What’s been your experience with the WordPress community?
Today on the WPMRR podcast, Joe and Christie are joined with Alex Denning of Ellipsis Marketing and Tom Fanelli, CEO of Convesio, to talk about WordPress hosting, how to get investors, and the close ties between WordPress and WooCommerce
Listen in for some advanced WP hosting tips!
Episode Resources:
- Check out Convesio
- Send Tom an Email
- Tom is on LinkedIn or Twitter
- Visit Ellipsis Marketing
- Read Alex’s Newsletter
- Shoot Alex a Tweet
- More episodes on iTunes
- Get infos on Liquidweb
- Check Nexcess
- More WP details on WPBuffs
- Send in your questions to yo@wpmrr.com
Christie:
Hello, WordPress people. Welcome back to WPMRR WordPress Podcast. I’m Christie.
Joe:
And I’m Joe.
Alex D.:
I’m Manny from Black Books.
Tom F.:
And I’m Neo from The Matrix.
Christie:
And you’re listening to the WordPress Business podcast. What is going on this week, everybody?
Joe:
We’ve got two fictional characters, Manny and Neo. I know Neo. I think people are familiar with those characters, but Manny. Who’s Manny? I don’t know that one.
Alex D.:
Shout out to listeners who got that. Manny is from a cult TV show Black Books where they run a bookshop. My name is Alex Denning.
Joe:
Yeah. We’ve got Alex Denning on the pod this week, who we’ve known for a little while and then we’ve also got Neo. Neo, why’d you choose that character this week?
Tom F.:
Huge Matrix fan and I’m actually outside the Bay Area and before all this crazy COVID stuff started happening, they were filming actually the next Matrix, so I think it’s good timing to revive the Matrix fandom.
Joe:
Nice. I’m a big Matrix fan too. I’ve always been, ever since the first one. I think my dad and I always went to see the new Matrix when it came out in theaters and stuff, so I definitely remember Matrix Reloaded and that highway car chase. I was like, “Yes, excellent.” Cool, we’ve got Alex and Tom on the pod this week. Why don’t we, Alex first, give people a quick intro to who you are and then we’ll go to Tom? Then we’ll just kind of get into today’s episode.
Alex D.:
Sure. My name’s Alex. I run a marketing agency called Ellipses Marketing and we do marketing for WordPress businesses. I have been involved in WordPress for 13 years maybe, so just a little while and also, co-author a weekly newsletter for WordPress people called MasterWP.co, the people say it’s good and that they read.
Joe:
I second it. I say it’s good. Christie, I think-
Christie:
I third it. It’s good.
Tom F.:
I fourth it.
Joe:
Yeah, and we talked about MasterWP… I mean, I think we’ve talked about it in multiple episodes, but in the funding episode we did recently, we touched on a big topic in the MasterWP newsletter that was actually authored by our other guest today who is Tom. So, Tom, give folks a little intro about who you are as well.
Tom F.:
Sure, yeah. Thanks. My name’s Tom Finelli. I’m the CEO of [Convesio 00:02:56] and we are sort of trying to revolutionize WordPress hosting. We’re a container based, highly scalable, highly performant hosting platform for WordPress and we’re basically trying to rewrite the book on how to host WordPress.
Joe:
Whoa, tall order for this week. It’ll be interesting to have a couple hosting folks on the pod this week, Christie. We’ve got obviously [inaudible 00:03:23] nexus and then we have Convesio too so we can talk more hosting stuff that goes way over my head.
Christie:
Ooh, hosting.
Joe:
Yeah. Cool. Convesio, what’s the… Man, you’re talking a big game about changing the world of hosting. What makes Convesio different than other hosting out there?
Tom F.:
Yeah, so let me give you a little history of the genesis of the idea of how we came up. It’s awesome to be here with people that have been working in WordPress for a really long time. I’m going to date myself a little bit, but I started building websites in the mid to late ’90s and so, before WordPress was, I don’t know, maybe even an idea in someone’s head. But I was using a product called Adobe Pagemill, so I started my career in the agency space and I transitioned into tech companies and really my DNA is product marketing and technology.
Did some executive roles at sales companies. 11 years ago, moved to California to work for a startup. A year into the gig, we sold the company and then a year later, the company that bought us had an IPO and I stayed there for another, gosh, five years, I think. I was very fortunate. I did the whole startup to exit to IPO thing in a short period of time, coming out to California.
I worked in enterprises for the following, I don’t know, eight or ten years. That experience showed me this huge chasm between what enterprise hosting has, disaster recovery, scalability, containerization, all of these really cool things that you can do at the enterprise level and when you see where shared, VPS, dedicated hosted, all of this stuff I put under legacy hosting, it really bothered me that so many hosting companies just “me too” one another. They license [c-panel 00:05:40], throw it on some servers.
They’re literally the same thing from one company to another. The only thing that is different is the marketing. So, as a product person, it really bothered me that there was so little innovation taking place in the hosting space. Three years ago, I decided to see if we could completely rewrite the book on hosting with a custom tech stack and using containers and all the latest technologies available since it felt like hosting was stuck in the 15 years ago time space.
