Building a WordPress-based product business is a much different process than it used to be. People have to do something different and better than what has come before.
The WordPress economy is changing, and many businesses are feeling it.
Often this change has been discussed in terms of hosts and agencies, but let's talk about products.
I just read an article on Indie Hackers about MH Themes, a premium theme shop that started in 2013. They describe a hard-fought journey to a solid $30K in monthly revenue, but they have noticed big changes in the market since they started.
The author, Michael Hebenstreit, puts it this way:
Back in 2013 it was much easier to launch a WordPress theme and make it somewhat popular. Today the market for WordPress themes has become heavily crowded and oversaturated. It's near to impossible to make a theme highly successful without investing lots of time and money in marketing and building a community behind your product.
It comes as no surprise that the theme business is saturated; it has been for years. I would now say the plugin business is saturated as well.
From 2008 to 2010 you could have released just about any decent plugin or theme, and it would have done fairly well, simply because there was very little competition. The WordPress market was in an early and extreme growth phase. People were realizing there was money to be made.
Many different product categories were ripe for innovation, with no dominant players at all. For example, the eCommerce landscape was wide open before WooCommerce became popular in 2011. Now there is no one even remotely close to them, and competing with WooCommerce doesn't seem like a good idea.
Today what we see in most product categories is at least one dominant player, and many other new entrants at their heels. Backups, security, SEO, themes, page builders, forms, caching, lead generation, and other categories all have stiff competition.
Previously the competition was a developer trying to figure out how to grow a company. Now it's a 30+ person organization with millions of dollars in revenue. iThemes, Yoast, Gravity Forms, Awesome Motive, and WooCommerce are just a few. These companies have a loyal following that makes it harder for smaller shops to take a piece of the pie.
Popular plugins now have millions of downloads, lots of articles written about them, and avid fans. They are becoming harder and harder to dethrone, or even to challenge for a slice of market share.
Your product is a commodity
As Alex Turnbull says in this recent article, “if your product isn't already a commodity, it will become one in the next few years.”
It's becoming easier and easier to create and sell a product online. Developers are ubiquitous, websites are cheap, and many people can build something on the side with a full time job.
That means when you release a product you not only have the established leaders to contend with, but lots smaller players with great products just getting started. Even if your product is great, there are 10 other great products in the same category.
That doesn't mean a great product isn't important — it certainly is. It does mean that it's not enough.
If your product isn't enough to stand out in a crowded marketplace, what does it take?
How to bring a new product to market now
The old way of starting a new product might have been to go where there was less competition and create a better product. If there are still places of “less competition” they are much harder to see.
You can go after a niche, but WordPress is already a niche. A niche within a niche is a very small market.
It's not impossible to slay the giant Goliath product companies. As Jason Cohen points out, they have an Achilles heel: “The profitable revenue stream is a prison.” They are slower to adapt to changes in the marketplace because they can still make money doing what they have always done.
If you are thinking about bringing a new product to market, here are a few observations that may help you.
1) It's going to be a lot harder than it used to be, and it's going to take longer.
Can you go for a year (or two) without making any money and still be cranking out code and marketing yourself? That may be what it takes.
Putting up a website and starting a content strategy takes six months to see any solid organic traffic. Publishing your plugin to official WordPress directory does not result in automatic downloads. The newer search algorithms favor the entrenched plugins that have more downloads and reviews.
It's an uphill battle, and it takes time.
2) You must have a strategic advantage, or a unique difference to win.
Ninja Forms went into a crowded space against one of the most popular plugins of all time, Gravity Forms. They gained an advantage by offering a free version and distributing it on the directory, while Gravity Forms was entirely commercial. Why did they do so much better than other free form plugins? I don’t know, but they certainly executed well, and they have created a great brand.
Can you find a competitive advantage and exploit it?
One weakness I see in many WordPress companies is marketing. Many of the early successes in WordPress were coders who made a cool plugin. Most of them are not marketers, and they have enough business without needing to learn marketing. This leaves the door open for companies with great marketing.
Can you dominate an under-marketed product category?
You are going to have to do something different and better than what has come before. Copying a business model that worked in 2012 is not a good strategy.
3) Branding is more important than ever.
Your brand is what will help you gain market share against your competitors.
A brand is not your logo, and it’s not what you say about your company. It’s what they say. They, as in, your customers.
Providing great customer service, getting to know people at events, being helpful on social media, providing refunds without asking questions — these are all parts of your brand. Being known for doing good work is another, so that when you release a new product, people just buy it.
I think of the brand Pippin Williamson has built for himself, since he is known for putting out high quality products. I will buy a plugin he makes over a more established competitor because of his reputation for quality. iThemes is another great example of a company that cares about their customers. They have built a brand on integrity.
Building a brand takes time, but it is more important than ever.
The WordPress market is no longer high growth and low competition.
The companies involved in products are maturing into well staffed, well funded operations. Their fans are loyal, and their products are entrenched. This makes it harder for new entrants into the market to compete.
New products must have a well thought out strategy to gain traction in this competitive marketplace. Without unique positioning and hard fought execution, they will not survive.
It’s not all bad news, because this is how most marketplaces look already. It’s a sign that those of us who make products need to get more creative about how we approach product development and marketing.
As the more successful companies get larger, they will also become more resistant to change. When this happens, newer product offerings will be able to steal market share with fast paced innovation and development.
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