Q1: What is your background, & how did you first get involved with WordPress?
I discovered development very early in my life. When I was 12, my father’s friend gave him a programming book on C-development, which my father passed over to me. I got bored one weekend and decided to give it a try by following a few tutorials – it was love at first sight. The fact that I could type some characters and create intelligence swept me off my feet! This magical “aha” moment changed my life and I knew that my future will involve software development. The combination of the “power” to code, my love for math, and my early passion for solving problems with engineering and technology guided my path to naturally become a technological entrepreneur.
I had the chance to work at a startup during high school, as well as while studying computer engineering and physics. I graduated with a double degree in Computer Science and Math from the Technion – the top engineering university in Israel.
After finishing my military service in an elite unit in the Israeli intelligence, I co-founded several companies and served as their CTO. The noticeable one was Senexx, which was acquired by Gartner in mid-2014.
I first learned about WordPress back in 2011. On October 2010 I developed Rating-Widget, a small web widget for a blog I was working on. After a few months, I started to receive emails from users asking to integrate the widget into WordPress. After receiving a bunch of those requests, I decided to Google about this thing called “WordPress”. Once I saw the size of the ecosystem and the power of the WordPress community, I developed a small wrapper plugin for the widget, making it easier to include it for non-tech savvy users.
In Nov 2013 I joined forces with Stanley Macha, and together we spent a year working full time, turning the project into a fully commercial freemium product. We have extensions for dozens of platforms besides WordPress like Shopify, Tumblr, WiX, Squarespace. But once we started to make money, we found out that 60% of the users and income were coming from WordPress. That’s when I became more involved.
Q2: What should readers know about all the stuff you’re doing in WordPress these days?
After a year of commercializing Rating-Widget, we immediately started to generate solid revenues that we could live on. When we looked back on that year, we realized that the product was still the same widget I built back in 2010, in just less than two weeks, and that all of the heavy lifting during that year was related to the commercialization, the implementation of user-management, licensing, payments, marketing, software updates, etc. This disproportion in time investment just blew my mind, and that’s when I understood there’s a huge gap and an opportunity in the WordPress plugins and themes space. That’s how we started with Freemius – a complete monetization solution helping WordPress plugin and theme developers to create prosperous subscription based businesses, in a matter of minutes. While other solutions like Easy Digital Downloads, WooCommerce and Shopify have some digital goods components, our sole focus is in plugins and themes. In addition, we are bringing fresh practices and perspective from our vast experience in the Software as a Service and conversion optimization worlds.
We are capitalizing on 4 key world trends:
- More websites: Naturally, more and more businesses want to have an online presence, so every day more websites are being deployed.
- More products: The inventory of open-source extensions like plugins and themes is growing. One of the reasons for that is the globalization. If a software developer in India could work for a western company for $2 / hour, now, this developer can build a plugin and sell one copy a week for $100 and match his salary while working on their own product and flexibility.
- More monetized products: The WordPress products ecosystem is commercially maturing. If in 2011 less than 1% of the new plugins released had a premium offering, in 2016 this number was more than 10%.
- The subscriptions economy: The way people buy and consume has changed for good. $420B spent on subscriptions in the US in 2015, up from $215B in 2000 (Credit Suisse).
Compiling those trends, the online market share is growing every day, more developers are now monetizing, and it’s clear that subscriptions is the business model of the future. It’s time for WordPress businesses to adjust, and Freemius is the go-to solution.
I’m wearing many hats in the startup, though all my efforts are focused on leading the team to make that vision happen. These days I spend 40% on marketing and business development, 30% on the product, and 30% on software development. I also try to write at least one piece of valuable content a month on the Freemius blog.
Q3: What challenges did you face in getting to where you are now professionally?
As an entrepreneur, you face challenges on a daily basis. I think that if things were easy it wouldn’t be interesting. That’s actually part of the fun :)
In all my companies, including Freemius, one of the early stage challenges is getting the first customers. You can do market research, ask people if they would be willing to pay for your product before you even have one, build a mailing list, and so on… but when the time comes to “swipe” the credit-card, the dynamics are different. It took us around 3 months to get our first beta customer.
Another big one is brand awareness. Even though we started the company more than 2 years ago, we are still the “new player” in the market comparing to solutions like Easy Digital Downloads or WooCommerce. Showing off in WordCamps, being involved in the community’s social channels, and focusing on strong content marketing strategy are some of the things that help us to overcome this challenge. But we still have to do a lot of work here.
“A startup is a marathon, not a sprint” – I’m not sure who came up with that sentence, but I couldn’t have described it better. Taking an idea and turning it into a vision and then executing it takes time, lots of hard work, and you stumble across endless challenges along the road.
Q4: Has anything surprised you while coming up in the WordPress world?