So, we did that. We went to beta, we got some raving fans, and what we do that is really different than other hosting providers is we’ve broken the entire tech stack of WordPress into different layers and microservices. We deploy sites not on one server and share the resources, but on a cluster of servers and the database is replicated across multiple nodes in the cluster.
The WordPress instance can scale up in seconds across multiple servers in the cluster and then everything is load balanced natively, so your WordPress runs in this multi-instance type of environment, which helps remove single points of failure traditionally associated with WordPress, like my database goes down and my entire VPS is offline with all my sites.
We’ve tried to flip the model from going from all of these single points of failure associated with shared and VPS hosting and make a redundant, very resilient, and highly native, scalable WordPress platform and that’s what we’re doing. As you guys know and you mentioned, we just raised just over a million dollars with 800 plus investors. We just closed that in December and that’s been an exciting journey for us and a lot of validation that what we’re doing…
Basically, we’ve come out of beta and we’ve started hustling, so everyday for me is a sales, marketing, keeping customers happy, hustle and trying to continue to evolve our platform to fulfill and deliver on those promises.
Joe:
Yeah. Cool, man. You just talked a whole ton about hosting infrastructure and as a non-technical person, I’m like, “That sounds cool. Yeah.” I’m like, it sounds very impressive and I’m sure that it is. I’m also just like, “Oh, yeah. I guess I’ll take your word for it,” because all the container stuff, I’m like, “Yeah, sure. Sounds great.” Christie maybe will ask some better questions about it than I could probably.
Christie:
I think that for both your sake and the thing about having questions is that when you have a question, most likely other people have a question. For our listeners, let me give it a stab at simplifying it.
Tom F.:
I love this. This is always fun.
Christie:
Yeah. My job at Liquid Web is as the single product manager for the Manage WooCommerce line, so in terms of the skills that I bring to the table, I bring sort of what the organization would call WordPress and up the stack. I’m talking about WordPress sometimes, but really I’m talking about the plugin ecosystem most of the time, so Woo Commerce and up. Thinking about WooCommerce, thinking about the other plugin ecosystems that exist, thinking about the WordPress ecosystem that exists and the types of people who buy Manage WooCommerce hosting and bringing in market understanding to do competitive analysis and things like that.
That’s a lot of what my job is. Liquid Web is a very market driven IT services company, but as part of my job, I have to understand everything Tom just said because if I don’t understand everything Tom just said, at some high level, I don’t know what technologies you’re deploying and how, but I have to get why that’s better.
Essentially, I’ll encourage you to think about it this way. In the traditional paradigm of WordPress hosting, you would at the cheapest level get space on a shared VPS. There is a box. If you get it from Liquid Web, it’s in Lansing or somewhere else, depending on some of our international locations but centralized in Lansing. If you get it from Nexus, it’s in Detroit. There’s a box.
Although with Nexus, that’s different and we’ll get there but with Liquid Web, traditionally, there’s a box and multiple people are on that box and multiple websites are on that box. If somebody else says, “Hey, we’re having a viral campaign and ten million people are going to come to my site”, the box is like, “Nope, we’re done. We can’t do this. This is too much.” Okay. Our first solution to that was, “What if you had your own boxes?”
Yeah, nobody can bring you down if you go viral if you have your own box. Dedicated VPS hosting. That’s the enterprise, that’s the high end solution, it’s a dedicated box. Well, the problem with the dedicated box is that it still has a number of limited resources, so even if it’s just you in the box, if you get 100 million views because your Instagram post went viral, you’re bringing yourself down.
The next space there was what Tom is talking about. How do we dynamically allocate resources to different requests across multiple servers, whether virtual or physical, to make sure that everything has what it needs and that everything stays up and has maximum stability, point one. Then you also said something about replicated databases. That sounds to me like maybe a way to distribute the kinds of queries that we do.
WordPress asks for a lot of different stuff. Many of us use WordPress for both external calls, what we see on the page, what we see on the checkout, but also internal calls like what do we have in terms of our order data, what do we have in terms of analytics in the WordPress dashboard. At scale, that kind of stuff gets super slow and I can give you the world’s biggest, greatest, shiniest box ever but I can’t really. Not when you’re running millions and millions and millions of requests a day.
When Tom were talking about enterprise hosting, he was talking about the way in which we hear all these things that we pair with them of Time Magazine uses WordPress, Beyonce uses WordPress, right? But the reality of situations like that is that there is a lot of custom infrastructure work that goes into making sure that that works. At the enterprise level, that happens because there is a team that is standing up container based cluster on cloud stuff and again, I have to understand this at a high level, right? To make sure that those WordPress websites stay up reliably, usually we’re using something like AWS or GCP to make sure that that is custom created.
But that means that you are going to be responsible for that entire custom infrastructure instances. So, what companies like Convesio…
Tom F.:
That’s correct, yeah.
