Is There a Future for Small WordPress Businesses?

The past few months have been riddled with acquisitions in the WordPress space. This past week we saw two huge ones with LearnDash becoming part of StellarWP (Liquid Web) and Sandhills Development selling all its plugins to Awesome Motive. Is there a future for smaller WordPress businesses with all this consolidation happening around us?

The past few months have been riddled with acquisitions in the WordPress space. This past week we saw two huge ones with LearnDash becoming part of StellarWP (Liquid Web) and Sandhills Development selling all its plugins to Awesome Motive.

Both of these are huge acquisitions with the latter causing more concern than the rest. More on that later.

Right now, my question is this… Is there a future for smaller WordPress businesses?

The Fragmented WordPress

WordPress as a platform has always been fragmented.

As a new user, you need to find a hosting provider, pick a domain name, buy both of those, then figure out what this thing called WordPress is and how it works. Once you’ve done that, you need to search for and buy a theme, but that doesn’t do everything you need, so then you need to search for and buy plugins.

But what if they don’t all work together?

How do I know who’s a trustworthy developer/seller that I should buy from?

How has a “simple website” turned into days and weeks of research before I even get anything up?

That’s pretty much been the real-world situation for new users who aren’t developers. For developers, on the other hand, it’s been a constant battle to find the best plugins that are in it for the long run, extensible, and so on.

They would build a site for a client and then a plugin update takes it down. Now they have to reach out to a plugin developer to find out it’s likely a conflict, so they have to contact yet another developer.

It might work right now, but it’s fragmented, to say the least.

The Structured WordPress

This is what hosting companies (GoDaddy, Liquid Web, Automattic through WordPress.com) and the likes of Elementor Cloud seem to be after. An end-to-end hosted solution that doesn’t necessarily rely on “WordPress” in terms of marketing but uses it under the hood to power their custom all-in-one solution.

It makes sense for the user – they just need to pick a solution and the experience of building their website becomes a smooth, singular process with minimal interference from anywhere else. Each solution will offer the extensibility of WordPress and all the benefits that come with that but solve the problem of needing all the constituent parts.

It sounds utopian, but it’s already in existence in different forms. The solutions I mentioned earlier are a work in progress that look like they could become incredibly powerful and successful in the coming years.

The Future of WordPress

As a Platform

Currently, there seem to be two paths that new users could choose from in the future. The Do-It-Yourself method which we’ve seen for the past few years and the hosted version which you’d get when choosing to work with a hosting provider or builder.

Whether one will win out over the other and whether the two can co-exist at the scale they’re at today is yet to be seen.

As an Industry

This is where my personal concerns lie and I don’t have an answer yet (and neither does anyone else, in truth).

Over the past couple of days, I’ve had many questions of my own pop into my head apart from the ones I’ve seen on Twitter, Post Status Slack channels, and so on…

  • How can small shops compete with hosting providers that offer the same product as part of their built-in offering?
  • Is the future for smaller plugin developers all about building a big enough user-base and revenue stream that it warrants an acquisition and a big pay-day?
  • Is there enough potential for failure in some of the product acquisitions that it opens up opportunities to “fix” that niche with a better alternative?
  • Is there room for many stand-alone plugins to become as successful as we’ve seen them become over the past decade or will they only be one-off successes?

An Unfair Advantage?

Going back to what I said in the introduction, Carl Hancock’s tweet sums up my concerns:

I’ve read about Pippin’s reasons for selling and even personally congratulated him on his decision. He made the right choice for himself and I completely understand the reasoning. On its part, Awesome Motive has made a huge move that made a lot of sense for the future growth of their company.

This change in ownership could lead to a lot of improvements being made to Easy Digital Downloads, AffiliateWP, and so on. After all, with alternatives like Freemius out there that have high fees and some limitations in running affiliate programs, handling automated email reminders, and so on, this could be a net positive for the industry standard of software used to sell and market WordPress products. Everyone needs to step up their game.

However, Carl’s tweet is exactly what I thought the moment I read the news. Here’s why it’s concerning…

  • Awesome Motive acquired Plugin Rank, giving them access to a lot of data about the WordPress plugin repo, how different plugins are performing, which ones are struggling, potentially also “why”, and so on.
  • Through their latest acquisition of EDD and AffiliateWP, they now own the two pieces of software that the vast majority of plugin sellers use to sell and market their products. Along with that comes quite a bit of data on how those products are being used and how they’re performing.

