foundation, or maybe taking a more strategic long term approach, a blanket company offering a variety of products is less risk adverse. You diversify, offer awesomeness, and if the day comes that core deems one of your products worthy for inclusion, you don’t lose the ability to run your business, or at least you’re making a run at reducing the potential impact.
Not sure I agree here. Where do you draw the line between what theoretically “could” be integrated into core? That’s like saying stop all innovation because they’re likely to be integrated into some existing system.. umm..
Like in any business, you identify a business model that you feel you can sustain. In reality, most businesses have what, maybe a 2 – 5 year shelf life? Before they close their doors or are acquired? I’d be interested to see statistics on that, what percentages of companies actually go beyond that, but that is a rant for another day…
Back to the point…
I would argue that it most likely can bode well. There are certain differentiators and reassurances that people and organizations alike get by paying for a solution, this has proven in various close and open communities.
That being said, I do like the platform agnostic approach to any business model. It’s the whole eggs in one basket that worries me, but then again it really comes down to personal risk thresholds right?
In regards a blanket company offering a variety of products, yeah sure isn’t that what most would want? But you do make an interesting point here, “if the day comes that core deems one of your products worthy for inclusion, you don’t lose the ability to run your business”. There in lies the problem in my eyes and most others. Why is there this caution sign looming over heads of the potential core integration? Maybe the messaging is off there, is that really the message we want people to take away coming in or within the existing community?
Food for though..
2-5 year shelf life? Those companies would fit into my short term group, and if that’s their aim, rock on. If you mean in general, yah, a lot of businesses fail for many reasons, or are acquired, etc. and so on. My point was more focused towards those businesses looking to sustain beyond that. Those looking to build and mature a business. Wait you didn’t get that? :)
I think it does come down to risk and how much of it you’re willing to take on. It comes down to having a plan. If you’re 2-5 years in you’re likely responsible for others well being right? What’s the plan if/when core consumes your product or a portion of your market? There’s an impact there, and it is likely greater than you or your business alone at that point. Not having all your eggs in one basket reduces the risk of failure, and the impact if one of those eggs cracks.
To that end, my initial comment was an attempt to voice my thoughts around building a business with external dependencies in general. To me, it doesn’t make sense strategically to build a product solely dependent on a platform that can consume you if you’re looking for the long term. I see nothing wrong with that messaging to the community, although my delivery may have been off.
Thanks for the thoughtful rebuttal!
Matt’s main point was that he doesn’t think that selling the code is the way to go, because it is artificial scarcity, and with plugins, the people who use them aren’t benefitted by fewer people using them. None of Automattic’s plugins are “selling the code”. Even VaultPress is freely available (though fairly useless without a subscription). They’re all SAAS.
Another potential model is paying for upgrades and support. That’s the Gravity Forms model. But Gravity Forms is not otherwise available, so this is sort of like selling the code. Completely fine with the GPL, by the way. But it may introduce awkwardness if we introduce form handling into WordPress core (a distinct possibility).
The other model, which I asked Matt about, is “free core, paid components.” This is charging for the software, but it shifts the balance so that the core of the software is free, and only niche components are paid (WooCommerce). I like this model, because it only relies on artificial scarcity for components whose utility is rare. But as Matt pointed out in his answer, where you draw that line really matters. If the core software is not very useful to you, it can be really annoying to hit that barrier.
Grab a cup of coffee because this is going to be long…
I would completely disagree with the notion the “artificial scarcity” that commercial plugins introduce does not benefit the end user. Quite the opposite is true. I’m not stating that just because we sell a commercial plugin. I’ll explain…
The type of users who purchase our product are business users who consider our product to be mission critical. Because they are business users they value the high level of support we provide and this support would not be possible if our product was free.
The “artificial scarcity” ensures that the user won’t be left in the cold when they need assistance. It also ensures that the product will continue to evolve and prosper with new features and enhancements. They benefit greatly in both instances.
When managing an online presence for a business you can’t afford to cross your fingers and hope a plugin developer replies to your support request, a kind stranger responds to a community forum post, or Google returns a search result that solves your problem.
