Oh My WOO!

Oh My WOO!

Woo-Ninja-GrenadeThis morning I caught a new development on Twitter about a new change to the pricing and licensing structure at WooThemes, one of the best WordPress theme providers on the planet. Already the post has exploded with a flurry of comments – some encouraging and many others seething with anger or disappointment. While I haven’t read through all of the comments, I can see some good viewpoints and others I think people really need to take a step back on and think through. Because I love and use WooThemes for my own projects and have been in the same situation they are, I want to share some thoughts from my perspective.

Profitable and Sustainable

I’ve said for ten years that if you can’t build a business that is BOTH profitable and sustainable, then you shouldn’t be in business. Period! When I worked with the team at iThemes, we constantly had to evaluate what we were doing and how we did it. Sometimes our pricing or membership models had to change in order to ensure the survival of the business. To be honest, I think most of the commercial theme or plugin development pricing models have been broken since 2008. I always thought that selling themes which took hundreds or thousands of man hours to create, build, launch, support, and keep up to date for pennies on the dollar was a stupid strategy. Offering a $79 dollar theme with lifetime support and upgrades will never be profitable and sustainable.

WordPress companies have to continue to change and evolve or you will not have the products you’ve come to love so much. So I applaud WooThemes for their desire to be around another ten years – especially when I religiously use their products.

It’s Not Fair

One might see their strategy as unfair. Really? Do you know how much goes into the development and support of just one product? I feel bad for the guys and gals in WordPress who work tirelessly to offer products that make web design and blogging easier for all of us. Technical support for a theme or plugin is just merciless sometimes. People can be complete jackasses to you and take up all of your time – not because of product failure – but because they did something wrong on their side! Sure, there are product failures and glitches, but those are usually fixed with expediency from the trusted companies who produce them.

Let me say it this way.

It takes a lot to invest in a product. It’s not a simple create, launch, and go to auto-pilot business that rakes in money while we all sleep. That is a fallacy. Commercial theme and plugin companies have to find ways to better support their clients and to stay around for the long haul. What would be unfair is if you purchased a theme for a client job and then had to stop using it three months later because the theme company went bankrupt.

My Own Business Can’t Afford It

I know that there are web designers, web developers, WordPress consultants, and designers who are using these types of products to make a living. They offer services to clients that require the purchase of a theme or plugin. I also understand that with any business, money can be tight – especially when you are just launching out on your own. But your business is not WooThemes business. I believe that Woo wants all of their customers to prosper, but they cannot put that need above their own.

If you aren’t making the money you need to make as a freelancer or agency, YOUR model is broken. 

People complaining about pricing or licensing changes and how it affects their bottom line aren’t running a profitable and sustainable business. I challenge those people who are complaining about not making any money, to sit down and reevaluate their own business or fee structure. Your client projects should cover all the expenses including themes, plugins, apps, software, etc. If you are only using commercial themes or  plugins for pet projects, then you have more of an argument, but still … consider how much time you would lose by not using these great products! Currently I run three personal blogs on Canvas and it has saved me tons of time — time that I use to make money elsewhere or that frees me up to do something more important like hang out with family.

I think that the Canvas pricing example that Warren presented in the post was great. Maybe it sounded a little arrogant, but I don’t believe that was the intent. It was meant to show you how a little investment in a great product allows you to make an even better Return on Investment.

Confusing Terms?

I agree that some of the pricing tiers and terms are confusing. It will take some time to sort it out and understand. There is also no doubt that the Woo team has made mistakes and that they will continue to make them in the future. They are human, as we are. However, WooThemes is doing their best to ensure they can continue to provide the tools and resources that have benefited so many people, people like you and me, and that should make us happy.

Go Woo, Go!

 

11 Comments

  1. I just happened to see your link to this article in the original Woo blog post comments. Nicely said…well done.

    What a bunch of crybabies wailing about Woo’s price increase! I’m not a web designer…I’m just a business owner who does his own web work with the help of Woo’s awesome platform. And just like I said on my comments on Woo’s site, I’d rather do business with a company that plans for its own future. The problem is, most of the whining is being done by people who are, frankly, hobby-ests who fancy themselves as running a web design business. As you well stated, blaming your own lack of profitability on your supplier’s fee structure indicates a serious lack of business strategy and acumen. Learn how to price your own services and stop blaming Woo for trying to make a living!

    Reply
    • Thanks for stopping by Greg and for the kind words.

      I couldn’t agree more. I don’t want to spend more money than the next person but I have always said “you get what you pay for!” The reality is that if you are serious about your business, you look at the proper tools and resources as an investment and not an expense.

