Will Automattic compete with WordPress freelancers?

Built by WordPress.com

A new service from Automattic will build sites on WordPress.com for customers starting at $4,900. How will this impact WordPress freelancers?

As Automattic enters the low-end web design market, a community discussion emerges about WordPress freelancers

Automattic announced this week that its “premium website building service” is taking customers now. In beta since late 2020, “Built by WordPress” now offers “websites starting at $4,900 USD” for WordPress.com customers. At this price point, will Automattic be competing with WordPress freelancers?

The announcement describes a turnkey service with a personal touch:

“You’ll work with a dedicated engagement manager throughout the entire project, ensuring that your vision is carried through from start to finish — freeing you to focus on the other critical parts of your business.”

People reacting to this news in the WordPress community had mixed reactions.

Hot takes give way to deeper reflections, better questions

This Twitter thread contains some of the more common, deeper concerns in the form of early hot takes:

“It looks like they're about to compete with the agencies and devs that have made WordPress what it is over the years.”

Chris Wiegman

“This is the open source version of Amazon copying popular products and turning them into ‘Amazon Basics' to take profits away from vendors.”

Morten Rand-Hendriksen

Matt Medeiros also gave his hot-take in an episode of the Matt Report. It was highly critical about the negative impact Medeiros predicts for WordPress freelancers and others he calls “digital blue-collar workers.”

Matt Mullenweg responded in the episode's YouTube comments.

Matt Mullenweg estimates that Automattic captures less than 5% of the revenue in the total WordPress ecosystem.

Other people simply had questions about the service which Matt Mullenweg fielded on YouTube, Twitter, and Post Status Slack. At one point, Matt admitted that “we don't have a PR agency” at Automattic. It's possible that better communication and messaging might have been helpful to Automattic in the launch of “Built by WordPress.”

Still others in their initial takes didn't see a problem. It's not clear Automattic is in conflict or even in direct competition with other service providers in the WordPress market.

As Joe Casabona notes, “If you think you’re competing with Automattic for sub-$5,000 websites, you need to change your approach.”

Joe concludes with this observation about Automattic:

Automattic generally works within the constructs of their .com platform, and most of the moves… have focused on acquiring new users. This is another step in that direction. They see potential customers have a hard time getting their business up and running on .com, and lose those customers to Wix and Squarespace.

Matt Mullenweg clarifies goal of expanding market by retaining users

Joining a Post Status Slack thread discussing the new service, Matt Mullenweg appeared to back up Joe's view. Matt explained:

“The market for this is people who have more time than money, try to get started on .com, hit a wall and go to Wix or Squarespace / etc. will be referrals to external folks, and 100% certain this will drive more up-market consulting in the future that may be a better budget fit for folks in this room… but if they go to another platform altogether, [there are] no opportunities for them in the ecosystem down the road.”

Birgit Pauli-Haack also noted “Most agencies don't advertise around ‘WordPress' and most customers don't care about the CMS… We all market solutions, great designs, user experience, get-the-job-done kind of products and services. WordPress is just the means to an end.”

A rising tide of .com users lifts all boats in the WordPress ecosystem

The conversations Post Status members have been having internally go a bit deeper than most on social media. Syed Balkhi shared his opinion about the larger ecosystems in play:

“Just to add another perspective to .com new services section… as Matt pointed out many other hosting companies offer this. GoDaddy, Bluehost, etc. This is a big pain point that we see from beginners who start with WordPress (whether .com or self-hosted) that they are unable to build what they had hoped for … and then eventually a portion of users give up and move on. Since Wix spends aggressively, it often ends up being a common alternative.”

“Once a user goes to Wix, they’re pitched with Services (Wix Partners). These partner/agencies pay Wix a referral fee. I was talking to one SMB web agency and they told me that Wix marketplace is their most lucrative lead source and they’ve built a multi-million dollar business around that.”

“As a WordPress company, we only win when WordPress wins. A user who stays with WordPress because of Bluehost web design services or the new .com service above will eventually purchase premium themes, plugins, and even larger agency services when they can afford it. In my opinion, Automattic launching this service will not negatively impact anyone and more likely it will positively impact the whole ecosystem.”

Chris Lema posted similar thoughts on his blog:

“Competition is good because the more that people's websites are powered by WordPress, the more the WordPress economy grows – for everyone, not just WordPress.com.”

Mullenweg: Not competing with WordPress VIP or freelancers

What is the general scope of the website build, and who exactly would be doing the building of the sites?

Matt Mullenweg confirmed in Post Status conversations that this “very small experiment” at WordPress.com is “not targeting or competing with WordPress VIP partners.” As it's “hard to imagine a VIP client spending less than six figures a year, […] I would say it's in a very different segment,” Matt said.

Matt suggested the Automatticians building sites might also recommend purchases, like “a premium theme or plugin where one is appropriate.”

While that type of partnership might be attractive to larger commercial entities in the WordPress space, what about smaller ones? Regarding WordPress agencies, consultants, and freelancers, Matt doesn't see them facing a squeeze from Automattic:

“I would be extremely surprised if this impacts anyone's consulting business, if you do have a current or potential client leave for it please let me know — it should be all new-to-WP users who wouldn't have been successful getting started.”

Matt also said he would “love to refer more work to agencies as well.”

He explained it has been difficult to work with agencies because they tend to move customers to other hosting platforms. We “hope to figure out a better Shopify-like agency program this year,” he added.

Matt estimates that Automattic captures less than 5% of the revenue in the total WordPress ecosystem. He observes this is “smaller than the amount hosts like GoDaddy and Bluehost make from WordPress clients.”

WordPress freelancers will be OK, but they could use more careful communication and concern

Next time we hear about the “Built with WordPress” experiment, I would like to see some transparency about its results. Six months from now, let's look at how many customers have been acquired and new sites built on WordPress.com.

With similar programs at other hosting companies, what Automattic is doing here is nothing new. Yes, the messaging and communication could have been better, and I think some in the community had some good questions. For example, what is the general scope of the website build? Who exactly will be building the sites?

That said, I am not convinced that Automattic is going to hurt WordPress freelancers by offering entry-level web design services. I say this as a WordPress freelancer working in this space for over a decade. I've freelanced on projects above and below $5,000. Increasing competition within the market has been the rule of the day for many, many years. Automattic really isn't a bigger name than some hosting companies when it comes to site development. Based on feedback from clients, customers, and people outside the WordPress circle, I agree with Matt's take on Automattic's position.

That said, I can't help but ask why Matt ended up doing reactive PR on social media. He offered a lot of good information that wasn't part of the initial release, but it could have been. “Built by WordPress” could have been rolled out with WordPress freelancers very clearly in mind.

At least one prominent critic has said “Matt doesn't care” about the smallest businesses and freelancers in the WordPress community. I disagree with that. But I do hope to see this demonstrated more on Automattic's official channels.

Next time we hear about the “Built with WordPress” experiment, I would like to see some transparency about its results. Six months from now, let's look at how many customers have been acquired and new sites built on WordPress.com. As the overall market continues to expand, does everyone benefit, or are there some losses and contractions in certain areas?

Only time (and transparency) will tell.