Christie:
What [inaudible 00:13:28] like Convesio are doing is productizing that concept. How do we give you that whole thing at scale? What’s interesting is that, and the community is slowly learning about this, which is that Liquid Web acquired a small company in Detroit called Nexus and Nexus is essentially that. So, we are figuring out the ways to describe how and why and the different ways in which that is better and can be done at scale and Nexus in particular hit this nail on the head with Magento.
Right? So, the thesis there is well, they did it really well with Magento, how do we bring that to WordPress? This is actually super cool. I hope that helps bring some clarity to the people like me who are operating in the site implementor and you know the products and you know the ecosystem and you know the concept of grabbing the right tools to put together a pretty looking website using minimal code to understand how a company like Convesio is bringing you something really exciting.
Joe:
Yeah, super cool. That was actually super helpful for me, Christie. I think what you and Tom both just said kind of came together in my brain and helped me to understand a little bit more about the scalability of hosting and how that works. That’s cool. Tom, I do want to come back and talk about the funding stuff at some point because Christie and I just had a great episode all about funding in the WordPress space and I think both of us would like to dive into that a little deeper.
But Alex, I also want to talk to you a little bit about the part you’re bringing to the equation, just the helping of the marketing stuff with Convesio. Maybe we can talk about that for a few minutes here.
Alex D.:
Yeah, so I have been working with Tom for nearly two years now, I think and yeah, it’s a lot of… I guess it’s developed a bit in that it was a lot of education to start with. People understand what they have to the extent that they need to and this is something new, so we need to talk about why that’s different, why that’s better. Specifically for Convesio, it’s quite interesting in terms of the benefits that you can bring that are non-technology to the target audience.
If I run an agency and I have 100 sites and I get a phone call in the middle of the night because my client’s site’s gone down, I get blamed for that but I don’t get any sleep and that’s just a bad outcome. If your hosting provider is taking care of that kind of thing automatically for you, then I can sleep better at night and that’s great because I love my sleep. You can apply that across all sorts of things.
That’s good for your MRL. It’s good for that because your clients are going to stay and spend more money with you, et cetera, so you might be able to [inaudible 00:16:46] your support in making that contract or whatever it looks like. Yeah, we’ve done a lot of that. At the moment, we are supporting Convesio in their efforts to get people to join. Yeah.
Joe:
Yeah, very cool. Alex, had you done marketing for a hosting company like this in the past? Is this something you had to pick up on as you were trying to market? Because a lot of marketing is learning the product and how it works and I’m hearing this as a marketer and I’m like, “That sounds kind of hard to market because I don’t really know much about the technical aspects of hosting,” and I probably lean more towards what are the non-technical benefits like getting more sleep and having your clients’ websites stay up more and that kind of stuff. Was this your first time doing hosting stuff, Alex?
Alex D.:
Yeah. We have internally a big cheat sheet on the technical stuff [inaudible 00:17:39] Tom. The non-technical benefits are important and to some extent, resonate more with the specific target audience right now, I think. Yes, you and I can understand that sleeping is good and how being phoned in the middle of the night because the site has gone down is bad.
Joe:
Yeah.
Tom F.:
I think there’s two aspects to this, which is the question of how are we different and how are we disrupting the marketplace and then what’s the… We do that through our technology and then the other aspect is the one that really resonates to the masses, which is what’s the value of that difference. It’s a bunch of these short little snippets of things like we’re 239% faster, we take complete accountability for your sites being online, we monitor sites at every minute. If anything happens, our team intervenes 24/7 and so, that’s the kind of stuff that I think goes from a feature to a benefit and that’s what Alex has really been great at helping us figure out.
Joe:
Yeah. Go ahead, Christie.
Christie:
That’s also a lot of my job. At a larger company like Liquid Web that is trying to innovate the best that it can at its size and scale, what a product manager does effectively communicate and build bridges between marketing and engineering and sales so that everybody can understand what we’re selling and so that we can look at market perspectives and product descriptions to sell something and grow something effectively.
In a setting where product managers aren’t needed, Alex’s and Tom’s are talking directly to each others which creates efficiency and then in large, big, slow, bumbling corporations, you have little Christies running around talking about an Instagram post bringing down boxes to help people across the entire organization understand.
For example, one big challenge that we see and that we’ve started to see as we’ve started to shift from, “Hey, Liquid Web is good because you get your own dedicated server on every single high end Manage WooCommerce plan,” to, “Hey, Liquid Web bought Nexus and Nexus is good because you get this auto scaling Nexus cloud platform.”
Now, people will say, “Well, it’s dedicated,” and we’re like, “Well, no, it’s better.” They’re like, “Oh no, it’s not dedicated. It’s shared. Shared is bad. Bye.” It’s like, “Wait, no, no, no, no. Hold on, hold on. Wait, wait, wait.” Right? The big conversation that we have is how do we work the innovation against the status quo of what this product ecosystem and what this market is used to. I’m sure you’re all dealing with that and trust me, we’re dealing with it too.