Elaborating on that last point, if you’re using AffiliateWP’s payouts service, I believe some of that data may be visible to the product owner. As for EDD, if you’ve opted into usage tracking, there are a few things that are tracked that can be used in market research. Getting to sales data, EDD doesn’t track that directly in any way. If you use the Stripe Connect integration though, I believe that might then share certain sales data only on orders that are processed through that gateway.

(If any of the above is inaccurate, let me know in the comments below and I’ll update it accordingly.)

This potentially gives one company access to information about the WordPress market as a whole that no one else has and, in my opinion, no one person/company should have. It’s like Freemius using their data to go and build products that will compete with whatever sells the best on their platform. Perhaps it’s less obvious since EDD and AffiliateWP aren’t full-on SaaS solutions like Freemius is, but just having the opportunity to access and use that data is a concern in itself.

This brings up even more questions…

  • Should anyone even bother competing in this situation?
  • Will the potential improvements to EDD and AffiliateWP make all the above worth dealing with?
  • Are there alternatives to EDD and AffiliateWP that are just as cost-effective and powerful?
  • Should Freemius be looking at lowering its fees and improving its offering to take advantage of any uncertainty?
  • Should sellers be looking at self-hosted alternatives who have no intention of competing in the WordPress space?

Alternatives

It’s worth mentioning that there are alternatives to these solutions. As a point of reference, here are a few that I have personally used or researched.

SliceWP – an AffiliateWP alternative that is WordPress-based.

Impact or Shareasale – AffiliateWP alternatives that are not WordPress-based.

Freemius or WooCommerce – EDD alternatives that are also WordPress-based solutions.

Chargify or FastSpring – EDD alternatives that are not WordPress-based.

We personally use EDD, AffiliateWP and Freemius for our products.

Whether that will still be the case in a year or two is still to be decided.

Why Is This Happening?

Those selling plugin businesses right now are mostly WordPress OGs who have been around for a decade. Entrepreneurs like these need new challenges and they all reach a point where they don’t feel like they can contribute any further to a project’s growth.

Some lose their passion for the industry or for their product and decide that they need a new personal challenge. All of these are valid reasons to move on and acquisitions are probably the best solution to keep most of the team and their users happy (and employed) in the long run.

WordPress as a platform on its own is currently too fragmented to compete with solutions like Shopify and Squarespace. That’s why we’re seeing the introduction of Gutenberg, blocks, full-site editing, and so on. That shift appears to be a net positive for everyone.

Single companies will create their own platforms that users will easily familiarise themselves with, probably without any mention of WordPress. This will give them the freedom to create what they want, just the way they want it.

The likes of Automattic, Liquid Web, Elementor and so on will become the main choices for news users. It simplifies the onboarding and takes away the complexity that has caused WordPress to no longer always be the go-to solution for a quick site build.

Is There a Future for Small WordPress Businesses?

Once again, I have more questions than answers…

Can smaller companies survive for more than 2 to 3 years with the current way of doing things?

Can smaller businesses compete with large companies that have huge budgets and teams of experts?

Even if one can build a better product, do they have the marketing power to reach enough potential customers and make their investment profitable before it’s too late?

Is it time for smaller businesses to turn their focus towards growing their business with the sole aim of getting acquired in a year or two and “cashing in”?

Should small businesses be looking at becoming the go-to seller for a particular niche of products that these larger “one-stop-shops” won’t have the time or desire to work on?

Looking beyond standalone companies, what about the WordPress community as a whole? Will opinions and perspectives remain as diverse as they have been in the past or will these acquisitions create a few schools of thought that will become the most powerful voices, drowning out the rest?

Or… Should one be looking outside of WordPress altogether?

On a Positive Note

This could be a time to innovate and invest in the future of WordPress. It’s risky, perhaps more than ever, but it could be well worth your time (and money).

You could build something completely new or just take a new approach to an existing problem. Differentiating yourself from the existing, larger solutions out there will be key if you choose to do this, but again, it can pay off nicely.

There are big pros and cons to all of this. So many opinions, thoughts and options.

At the end of the day, following Brian Gardner’s advice may be the best way to take a step back, reflect on what’s going on, and figure things out for yourself…

Update: I reached out to Brian about this tweet and he has since confirmed that it was not in reference to anything WordPress, but is still an applicable lesson to us all.

Mark Zahra
Mark Zahra
CEO at RebelCode, the team behind WP Mayor, Spotlight, WP RSS Aggregator, and the Mastermind.fm podcast. Follow me on Twitter @markzahra.

