Elementor Talks #54: How to Monetize WordPress Plugins

Vova Feldman from Freemius talks about the challenges WordPress developers face when trying to build a business around their product. We also discuss how developers can optimize their holiday campaigns and differentiate themselves from their competitors.

Vova Feldman is the founder and CEO of Freemius — a monetization, analytics, and marketing automation platform for digital product developers. Freemius enables developers to start selling WordPress plugins, WordPress themes, and SaaS (software as a service) directly from the WordPress admin dashboard.

Vova is a well-known figure in the WordPress community, as well as a passionate entrepreneur and professional developer since the age of 14. He holds a double major, BSc in Computer Science and BA in Math.

01

How Freemius Helps WordPress Developers

Working in WordPress open-source environment requires a certain mindset, which not every developer manages to develop — how to monetize your product and building a business around it is the main challenge. How does Freemius help WordPress developers achieve this goal?

“Indeed, in our ecosystem, when we are kind of powered by the GPL license, it seems to be more challenging to build a business around that. Because there is always the risk that someone will come in and actually use your code as a base for starting a new competing product. So you always have the challenge. But on the other hand, and this is why I think there are so many new products and new businesses coming into WordPress is because of their potential.

So you have this huge potential, 35% of the web. It sounds pretty lucrative just to think about, ‘Okay, potentially I can target every third website online.’ And that’s a huge market. So this is why more and more companies stepping into that space in relation to Freemius. I’ll quickly explain what Freemius is so the audience will understand what we’re talking about.

Basically we provide all the technical infrastructure that is needed to run a plugin or theme business like accepting payments, subscriptions, affiliation, card recovery, managing licenses, etc.

Freemius is an eommerce-engine-as-a-service for selling specifically WordPress plugins and themes. Basically, we provide all the technical infrastructure that is needed to run a plugin or theme business like accepting payments, subscriptions, affiliation, card recovery, managing licenses, et cetera, et cetera. All those components that you really need to run a business regardless of your product. And we tailor, that’s our solution specifically for that niche. 

So we are able to provide much better user experience because unlike other solutions, for example, like WooCommerce where the solution was made mainly for selling physical goods. A lot of the user experience is just not relevant to digital products.

Our focus is basically helping those plugins and developers covering all their needs so they can run their business.”

02

Meeting Face-To-Face as a Leverage Tool

What we found interesting is the way Vova finds new customers. Aside his content marketing strategy, Vova likes meeting face-to-face with people in WordCamps and generating direct sales. We were interested in that process specifically:

“For sure, for us it was very valuable to go and actually be present on all these conferences, meeting other product people. But I would say it really depends on a product type and what you are trying to sell. But the key here, and this is the main thing that I’m doing, I’m not going with the intend to sell in WordCamps. That was my kind of original strategy. When I didn’t know anyone, I went to WordCamps and for me it was like pitching, ‘I need to sell Freemius’, that was my goal.

I found out that it’s a bit more challenging sale and that’s not how typically people are making decisions regarding big things that they want to commit into. So for me, the key of going to conferences and physically knowing the community is because I really want to be the number one expert in our space. And the only way to do that is actually be present and know exactly what’s going on with all those other people in my target audience.

Going to all these physical conferences, it's a lot of knowledge gathering that later we can implement that in our business in one way or another, whether it's by features, whether it's by introducing more content on our blog that could be relevant.

So for me, when I go to WordCamps, I try to meet as many people from you know, whether they are our customers already or potentially can be our customers, or maybe in the future they will get into the product space. But I’m trying to gather as much information as I can about their challenges, about their pains. Obviously, I’m trying to steer the conversation to things that are more relevant to our business, but also trying to collect as much knowledge as I can. Because in the end of the day, when you have a product or a service, as good as it can be, it doesn’t matter. You still need to market it. And the best way to market is to know the pains over your target audience, right? Because you know exactly how to communicate with them. Exactly how to position your messaging towards their feelings. Use their terminology.

Knowledge is power. It is a power, right? So it’s a lot of … It gives you a lot of power. Going to all this physical conferences, it’s a lot of knowledge gathering that later we can implement that in our business in one way or another, whether it’s by features, whether it’s by introducing more content on our blog that could be relevant.”

03

The Typical Obstacles Developers Experience

We asked Vova to list some of the typical challenges and obstacles that WordPress developers are experiencing, based on the experience he gained at Freemius:

“I would say one big pain point is self-hosted solutions, right? So when you need to maintain this stuff yourself. So when you just set up, the most popular kind of widely spread solutions today for plugins in developers that are self-hosted are WooCommerce and EBD. Okay.

They’re good solutions, right? I’m not saying anything bad, you install them on your server. And initially, maybe it’s enough to get started. But over time, once your volumes are getting higher, once you need more features, more capabilities, you usually end up with a very heavy WordPress store installation that has many plugins. You probably customize some things because you couldn’t wait for the bug fix update and you had to fix it quicker.

And it’s kind of you end up with a spaghetti store in one way or another, and you need to continue maintaining that. And initially it sounds very easy, right? I just install something and supposedly it should run, but you have so many dependencies between all those extensions. And you want to update one plugin and then you don’t know how it impacts the other extension and so on.

Instead of focusing on your business, which is your product in the plugins and theme space, you spend a lot of efforts maintaining the ecommerce infrastructure. That’s one big thing that we have seen all the time. And eventually, people say, ‘I give up, I’m tired of that.’ And even if you look at more established and larger companies, including Elementor, I know it’s a pain in the ass. Because I know you guys do it and I’m asking the same questions. So it’s a pain in the ass.