As for the business model where you provide the plugin for free and only charge for support when needed? It’s nowhere near as successful Or sustainable due to the fact the vast majority of users will simply forgo support and use a different solution if they encounter any hiccups. A minority of these users will also bad mouth the product in their blog or social media if they encounter an issue despite the fact it may have been user error but they would never know because they were to cheap to pay for some support.
The “pay for support only when necessary” model also turns your business into a consulting and services company. This means your revenue would be difficult to forecast and plan for as it would be wildly inconsistent. We don’t do consulting. We are a product company.
With functionality that is mission critical for businesses like advanced forms, shopping carts, event ticketing, etc. users want to be sure that any bugs are squashed swiftly. They can’t wait until WordPress releases an update.
Gravity Forms is not a feature. Menus are a feature. The new media library uploader is a feature. Gravity Forms is a full blown application that happens to run on top of WordPress. It’s not a “contact form plugin”‘, it’s so much more than that.
At a time where WordPress is finally removing functionality that isn’t needed in core such as Links/Blogroll, it’s surprising to hear forms may be added to core. It would be a step back in the progress being made to streamline and strengthen WordPress and its overall performance.
I’m surprised NOT because of the potential competition it would introduce. I’m surprised simply because we’ve been doing this for nearly 4 years and we know what business users want and need in a form solution. The scope of what is necessary to satisfy users needs is far far too big to just shove into core as a “feature”.
The scope and complexity of what is required (features, 3rd party integrations, etc.) is tailor made to be a plugin with its own development cycle and bug fixes. As I mentioned above, business users cannot wait for a core update to resolve possible bugs or issues that they may encounter with these types of applications. They want bug fix updates released quickly and they want the comfort of knowing support is quick and responsive when needed.
As for the difference between a commercial plugin that uses the SaaS model and one that does not? With one of them you get ALL the code and the freedom to run it on your own server with complete control of your data. With the other you get a free download that is useless unless you sign up for a subscription to the service provided by the SaaS plugin. You don’t get all the code because it’s powered by an API that resides behind a paywall and because of this you don’t have the freedom to run it completely on your own servers with complete control.
SaaS is like renting code rather than buying it. Sure you get the plugin that interacts with the SaaS API, but what good is it unless you pony up the money for the SaaS service? It’s like giving somebody a brand new Corvette that doesn’t have an engine in it for free and then telling them if they’d like to drive it they’ll have to lease an engine from you.
There’s nothing wrong with either business model. Both are compliant with WordPress licensing. Not everything makes sense to be SaaS driven and not everything makes sense to be non-SaaS. One model isn’t necessarily better than the other. It simply depends on the situation.
That was long.
Excellent thoughts, Carl. I’m a multi-year customer of yours and I can’t imagine *not* paying for Gravity Forms. I used the free solutions for awhile, but indeed the mission critical nature of the type of work that Gravity Forms ends up powering means that it’s highly important to me to know that there’s a dedicated team that’s making a profit and has a vested interest into pushing the product I rely on further.
It’s also important, as a customer, that the developers I buy from are accountable to me (to a degree) as a customer to direct future decisions according to my needs (over a consensus and within mission, of course) – not just an arbitrary “Let’s go this route!” perspective that leaves me in the dark.
Carl, this statement which you made is key:
“When managing an online presence for a business you can’t afford to cross your fingers and hope a plugin developer replies to your support request, a kind stranger responds to a community forum post, or Google returns a search result that solves your problem.”
Businesses expect to do business with another business which is sustainable. Knowing a business you work with is sustainable gives them peace of mind. They know when they need help it will be there. Plus, having a plugin or theme company who’s business model is to remain sustainable also insures that same company will continue to innovate and change with the demands of their own customers.
Running any business, even a theme or plugin business is no longer a hit and miss business. If we are expected to give our customers the support and innovation they expect and certainly deserve, our business model must be sustainable. Spraying and praying it will stick on the wall is no longer the way to do business.
Hey Carl, I’m going to play devil’s advocate here a bit, so please take this as just that.