When I became more involved in the WordPress world – the community blew my mind. I’ve never seen such an engaged and powerful open-source community like WordPress. I truly believe that this is the main edge of WordPress, comparing to its competitors.
Another thing that surprised me is the business and product immaturity. You would imagine that the most popular web platform, with a 43.3% market share, would yield a few unicorns in the product space. But it’s far from being the case. Developers are building plugins and themes blindly without any usage-tracking mechanics, and the largest businesses (excluding hosting companies) gross less than $10M in ARR. It might sound like a large number, but looking outside the WP world, those are considered to be small businesses.
We actually leveraged that lack of business knowledge on our blog, which is solely focused on the business side of WordPress plugins and themes. Becoming the authority on that became Freemius’ main marketing strategy, and that’s how we managed to spread the word out about the platform.
Q5: What does the future look like for the WordPress world?
Since we are heavily invested in the WordPress market and community, I’d love the platform to keep on growing and gaining a larger market share. Having said that, I don’t see it happening until we fix a few things.
My gut feeling is that WordPress is already the go-to solution for most web agencies and freelancers – tech savvy users. The thing is that most of the users out there are not web developers and not “power users”. The WordPress interface ease of use is far behind WiX, Squarespace, and a dozen other WYSIWYG website builders. You don’t need to be a UX expert to tell that the WordPress admin dashboard is overwhelming. And that’s why I think we see the gold rush of page builders. If the leadership of WordPress would like to go after the “mom and pop shops”, the onboarding experience and interface will have to drastically become friendlier.
The second thing that we should “fix” is the lack of data. The development of the open-source project is based on guesses. There’s no usage-tracking to back up decisions by concrete numbers, which means that the “feedback loop”, which is the fundamentals of product development, is simply broken. How can we iterate on features if we don’t have any data? Today the decision-making process regarding the “WordPress product” is done based on biased opinions and vocal influencers, many of them are developers that live and breath WordPress – they can’t put themselves in the shoes of the standard user.
As someone who is deeply involved in the plugins/themes ecosystem, it’s clear to me that the market is maturing. I did an in-depth research on ThemeForest and CodeCanyon, which is a great representative of that market, and it seems that the inventory of premium plugins and themes is growing by hundreds of items every month. Also, if five years ago the concept of paying for premium open-source WordPress products was a crazy idea, today users understand that premium plugins/themes are more reliable and supported, and that it’s a healthy thing for the ecosystem.
Another growing trend in the WordPress business world is sustainability. We see a shift from one-time payments to recurring subscription-like businesses. The premium plugins and themes ecosystem started with lifetime licenses. A user could pay $50 and get lifetime updates and support. After 3-5 years, those businesses realized that they are drowning in support. This natural evolution pushed shops to either rethink their business model, or die. We witnessed a shift towards annual licenses. The next evolution step, which we are witnessing right now, is the move to automatic renewals and I think that we deserve some of the credit for that trend by educating the WordPress business on our blog. Instead of “chasing” customers and begging them to renew a license with incentivized discounts that devalue the product, plugin and theme owners now take the opposite approach of automatically renewing while giving the user an option to cancel the subscription. That’s the only way to build a sustainable and predictable online business and that trend is happening all over, not only in WordPress.
Looking to the future, businesses who will not adapt to that model won’t be able to grow. With the new competition that is growing every day and with the slowdown in the WordPress market share growth, those businesses will probably die. There’s a cap to the number of customers to which you can sell a one-time license.
Q6: What do you look for in a WordPress host?
As much as we are involved in the WordPress world, most of our code is proprietary and we do the system administration in-house. Therefore, the key components we looked at when searching for hosting were price and infrastructure reliability with small downtimes. I’ve been hosting servers for years on Rackspace cloud, and one of the main pains we faced (besides the price) is forced server restarts 3-4 times a year, for maintenance reasons. When you’re running a SaaS (Software as a Service) or an eCommerce, these short restart downtimes become mission critical and add an overhead to your business.
Q7: What do you enjoy doing when you’re away from your laptop?
When I’m away from my laptop I have my smartphone with me ;) Being an entrepreneur is amazing, but it’s also an addiction. I enjoy it so much that I sleep, drink and eat Freemius. Luckily, my wife is there to help me balance my addiction. If she wasn’t there I’d probably work 24/7. I know that it’s not healthy, but I also know that every hour counts, so I deliberately made the decision to focus all my efforts on Freemius in the near future.
Q8: Whom should we interview next & why?
There are so many wonderful and interesting people in the WordPress community. If I have to choose one, I’d recommend interviewing Erick Danzer, the CEO of Imagely, the company behind NextGEN Gallery. Erick is one of the smartest business people I know in the WordPress ecosystem and his vision on the photography field in WordPress is super interesting.