Why Are So Many Acquisitions Happening Right Now?
Post Status Comments exists to provide a stage for WordPress professionals to exchange ideas and talk about emerging topics and trends. It's a way for our members to share experiences, analyses, and feelings that matter to the Post Status community and beyond.
Our second episode featured a conversation in Twitter Spaces on September 29, 2021 about the motivations behind some of the biggest and most prominent acquisitions in the WordPress space: Why so many? Why now? And how may it change WordPress?
We talked with some key people who have played a part the acquisitions that have rocked the WordPress community in the past few weeks:
- Justin Ferriman, Founder of LearnDash
- Marieke van de Rakt, CEO of Yoast
- Jason Schuller of WP Landing Kit (For the last 15 minutes.)
David Bisset, Curator at Post Status, hosted the conversation.
Due to technical issues, we aren't releasing the audio for this episode of Comments. This is the summary:
Four WordPress acquisitions were announced in one week. Prior to that, there were others that included some of the most well-known names in the WordPress community: Yoast, Advanced Custom Fields, and more. (See the Post Status Acquisitions tracker.) This is more or less coincidental as the decision and process of selling and buying a business take months or even a year to complete. Still, they are happening more often, and we wanted to ask some recent sellers their motivations and see how the news is being received in the WordPress community.
With Yoast seemingly self-sustainable and opening new initiatives, what was the trigger that made the leading team decide it was time to sell?
So I don't know if that was one trigger, but we had (and still have which is weird because we've been acquired) every week someone reach out to us. So there's a lot of money and funds in the world and they're looking for places to invest.
So I think up until three years ago, we just didn't look at those and then well then that's changed. I think COVID was a big part of that — but we're also already talking with companies before hand. We felt the workforce ecosystem was changing and that there were a lot of companies that have much more funding behind that…which made us a bit more vulnerable a bit. We're based in the Netherlands. All of our costs are in euros but we make most money in dollars. So I remember when president Trump was elected and the dollar went into like this skydive, that's really scary.
I think COVID for us was a big thing as well. We weren’t doing badly at all — we did have one month in which the entire world was on fire and we had a slightly less [profitable] month [but] that just made me worry again. And I think for my husband, he also was bored and that sounds really weird, but would love to do some other things as well.
If someone is investing in our company they want to see that they want to reap the benefits in like five or 10 years. That would mean that we would be really money driven because the only thing that mosts investor care about is that if their investments will be returned and that wasn't that appealing to us. So that's why we decided that a strategic access as this would fit us better.
I had a lot of energy personally and motivation and drive in the early years in the middle years. But over time, I mean, I've been involved in e-learning for a very long time… longer than WordPress.
I got to the point where I wasn't sure what the end was going to be for me and the company. There's some point I think, for any founder, when you start thinking: “okay, what's the outcome here?” You mentioned the e-learning industry kind of exploding. That's always been the case. I've always known that to be true. In fact, I think that's where I learned that really from day one was making money and I was able to quit my job really quick.
It was important to me that, you know, if I'm not going to be involved with it, I ended up landing somewhere with people that understood that vision and the importance of the brand. LearnDash is unique in the fact that it straddles two industries (WordPress and e-learning) and wanted it to land in a place where that was appreciated.
LearnDash had been so energetic and excited the entire time and I really got to know them and what their vision was and I'm excited for the future of the product.
Why do you think in more recent times we were seeing more and more acquisitions – do you think that's related to some of the things that you were considering or where you were… your thoughts are to why we're seeing this seeing accelerated trend of business acquisitions in the last few years?
I remember talking to Andrea Middleton at WordCamp Europe 2019 and she said “And the era of WordPress acquisitions has begun.”
I think WordPress is just maturing and I think it’s something you see in a lot of markets. When in Yoast starting 2010 it wasn’t the same market. There are bigger parties and more money (in the investment world too which makes it easier for investors to invest) today, which i think are contributing factors to what we are seeing today.
I have an observation that some of the original older WordPress business owners.. that have had time to really mature and define their market (clearly Yoast and Sandhills Development) and that’s attractive to investors and ones looking to expand their portfolio. The other side of it are the new products that kind of catch the wave.
You have two ends of the timeline. On one side of it you have a mature product that the founders have brought into a certain point and maybe feel like “okay, this can go to another level and whether I'm involved or not but needs a little bit more cash backing or creativity back in” and then you have the ones that are brand new companies. So, um, that may be a long way of saying there is a market maturing with more people looking to invest.
Do either of you think there’s a chance for a single developer or small team in this mature market to be as successful as many individuals and companies did 10 years ago? Is the potential still here?
I want to believe it’s still possible [to start off like Yoast did initially without any plugins then with the one plugin] but I do understand that if you start an SEO planner it's rather difficult to do that in a market in which we (Yoast) are already here. But if you have an idea of something that is not there and anything could happen.
Developers today can take what is working but just kind of deviate a little bit and then own that mediation and be the front of mind for that. I think we saw that a number of years ago now, but with the Astra theme.. there's tons of themes that do all kinds of great things. But with Astra they kind of deviated a little bit and put a huge premium on speed and then owned all the mindshare of speed. So everybody thought, oh, after I want to quick website then that's what I'm going to do.
It’s easy to get lost in the code and lose track of the value proposition, the marketing and where you’re going to fit in the market.
What question(s) should business owners ask themselves to determine if they might be ready for an acquisition?
It’s really a personal thing, a gut check. Obviously if you are burned out, then that might be an indication that the timing might be right. Check in with yourself why you are doing this in the first place. When a lot of folks when starting out they are ok with taking risks — but as time goes on… you get a life and family… you become a different person. Stress and sleepless nights can go away if you can find yourself in the right situation (for an acquisition).
You get to a point in the WordPress world where you can experience burnout, it did happen to me. If you stay too long then it becomes a problem for your customer base and for yourself.
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