You mentioned that giving the plugin away and charging for support is less sustainable and mentioned that it’s because the “vast majority of users will simply forgo support”. You mentioned that this same support is extremely critical to businesses, so I’m assuming these businesses are an extreme minority for plugin use. The question becomes, do you think it makes sense to charge all the smaller uses that don’t need the support in order to better care for the bigger ones that do? Couldn’t you make a sustainable support-style model by simply charging more to the businesses that need support so that the burden of cost lies solely on those that need the service?
Excellent questions Aaron. There are a variety of reasons why we don’t like the model that you have outlined and do not think it is the way to go. As for as business users being in the minority for plugin use, that’s certainly not the case with our user base. One man shops, mom and pop, small and medium sized businesses make up the core of our users. Anyone who works with smaller business knows how frugal they can be.
The first reason is if we gave it away and only charged for support, we’d encounter lot’s of users that run into a problem when trying the plugin that simply give up on it and using the power of social media broadcast that the product sucks.
They would learn the problem isn’t with the plugin, it’s with something on their site or how their web server is configured. There are a variety of common support issues that people encounter that are simply beyond our control. We know what they are and how to solve them but couldn’t do so if we don’t have a relationship with the user like we do with paying customers. Why not put these types of issues in an FAQ? Easy. Ask anyone that has a popular theme or plugin… people don’t read.
The second reason is a lot of users wouldn’t think ahead and purchase the support up front. They would wait and purchase the support only when it was absolutely necessary. Only when something breaks. Combine this with the fact that plenty of users never even need to get assistance from our support team and the impact on revenue would be quite dramatic. It also means revenue would be more erratic and difficult to forecast.
The third reason is no matter what you tell people, people are still going to try and get support for free. “But it’s just a quick question”, “If you help me fix this one time I promise i’ll buy support next time”, etc. Combined with the increased user base you would have if it’s freely downloadable and you’ll take an overhead hit on dealing with these situations. Which comes back to the first issue above because those types of users are also the same type that would bad mouth you publicly because you wouldn’t provide them with free support. Now not only does your product sucks, but your an asshole for not providing free support “just this one time”. Users don’t realize that “just this one time” adds up and impacts the bottom line.
The fourth reason is it helps weed out problem users. Anyone that sells themes and plugins will tell you that frugal users who love getting freebies or at an extremely cheap price are more likely to be problem users than those that don’t think twice about paying for a quality product with quality support. You’ll still run into this issue, but not nearly as much as you would if you made it freely available.
Let’s just say that i’m 100% positive the outcome would not be as successful as it’s become. We wouldn’t be the company we are and the product would not be as good as it is. Our business model works for us and the end result is a win/win situation. We win and our users win.
I could go on, but i’m boring myself.
Holy smokes, grab a cub of coffee? I had to grab three… :)
In all seriousness, I’m not sure I buy the whole artificial scarcity argument either. I think all code has value, it’s why Nacin, Otto and so many others are paid to help maintain and focus on core. If there wasn’t value then that wouldn’t happen. The only one that can really say they apply that in terms of core development is probably Mark, but then again, it’s all about basic economics right.. :).. if it was economical I’m sure things would be different.
Let’s be frank here, it all really just comes down to basic economics and capitalist principles. The real issue here is that I think people have a real problem with an opinion and this impression that you have disappointed someone. And I use “you” as the collective you, not you specifically.. :)
Basic business acumen, specifically in the software business and those that employ support models, tells you that most of your thoughts and opinions around the challenges are realities. I face them everyday, and it’s a delicate balance that every business has to deal with. These are realities that every business has to face.
Here is the catch, these are all practical arguments and not one carries any way when you are debating ideals and principles.. :)
I have to admit Mark, you had me at “artificial scarcity”… :)… Actually looked it up to make sure I fully understood what you were saying. Based on my new understanding of the term, isn’t providing an empty shell that does nothing without access to the service essentially doing the same thing?
Your model of updates and support makes a lot of sense though, it’s the same model that AVAST employes actually. There is very little difference between their Free product and their Premium one.
Here it is again, ” introduce awkwardness if we introduce form handling into WordPress core (a distinct possibility).” It’s like this looming threat, and maybe threat is the wrong word, but that is what it comes off like, not sure I understand that approach. That does make me wonder though, if the argument is around “selling” code then the same should in fact apply to themes, or is that not classified as code?
