The Biggest Opportunity in WordPress History

At WordCamp Europe in Paris last weekend, there were many inspiring people who have built a thriving business upon WordPress. For each success story, however, there were dozens more attendees scrambling to find their own way, chasing the dream of working for themselves and making a living from WordPress.

There was a general sense that many of the most profitable avenues peaked a few years ago, with much discussion about just how screwed the theme market is. The plugin market is even harder to crack, unless you have a particularly useful new idea, but it seems that almost anything that can be done has been done, and now the fight is down to who can market most skillfully and assemble the most financial firepower.

It can be tough for eager new entrepreneurs, to hear the stories of peers who hit upon success just a few years ago, but be told that they are now too late to the party, and that the path to success today might be “something, something, Bitcoin”. Luckily for WordPress, hope springs eternal and these plucky folks keep looking, they keep searching for their own big opportunity.

 

Life Turns When you Least Expect It

Today, without warning, WooCommerce owner Automattic opened the door to what is probably the biggest opportunity for an ambitious new company that I have seen in over 12 years of following WordPress. It presents not only a massive potential market but also, most unusually, the potential to get large customers committed and generating cash from day one.

WooCommerce, the creators of the most popular WordPress eCommerce platform, were acquired two years ago by Automattic, the owners of WordPress.com. The WooCommerce platform is used by millions of ecommerce website owners, all over the world, powering almost half of all ecommerce stores. It makes money by charging for extensions that add functionality to these sites. When you build a website using WooCommerce, and starting using it for real business, you are essentially locked into their platform, the ongoing cost of WooCommerce license renewals becomes simply part of the cost of doing business.

As such, there was outrage four years ago when WooCommerce announced a change to their pricing structure, eliminating the license tier that allowed you to pay more in return for permission to use an extension on an unlimited number of sites. Software providers often soften the blow of such changes by “grandfathering” their existing licenses, meaning that existing sites would have been allowed to continue on under the terms no longer available to new sites, but WooCommerce decided not to extend that courtesy to existing customers, generating considerable bitterness among those who had used the unlimited licenses to build out a large number of sites and were now facing a massive increase in costs.

The general consensus, at that time, was that WooCommerce had taken advantage of their effective lock on existing customers, changing terms that, in the general context of the WordPress market, could reasonably have been expected to remain unchanged. WooCommerce defended the move by claiming that the existing license cost could not possibly fund the ongoing cost of providing support, and many plugin sellers joined them in arguing that it was in everyone’s interests that WooCommerce remain a profitable business.

Many license holders angrily responded that they had hardly ever used support, that the reputation of WooCommerce was, in any case, piss-poor, and that any support was likely to occur early in the life of the license, that someone who had been using a particular extension for more than a few months was unlikely to need any further support. WooCommerce explained that this reality was acknowledged in the fact that annual renewals were only 50% of the original cost of the extension – your subsequent years would cost half as much as your first year.

Even with 50% renewals, people were not happy, and it is fair to say that WooCommerce provided the primary impetus behind the emergence of the dozens of GPL sites that, today, distribute paid GPL plugins and themes for free or for a small monthly fee. Such sites were always theoretically possible – and entirely legal – under the terms of the GPL license, but it was only the 2013 WooCommerce debacle that created a real market for them.

 

History Repeating

Now, today, in 2017, it seems to be happening all over again. With no prior warning and no formal announcement, WooCommerce have once again altered the terms of the deal and renewals will no longer be at 50%, license holders will now have to pay the full current cost of each extension, for each site, every year. This presents all WooCommerce customers with an immediate doubling of their expected costs.

There are no doubt many WooCommerce customers who have no problem with paying twice as much, for whom license costs are a tiny fraction of what they charge their clients for ecommerce websites. It may also be argued that, even at twice the cost, WooCommerce still represents a better overall value that competing products. It is also likely that this price increase is an almost incidental side-effect of Automattic laying the ground for a future hosted ecommerce service – if they want to charge a set amount per month for a hosted service, they have to first eliminate the loophole of users reducing their longterm costs by using the self-hosted version of WooCommerce and getting those 50% renewals.