      I can’t tell you how much money I’ve made because of theme companies like WooThemes, iThemes, and StudioPress. It has helped me tremendously and provided me an opportunity to make a very good living. But I do understand the concerns of those who are starting out or struggling – I see their viewpoint. But they have to learn the business side as well and that is you gotta make money.

      Appreciate you sharing!

      Reply
  2. James, my friend, I love hearing your perspective and opinion! I know you’ve written and we’ve talked about this sort of topic before.

    I think many people that are complaining are stuck in the same business model we found ourselves in. They now have to re-evaluate their business in the same way WooThemes had to. We previously had people complaining about our pricing, paying $49 (a one time payment then) for a payment gateway, etc… We often told them that if that cost breaks your budget then something is wrong elsewhere with your shop, your own business, etc…

    I hope this helps be a start to a refreshing change in the WordPress world to put more value on the products or services in it. I think the race to the bottom is over, at the least. :)

    Reply
    • Thanks Ryan. And you’re right, we have discussed this before. :)

      I do think there needs to be more candid conversations and education about the business side of WordPress. It always amazes me to hear people who think you create a theme and then sit back and watch the money roll in. It just doesn’t happen that way and the “passive income myths” needs to be put to rest.

      The biggest problem I believe is that our culture believes in entitlement. We should get everything for free or cheap because we deserve it … and that ISN’T reality. I’ve watched how the free product model has caused this belief for years. Our culture has trained an army of people to believe that nothing comes with a cost and it hurts everyone.

      Anyways, that’s probably another post itself!

      Reply
  3. Thanks for the support sir!

    And I fully concur… The fact that we have underpriced our products had a knock-on effect to our customers underpricing their services to clients. That is however part of a greater trend online where we expect all software to be super cheap. Now that’s what I call a fallacy. :)

    The reality is that everyone, across the board should be charging more.

    Reply
    • Adii,

      Thank you and your team for providing the tools that have made me a great living!

      Perhaps we could do more training and education to those who are trying to build a profitable and sustainable business. Wait … I think we have done that already. ;)

      I am glad to see more WordPress businesses re-evaluating their models. It has to change or many of us will have to accept the fact that we may have to go back to a 9-5 job doing something we hate, instead of a flexible lifestyle we love.

      Excited that you are launching http://publicbeta.co as well. It’s really needed. Let me know if I can do anything to help!

      Reply
  4. The problem is not the price hike. Many people understand the logic of making a business profitable to sustain scalability and guarantee that the products are supported in the future, perhaps for “a lifetime” (pun intended). I, for one, support commercial plugins and services because I hope they’ll stay in business and make MY products better and well supported. But there are 2-3 things that concern me with WooThemes behaviour and business model.

    1. First of all, every year or so they pop out with a blog post “uhh… ehm… so sorry but our business model is not sustainable, therefore we do have to review all the licenses and increase prices, this is why and why”. My first thought was: they have to do their math every year and their only answer is to increase prices? This feels cheeky and confusing. Perhaps there’s a problem with their expenses too? Is the management clueless on company expansion and expenses? If this is the case, the management could be wrong at other things too, and this could impact on product development, growth and support. A customer who has invested into WooThemes has the right to be worried about it.

    2. Support (or lack of thereof). Last year the price increase was justified to offer better support to customers. It was also justified by some figures about tickets being opened. Fine. But that’s also hinting there might be something wrong in the way you manage support if you still have problems with it. The forums: a lot of people would be just fine with those. Instead, you killed your own forums and replaced them by something unusable and broken (it’s frustrating to browse, read, and many links are 404). On top of that the ticket system is entirely private and my guess is that you’ll be answering to similar questions very frequently, wasting resources and time. It’s reasonable that some tickets should be kept private, but there should be room to public support for your own sake too. Furthermore, your support isn’t supporting at all. 9 out of 10 times I issued a ticket the answer (that often came after several hours or days) was “sorry we don’t support that”. Your “support” only covers very basic questions and issues which could be answered easily by the said open forum/support system or with a good KB (yours is not too bad but could be a lot better since you mention you have a lot of staff now) or even video tutorials/screencasts. As a developer I pay for professional support because I do want professional support. If I can’t have it at all, then of course I’ll be wondering why I have to pay so much when with plugin X from company Y I have it for the same price? If you expect people to use your extensions out of the box, then again, something is wrong here too.

