Rainmaker goes service only, sells partial stake to Nimble Worldwide

Rainmaker launched in April of 2014, and now it's moving from a SaaS product model to a service-only model, which includes a partial buyout to a new stakeholder — Nimble Worldwide.

I was excited about the launch of the hosted and highly customized WordPress service, and at one point, Copyblogger (now Rainmaker Digital) credited Rainmaker as their fastest growing product ever. Brian Clark said that their growth in 2015 — from $10 million to $12 million in revenue — was based on the success of Rainmaker: the “extra 2 million in revenue is all Rainmaker, so itโ€™s our fastest growing line of business, not only currently, but ever.”

He also said at the time that they were contemplating private equity investment, which it appears never came to fruition.

It's hard to pinpoint exactly how and why a transition occurred with Rainmaker that would've caused growth to stop, incentivized the company to spin out the Rainmaker product into a service business, and take on a partner. But I believe it's probably indicative of broader market shifts, in part.

Nearly every mature business I've spoken to in the world of WordPress plugins and themes has seen growth slow, or even stop, in the past year or so. Economic uncertainty is a very challenging factor for businesses — often causing consumers to put purchasing and business decisions on hold, therefore creating a gap in the market, especially with more discretionary spending as software and web projects tend to be — and 2016 was certainly uncertain.

I am unsure if and by how much a slowing market affected Rainmaker, and the decision to alter the business model, but it's my working hypothesis. At the same time, Rainmaker's parent company has put significant resources toward building out and supporting the product, and some community members have told me they believe they were neglecting other properties — like StudioPress and the Genesis theme — in the process.

I think some recent changes to StudioPress were warning signs for the Rainmaker transition that was just announced. In late January, StudioPress started offering a hosting and theme bundle, called StudioPress Sites, which I said at the time felt “nearly competitive” to Rainmaker. Now, I believe that move was made in preparation for this one.

StudioPress has created an incredible brand and community with the Genesis theme framework. It wouldn't surprise me to learn if a lot of leads to the Rainmaker platform were from StudioPress. StudioPress Sites appears to be a loose template for a siteowner, and is less restrictive than Rainmaker, and perhaps will fit better for the leads that come from the WordPress and Genesis side of the business.

Rainmaker in a service capacity can serve folks seeking more from the marketing side of things, content and marketing assistance with less technical control. Nimble Worldwide appears to be comfortable in that realm, and previously had a working partnership with the Rainmaker team.

I believe this is not the outcome that Brian Clark envisioned, despite the verbiage of the announcements. Rainmaker customers got forewarned in an email that changes would be coming, though their existing plans remain intact. The public announcement title simply notes it's the last opportunity to lock in current pricing, which is strange in and of itself. Within that post, Brian says it was a natural evolution:

When we rebranded from Copyblogger Media to Rainmaker Digital in September of 2015, it was a firm statement that put the Rainmaker Platform at the forefront. But it was also a foreshadowing of where we saw things going.

We knew we were headed from software-as-a-service (SaaS), to software and service to create complete solutions. People need sophisticated marketing technology, yes โ€” but they also need done-for-them services such as design, content, and lead generation strategy.

The technology is only getting more sophisticated, and we plan to remain at the forefront of that with Rainmaker. But sophisticated technology calls for equally sophisticated strategy and execution โ€” and not everyone has that kind of expertise in-house.

While it may be the case, I don't really buy it. It doesn't mean I think the new strategy is bad; but a service business is going to be a lot harder to capitalize on at scale than a product business. If nothing else, this at least is an admission that Rainmaker is not going to be an at-scale hosted solution. But I do not question the marketing prowess of Copyblogger, and if they strongly push “complete solutions” under this model, leading to much higher revenue per-customer, I'm sure it will have its place.

I don't really understand, though, how the code that powers the platform would get “more sophisticated” by going to a service model; if anything, I would think it would become less sophisticated over time, with a more hands on approach.

Rainmaker Digital still owns a majority share of the new organization, according to the announcements, and Brian says he'll be the “captain of the ship” still. But Nimble partner Ed Bardwell told me on the phone that Nimble will maintain “operational leadership.”

As an unfortunate side effect of this change, four full time employees lost their jobs, as did several contractors. After contemplating this part of the story, I've decided to stick with my trend of late, and not to report the names of those who were affected, but to simply note that they were mostly longstanding employees, from support to management; and as far as I can tell, the layoffs had nothing to do with performance.

Time will tell whether this change causes Rainmaker to fall into the background of marketing on Copyblogger and other marketing channels. It will also be interesting to see how development resources will shift, and if that will affect other products like Genesis.

It's fairly difficult to make sense of Brian Clark's explanations of corporate moves. He consistently puts a spin on any situation, which is fine, but definitely makes it harder to paint a clear picture, especially when it seems rather obvious that the new direction is not the direction they intended to take in the first place.

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