Tom F.:
Yeah, I mean I think of people like Elon Musk, right? Before I moved to the Bay Area, I was in Florida and I remember a time 15 years ago where people were just downright anti electric vehicles. You think about how long he’s been working at changing the tide of perception to now these things have become like a status symbol. That’s a great example of how sometimes, believe me, I know what we do is complicated and it’s hard.
I remember when I first started building websites for people. Do you know the biggest challenge people had when we would build a website was setting up their email? Now, people rarely ask for help with how do I configure pop servers and iMap servers because collectively, the community as a whole, the world has gotten much more tech savvy. I see that kind of paralleling hosting a little bit in the fact that there’s such an entrenched standard of shared and VPS hosting that when something new comes along and it’s drastically different, there’s a bit of an education curve to it.
Right now, I would say we’re getting the early adopters, the people who get what I said and they’re like, “Wow, that’s cool.” Alex is trying to broaden that for us but it’s certainly people who are open to going with something that’s still new and still evolving.
Joe:
Yeah, hosting is such a big… I mean, every website online needs hosting and it’s such a big industry that it’s hard to move the entire industry away from something like c-panel. Not everything’s bad about c-panel, but Christie and I definitely talk about c-panel in our last Q&A episode and we’re like, “There’s some definite issues with it.” Yeah, Tom, I would also love to talk about the funding stuff because Christie and I got a lot of great feedback from our funding episode.
We had a ton of listeners and we got a lot of people that were like, “That was a really good episode”, so I think people probably are hungry to hear a little bit more about that. It’s interesting to hear someone from your background coming into the WordPress space and trying to innovate on something like hosting, especially someone with more of a tech background. A lot of WordPress folks have WordPress backgrounds. Alex and I have been working WordPress for Alex for a long, long time.
Christie and I, probably for somewhat similar amount of time. I don’t know, I’ve been eight years or so but a lot of WordPress, but not as much in the more tech scene, like the bigger tech scene. As someone who raised money to build a company that’s working in the WordPress space, it’s very interesting to us. Christie and I literally said that in that episode. We were like, “We want to talk to more people who are doing more funding stuff. That’s super interesting to us.”
Could we talk a little bit about the million dollars you raised? From 800 people, that’s also… I want to touch on that because you’re not raising from [inaudible 00:24:04] two people, you’re probably raising $10,000 from smaller maybe angel investors. Can you tell us the walking through of how that worked and how you came out the other side of it?
Tom F.:
Yeah, sure. I’ll start with the fact that when I had mentioned earlier I moved to the Bay Area 10 years ago, 11 years ago now, that was in a space, the prop tech industry. So, it’s a subsection of real estate dealing with usually rentals. So, that space, the company that we took public was the first unicorn in that space. Now, fast forward eight, nine years later, that space has blown up. There’s conferences with hundreds of startups that attend. There’s billions of dollars in VC money that’s getting poured into it and it’s this flourishing industry that people now purposely go into with the model of raising money for a startup, a more traditional-
Joe:
It’s pop tech, you said?
Tom F.:
Property technology.
Joe:
Prop tech. Property technology.
Tom F.:
Right, and so basically, I see this type of thing happening in WordPress because I think the big shift in prop tech was that when we went public, which WP Engine I predict is going to be the first to do this in the WordPress space, now you’ve got EIG and GoDaddy and other web companies that are public, but when the institutional investment community starts to see that there is a unicorn in the WordPress space, it’s going to change the dynamic of the industry.
WordPress is very grassroots because it’s an open source industry and while there’s some great examples of open source industries just blowing up, I think that the investment community is still unsure exactly how, especially the non-tech investment community, is still unsure how to wrap their head around it. I think WP Engine, when they go and they have their IPO, we’ll be able to see man, there’s now a billion dollar company in the WordPress space. Automatic is going to follow it, maybe Pantheon with follow them, who knows?
But there’s going to be a string of IPOs and people are going to start to realize the profound nature of a platform controlling 35, 30 some percent and growing of the web. Okay? You look at people who get super excited about the Wixs of the world. They’re around three percent market share, compared to WordPress’s 30 some, five percent, whatever it is. It’s going up every month.
I think that that has made it both traditionally difficult to raise money, because we started pitching angel investors and I pitched for some angel groups and they’re like, “Wait, what’s WordPress?” So, I immediately realized, “This is the wrong crew. I’m not in front of the right people. They don’t get this. They don’t get what we’re doing.”
So, we decided, after sort of trying to find some people in the VC community to partner with, a buddy of mine came to me and said, “Hey, you should check out what’s called equity crowdfunding. I just raised a million bucks on it for my startup. You should check it out. I’m going to introduce you to some people that can help you.” He introduced me to a company called WeFunder.
In 2016, Obama implemented the JOBS Act and as part of that, they lifted the restrictions on being what’s called an accredited investor to investing in startups. To be an accredited investor, you need a million dollars in net assets or three years of 200k or more verifiable income. Then they basically say you know enough or you have enough wherewithal to invest in startups.