    3. Attitude. This does not upset me or changes the way I work or my business expectations but saddens me. Don’t say “we do this to improve support” if you offer only very basic support. Don’t say “your license is unlimited” and then change your mind without giving options or bonuses for early adopters (it might be logic at a business level but still makes people feel cheated). Every time there’s a price increase why making statements like “we feel we deserve a chunk of your profits you make because of our products” (I’m quoting by memory your latest blog post) or suggesting “you don’t have to renew your subscription” (from a blog post comment). Customers helped YOU making WooCommerce and WooThemes popular and let earn YOU money in the first place. YOU owe something to them as well, not just good products or services, but gratitude to begin with, especially toward early adopters which brought YOU where you are now. You can’t only listen at the customers that tell you’re right – like this blog post I’m commenting to now. To me all my customers/developers are equally respectable, those who can afford spending thousands of dollars on licenses and those who make a small living on a small business – hey perhaps they’re happy. And remember, there isn’t only US or Europe, think about the developing countries where skilled IT profiles can’t earn more than 500-1000$ or so per month. Just because they don’t spend a lot in licenses doesn’t equate their business with yours or assume is bad or their market is bad, it’s just different. You also can’t assume their profit comes uniquely from Woo, perhaps they have worked a lot on your code – and since you don’t seem too keen to support customizations, then it’s something they had to work for entirely on their own.

    Let me conclude this lengthy comment with a comparison which I hope would hint you to a better and more fair business model. Gravity Forms. They have changed their pricing scheme once, yes, but they did it fast and they maintained it for very long, hinting that they did the right choice. They don’t complain with the customers about the costs of supporting them. They’re responsible enough to handle it themselves. I have no idea how many developers they have, how much they make, how much they spend. It’s not my business, it’s theirs. I don’t feel treated like the cause of their problems, like Woo does. At the same time, their only plugin comes with many addons and the cost of the whole package for the developer license (which means unlimited installs) is still lower than some of your costlier extensions. Support: their support is stellar. I had these people working on MY site on MY code that I wrote to extend THEIR plugin (and in fact even one of your extensions, something they shouldn’t have supported in the first place, yet they did and fast!). When I had similar issues with you, the answer was (after days waiting) “we do not support that”. People compare, you can’t avoid that.

    So my advice is: lower the price of your extensions (I’m not sure about themes, I don’t use them), lower the price of the subscription renewals, do not disappoint early adopters who supported your business growth from the beginning, offer them some reward so they won’t complain about the change of licenses/prices; offer paid support as an option in exchange. Improve your support management, reintroduce forums, improve KB, perhaps publish video tutorials. Try to reduce your expenses especially on support. Many customers wouldn’t need that anyway. Offer monthly/yearly subscription plans, perhaps of different types (basic/developer/priority). Most importantly: listen to your customers, even those who have written something bitter, they’re not crybabies, they’re customers.

    Reply
    • I think that these are all valid points and having read through many of the other blog posts concerning this topic, I can understand how people feel about the TOS changes. It is always tricky navigating these waters and any business is bound to mess something up along the way.

      I can also see your unhappiness about how the whole thing was handled by Woo and how one could sense that “we” are the problem for their misfortunes and not “them.” The communication made by Woo definitely could have been better — the post did sound harsh in some places.

      WooThemes has since come out with an update: http://www.woothemes.com/2013/08/an-important-update. Hopefully this will resolve the situation and make it better for everyone involved.

      Everything you’ve written is great and I appreciate you taking the time to share. You’ve definitely helped me see some views in a new light!

      Reply
  5. Actually, they’re not mad at the price hike. They’re mad at Woothemes changing the terms of service, not just the price. While they are transparent about making mistake. They’re not so transparent about making customers pay for their mistakes and this is what’s happening hear.

    I don’t pretend to understand Woothemes more than Woothemes itself, however, support is not that much of a burden when your business sells products too. I’ve written an article on my own site about someone beautifully handling support of a community one-tenth the size of Woo by himself. It proves Woothemes took the easy way out to screw customers.

    Reply
    • Tung, I disagree that WooThemes was out to screw customers and I don’t believe they’ve done anything unethical from a TOS standpoint either – this has been discussed and documented in other blog posts so I won’t go into it here.

      http://chrislema.com/pricing-lies-we-tell-ourselves
      http://www.wptavern.com/major-pricing-changes-at-woothemes

      Support can be a HUGE burden in a product based business such as themes or plugins. I know because I’ve worked support at a theme company. This isn’t the customers fault or concern by any means, but community support is definitely not easy! It isn’t easily scalable either, making the experience extremely difficult at times.

      The biggest issue I see here was about communication, but even if it had all been handled as people have suggested, there would still be issues with customers.

      Reply
  6. WooThemes didn’t walk thru the entire model, and I’m not saying they should have put out specific numbers. But with the goal of education, I would have charted out how support costs were growing, over time, and highlighted the percentage of each purchase that was going towards it’s own future support.

    Reply

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