What cannot be avoided, however, is that, for most customers, large and small, any trust they ever had in WooCommerce has now been comprehensively trashed. Any notion that, under the benign rule of Automattic, the worst instincts of WooCommerce management, that led them to screw their customers in 2013, would be restrained, that the interests of small businesses would somehow be protected, is now gone.

Again, incredibly, there has been no formal announcement, no blog post, no emailed notification, no tweet. For the vast majority of WooCommerce customers, the first time they will learn about this doubling of their costs is when they go to renew their licenses, increasing the already strong impression that Automattic want to strip away their customers’ options as ruthlessly as possible.

This is an extraordinary way for any company to treat their customers. Is this greed? Or simple stupidity? Or is this a true reflection of how Automattic perceive the world?

 

And there lies the greatest opportunity in WordPress history:

There are millions of ecommerce site owners out there, who have no choice but to keep using WooCommerce, but who have budgeted for the 50% renewal cost. Millions of business people, with money to spend, who are about to discover that their bill has suddenly doubled, and that their supplier cannot be trusted to not do the same thing again, anytime they want, with no warning.

These WooCommerce-based websites are easy to find, the owners are easy to contact. Every human has a sense of what is fair and what is not. No-one likes to be taken hostage. In this unique set of circumstances, many will welcome a credible alternative, and their motivation will be more about principle than money.

 

Grab Your Slice of the Cake

Right now, today, a unique window has opened for any ambitious person who can somehow gather together a small team of smart, hard-working people, to offer the WooCommerce extensions along with comprehensive support, at exactly the 50% cost that millions of customers were expecting to pay.

The GPL license explicitly allows anyone to redistribute code. It was, in fact, specifically designed to reduce lock-in and to discourage vendors from acting abusively towards their customers. It was designed for precisely this calibre of bullshittery.

The provider of such a service would have to go beyond the existing GPL sites and offer proper updating, the ease of updating would have to be as good as WooCommerce offers today, but that is not such a complicated system to set up, several WordPress products already provide that functionality.

More importantly, they would have to deliver support that is at least as good as what WooCommerce provides. Support is never easy, it is something that every paid plugin or theme provider struggles with, and it cannot be faked, the team would have to become intimately familiar with the full range of extensions, and there had better be some good writers on the team. In fact, the quality of support would have to be better than WooCommerce, they can get away with patchy support precisely because they are WooCommerce.

The upside would be worth it, though. This is one of those rare situations in which a major player, with a massive market, grabs for more cake and accidentally knocks a few slices onto the floor. An alternative, fully-supported WooCommerce service would be asking people to spend money they were already going to spend, for a product they already make money from. Those slices are going to be lying there, waiting for someone to pick them up. Such opportunities are rare in any business. If I wasn’t hand-cuffed to this radiator, I would be boarding a plane to Manila myself, to assemble a crack team of support staff.

About Donnacha MacGloinn

Donnacha has worked online for 20 years and been part of the WordPress community for 12 years. His latest venture RedPen.com helps your website to make a better impression by automatically sending anything you publish to human proofreaders, so that they can alert you to any mistakes you might have missed.

34 Responses

  1. Kobe
    Kobe June 21, 2017 at 14:01 | | Reply

    As far as I know this as only very recently announced, so kudos for writing this up so quickly.
    A substantial prices increase was recently noted at EDD, too, which makes this article even more accurate.

  2. Igor
    Igor June 21, 2017 at 14:45 | | Reply

    Well, we’re ready to pick up some of those cake slices up. Give https://www.magictoolbox.com a try. We’ve been in the market since forever and our support is what makes people leave those good reviews 🙂

  3. Daman Jeet
    Daman Jeet June 21, 2017 at 15:11 | | Reply

    That’s an insightful article. As someone who leads WooCommerce support at XLPlugins , it’s the hardest nut to crack. I am sure that some gateway is open but owning a code base is like nurturing a child. It’s just difficult when it’s someone else. Reality would strike when a customer comes back and enthusiastically ask supprort “What’s next?” 🙂

  4. Kenny Eliason
    Kenny Eliason June 21, 2017 at 20:05 | | Reply

    Dude, bravo on an incredibly well written post 👏🏼👏🏼👏🏼

    It’s interesting what will happen to people once money is involved. They care less and less about the consumer and more on the bottom line.