With the removal of that limitation, it’s created this hybrid where sites like Kickstarter, where they’ve got massive amounts of people wanting to help start startups, and investment community models have come together and they’ve created these sites like WeFunder or Start Engine, they’re both the two big guys in the space but there’s dozens of other ones. Basically what they do is they allow hundreds of investors, thousands of investors to make micro investments.
But unlike Kickstarter, and by the way this is one of the biggest things we struggled with was explaining the difference to people investing because a lot of people are like, “Wait a second, this is like Kickstarter, I’m just making a donation”, you actually own equity in the company that you invest in. It’s a real funding vehicle, it’s regulated by the SEC and Finra and we basically leveraged that through what’s called a regulation CF or regulation crowdfunding campaign. That allows you to raise somewhere around a million dollars.
That’s what we decided to do. There was a lot of work launching that campaign and I’m happy to talk about that if you want, but that’s really what we used and we used WeFunder to run our campaign.
Joe:
Gotcha. Yeah, cool. I figured it was something like that, but I didn’t know about WeFunder specifically and that model of buying equity in the companies and stuff. I mean, that’s a cool model for people who may not have a million dollars in assets or whatever. I think you said they make $200,000 two years in a row.
Tom F.:
Right.
Joe:
Most probably haven’t done those things and still probably want to maybe do a little more than getting out the Robin Hood app and try and do a little [inaudible 00:29:54] company, so…
Tom F.:
It lets individuals invest in companies they believe in and that they want to get behind and they want to go on this and that’s why I love it for WordPress. WordPress is so community driven. For us to be able to give people the ability to get into actually own a piece of hosting company that will hopefully turn into the next WP Engine, Pantheon, Flywheel, is a really cool way to I think keep your customers and your fans close to you in a way where you have this shared success.
As we grow, we have the ability to bring people along on that journey with us, so that’s a really cool proposition that I hope more WordPress businesses and companies take advantage of this. By the way, if anyone’s interested and wants more details on this, you can reach out to me. I want to kind of be an advocate of WordPress businesses using this to help generate capital for them to make more investments, because that’s going to make the overall ecosystem of our products and services much better.
Joe:
Yeah. This is becoming very interesting to me hearing this because, because like Christie and I on our last funding episode were talking about, big companies coming in and changing the WordPress space and maybe not for the better. I’m hearing a lot of ways for us as a WordPress, like you said Tom, grassroots community to have more financial control over the future of WordPress just because a lot of us aren’t these top investors or have a hundred million dollars to invest in the WordPress space. We can still invest in companies and have a financial stake in, albeit a small one, but have a financial stake in companies we want to see do well. I don’t know. That has some positive connotations in my mind. Christie, what do you think about that idea? You think that’s something that would be welcome in the WordPress space?
Christie:
Here’s a fun fact about me that you don’t know because, I don’t know [crosstalk 00:32:06].
Joe:
We’ve done 100 episodes and [inaudible 00:32:08] episodes, I learn something new about Christie. I didn’t know that before. Okay, cool.
Christie:
It’s because I am an idea a minute type person and every once in awhile, I act on them, you know? Here’s the fun fact about me that you didn’t know. My Master’s thesis was actually on alternative methods of new venture financing back in 2015. Yep, and I looked deeply into both crowdfunding but also equity crowdfunding and also a lot of zero percent loans, Kiva.org, things like that and all the different methods that are existing beyond sort of the first round of alternative methods of new venture financing, because it’s an interesting topic both in economic development and also business development.
It’s a whole rabbit hole that we should totally do multiple episodes on. It’s super interesting. I’m sure that the things that I learned and dug up in my interviews and research in 2015 are all now just completely obsolete, because it’s such a space that’s changing so quickly. But one of the things that really stood out to me in that research was that your success with these kinds of methods right now is actually closely tied to your existing social capital.
We tend to think of these methods of democratizing the ability to fund raise and they are, but in addition to that, we have to put in other efforts to make sure that people engaging in these alternative fundraising methods are able to leverage people of more privilege and people who have access to resources, right? The thing is when you have money, you know people who have money type situation. And making sure that we make that playing field as level as we possibly can was a big part of the conclusion of that paper for me, which brings me back to something that really caught my attention which was WordPress seems particularly positioned for that because there is such an ability to enter. All you need is time and a computer.
There is such a propensity to help others. I had a call yesterday with someone who is building a new WordPress product and wanted just some tips of getting those first few customers. One of the things that I kept drilling on is you’re going to be surprised at how willing people are to help, to help you, to be advisors to you, and to support you just because you are new and this is a community that believes that everybody rises together.
I was surprised when I started working with WordPress at the way in which my top competitors all wanted to give me good advice. I was like, “What? What’s happening here?” One of the most incredible moments I think in the WordPress ecosystem that I had was I spoke at WordCamp San Jose and I got to meet the creator of Gravity Forms while I was working on Caldera Forms, Carl Hancock. He was kind, encouraging, had lots of good advice and lots of positive spirits to give me.
