 Good afternoon. This is my first time in Thailand. It's been fantastic. I was walking the streets of Bangkok yesterday with my friend Luke and When I was reflecting on it today, I Saw some interesting similarities between my experience walking the streets and the WordPress community and ecosystem First there's a lot of people Which is awesome There was Like we went to these little side streets There was this what I would describe as a sort of kind of organized chaos to it Where everything kind of had a good place and purpose, but like if you didn't pay close attention It could be a little disorienting at times all sorts of food too, which is fantastic and There were several instances where I found myself Kind of not sure where I was kind of lost and it didn't bother me. We were having a great time I think that well describes how it can feel in the WordPress ecosystem at times. I Have three things that I'm hoping to do in our next couple minutes together I'm hoping to Expand your context for the WordPress ecosystem Talk talk about what it is. We'll talk about business models We'll talk about some of the characteristics and my hope is to just give you a little bit broader sense of the size and shape And scale of the space. I want to inspire you with some possibilities for ways to Do business better and the WordPress ecosystem and then offer some hopeful hopefully actionable Insights on things that you can do To take advantage of the things that you're learning Now let's let's get into it So the WordPress ecosystem Is decentralized which is a fantastic and key attribute of it There are I like to divide into three main categories. You've got hosting providers You've got your service providers and your product companies and a couple of numbers that Many of us know but may not be obvious or can be easy to sort of miss the scale of it There are according to built with comm 38 million live WordPress installs. That's a lot That's and that's just the ones that it counts as live at the moment By my best sort of current estimates, there are More than 5,000 hosting companies that serve those 38 million installs There are more than 10,000 product companies by a couple different definitions, but there's a lot that both either directly or indirectly serve the WordPress ecosystem and Easily over a hundred thousand service providers the freelancers agencies That build build on WordPress That's a lot and it can be easy. So coming to an event like this is fantastic You can get a sense of the size of it But still this is only a very small piece It can be very easy to miss like just how big WordPress is and a large part of that is because it's decentralized you can Have WordPress with a hosting company for instance and be there or you can move and have a very different experience somewhere else There's a lot of freedom. It can be easy to sort of lose sight though of how big it is All right, so let's talk about business models The way that I think about a business model. It's a it's a way of describing value how you can create value rather and ideally Generate a return on your investment. So this is your way of saying, okay, I have a particular audience This is how I think I can create value for that audience And this is how I'll get a return on that through a revenue model and ideally you increase the value over time now There are a lot of different Business models and a lot of different ecosystems in the WordPress ecosystem in particular I've found that there are five key characteristics that matter most so let's let's talk about those first you have the Type of plug-in that it is I'm gonna just leave themes alone for a moment and focus on plugins and products in general You have an ecosystem plug-in. We'll talk more about that in a bit You have your typical feature plug-ins, which are the majority that just introduce a new feature into into WordPress You also have integrations which tend to be focused on software as a service getting that connected to WordPress So those are your three primary types You have the audience Which most WordPress products are what we it's called B2C their consumer focus. They're focused on the end user Providing some additional functionality for them You can also have very market specific Audiences, maybe they're your focus on a particular type a typical vertical. Maybe it's geographic. Maybe it's a type of business Next you'll have how you make money We'll talk about the deals different ways in a moment Distribution how the product connects to its audience and in decentralized ecosystem distributions, especially important You have all these WordPress installs But it's not to be taken for granted that you can actually reach your customers on them And then last but not least is licensing for the most part. We're not gonna get into that a whole lot today But it is a consideration GPL is the primary license that so that we believe in a practice in the space There's other ways that you can do things as well Let's so One of the things that I got to do it was kind of fun is do some research That's one of the most popular plugins on the dot org directory and Wanted to share some of that so the top 100 plugins as of earlier this week 87 of them are what I've described as freemium or freemium plus and I'll unpack that in a bit 27 of them are owned or sponsored by a Split between 10 different hosting companies. I think it's pretty interesting for a number of reasons 12 of them are making use of the new taxonomy to indicate whether they're Commercial or community which I think is this cool that that's happening and 11 of them are owned by a single company That company is not automatic which is interesting The freemium versus freemium plus let me just touch on that for a moment So most of your plugins in dot org Will have a the free version of course and then it will encourage you to upgrade to pro The freemium plus is a reference to what I would just describe as like other forms of monetization So some of the plugins for instance will be advertising for services So the plugin is entirely free. There's nothing to sell But they're making additional money by paying for people to customize it. So which is cool But that's the majority of your top in the top 100 and I think you'll find that that extends