    Your points on a woo takeover are stellar. Let’s both get tickets to Manila ASAP.

  5. Stephen Pate
    Stephen Pate June 22, 2017 at 00:01 | | Reply

    Alternatively, the reality is that Automatic realized the current pricing model is not sustainable and the increase is justified Supporting old code is very expensive, usually at high multiples of the original development cost. At some point, the technology has changed sufficiently that the code must be re-engineered.

    Most things of lasting value, certainly economic value, have real costs. People making money have to expect costs.

  6. Jon Brown
    Jon Brown June 22, 2017 at 05:52 | | Reply

    Soo… one of the many conclusions that can be drawn here is that WooCommerce/Automattic can’t compete with Shopify on cost. Woo is now _more_ expensive up front AND more expensive on a recurring basis than Shopify, while also having a poor site owner/service buyer experience.

    I won’t go as far to call that another nail in WP’s coffin, but it’s not good sign for the broader WP ecosystem.

    I think the real opportunity here is to build a breaking fork Woo that fixes the mess. The problem with a SASS that came bundled with “all of WooCommerce’s extensions” is you’d be the one on the hook for support the mess that is WooCommerce extensions.

    1. Ahmad Awais
      Ahmad Awais June 22, 2017 at 14:48 | | Reply

      Hey, Donnacha!

      You have written an insightful article! I appreciate your candor here, though, somewhere a bit too much of it — but that’s given with a Woo’s current status.

      I also happen to strongly agree with Jon on this one.

      Here’s a fact! I spent an entire month, back at the end of 2015 — reviewing a possibility of WooCommerce’s SaaS. I did a lot of research. What I had in mind was a WooCommerce fork (hint: not all PHP but a little help from NodeJS and serverless framework obv. to reduce the cost and deliver a better exp.), after the ideation phase, and discussion with a few industry veterans, — the thought of investors and partnerships came to mind.

      But all of that ended with the cost of supporting such tech. That’s where it all broke apart, and I never really pursued the eCommerce niche.

      Probably, the same issues at that time — though it might be a bit worse this time.

      Safe to say, the initial business learning curve for a team is way too much for new or even existing businesses! As they say “That’s where the gold is!”

      Anywho, it was a good read! I read a few comments and will keep a keen eye on what happens after this move from Automattic.

      Cheers!

  7. Syrehn
    Syrehn June 22, 2017 at 08:37 | | Reply

    Well said Donnacha.

    I seriously wish this was being talked about more. I hate that it’s going hit unsuspecting store owners with a surprise right hook.

    I’ve said it before and I’ll say it again, I have no issues if they need to change their model (even if I don’t agree with it), however they shouldn’t be attempting to change the purchase agreements for established customers. Grandfather them in.

    The 0 warning that this was coming (no emails, blog posts, tweets, etc.) is what really grinds my gears. The attempt to sneak it in on unsuspecting customers who have auto-renew turned on makes my blood boil. Woo/Automattic could put someone in a serious credit card crunch if all of a sudden they get an auto-renew for say $1000 that they weren’t expecting; depending on the amount of plugin renewals.

    To me this is not only unethical and unprofessional but possibly illegal, as they’re attempting to change established purchase agreements; similar to the 2013 fiasco. They were wrong then and had to backtrack and they’re wrong now.

    This just further tarnishes an already poor reputation.

    I’m not going to lie, this has me seriously considering using something like GPL Vault for my personal sites. I’m cancelling all my auto-renews. I rarely, if ever, need support and most of the time when I contact Woo about a plugin it’s to submit bug reports.

    Their current support is abhorrent and I don’t believe this change is going to fix that; that’s what the 2013 change was supposed to do. Doesn’t seem like much really happened on that front so I’m not expecting miracles here.

    I’m currently in the middle of an on-going support ticket with them about this issue. Warren is now offering to honour my 2 most recent renewals but “all other licenses going forward will renew at 100%” because I’ve been a long-term customer.

    Seriously, it’s like a slap in the face and rage is real.

  8. Brad Griffin
    Brad Griffin June 22, 2017 at 09:05 | | Reply

    This last year with WooCommerce has the phrase “Mental Health” written all over it.