In all that, I think this is by far the most important point, “Matt pointed out in his answer, where you draw that line really matters” He’s absolutely right, that’s all that matters for everyone, where do you draw the line..
I would argue that the SaaS model introduces more “artificial scarcity” than the non-SaaS model and not the other way around.
With a non-SaaS commercial plugin you could be given a copy by a buddy and use it without a problem thanks to the freedoms of the GPL. You could also continue to use the plugin even if the company that produced it ceases to exist.
With a SaaS commercial plugin that requires a paid service you could get the plugin from a buddy but it’s a useless shell as you pointed out without ponying up for the service that powers the SaaS API. If the company that produces it ceases to exist you are SOL.
That’s actually a very good point and I can definitely see that argument.
I think a lot of people misunderstood what I meant by real and artificial scarcity, and the point I was trying to make:
1. A theme’s value is partially in its uniqueness. A design for my site becomes less unique, and less valuable, if everyone else has the same one. The fewer other people have my design, the more value it has. Think of the continuum between Kubrick and paying a designer 10k for something completely bespoke. Themes have more in common with fashion business models than software ones.
2. Gravity Forms, e-commerce plugins, SEO plugins, pretty much any plugin, paid or free, does not lose value if everyone else is also using it. In fact the opposite happens, they become more valuable. An ecosystem develops around them as they become a platform for developers, consultants, get add-ons that broaden appeal, have books written about them…
For things that become more valuable the more of them exist, like fax machines, there are different business models that are easier or harder depending on the size and maturity of the market. If the total market size is in the tens of thousands of customers, a paid-only model is much easier. If the market is millions or tens of millions of customers, the network benefits of ubiquity can make non-paid users make a lot of financial sense. Both models are hard, and only a single digit percentage of new ventures attempting either will make it. Freemium as a model is pretty well-studied at this point for example this article in Techcrunch is quite erudite.
It doesn’t really have to do with WordPress or the above at all, but the worldwide software industry is about $300-400B a year, and fashion is $600-700B.
I agree. A theme’s value is in it’s uniqueness. But it’s also in the quality of it’s code, it’s features and it’s extensibility. All of which are directly applicable to plugins. Themes are unique just as plugins are unique. The difference being with themes you may think the fewer sites with your design has more value, with plugins the better the plugin is from a code, feature, and extensibility standpoint the more value it has. To say themes are unique and plugins aren’t is simply not true. Even when the plugins provide the same type of functionality, they most definitely are not created equal.
The fact that Gravity Forms is a paid plugin hasn’t hindered the ecosystem that has sprung up around it. We have a great ecosystem with plenty of 3rd party Add-Ons, people that make money providing more advanced training, and consultants who implement amazing customizations for clients.
Would it be bigger if it was free? It very well could be. Would it be orders of magnitude bigger? I’m not so sure. The types of people that are enthusiastic about our plugin specific ecosystem enough to contribute to the ecosystem are already doing so because they value the product, don’t have a problem paying for it and have already done so.
If Gravity Forms was completely free and we tried to monetize other ways I can guarantee you that there would be one less small business located in Virginia Beach employing fulltime employees on 3 continents. We don’t have the luxury of VC funding to be able to play that game. If we did and the entire thing had not been bootstrapped, maybe i’d be singing a different tune.
Every product needs a core team dedicated to pushing the product forward and if our product was free from day one… it wouldn’t have had that core team.
We were 3 guys each with families and young children that quit good paying comfortable jobs at the height of the downturned economy to start a company with no safety net and no funding. We had to build a quality product as fast as possible, get it on the market and make it a success as quickly as we could. Considering where we are 4 years later i’d say we did a damn good job.
We could have built Gravity Forms from the ground up as a SaaS solution. Wufoo and Formstack have done so. We have no problems with SaaS solutions and as Gravity Forms has grown we’ve incorporated SaaS functionality into the product and will be doing more and more of that going forward. But given the reality of our situation at the time it wasn’t a viable direction to go in.