This is by far the the most popular way of doing things at least on dot org So next up Let's let's dig into across the ecosystem as a whole Let's talk about some of the most popular business models first you have Your freemium Which is the most pop the not only the most popular but really the only option that you have available to you on Dot org this is where you can provide initial value without requiring any money up front They just install it and it's useful or it's not your premium where you pay for it before you get to use it and your ecosystem plugins where Most of the users are indirectly monetized and we'll talk more about that Let's let's break them down a bit and we're gonna talk about the benefits and trade-offs of each of these models So your freemium of course One of the key benefits is that's a low barrier of entry Most of the times you're just asking for time From your end user and ideally as little as possible, right? You want them to be able to install it and get to value as quickly as possible and it being free is a great way of reducing that friction One of the things that that I care a lot about and and hope that you guys will get the benefit from is in this decentralized space Your most effective path to grow into getting distribution is going to be through partnerships and in general when you've got a free Plug-in, it's less friction in negotiating partnership deals, right? Like it's you can it's easier to figure out a way a win not always And then of course the a big benefit is that you can get distribution through wordpress.org which is fantastic but as We'll talk about on the trade-off side Let's just jump into it being on org is no guarantee that you're actually going to get traffic that people will find your plug-in There are more like around sixty thousand or so plug-ins there today and it can be really hard to Cut through the noise on that Some of the other trade-offs if you focus on free the product end up being undervalued and For you as the product creator free can end up meaning you have a longer return on your investments, right? You're taking more risk Let's talk about premium and of course some good examples here Yoast jetpack code snippets each of those have a strong free offering that provides a lot of value And then they'll guide you to a pro offering Premium is straightforward the customer pays for value upfront now This is something that is prominent in our space, but isn't we don't talk about it as much because premium plug-ins Just by nature aren't listed on org so we often won't hear about them Um Charging for something up front. It's interesting. We can get into a bigger discussion about what are you actually charging for? How does that work? But the point is that charging something up front Tends to be a clearer way of aligning with value So if someone's going to use it they purchased it and that's just an obvious way for you to know that okay They see value in it unless they ask for a refund of course It gives you and this is interesting when you're talking about partnerships if you've put a price on your product It actually gives you a lot more value that you can offer when you're doing partnership deals You might do a deal where a partner Includes your product in a bundle and they're covering the cost of it right and the more Expensive the higher the prices on your product the more value in theory you're able to offer in those partnership deals And of course it gives you predictable sustainable revenue potential not guaranteed, but you have that potential for for the revenue The trade-off of course is that you have a higher barrier of entry You have more complexity when it comes to partnership negotiations there's more things to consider if you haven't really sort of sorted that through and In general, this is the big one you limit access to your full address will market There's less like if you don't have a clear strategy for getting the word out You tend to just you tend to have a much smaller install base when you focus on premium and Including especially on wordpress.org And the key when it comes to premium just just jump in on this for a moment you go for this from what I've seen work and My my guidance on it is that you really want to make sure that you you sell it as much as you can before you Make it like that you understand your audience that you're clear on what problem that you are solving for them and that you verify with them explicitly or implicitly that it's actually something that they want and When you put a price on it, that's a really good way of Finding out they they're willing to pay for it or not All right now. I'm gonna talk about the the ecosystem plug-in which is is my favorite This is something that Let's just kind of unpack and talk about what this is So the way that I define an ecosystem plug-in is that it starts with a suite of functionality For a specific audience. It's more than just a feature. So it brings a whole new set of functionalities to wordpress It provides an integration layer so some way an API for additional functionality that's That's used by others other than the product creators So you're thinking about third parties who would come in and create additional functionality for your plug-in and then for you as the product owner The other the other key characteristic is that you're able to shape and influence your ecosystem over time and Align incentives amongst the participants I've you can if you go to my blog you can find more about this I can unpack in different ways, but these are the key So three definitions for me of what makes an ecosystem plug-in and the context of business models the a great example of this is WooCommerce you can install WooCommerce for free and WooCommerce the business is able to monetize in a bunch of different different ways So you have upfront and a long-term alignment with value so it's free they can get some initial value and Ideally if you have a strong healthy ecosystem around your product the the value is able to increase as time goes on For you as the the product and the business that compound value There's a comp there's that potential for compounding the value as the ecosystem expands the more third parties that you have creating within your ecosystem The more