This ecosystem knows that there are billions of people in this world and they all need websites and it doesn’t see what we’re doing as limited pie, which is the perfect foundation for an equitable and democratized system for new venture financing. So, I love everything about this.
Tom F.:
Yeah, well said.
Joe:
Cool. Alex, as someone who writes this super popular newsletter in the WordPress space that I think most people in the WordPress community who I knew subscribe and read and check it out, as someone who puts that newsletter together and putting together Tom’s update on Convesio and this thought on companies potentially IPO’ing and that bringing a lot of attention to the WordPress community, is that something you’re starting to see and hear more rumblings about?
[inaudible 00:36:38] that in general but also funding in the WordPress space just as someone who does a lot of gathering of information and delivers it to folks.
Alex D.:
I’ve been running this newsletter for just over three years now. We do it every week and that probably coincides with when this has really taken off. There was I guess a slow down the last couple of months but there was a time at which every week, there was someone’s raised $100,000, not even worth mentioning. Come back to me when you’ve got a million.
There was a time when 100,000 was very exciting and everyone dropped everything for that. Automatics invested in whoever. Two years ago, I would’ve known exactly all the details. There was something last week, I didn’t even look. For me, I’ve accidentally become a source of news for people.
Christie:
[crosstalk 00:37:46]
Alex D.:
People increasingly leak us stuff, which is fun and yeah, there’s just more and more and more and it’s not going to stop and we’re going to see hopefully more equity crowdfunding but also more just straight up, here’s a big pile of money, go ahead and do something with it. There’s been a lot this year. Elementor, $15 million. Stratic, I think $6.5 million. Others who I forget the names of, my apologies, and we’re just going to see more and more of that and those numbers are going… The baseline for what is a normal amount is just going up and up.
Tom F.:
Yeah, and what’s interesting is if you look a little below the surface of those, what I look at is who is investing. Excuse me. You take Elementor for example, their lead investor was Lightspeed. That’s a top tier VC in the Bay Area, okay? And beyond. You look at Stratic and they had some lesser known ones but they had participation by Excel. Excel is one of the top three venture partners in Silicon Valley. I mean, they were Spotify, Facebook, early stage. I mean, they’re a titan in the VC world.
If these guys can get validation of these top tier VCs, that is a really big sign that these more traditional sources of venture capital are wising up to the maturity of the WordPress space. The other thing that I would say is the fact that while Stratic and Elementor are both WordPress companies for sure, I think a lot of the buzz around Stratic is the serverless possibility and I think a lot of the buzz around Elementor, quite frankly, is the notion that we help people built websites, okay?
I think there was some hinting at their press release on this that the story that they’re talking about is something that goes beyond just WordPress, right? It starts to touch into this notion of where Wix is at, which is we make it easy for people to build websites and get online. Make no mistake, that market is massive, okay? Lots of people want to get online but it’s a totally different animal than the agency developer space who’s building five WordPress sites a month and they’re totally baked in on that.
I think that while WordPress is definitely a narrative in those and a very important one, I think it’s cool to see how we’re attracting these more traditional VC sources and the valuations, to Alex’s point, just keep going up, up, up and up. I think those are all really encouraging signs as to where the market’s heading.
TechCrunch posted an article in the beginning of 2018. They said WordPress was the most underfunded, one of the most underfunded VC segments of the technology landscape. Now, 300 million from Salesforce into Automatic skews those numbers, but you take that out, it still remains there’s very, very minimal VC investment into WordPress companies.
Alex D.:
Something else that’s exciting about the Elementor and Stratic deals is those are not US companies which, for me as a European, is very exciting because I don’t think… They’re isolated examples before, but for those two to come along quickly was very exciting and that paves the way I think for more of those.
Joe:
Yeah, for sure. I had not looked a ton into the actual funders or the people behind the VC money but that is super interesting to me. Thank you both for talking about that because I have not really thought about it in that way and it is enlightening to hear that wow, some of the top VC firms, some international VC interest is coming in. All these different companies you’ve talked about getting VC funding, they’re all somewhat in different spaces. Convesio is, as you know, doing funding and there’s kind of the headless WordPress stuff with Stratic and then Page Builder potentially aiming more towards a closed system in Elementor.
I mean, all kind of in different spaces. Tom, what you said made me think that maybe this is VCs kind of dipping their toe in the water and seeing what’s going on in the WordPress space. Obviously, these companies have a lot of money they’ve invested in things like Facebook. They probably are doing pretty well financially. This may just be the first step for some of these VC firms and then they may start looking for bigger options. I don’t know.
Tom F.:
Yeah, the ecosystem is so broad, I think that’s absolutely going to happen.