There are a lot more luxuries involved in VC funding when it comes to trying to grow a large community around a free product that you’ll try and monetize later. Especially when you are a product business and not a services business. Later isn’t a luxury that most bootstrappers have. That isn’t a knock at VC funded companies, it’s simply a reality when you are a bootstrapped company.
It doesn’t matter if it’s a SaaS solution or a non-SaaS solution. Making a kick ass product that users love? That’s what matters.
Sure, and I hope it was clear in the above that these different approaches are value-neutral. There will be successful businesses built up in every possible combination of market and model and funding. If what you’re doing is working, by all means keep doing it. (I also love that you guys are 100% GPL and prospering.) You didn’t ask me for advice on GF’s business model, so it wasn’t really a topic I was trying to address. :)
We have developed CloudSwipe, as a SaaS style plugin for WordPress e-commerce. We picked the SaaS model primarily because there are things about e-commerce that require a level of server security (to meet PCI compliance) that cannot be achieved easily and affordably by the average person who wants to sell something online. So a significant part of the value of CloudSwipe is the use of our PCI compliant servers themselves, not just the code.
For example, we wouldn’t be able to provide things like transmission of cardholder data, recurring billing, one-click ordering, saving billing information, etc. if we didn’t have PCI compliant servers running the system. You can’t just slap an SSL certificate on a WordPress site and then start storing (or even transmitting) credit card data. Anyway, all this is to say that our decision to go with a SaaS model was not about creating artificial scarcity or any of the other reasons previously stated, but about providing features that would otherwise be impossible on a “normal” WordPress installation – without fully PCI compliant servers. Then having our customers enjoy the e-commerce features without having to meet the requirements of PCI compliance on their own.
I’d say your name, but I can’t see it.. :)
Very good points in your post. I would say that in your case you really didn’t have an option at all and SaaS made the most sense and is the most appropriate. It’s very similar to my own company at Sucuri, very similar issues. The entire process from detection and remediation would be practically impossible to integrate fully into any plugin, a SaaS is the only real viable solution. Further compounded by the fact that we are platform agnostic working on Joomla, Magento, Drupal and many other applications.
There will always be these challenges and I think the distinction becomes very clear in these cases.
Cheers and thanks for stopping by.
I thought it was a great question and a slightly puzzling response. I also kept hearing talk from Automattic about too much duplication of efforts from plugin developers when they could be much more productive if they were devoting their individual efforts to where they might be needed more by “the community”. (I think I am stating this position correctly – I don’t totally agree but more on that later.)
In your post you asked “Why would you want to build a company around something that can be turned into a commodity?”
Here is the thing – and I know you already know the answer to this – you really never should do this unless the probability of very good short term profits are high. What you CAN build a company around is your value to your customers. I found Sucuri through Google. A client was in a jam and I needed something fast and found you. I had no idea who you guys were (or that you were relatively local) but I was blown away by responses coming in quickly from yourself and Dre. And although there was some (very helpful) boilerplate I could also tell that some of the responses were directly specific to my issue and being written by a real human. I was blown away. Since then I haven’t even looked at another service such as yours – that and the fact that I trust you guys as insanely passionate security wonks means that I am probably a customer for life. And you know what – you, Dre and the rest of Sucuri can never be “rolled into core” and I am fairly confident that if the need for the specific product you are offering now decreases Sucuri will adapt and will still be providing value in other ways. It is your company that adds value – the product is secondary.
That’s also why I think it is ok for there to be some duplication of efforts. Some people are just doing a better job with their “value add” and those companies are a lot more likely to rise to the top of the ecosystem. And frankly I think those companies can serve their niches better than Automattic is able or even wants to.
By the way I was the one who begged for one more question after yours. I don’t know if you heard my question but I was concerned about the quality of plugins in the repository and if more can be done to clean that up. Again, I wasn’t entirely happy with the answer and it didn’t seem like something that Matt was too concerned about for now. Raising standards for plugins would certainly limit growth so I think I can see why the foundation would maintain this laissez-faire position even if it comes at the cost of overall quality. However I personally think that there really needs to be some sort of “gold standard” for plugins – maybe some kind of curated list of 100 or so plugins that are doing a good job of coding with integrity, delivering stellar performance and playing nice with others. I know there is a new review process that is still finding its way but I would like to see it go even further further either from within or from outside of the foundation.
