So, you’ve made the decision that you will build the next great WordPress plugin — what’s the best way to prioritize dollars? Spend more resources on plugin development? Or on your message?
One perspective was recently provided at WordCamp Orange County by WordPress Industry leader, Chris Lema. I encourage you to watch the business track panel here:
In short, this one quote sums its up pretty well.
— WordImpress (@WordImpress) July 10, 2016
I have a somewhat different perspective. The notion that 90% of your time is spent on messaging is misguided. For startup plugin developers and agencies moving from selling services to building products, I’d swing a bit differently and focus more on crafting the code.
After a deep dive into the last eighteen months of Give’s finances and more than 10,000 active installs, I’d suggest that the formula for plugin developers and those moving from services to product is the following:
“Focus 60% of your resources on product and 40% of your resources on messaging.”
Before I get into the data, here are a few conditionals, based on our eighteen months of operating Give.
- Though I consider myself an entrepreneur, at WordImpress, my day-day would like be termed “marketplace analyst and financial forecasting.”
- I spent nearly a decade at a mid-size integrated marketing agency before Devin and I founded Thought House and created Give.
- Time is a billable resource for messaging and development.
- I have two amazing partners and am blessed to have an incredible team, too.
- And finally, I agree with this statement by Mr. Lema 100%
“Success of business is not connected to your competence. You could be the most incredible, exquisite specialist and if you cannot interact with people to make a commitment, your competence doesn’t matter.” Chris Lema
So it’s September 2014 and we’re doing client work in our office (metal warehouse without AC), Devin, my partner, came to me with a concept.
He shared that we should begin migrating priorities from services to product. Having been schooled in services, I was somewhat trepid. However, he knew a problem we could solve and that got me excited. Plus, who wouldn’t want to help nonprofits? It’s a dying wish for any Liberal Arts major from Butler University. Learn about Butler and their kick-ass service learning approach to education here.
“I don’t want to hack WooCommerce anymore for our clients to accept donations on their website. Let’s build a plugin just for Causes to accept donations through WordPress.”
I trust Devin; we’re partners. I said, let’s go!
On initial planning, Devin had been involved in WordPress for over four years and actively knew how to take this challenge on. After some thought and discussion we landed on Give. I wouldn’t go so far as say no time was spent on the brand name, but the genesis from a very simple premise — let’s just solve a problem — allowed us to come to terms quicker with our purpose. We also needed another partner to round our team. We were blessed to find Matt Cromwell and got him over to our team, too.
“Just solve a problem with your plugin and you’ll be fine.” – Devin Walker
Looking back and learning from our data, from September to April (we launched April 8, but didn’t get steam till June-ish), here’s the breakdown of resource allocation:
Based on resources and budgets, looking back up to launch, we see the following:
- A total of $40,400 was spent on messaging up to launch or 36%
- A total of $73,000 was spent on Product development or 64%
Other items to consider:
Marketing is not a given, it is a skill. Having spent nearly a decade working on brands who serve different sectors and audiences, I have been part of more than a dozen brand builds.
If you’re new to WordPress, likely, you’ll have to spend more than 15 hours working on research. We identified a problem, based on our day-day reality of being immersed in the community.
We did as much as we could internally.
NOTE: any Brand launch at my old firm would require around 70K in billing, which would bring our percentages to 45% of allocated resources against budget.
“Product is always the biggest priority, but it won’t get you across the goal line. Marketing will.” – Jason Knill
We desire to build brands across many sectors which are sustainable, improve lives, and support our families. It is important to us that we maintain our business without outside investors and reach our desired profitability, based on our rolling six month financial forecasting. To do this, we had to rely on organic and grassroots marketing, more than an ad spend. We internally bill that organic marketing at $100/hr.
Here’s the breakdown of the first six months.
Give: First 6 Months:
“Supporting your customers well gives you the best data on how to improve your product, as well as the best testimonials for your marketing.” – Matt Cromwell
I cannot underestimate, as a forecaster, the time that Matt Cromwell spent developing relationships in Advanced WordPress or the time that Devin spent building his other successful reviews, maps, and WooCommerce plugins. Without this, we likely would have had to spent considerably more (maybe 50%-100% more in energy and cash) on this brand building thing and sharing our “why.” That being said, here’s the math.
- Total Spent on Messaging over the first six months: $56,500 or 50%.
- Total Spent on Product over the first six months: $56,400 or 50%.
November 2015 – April 2016:
It took us a few months to get centered and gain momentum, but it happened, as expected. Then, we went back into a development cycle to try and get our large Add-on, Recurring Donations, out by year’s end. While this was happening we continued to invest into development of our current product in addition to new Add-ons. We also hired a full time marketing manager.
From November 2015 – April 2016, the following breakdown represents the expenses in our business.
Give: Nov 15′-April 16′
- Total Spent on Messaging was $52,700 or 37% of our budget.
- Total Spent on Product was $89,200 or 63% of our budget.
May 2016 – Today
Today, our support expenses have nearly doubled and our product development budgets continue to grow congruent to those support costs. Our marketing costs are under control, but with large plans to play a bigger role in WordCamps in 2017, those investments will grow faster than support and development.
Additionally, with a new implementation partner program in the works, account management will begin factoring into our “Messaging versus Product equation”, skewing Messaging (including AM) higher. All that being said, here’s our expense numbers for Give, in the first 18 months.
- Total resources on Messaging: $149,600 or 40%.
- Total resources on Product: $218,600 or 60%.
Product Development and Craft Beer
Over the weekend, I went to Bottlecraft and spent $60 on four six-packs of Ballast Point.
On the way, I ignored all of the billboard ads about “We’re not backing down” and “Not a Fad” by Budweiser. I went with quality and taste — because that is what matters most.
This is why an Anheuser-Busch competitor, Constellation Brands, recently bought Ballast for $1 Billion — because of their messaging and their product.
That’s craft at its best. Be more like Craft Beer.