Alex D.:
That’s a very important point. We think of it as WordPress, but that WordPress market splits out so many different ways. I run a marketing agency that obviously can’t work with two people doing the same thing, so we have a conflict of interest rule and we basically never have to deal with it. I can think of twice in the last three years where we’ve had two people who are actually doing the same thing because WordPress splits out so many different ways. You look at your form plugins, which you would I guess think is a fairly narrow space, but no.
Christie:
No, no, right? One of the big things there was why are WP Forms and Formidable Forms now under the same thing? What? It’s like, because they’re completely different. There’s so much space and that is only thinking about the people who even identify as being WordPress related, because before I was involved with the WordPress community, I was working with WordPress every single day and at no point was I like, “I am a part of the WordPress community” because nonprofits don’t think of themselves as part of the WordPress community, agencies serving major NGOs building WordPress websites don’t think of themselves as part of the WordPress community. They’re the nonprofit tech community.
Associations don’t think of themselves as part of the WordPress community. The people who serve the technologies required for associations which mostly leverage open source technologies and member plugins and things like that to run association websites do not think of themselves as part of the WordPress community, so it’s huge. Because it’s distributed, we haven’t seen the way that all the links fit together, but they’re all there under the hood if you understand the market and you understand the products.
Tom F.:
Yeah, think of how many companies have… We just participated in the Ecom Services Summit just a couple weeks ago and I was on a panel there and one of the companies was this company OmniSend and they do multichannel ecommerce and I don’t think they think of themselves as part of the WordPress community, but they have a deep WordPress integration plugin and I think I’ve seen a bunch of companies like that before and it’s almost like they look at WordPress as an extension to what they’re doing, but they don’t realize, “Man, I could actually go into the community and leverage that a heck of a lot more as a channel to engage people than I could just going, oh, I’ve got a few WordPress users, I’m going to build a plugin for them.” You know?
So, I think it’s mindset in some of these bigger companies as to do you want to part of the community and contribute or do you just see it as something that’s this, I’ve got a need for a plugin so I’m going to build one and you never even think of yourself as part of the community.
Joe:
Yeah, that’s totally true. There’s so many companies that try to, I don’t know, get into the WordPress space or do more WordPress. Well, you’re right. There are a lot that don’t take advantage of it and just kind of almost even know the communities there. A lot do, but they don’t really know how to get into the community. Tom, I think it was very smart of you to work with someone like Alex who has a lot of experience in the WordPress community because I’ve seen a ton of companies try to come in and it’s like, that’s not really-
Christie:
Yikes. Yeah, I’ve seen that so much. It’s so cringey, right? Hiring Alex was such a smart move because Alex deeply understands the ecosystem and it is more common than not to watch outsider companies come in and just be cringey in weird, small ways, like not capitalizing the P and other things that are so inconsequential and yet mean the world when competition is high and details matter.
Tom F.:
Yeah, I don’t know who this guy Alex is. I hired Manny and so, Manny’s awesome. You should check him out. He’s great.
Alex D.:
That’s a good point about the capital P though. That’s just the single biggest thing. Single smallest biggest thing that you can do to signal that you understand what’s going on.
Christie:
Or the C in WooCommerce. That’s one that I end up dealing with now or even the understanding of how WordPress and WooCommerce fit together, right? With the larger ecommerce world, the larger ecommerce world is looking at WooCommerce like, “Whoa. Okay, hold on, that’s a thing.” Then they try to market to it and without understanding the deeper ecosystem around it, it just seems weird. Right? If you don’t understand that WooCommerce subset of WordPress and how, you’re going to put your foot in your mouth in lots of awkward ways which is why you need competent and… I don’t think competent is the right word. I think involved is the right word, people on your team.
Tom F.:
Can I ask a question of Christie? I mean, I know I’m not the host.
Joe:
Turns the interview on Christie.
Tom F.:
This is something that… Christie, I was really hoping when Automatic took the 300 million from Salesforce that… In my mind, I was telling myself this narrative that they’ve seen what Shopify’s done and they’re just angry about it and they basically have taken this investment capital and they’re going to crush Shopify with WooCommerce and then the Tumblr thing came into play. I’m like, I want to know your opinion being so close to WooCommerce. Are we just going to let Shopify eat our lunch for another 10 years or what are we going to do here?
That Shopify situation is… I mean, it’s an amazing story but it’s also bittersweet because I’m like, “Man, that should be WooCommerce.” What’s your thoughts on that?
Christie:
Tom, let me start by saying that my hair is full of secrets I can’t disclose. That’s why it’s so big.
Tom F.:
That’s not fair.
Joe:
She’s going to drop Alex some secret [inaudible 00:49:49].
Christie:
But in terms of the question, for real, for real, I think that’s exactly what we’re doing. That’s what’s going to happen. Now, the problem is that you want it to happen faster. We all want it to happen faster. We want to see the turnaround overnight and that is what we’re not seeing and why is that? I don’t know, because we need more hurried, spazzy people in there. That’s okay. That is the nature of these things is that change happens slowly and all at once
I do think we’re going in that direction. The conversations that I’m internally from my boss and my boss’s boss all are throwing me in that direction. The innovations that we’re seeing surrounding WooCommerce and then also surrounding… I just lost my train of thought. The innovations that we’re seeing surrounding WooCommerce, both itself and also the companies that exist around to prop it up, are all about that.