  9. C. Wagoner
    C. Wagoner June 22, 2017 at 10:49 | | Reply

    Awesome. We really need to kill the “Split GPL” licensing that so many companies are doing these days. If Automattic does this with WooCommerce then we’re all screwed.

  10. Melanie A.
    Melanie A. June 23, 2017 at 06:56 | | Reply

    Wonderful article. I own several of those unlimited site licenses and like you mentioned plus others with a yearly renewal and on the rare occasions I asked for support it totally sucked and lasted weeks. That is why others have built businesses around support for woo like https://woobetter.com/ and wooguru.net.

    Yesterday, in a private Facebook group we were having this very discussion. I lamented the fact that Woocommerce needed a competitor to either force them to do better or to stop their tyrannical ways.

  11. Frank Gomez
    Frank Gomez June 23, 2017 at 08:29 | | Reply

    Hate WooCommerce, Love ECWID. WooCommerce is specifically designed to force you to install more and more plugins. Why encourage that behavior?

  12. Bob Richardson
    Bob Richardson June 23, 2017 at 09:58 | | Reply

    I almost never use support and find most answers with a Google search.

    I would like to see a new model where you split the price of a plugin. A lower price for the plugin only (no support) and a separate price for a support package.

  13. M Asif Rahman
    M Asif Rahman June 23, 2017 at 15:19 | | Reply

    Donnacha, I understand your feelings, and frustration with what’s happening overall. I personally was one of those grand-fathered account owner who used to have lifetime update and support type account at *WooThemes*. They gave us 2 year to breathe, now all removed. This sudden and not well-communicated decision will put a lot of people in a lot of stress. WooCommerce is cheaper than its alternative, still its one of the most costly niche in WordPress, and I have seen, heard and experienced, WooCommerce is not very affordable for many many people already. And this increase will going to hurt them even harder.

    But, here is my issue with your suggestion – even when you could do this very legally within GPL, but still this is very wrong. If I am a developer of something (plugin or a sub-system like WooCommerce itself), as I could release it for free in GPL, again I have the right to make it cost like $1M for say for a single domain license. I have that freedom as a developer. If I created this, it does not matter how many normal people need this for free or this might come handy to save their life, If I want I could choose to make it cost how much I want. Sure that will be hard for a lot of people, and they can’t get benefit from that code, but maybe I don’t care. That makes me a different person, but not wrong.
    Many people pirates software or song or movie, saying they can’t afford the price. But see its very wrong base of logic. Maybe that product worth that much to the developer.
    Forking a product, and claiming to become their official support is wrong.
    I think the main wrong doing is done by Automattic here is increasing existing user’s price. This is very wrong. If I brought a product and signed up a renewal subscription at 50% price, I agreed on that 50%, I clicked “I Agree” for that, now you can’t change that. When you go ahead, and keep things in your detail terms, like you could change your price anytime and put that in effects, you are just as shitty a company like many of those Silicon Valley venture backed, where you main matrix is ARR, and how much return you are generating for your investor, without considering customer satisfaction.

  14. Hashim Warren
    Hashim Warren June 25, 2017 at 06:08 | | Reply

    Anyone who follows your plan will soon learn what Woo is discovering: support for self-hosted ecommerce software is expensive.

    What’s an edge case bug and what is user error?

    When do you log in to the user’s site and when do you send instructions?

    Users have their own custom setup, which is hard to support in a way that scales. And a problem means less sales every minute, so every support ticket is an emergency.

    The opportunity here is to build a new ecommerce plugin.

  15. Hashim Warren
    Hashim Warren June 26, 2017 at 05:06 | | Reply

    Donnacha,
    Thanks for your thoughtful reply. I should have read the other replies first – many are saying the same thing but better.

    Let me add – self hosted by not be the answer. Salesforce is self hosted but it’s still “consultingware”, software so complicated you need a consultant to customize the way you like.

    I don’t have answers to the problem.

  16. KevinMuldoon
    KevinMuldoon June 27, 2017 at 05:40 | | Reply

    First off, great article Donnacha. I fully agree that there is an opportunity for a business to come in. I’d also argue that the market needs it as WooCommerce has a monopoly now and the sheer number of themes and plugins available for WooCommerce means that shop owners are unlikely to use alternatives.