I don’t think that commercial plugins will ever die out because obviously not every plugin can be rolled into core. I know Matt was just throwing some ideas around but I really don’t think Automattic wants to alienate commercial developers because then they risk breaking up this great community and we will start seeing forks. Although I was slightly alarmed by Matt’s answer to you I am still optimistic that this is going to be a vibrant community with opportunities for commercial plugin developers going forward.
I do not see why the same argument can not be used against themes – can’t remakes of some of the best selling themes be shipped with the core? I do not see theme businesses fearing this. Nor they should as they are many layers of the business on top of the actual product being sold.
Also I would argue it is the plugins and not the themes that are essential part of what WordPress has become today. And that plugin developers who want to make a living by selling plugins they’ve built, should be given a nudge by the foundation, something theme developers have enjoyed for such a long time.
And even if there is a possibility of turning ‘premium’ features into core I do not think that’s a great idea for the foundation for two reasons
1) It would be undermining the very community that is helping it grow
2) I strongly believe WordPress should be stripping features with each new version, not adding them (and some changes in the 3.5 are a really good step in this direction). Core should be really that – just the core. Focus on performance. Let the community build and thrive on the rest.
I’ve purchased many WordPress plugins over the years, and for the most part, they’re more fine tuned, they stay up to date, and the support is great. There are many areas of my site that rely on commercial plugins. Without them, I would be stuck with sub-par functionality. For someone who can’t afford to hire a fulltime developer, commercial plugins are the next best thing.
Great insight Howard, and that talks to some of the points I am making as I work my way down the thread. Awesome that you stopped by and shared your thoughts.
I think I can add some perspective to the theories above, given we have had our simpler plugins released for free, as well as our code going in to core (or will be – see: domain mapping).
For both those, it involves the business owner being well read up on not only the GPL but also on what’s going on in core. Both of these (especially contributing back) allows you to look ahead long term and begin to adjust your business model.
(for those lost to references, Ron and I sell plugins at wpebooks.com, as well as ebooks)
I would also argue here we’re talking about two different kinds of plugins: the easy simple ones, and the larger, more complex ones. Take the forms example above – while a simple contact form could realistically be rolled into core. Gravity Forms – to run with the example – will always have a place because of complexity. And it’s partly the complexity level of multiple forms that makes it something people are willing to pay extra for – whether it’s code, support or both.
I do agree that a full scale plugins marketplace would lead to a lot of teeny easy to copy plugins showing up for varying fees. That, to me, would make a bit of a junky marketplace, with products that could look like people were only in it to make a quick buck.
And that would be sad. :( Consumers don’t like it much either, based on the feedback I’ve seen.
It does leave lots of wide open areas for developers who care to make really cool complex things available – either free or paid. Just look at Boone’s sponsorship model or what Pods did for development funding.
So I do think there’s a place for it, though it’s never going to be official and devs need to get creative.
Very good points Andre. Very good points indeed.
Man, so good I really don’t have much of a response.. : (
Damn, hate when that happens.
Heh. :D I’m always worried i put my foot in my mouth somewhere.
The points elsewhere about very few plugins making it into core is also a good one.
You and me both, seems to be my specialty… yes very good points throughout..
Hey everyone, the bottom line that everything comes down to is quality of work… let me explain.
With WordPress now having a plugin repo of over 20,000 plugins the overall quality of plugins drops day by day… I’ve talked to numerous developers who are spending hours upon hours on free plugins, and who need to balance paid work with free development and support… they find it very hard. Naturally some of that free work turns into paid work but it’s not what this is about.