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14 Responses

  1. Having moved out of WordPress myself (aside from being a normal user, running my own blogs on it) a few years ago, I can empathize with Pippin’s reasons for selling. It’s never easy to let go of a successful business, even if there is good money to be made in selling it, and I’m really happy for him. I remember when Pippin was just starting out in WordPress, and he’s been a massive positive influence on WordPress over many years, putting a lot of energy into not only building his products but also educating thousands through his articles on development and later his insights on running a WordPress business. He deserved every bit of success while running his businesses and the handsome payout one gets when selling a company of this scale.

    I happened to write some of my thoughts on WordPress last year, so check out that article for my opinions, which remain relevant today.

    While the streak of acquisitions we’ve been seeing in the WordPress space are to be expected, they are also a sign that the space has changed a lot over the almost two decades since WordPress’ inception. Particularly the last 5-10 years have seen accelerated growth. Leaving aside any emotional reactions one might have, I think it’s important for everyone involved with WordPress to be clear on what WordPress is nowadays and where it stands in the grand scheme of things.

    For that, we need to start with an understanding of the web’s history and where WordPress fits in. WordPress caught the wave of the transition between Web 1.0 and Web 2.0.

    Web 1.0 refers to the read-only, static, version of the internet, where there were relatively few sources of information and there were high barriers to publishing your own content and obtaining visibility. The web in those days was just an extension of traditional one-way media like TV and radio.

    Web 2.0 changed everything, and it became known as the read-write web, meaning that now we could interact with things on the web and more importantly publish our own content. That’s where WordPress and other similar open-source projects came in. WordPress eventually came to dominate the open-source blogging and CMS market.

    At that point in time, it was very cool to have your own website or blog, and people were relishing the prospect of being able to share their thoughts online. The revolution was huge, and we saw a big shift in information decentralization, moving from the big-money media to independent small publishers and individual bloggers. Knowing HTML and CSS as well as your way around domains and hosting was a badge of honor, this stuff was very cool back then.

    Over the years, however, many of the ideals that WordPress and Web 2.0 stood for were lost by the wayside. Users started preferring the ease-of-use of centralized platforms like Facebook and Instagram, and web blogging itself went into a decline. Of course, WordPress moved beyond being just a blogging platform, and the addition of e-commerce capabilities made it a very nice all-rounder tool. However, it also lost its way for a few years (more on that in my blog post) before the big push for Gutenberg in a last-ditch attempt to stay relevant in the publishing space when faced with formidably polished publishing interfaces by Squarespace, Wix and other hosted platforms. Only time will tell whether this move was even successful, as the Gutenberg plugin is literally one of the most hated plugins I’ve ever seen, with an overwhelming number of 1-star reviews in the WP repository as of today.

    In any case, I think that WordPress is by no means the web darling it once was. The spate of acquisitions we see happening definitely increase centralization and move away from one of the core ideals that the early WordPress community espoused – that of decentralization and power to the small guy. Let’s remember that WordPress enabled thousands of young web enthusiasts from all over the world to make a living online and even start their own web businesses selling themes, plugins or related services. In those early WordPress years, it was one of the only avenues for geographically or financially disadvantaged people to get out of the rut they were in. It was definitely a lifesaver for me and I will forever be grateful to WordPress as an open-source project and the wonderful people I met in this community.

    Now, the big deal is that we are moving towards Web 3.0. It’s already happening, driven mainly by the invention of Bitcoin, which paved the way to more expansive blockchains like Ethereum that enable smart contracts, decentralized finance and even governance structures through DAOs.

    In many ways, I feel the same about crypto and Web 3.0 as I did when WordPress and the shift to Web 2.0 happened. The focus is again on the principles of decentralization, permissionless access, censorship resistance, as well as the new ideas of monetization and privacy.

    For the technically-inclined, here’s a nice overview of Web 3.0 architecture. If you haven’t yet dabbled with Web 3.0 apps and want to know more, it’s a great read. It requires quite a paradigm shift and from a development standpoint, I feel that it’s a bigger leap to make compared to the one we made from Web 1.0 to Web 2.0.

    Zooming back into the WordPress space, I do believe that these acquisitions are not great news for product owners in general. In this particular case, there are the specific hazards that Carl Hancock and Mark mention. This is one reason why I feel that the WordPress space has grown a lot but at the same time remained very immature in certain areas. The lack of an official plugin store (app store) has driven almost all premium plugin developers to use either EDD or Freemius. These two businesses in turn become excellent acquisition targets, and if you’re worried about the EDD acquisition, wait till Freemius gets acquired. The latter is a hosted service, so they hold all the important data and metrics on their end, and they’d be visible to any company that acquires them. The founders of Freemius are friends of mine, and again, they provided a sorely needed product in the WordPress space, and worked extremely hard at making it a success, but this big danger remains in the case of an eventual acquisition, which in my opinion is only a question of time.