    I posted a long comment the other day after you first published this, but looks like my phone didn’t submit the comment correctly. Hopefully I’m not too late to the discussion now 🙂

    I think you summed this whole thing up when you said it was history is repeating itself.

    From a business point of view, WooCommerce have never did anything wrong. From an ethical point of view, they have been acting like assholes since day one (I’m trying to think of a more polite way to put this, but I can’t think of one).

    The plugin started off by ripping off JigoShop and stealing their developers. They did not add anything to JigoShop and simply used their market position to promote the plugin more effectively.

    WooThemes, who are now WooCommerce, decided that lifetime commissions were not suitable for them, so just closed down their affiliate program without warning. This resulted in them screwing over people like myself who had been promoting them for years. I lost thousands of dollars over this decision (possibly more) and the way they handled it all was poor to say the least.

    It’s not like customers have had an easy journey either. WooThemes customers who had purchased unlimited licenses were told that there licenses were in fact extremely limited and they had to pony up more cash to continue to use the products they had paid for. Once again, it was handled badly with customers never being consulted over it.

    The justification over the decisions to raise prices again and again is always support. They stress that support is expensive yadda yadda yadda. However, if you look at the comments on WP Tavern regarding the latest news of them doubling renewal costs, there is a large number of people stating that they need to wait three or four days for tickets to be responded to, so it is hard to justify additional fees when existing support is so bad.

    I had a short discussion about this whole thing with Syed from WP Beginner on Twitter.

    He said “Every SaaS product you use have normal renewals … if the ROI doesn’t justify the regular price of an addon then idk what to say.” and then noted that “prices should be based on value”. (see the original tweet at https://twitter.com/syedbalkhi/status/879441932484845568).

    This whole viewpoint is based on the assumption that every shop owner generates millions in sales every year. That is simply not the case.

    Value is subjective.

    If you run a large store, then WooCommerce plugin fees may only represent 0.5% of your total expenses. Seeing prices double isn’t going to be a big concern for you.

    If you run a small shop, then this latest price hike could kill your business.

    Your shop may only generate $10,000 per year so seeing your total costs go from $500 to $1,000 is a big deal. Particularly when you are getting the same sub-par support for it.

    With regards to how Automattic takes WooCommerce forward, I suspect it will be more of the same. We have seen renewal costs go from 50% to 100%. What’s stopping them raising prices again next year by 10% or 25% or even 50%. If there are no other options for shop owners, people would be forced to pay them.

    We can complain and complain, but until there are alternatives for shop owners, they are going to have to do as they are told.

    Perhaps a large company needs to fork WooCommerce. Perhaps someone just needs to fork their most popular WooCommerce extensions.

    Or perhaps the WordPress community needs to start actively supporting other shopping plugins.

    Developers will continue to develop themes and plugins for WooCommerce because so many people use the plugin. This leads to WooCommerce getting a larger market share and subsequently more people tying themselves to WooCommerce.

    I’m not sure what the solution is, but I know that we can continue to complain about all of this until we are blue in the face and Automattic won’t change their strategy for WooCommerce.

    Stuff it, let’s start supporting those GPL club websites that offer premium plugins of others at a reduced cost 🙂

  17. Bjørn Johansen
    Bjørn Johansen June 29, 2017 at 02:16 | | Reply

    If I were to setup a competing shop, I’d have *higher* prices than WooCommerce. Would try to sell on premium support to attract customers who knows their shit, instead of those ITDOESNTWORKYOUBROKEMYSITEWHAAAA when what happened is their hosting company but them on a .NET plan instead of PHP.

    Oh, and I would try to find a way to pass down a fair share of the income to the developers, since my business would be built upon their work and my future would highly depend on them maintaining the software.

  18. WooRefugee
    WooRefugee June 30, 2017 at 20:43 | | Reply

    I read this article 7 days ago. 48 hours later I had completed our website. And now I am off to Manilla to assemble a crack team of WooCommerce Support Staff. Great idea! If you ever need a job, drop me an email…

    Oh and btw; Totally not joking here… Seriously! I am literally doing this right now. I had some free time on my hands and thought why the heck not! Manilla here I come! 🙂

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