In order to produce great quality plugins or themes a lot of time needs to be spent in planning the development, supporting the project, and lastly evolving the project as the world around us changes. This is where I feel people want to pay for a great product… as you realize how much your time is worth, you understand that spending $39 for Gravity Forms will save you $100s in the future…
I think that there are actually very few… and I mean VERY few products that could get rolled into core and kill other plugins… (menus is one of those)… even if WordPress builds in a form building right into the core… Gravity forms has a 4 year head start… and the number of features within GF will just never make it into core… overall there is a big lack of support for free plugins and I find that the overall quality of plugins is quite weak… most plugins handle their core functionality but they either lack features, extensibility, or UI design. I think most people will pay for those things. We have the power to build software that’s kick ass and all developers want to be proud of their software, more now then ever as WordPress gets adopted by more businesses around the world.
One last point, it’s up to us in the WordPress community to watch out for each other… we need to push the best quality plugins and themes. We need to educate the general public so that they expect great quality and help to grow WordPress to even bigger marketshare.
Spot on, you’re absolutely right. The problem with principles and ideals is that they very rarely bring about the economic gains that most are looking to achieve or require to survive. You’re also right in terms of quality of the code, I can attest to the challenges with quality especially when it comes to security. So very good points.
The other problem with principles and ideals is not everyone will share the same principles and ideals you may have.
There is a subset of the WordPress community that tends to look down at and ostracise those that don’t adhere to their principles and ideals whoe claiming it’s for the good of the community. That is flat out wrong. That doesn’t breed community. It’s detrimental.
You can never assume that your way is the right way and the only way. It’s extremely shortsighted to do so.
Yeah, don’t know about all that.
When you venture into this domain you have to be able to remove all emotion and think rationally and objectively. When I have these conversations in person I often remove those feelings and I find it to be a pleasant conversation. Regardless of principles and ideals most of us are rational and intelligent beings, and most are able to agree to disagree on certain subjects.
[…] in line with Matt’s. In the meantime, there’s an excellent discussion going on in the comments of Tony’s post about this stuff. Check it […]
[…] add Jason’s post to John O’Nolan’s Ghost concept and Tony Perez’s post on WordPress commercialization, we seem to have a trend here. Filed Under: News Tagged With: Jason […]
Thanks Tony for this thoughtful write-up, and also distinguishing my opinions on businesses I would build personally or invest in from the rules of the GPL or WordPress.org. I’d much rather discuss something I actually believe in than the wide range of opinions misattributed to me. (Matt hates selling things! Everything should be free! Matt hates plugin developers!)
For people interested in this topic, I recommend this talk on why companies are easy to kill, but cities aren’t:
Second, I’d encourage people to keep an eye out for a common logical fallacy (of composition): a commercial dev could very correctly say they or their entire company wouldn’t do work or create a product if they weren’t paid, but that doesn’t mean that no one else in the world would. Conversely, someone working on something for passion instead of money doesn’t mean that if they stopped it would be picked up without by someone else without extrinsic motivation.
Third, there is no such thing as a non-freemium plugin for WordPress. What do I mean? You may only having paying customers and offer no free products, but all of WordPress and 20k+ other plugins and themes are the “free” to your “mium.” Just because you don’t personally create them doesn’t mean they’re not the market-enabling factor.
Finally, keep in mind that demand begets supply and free markets are ruthlessly efficient at filling in gaps, particularly in an environment with high equality of opportunity like the WordPress ecosystem.
No sweat, always interesting when perspective is added to a conversation. I really like the engagement throughout the thread though, it obviously talks to a lot of misunderstandings I think. Your engagement throughout is awesome too, providing clarity where needed.
I do agree though on your first point, think we need to strive to better differentiate between your opinions. Think folks are just lumping them all together and it’s really just complicating the conversation and creating this perception you describe. And to think, you said your opinions don’t matter.. ;)
Very cool on the link, adding it on the list of things to read through.
Your point on common logical fallacy is interesting and on point, but I miss its application. This is true in almost any sense, no? It’s one of those philosophical points that make me scratch my head and think, “ok?” What are you really trying to say there?
Spot on with the “Free” to our “mium” hadn’t thought about it that way, but I kind of like it. More importantly it’s true.
Lastly, yes and free markets are also ruthless when it comes to competition and economics and “free” is not exactly in its vocabulary.
[…] As for Gravity Forms, I’ll let the founder, Carl Hancock speak to that. […]