On the other hand, we have … Because relatively the whole payment space in ecommerce is still new, right? It’s like two decades, maybe it’s still new, it’s very evolving and there was a lot of fraud in that space. And fraudsters keep innovating as well, how to commit fraud all the time. So you have this battle between the payments companies, gateways and you have the people that committing fraud, as well as you have entities like the European Union trying to come up with new regulations and rules to actually help to protect consumers and their data.

Instead of focusing on your business, which is your product in the plugins and theme space, you spend a lot of effort in maintaining the ecommerce infrastructure. And eventually, people say, 'I give up, I'm tired of that.'

The reasoning behind adding all those things is good. It comes from good intentions. But the challenge here is regardless whether you are running a clean business as most of us, versus you’re committing fraud, it still impacts everyone. And everyone has to deal with that. So you as a new seller, especially for new sellers, right now, just to start a business, it’s much harder than what it was, I don’t know, five years ago.

Because you have all these regulations that you need to meet and you have to meet from day one. There’s also the whole taxes issue, like European VAT and now all these countries are coming in to say, ‘Oh, we can take a cut from the taxes in the world.’ Why not? You have GST in Australia. India came up with its own taxes. Russia, I think, is also coming with their own taxes. So basically it means that they’re saying, ‘You want to sell anything online to people that living in my country, you need to pay us taxes.’ So you need to collect those taxes. You need to collect the right tax, you need to preserve some evidence regarding the geolocation of the person, et cetera.

And then actually open legal entities in all those different countries and submit those taxes. And regardless of what you are making, dollar or not. All of that happening in the world that in theory should protect us. Not in theory in practice should protect us, but it affects a lot of the smaller players. All of this taxes stuff, it was originated because of Google and all the other companies that were basically starting a company in Ireland for example, for tax benefits, et cetera.

The European Union changed that because they wanted to find all these tax structures that were avoiding a lot of payments. But it impacted everyone, everyone, because they didn’t add thresholds to that. So that’s just some of the challenges.”

04

Hot to Stand out From Your Competitors During the Holiday Season​

The holiday season is ahead — Black Friday, Cyber Monday, then Christmas and the New Year. How can a product developer stand out from such a big crowd during those times that everyone’s just grabbing for attention?

“Yeah, it is definitely challenging, and I think the key is building a community from the first place and not waiting for the Black Friday, Cyber Monday. Exactly because of those reasons. You need to generate some traction to whether it’s a promotional thing related to black Friday, or just generally for your product. Because you need to somehow stand out. And the key to standing out is exactly is marketing and drilling downright the way that you can do better marketing is if you know your audience better than your competitors.

Because people are overwhelmed with all these promotions, and they have many options where to buy. So I would say the earliest you start building a buzz around whatever you want to sell, the better."

So I would say that it’s a combination of knowing your potential buyers and users very well. The way you execute marketing, right? If you are a developer and you keep postponing sending that email, letting your users know about that promotion, and you just send it a day before, then yeah, you’re going to miss a lot of that. Because people are overwhelmed with all these promotions, and they have many options where to buy. So I would say the earliest you start building a buzz around whatever you want to sell, the better.”

05

How to Improve Your Emails Deliverability

Going back to the holiday season, we have witnessed some trends that cannot be ignored. Obviously during the week before, the two weeks, even three weeks before you would probably get more than one email from different product companies. This FOMO thing is accompanying you everywhere you basically go. What does Vova think about these promotion trends? are they actually helpful or too stressing? 

“I think that it depends on the product, but I think that what you mentioned. Those are the more sophisticated and advanced companies. Actually not a space. Because from what I see, most product people don’t do that. They don’t have the time. It’s like they’re usually busy with their day-to-day job and it’s really hard to comment, pause whatever you are doing and work on something that you are not really passionate about that, especially if you’re a developer.

Because we developers, we don’t like promotional stuff more than others, right? So we also feel that I don’t want to spam others, even though it’s not spam. That’s the way to communicate that you have a promotion. Make sure that people are actually aware about that. And if you are emailing to your free users in case of a freemium product, that’s a good idea because they’re using your product. So they may be interested to get the paid offering.

Adding some quotas, some limits to your promotion, not just saying, 50% for the next week, but saying 50% for the first 200 people for the next week actually adds that 'Oh, I actually need to go and do it right now, because if I wait for that for the last second.'

The kind of all the things that you mentioned has become the standard right now for everyone that allocate resources into those promotions. But I think just adding the time urgency is not good enough, because you want to push the person to make the sale right now, once they get it. And I think that I do see more people that are starting to acknowledge that. 

But actually, adding some quotas, some limits to your promotion, not just saying, 50% for the next week, but saying 50% for the first 200 people for the next week actually adds that ‘Oh, I actually need to go and do it right now, because if I wait for that for the last second.’

So I think that’s a thing that is not really well utilized in our ecosystem yet. You see that a lot in the travel world when you … Like if you go to Booking.com and you’ll have so many notifications that you know, how many people were watching that listing right now, how many rooms left, how many say, ‘Oh okay, I’m buying, I’m buying, leave me alone.’ That’s kind of the fear that I think is still missing in our ecosystem. But there are techniques to try to generate that.”

About the Author

Matan Naveh
Matan Naveh
Matan is Elementor's Magazine editor. Starting his career as a Radio Broadcaster, he worked as a content manager and Editor-in-Chief for over 10 years. Matan enjoys psychological horror movies and 80's Chinese restaurants.

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