value that you're able to provide to the end user in theory and the more value and the more return you're able to receive on your investment and Of course there are multiple ways that you can get that The trade-off so an ecosystem plug-in typically has higher upfront costs Not just development there tends to be a lot of other things you have to put around it There's greater risk as well. There's more complexity as your stakeholders increase and It's I've in my experience so far That there tends to be more difficulty in managing revenue streams. Sometimes for instance, you'll have something that's making money But is but can get more attention than it probably should Relative to other parts of the ecosystem that are creating a lot more value So there's some interesting trade-offs a few other things when I think about an ecosystem plug-in a key piece to it is You want to have an addressable market where you have a shot at achieving like ubiquity in general I'd say like less than 500,000 installs It's probably just not like 500,000 is probably the minimum Installs and WordPress for it to you have the start of an of an ecosystem plug-in depends of course on what? particular vertical that you're focused on but the idea with this is that you Focus on providing that value getting the install base nice and wide and then you monetize the majority of your users indirectly There's different ways you can do that will commerce for instance Monetize is indirectly through will commerce payments. You don't have to charge They don't you don't have to pay anything to use it if you use it and you're successful. They're taking a piece of that Excellent so What I want to touch on next so these are so these are your different these are the most popular business models There's other ways of doing things but in terms of what we're seeing work well in the space These are your three primary As you're thinking about what to do one of the mistakes that I see commonly is Is trying to do a little bit of both or just not being clear on which business model you're using? These three have compliments, but they're I would argue that they're fairly mutually exclusive if you're going to focus on premium for instance, and let's say let's say your product is a premium product today and You see that you have the attributes of an ecosystem plug-in Continuing to charge for the product up front is going to tend to be a limiter to growth Right like you're gonna have a hard time growing the install base which then limits how much value that you're able to provide to the ecosystem So that ends up being a key strategy choice. Are we creating the ecosystem plug-in? Do we have the do we have the Are we thinking about third parties and what they're going to need to be able to build into it and expand on it? And are we doing the things that we need to to increase the install base? So that we have that value for our users and for the people building within it I think there's a lot of opportunity for more of these to exist Not everything should be that some things are this is just a feature. There is no community going to be built around this But I think there's a ton of potential there so Been thinking about one of the things I wanted to give you as well is just a couple of ideas for things that We think could be explored more in the space. So just a couple of concepts to consider first One of the areas that we're seeing a lot of opportunity is in what we describe is the B2B at this point if you think about those 5000 plus hosting companies 10,000 plus product companies and all the extenders all the all the service providers Those are a lot of businesses that also need to have things that they need a lot of problems that you can help solve For them and at this point there's more than enough to have an entire business focus on just doing that So as you're thinking about your opportunities my my guidance here is just to recognize that B2B versus B2C is very different and One of the mistakes that I've seen more commonly is businesses that have clear B2B potential But they're still acting like a consumer focus business and their pricing and how they structure things So there's a lot of opportunity there and that opportunity exists because of just how large the space is now and continuing to grow So I think that's something to be thinking about The world of SaaS software as a service is really interesting and I think there's a lot of opportunity to bring more of that into WordPress There are one of things we're seeing now is more software as a service companies building integrations for WordPress Which is great and I want to see more of that for those of you already in the space There's a lot of opportunity to think about ways that an external service could provide value the key Though is just not force it. I've seen products where it's like, okay. This is a pretty light attempt to add a SaaS component to it and it's like now. This is functionality that really belongs inside of the word WordPress admin But there is a lot of opportunity there something to consider And crowdfunding is interesting One of the going back to this idea on what I mentioned on the premium If you choose an audience and you've found a clear problem to solve One of the ways that you might be able to go about it is to ask them to help fund you in solving that problem there are some great community spaces in WordPress and Going in there and sharing your hypothesis about a problem and say hey, this is something that we think would be useful and Seeing if people are interested that can be a good way to to build into that Excellent all right, so what I want to touch on next I want to just offer a couple of pieces of guidance for for product companies who are trying to Grow in the WordPress space The first thing I'm going to touch on is how to look at your product It's important to evaluate your product as objectively as possible. We'll talk about some factors in a moment I want to I think there's a lot of potential to grow through partnerships We'd love to see you guys doing that and it's important to be connecting with other founders WordCamp is a great place to do that and in our space as a whole people are very willing to share There's a lot of insights that we can gain. We have