    Now, whether you like it or not, the future of WordPress involves many more acquisitions and centralization. With the big players getting bigger, it is undoubtedly harder for the traditional single web enthusiast or developer to develop a product that generates meaningful income. This is not something new, however, it’s already been the case for several years. There will be success stories, but they will be fewer and further between.

    The first decision you need to take, in my opinion, is whether you want to be in the WordPress space at all. As I mentioned, personally I find Web 3.0 much closer to my ideals and so I’m devoting my time there. You could also be building apps for Shopify or other platforms, or building a SAAS. I don’t see any special advantages in building a WordPress business over some of the alternatives I mention. It used to feature a lower barrier of entry technically and financially speaking, but I don’t think this is the case anymore.

    If you still love WordPress and feel strongly that you want to build products for WP, then perhaps it’s time to focus more on building businesses that are “built to sell”, as Pippin himself mentioned in his announcement post. You might want to think twice about building a competitor to EDD, Yoast SEO, AffiliateWP, and other major plugins, because it’s extremely hard for you to compete. Instead, you might want to focus on businesses that the big companies in the space will find interesting as an acquisition target. That will provide you with a potential big payday as well as a very probably job with a successful company should you accept that proposition.

    I hope this was helpful, as always I like to be honest about things with no bad intentions. I am really curious to see what’s in store for WordPress in the years to come, and as a user I hope it remains a major player as a publishing tool, not only in the much-touted market share, but in actual functionality and ease-of-use. Who knows, maybe WordPress also somehow crosses over to Web 3.0 as well.

  2. This article landed in my Google discover, and I greatly thanked for that.

    This post predicts far beyond what I think WordPress will be in the future.

    However, I do agree how difficult it is to find a reliable official plugin that I can rely on for lifetime.

    I view this as a regular user, not a developer.

    Elementor is great, but Guttenberg seems reliable as it is officially from WordPress.

    Full site editing seems promising, but it is way to difficult for a starter. Besides, I don’t see a promising future of it.

    1. Hi Aliv, I’m glad to see the post doing well and making the rounds. The more thoughts we can gather and discuss, the better for everyone. Long-term reliability is definitely an issue for WordPress products, so I believe the block editor and full site editing will be a welcome base for the future of WordPress as a whole. It needs more time though. Just like the block editor took a couple of years to get to where it’s at today, full site editing probably needs the same kind of time-frame until it becomes what it’s meant to be.

  3. Thanks both Mark and Jean for such a thought provoking article.

    It’s really well balanced and fully in-line with the same questions I have swirling around in my head right now. I’m trying not to think of it as a potential fork-in-the-road as that sounds dramatic but it is hard to avoid such a thought process.

    I’ll be continuing to follow your observations with interest

    1. Thanks, Brian, I appreciate the comment. Even though it may seem like a fork in the road, I think there will still be enough commonalities between the two potential futures of WordPress that will tie them together. No single solution/provider will cover every potential aspect of a website that users and customers may want, and that’s where the opportunity lies for smaller creators and entrepreneurs.

  4. I’ve been working on building up a suite of tools to help agencies manage multiple WordPress sites, but I’ve been feeling like this is something that was much better suited to be built years ago. We’ll see if I’m wasting my time or not as WordPress becomes more centralized.

    1. Thanks for sharing, Russell. If an agency doesn’t want to rely on a single provider, there’s probably still room for such a tool.

  5. Thanks for the article. Some of the questions you have asked definitely made me stop and think. I personally think small businesses should focus on a particular niche and aim to become the very best at it. This will enable them to focus their time, energy, and resources on growing quicker in that specific space. Trying to offer too much could make it difficult for a small business to compete with the larger companies with more resources and budgets.

    1. In the long term, that seems to be where the best opportunity lies for smaller creators, especially those who don’t want to grow into larger companies with multiple employees. Be it a solopreneur or a couple of co-founders, smaller teams have their own advantages that they can focus on going forward.

  6. It can be difficult for any small or startup business to establish a strong web presence. It can be a severe problem because having a solid online presence can come at a cost in terms of money, time, and effort that they cannot afford. As a result, WordPress is the simple and obvious solution to all of these issues.

    You explained it in a significant way. Thanks!

    1. Thanks for chiming in, Andy. Which part do you consider to be simple in terms of building a strong web presence within the WordPress product industry?

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