Within WooCommerce, we just saw WooCommerce payments roll out. That’s a clear attempt at moving in that direction. Within the innovations surrounding WooCommerce, I just told you all what the hosting end is working on, right? Liquid Web sort of was the first one to hit with this Manage WooCommerce idea and now we’re making the underlying infrastructure even bigger and better while continuing to add stuff to the top so that it’s an all inclusive feature rich platform. That is also going after the Shopify lunch.
Then the last thing that I look at is numbers. Shopify has lots of money, so it feels like they’re everywhere and they have lots of reach at the lower end of the market so it feels like it’s absolutely everywhere, but Shopify only maintains a third of the market share that WooCommerce maintains right now. So, WooCommerce kind of came in and took over. Why? Because of the proliferation of WordPress.
If you already have a WordPress website, you can install WooCommerce on there and then there you go, you have an ecommerce store now. That is not to say that that means anything. Actually, that means nothing at all. You could overtake that with enough money. Boom, bye. Knock WooCommerce out of the park, which is why WooCommerce needs to catch up with all the other feature functionalities and quickly. That’s what you’re feeling. That’s exactly where everybody’s minds are. We just need to move faster.
Tom F.:
Yeah. Cool. I’ll sleep a little bit better at night knowing that you’ve told me secretively it’s happening.
Joe:
Christie’s [inaudible 00:52:25] the WooCommerce train. Cool. That’s probably a good place to start wrapping up today’s episode. This was super informative for me. I had a ton of fun talking with all three of you. This is, I think, our first episode with four people and it actually went pretty well, I think. Awesome. Let’s wrap up. Tom and Alex. Alex, you first. Where can people find you online if they want to catch up with you?
Alex D.:
I run Ellipses Marketing if you would like some marketing.
Christie:
Please buy my marketing.
Alex D.:
Our website is getellipses.com. I’m also on Twitter, just my name, @alexdenning and I run MasterWP.co, which as we all agreed, is a pretty good newsletter that you may like to read.
Tom F.:
Go sign up.
Joe:
[crosstalk 00:53:17] good. Cool. Thanks. How about you, Tom?
Tom F.:
Yeah, you can find me at… My email is tom@convesio.com. Feel free to email me if you’ve got questions and you can find me @tfinelli on Twitter or LinkedIn.
Joe:
Right on. Last thing we ask our guests to do every episode is to ask our listeners for a little five star iTunes review, so Tom, maybe you could ask our listeners here for a little review for the show.
Tom F.:
Yes, so to all the WPMRR listeners, please go to iTunes and give us a five star rating for the awesome job Joe and Christie are doing with this.
Alex D.:
I listen to no podcasts apart from yours, pretty much. So, five stars.
Christie:
Special.
Joe:
Thank you. If you’re giving a review, make sure in the comments, you leave obviously your favorite emoji but also something you learned from this episode, something you took away, maybe Tom and Alex’s names so we can send them a screenshot and say thank you for the review. Poo poo. How else do we wrap up the show? If you wanted to leave that review, WPMRR.com/itunes. We direct you right there.
If you’re a new listener to the show, if this is your first episode or second episode or third episode, go back through some old episodes. This is going to be episode 101, so we’ve literally got 100 other episodes for you to listen to. So, go back and check out some old ones. Got a ton of content there. Q&A episodes. Christie, you want to talk about Q&A episodes?
Christie:
I want to talk about how I just followed Tom on Twitter, who was the only person on this podcast that I didn’t already follow on Twitter, so if you want to be just like me, follow Tom or I don’t know. If you don’t want to be just like me, still follow Tom. What was the real question? The real question was if I want to tell people about…
Joe:
Q&A episodes. [crosstalk 00:55:23] should they reach out to us for [inaudible 00:55:25]?
Christie:
Hey, if you have questions about what you heard today or anything else that you hear in the binge listening of WPMRR that you’re going to do because we recommended it, let us know. We have an email inbox where you can send your questions and it is yo@wpmrr.com. Why? Because we are hip and cool and totally not in our 30s or old. I love answering questions. I think Q&A episodes are super fun, so that will make me really happy.
I’ve been pushing Joe for the past month now on letting me do a WPMRR episode that is just bad advice with Christie [Churinos 00:56:03], so if you think that would be funny, you can send your questions and we will do a bad advice with Christie Churinos episode.
Joe:
Yes, love that. It’s coming. Cool. Check out Convesio, check out MasterWP, check out Ellipses Marketing, check out Nexus, Liquid Web, WP Boss, WPMRR, all of the above. We’ll be in your podcast player again next Tuesday. Tom and Alex, thanks again for being on. It’s been real.
Tom F.:
Thanks so much.
Alex D.:
Thank you, guys.