that open source mindset And I'd love to see people taking more advantage of that So let's take a look at each so as you're thinking about your product These are the things that I think are most important when you're assessing whether or not you're ready to grow In the WordPress space first is how customer-centric that you are what whatever type of plug-in that you are That's that is a key piece. Are you focused on solving a problem for a specific audience? This is where I see Folks make the most mistakes. They've built some cool technology, but it's not clear What value that they're actually creating for anyone It's important to make sure that you keep your messaging your product and the partnerships that you build focus on Solving a problem for a clearly defined customer. That's the biggest mistake that I see is like, hey, this is cool But we don't know what customer that we're serving. We don't know what problem we're solving for them And I'll ask product founders. Can you point me to some clear wins? Some have them It's awesome They can point me to a customer that they've created a value for others can't and that to me is a sign That it's not ready to grow The next is that the plug-in works well with others especially if you're playing in any other ecosystems in the space if your product for instance It is Touches WooCommerce you want to make sure that it works really well with WooCommerce and within the most prominent extensions within the WooCommerce space It's important here. It's a lot of work quite frankly It's important to be planning and especially in a decentralized ecosystem It's a lot of work because there's a wide range of standards a lot of ways that things can get done but I suggest that it's worth the effort and The key here is to be proactive making sure that your product remains compatible and That you react well to customer feedback. They'll tell you when things aren't working take that seriously It's an opportunity. It might be frustrating to hear about a plug-in that doesn't work with your plug-in but that's a great opportunity to Make it work well together and maybe maybe that's the start of a partnership Make sure that you align that your whatever business model that you pick whether it's freemium premium Ecosystem or something else Aligns with the value that you're trying to create For your customer and for your partners I've seen Yeah on the partnership front alone Making sure that you've thought ahead to how your partners are going to be able to to get a return on their investment Is key and making sure that your model your pricing reflects that Leadership is just making sure that you have the at the right team behind the product One of the mistakes that I'll see folks make is just not thinking ahead to what growth is going to look like Do they have the resources necessary to support that growth? Partnerships alone if you start going into the partnerships route you're gonna want to make sure that you have someone who can take Care of those relationships Because in the WordPress space especially they're often going to be quite different They're gonna require time and effort to really get right and then last and this is one of my favorites to talk about To folks coming into the space if you're not inside of WordPress already It's very easy to take for granted for those of us who've been in here a long time Just how important and how intimidating at first it can be to get involved in the community but this is a big thing if I'm looking at a product and Placing a bet on whether it's going to do well in the space or not I pay attention to are they investing in community That starts by going to word camps, which you guys are doing. It's fantastic getting involved in sponsoring if you can't sponsor one of the big ones get involved with some of the smaller ones and And make those investments in the space On the partnership front so this is what I call the product growth loop and This is something to nice and simple my suggestion if you feel like your product is ready Find some partners that share the audience that you're sharing that that you're focused on and that align with the problem that you're trying To solve and decide to work together And and this is the key that I found because this can get very can be very easy to get Overwhelmed with the details and the things to figure out focus on a first win Find a customer that you can work with together and sometimes it's literally just finding a customer or two That you can create a win for and that you can affirm that your hypothesis is good that there's an alignment there and Then and then talk about it Figure out a way to you know in both of your channels talk about the win and keep it focused on the customer That's the key like I've seen people announce partnerships, but it's like so what like what value does this partnership? Can actually create what we want to see is that those partnerships are solving problems for the end users And then what I find is that it's a loop you do that and then start another partnership go back to the first Find the next one talk about it and just keep doing that and that's what I find is most successful in this space It's decentralized. There's not one clear space place to go to so you find your partners You work together to find some clear initial wins you talk about them and you let you build on that momentum The other thing is I think it's really important to be connecting with other founders Go to word camps. That's a great place to start And participate in the community spaces you have your wordpress.org slack if you're not already there post status is great There's smaller sub communities like WP minute, which are fantastic build those relationships One of the things that I've been spending time with these days is the idea of accelerators There's a few starting to be in the space take a look at those you might be able to get additional resources that that are necessary and Yeah, this and what I've found In the wordpress space in particular is that people are quite willing to share. They're quite open and I think that's a big part Of why many of us are still here after all these years and excited to to be at word camps again That's what I've got so far. I love your questions. Thank you