The evolution of 10up

10up-logo-teamThe ecosystem of businesses that have been built around WordPress is huge, but shallow. Few companies are both large (relatively speaking) and central to a broad WordPress community. With 60+ employees, some of which are very well-known WordPress developers, 10up has quickly become a central figure in the WordPress world.

Big WordPress companies with significant community influence

Until recently, Automattic has always been the primary example cited as a mature company in the WordPress space. But it’s hardly the only company using WordPress as a primary tool. Envato is similarly sized (just over 200 employees, and 50+ more this year), but Envato’s business spans well beyond WordPress themes and plugins on ThemeForest and CodeCanyon.

A 60+ person team doing web consulting is not particularly unique either. There are loads of more traditional design agencies, ad agencies, and regional web firms that do a good bit of their business using WordPress. But there aren’t very many companies in general, much less the size of 10up, that are so engrossed within the WordPress community.

Yet, as WordPress gains more and more traction as the CMS of choice for the web services and consulting industry, there are now WordPress focused service agencies that are growing quite rapidly. 10up leads this pack, despite being quite a young company; they just celebrated their 3 year anniversary.

Meet John Eckman, 10up CEO

10up Founder Jake Goldman has just announced that they’ve hired a CEO, John Eckman. The hire is representative of a new era for 10up, a company often analyzed by other agencies and professionals in the WordPress ecosystem.

I was fortunate to be able to interview Jake and John together to talk about the announcement, a number of other topics around running 10up, and the WordPress ecosystem in general.

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John Eckman is from the Boston area, and is an organizer of WordCamp Boston. Prior to his new role at 10up, he was the managing director of ISITE Design‘s Boston office. John has experience working for and managing teams in a number of service companies over the years. He’s generally an open source advocate, with specific interests in Drupal and WordPress.

Jake and John met in 2009 during planning for WordCamp Boston. Jake has been thinking about bringing on a CEO for about a year and a half. Jake interviewed a number of candidates for the position, but specifically wanted someone with ties to the WordPress community, understanding of engineering disciplines, and experience managing teams within large web-based organizations.

This is the first interview Jake and John have done together. We talked about a number of things, largely around decision making and running a business.

Mini 10ups within 10up

One of the things I was interested in was the growing pains. If you are like me, you’ve watched, flabbergasted, as 10up grew at an amazing rate. And Jake admitted that a significant challenge has been realizing when architecture needs to change.

The company was mostly flat until they scaled beyond a dozen people. At that time, they established a leadership team, most of whom have now evolved into Vice President or Director roles. However, he also notes the early lesson they learned that great engineers don’t always make great team managers and mentorship doesn’t have to be exclusive to managers.

When they got to around 30 employees, they switched to a pod system, with pod leaders. Each pod has dedicated production employees, a pod leader that acts as a manager and lead strategist, and they are now introducing a “producer” role to help the pod leader manage day to day managerial duties.

From what I could glean from the conversation, a pod within 10up basically functions like its own little agency, with each pod handling a variety of projects. The design pod, however, is independent from the others. 10up is better known for programming and implementation than design — something they are working to change — and currently the design pod acts more like an outsourced element from each pod on a per-project basis as needed.

Turnaround projects and managing cashflow

I was curious about cashflow and managing clients when you have a lot of teams. If 10up was only doing new projects and not maintaining relationships longer term, it seems like it would be difficult to constantly manage everyone’s time.

While they didn’t downplay these challenges, both Jake and John highlighted how recurring revenue from large customers and also engaging customers beyond “positioning yourself as a coder” and simply doing what is asked. He notes that those who do so set themselves up for short term clients, and instead 10up offers advice for engaging a client long term.

In those early phases, bring value, bring strategy, bring ideas that help them build their business; to show that you’re a partner that has business solutions, right, that you create those kind of relationships. It’s why we call everybody at 10up engineers, instead of developers. Because the definition of an engineer is not a coder or a programmer; it’s somebody that builds a solution for a problem.

For those looking to get into these types of relationships, John advises to begin in the proposal phase, by introducing ideas and showcasing the experience the client would be buying, versus simply showing deliverables of your proposal.

You’re essentially selling a point a view. You’re bringing a consultative guidance to them on how things ought to operate. And as long as they’re hearing that value, they’ll be excited for it.

Jake estimates that between 60 and 70 percent of their business is reliably repeat business and another portion of their business is repeat business that was less planned. They are able to categorize these projections as expected repeat customers and not have to worry as much about constantly finding new work to make payroll every month.

As far as the size of projects, they like to take on large projects, which helps reduce churn, but they also like to stay open to smaller projects that excite them.

Jake didn’t exactly highlight what their “floor” is, but he did use $5,000 as an example of the type of budget that sometimes comes in and is usually unrealistic for them.

He also noted that they have some accounts that have spent over $1 million with them in a year, and “definitely” some that have spent that amount over the life of the project.

These long term, higher value clients rarely spend the money they do because of WordPress specifically, but rather consider 10up a partner to their web presence. And  these longer term and higher dollar projects are what enable them to more effectively manage their team.

How big will 10up grow to be?

When I asked the inevitable question of just how big 10up would grow to be, Jake responded the way he says he always does. “My reply to that is always, ‘as big as it can be while we do great work.’ To me the number of people is actually irrelevant.”

Adding to that, John notes, “growing does enable us to have more impact in places we want to have more impact.” The impact he’s referencing is to push into markets like “government, higher ed, the enterprise,” but also cites that it’s important for them to do so “without sacrificing culture or quality.”

Bringing in CEOs in tech companies

There is some precedent for a founder of a tech company to bring in a CEO. Outside of WordPress, the examples are many; even within the WordPress world, there are a few worth noting:

  • Matt Mullenweg brought in Toni Schneider to be the CEO of Automattic in 2006; and at the beginning of this year they actually switched jobs.
  • In October 2013, WP Engine CEO Jason Cohen stepped down into a CTO role, and hired Heather Brunner to be CEO.
  • Not exactly the same, but in November of 2013, VeloMedia acquired Crowd Favorite, and Crowd Favorite founder Alex King became the CTO — a role he felt more comfortable in.

It’s very impressive to me when a founder relinquishes a level of control and brings in a CEO to help steer a ship they’ve made such great efforts to build. I think in the instances I cite above the changes have been hugely successful for each company, and we’ve seen them all continue to grow and do a lot of impressive things since.

What will things look like three years from now?

I do hope you watch the full interview with Jake and John. I think it’s very valuable for anyone interested in the business of WordPress, or want to know what life is like inside a company like 10up.

I haven’t gone into some of the topics we discussed at all, such as their stepping into the product business.

It amazes me just how fast our space is evolving. The “old” companies in the WordPress world aren’t even ten years old; WordPress itself hardly is.

A slew of companies are doubling (at least) in size every year.

Traditional web agencies around the world are abandoning proprietary software and advertising their WordPress chops — because their customers demand it.

Businesses that have historically just done services are getting into products.

It seems almost everyone is hiring.

The culture of work is being disrupted.

With all of these incredible shifts, it’s almost not surprising that a company like 10up could go from 1 to 60+ in three years, gaining a stellar reputation along the way. But it doesn’t stop it from being impressive.

I can’t wait to see what the landscape looks like three years from now, to see how existing companies continue to evolve. And most of all I’m excited to see how many other entrepreneurs enter the fray between now and then and how they change the conversation again.