Episode 406: Running a Plugin Company With Katie Keith

Hey everybody, Rob Cairns here and today I’m with Katie Keith. How are you, Katie?

Hey, I’m great. Thanks. Thanks for having me.

Such a pleasure. So one of the things I always do when people are in the WordPress space is I like to ask them how they got into WordPress. So let’s kind of start there. How did you get into WordPress? 80 originally.

So in early 2010, so that’s 14 years ago, my husband and I were starting a web design business and he was researching the best ways to start. To build a website for a client and he came across WordPress and he said to me I found this thing called WordPress and you can use to build websites. It’s mostly used for blogging but it looks like you can use it to build a business website and I was like hmm, that doesn’t sound right. And he told me about the themes which he called. Templates and all that kind of thing. And I thought this doesn’t sound good. A template based blog.

Yeah.

System that’s not. A professional business website. So I was really cynical. But he was right.

And and it’s funny because as we know, those of us have been around for a while, WordPress has really evolved. And the and the themes and the plugins etcetera have evolved with it. I mean I can remember you know, I was telling a story the other day when we first started talking about page builders and the community just wasn’t ready for it. And there was a theme at the time called Headway themes. I don’t know if you remember. Headway things.

Yes.

Yeah, but, and it was more like a drop in drag and drop block system. And I think one of his biggest downfalls beat between another multitude of things that happened was they were way ahead of their time. The community just wasn’t ready for that and that’s. You know, that’s kind of the strength of our process. The community, isn’t it, Kitty?

Absolutely. Yeah. I think that’s what keeps it so far ahead of anything else. I mean, nothing can touch it for market share, can it? And there’s so much momentum, which is largely due to the community, the sheer number of people not just working independently but working together to make it a huge success.

Yeah, I I would agree with you and it’s companies like yourself that are. I mean, you’re in it for business. We we’re all in it for business. So you know, let’s stop that. That everything in WordPress is free. I would humbly disagree, but I think your company does a good job in you personally, of being involved in the Community. So thank you. For all your involvement, it’s much appreciated.

Yeah, I think it’s important to share what you’ve learned and I get so much back from the community by sharing what I people share with me, what they do and I learn. So there is selfish reasons to share as well. And then everybody benefits.

Yeah, it’s funny because I your posts are some of those posts I go read on ex regularly because you you’re very transparent in what you share. So I know I appreciate, I’m sure the community does so. Thanks for what you do. You started to plug in. Happening and that’s interesting because I know a couple of people in the plug in space, one a guy who’s I know very well is Adrian. Toby over at Groundhog. Adrian is afraid his dad, interestingly, was one of my mentors in the marketing game at one time. His dad. I know. Mark W card over at WS forms very well, and when the better foam products in my opinion and you started one did your plugin company come out of a need that you were filling for a client and then you just kind of morphed it originally or did you go in with the intention of starting a plug in company?

Both we had the intention of starting a plugging company because we were feeling that would be a business model that we would enjoy more than client work where we’re selling products instead of our time. The usual thing. And so we had that idea first, but then we looked around. Because I always say that the most the best way to find plug in ideas or product ideas, business ideas is go with what you know and what we knew was websites we built for. Sense. And so when we were in the place where we wanted to build our first product, we looked at what projects we were doing for clients. And one of them was they had a massive block with hundreds of posts that was quite hard to find older posts and things. You know how it’s always reverse chronological order. And you know the. Way out doesn’t lend itself very well to finding older content and so this client paid us to build a searchable table of their blog posts, and so we ended up releasing that as a free plugin just to sort. Dip our toe in the water, really to see what’s it like to have a plugin out in the wild. And then we started getting feature requests and they were not what the client had asked for. It was things like how do I list custom post types in a table? How do I list with commerce products in a table with variations and add to cart. Buttons and all these other use cases came from this table blog table that we built for the client. So we the client project to piggyback now several of our most successful plugins.

Yeah, that’s really amazing because a lot of I find over the years a lot of plug and shops have come out of we built a plug in for a client and then we realized, oh, we could sell this now. And so that’s quite common. The biggest part I would say and probably running a plug and chop and that could be wrong. Support supports always an issue. Many of my listeners know that I spent 23 years in tech support before I ran an agency, so been there. I’ve been the team leader for a a large call Center for an internal hospital in the Toronto area, so I’ve been there too. You support a challenge or how do you manage that?

Definitely. When we first started, my husband Andy and myself did all of the support and we couldn’t believe how many support requests there were when we were so new. It felt like every single sale was generating support tickets and we thought this doesn’t feel like the scalable. Business model that we were hoping. For what I’ve learned since then is that there will always be lots of support, but it does reduce when your product matures initially. However well you’ve tested, you cannot test with every possible theme and other plugin out there, so there will be compatibility issues. You will miss some bugs and also you might not have anticipated. All the possible features and use cases that your customers will want. So you’re gonna get support tickets about all of those. And while they’ll never stop, they will reduce when the product matures and you’ve done the first few major updates, added the features that you totally missed would be so essential to your users and things like that. And I handled support myself for a very, very long time because as the founder. I know the product so well and I’m not accountable to anybody, so I can just reel off support tickets. Yeah, very, very quickly. Whereas and I just couldn’t imagine anybody could be as good as me at support and. Eventually it was just ridiculous because I was spending half my time on support and obviously I’m supposed to be building the business and that was bringing a big opportunity cost for us. So we started hiring support people. We mostly use level up for our support, who just provide support. Engineers specifically for WordPress product company. These, and they do all the training and stuff and that really helps and our first level up person. This is in 2019 and he’s still with us now and I was just thrilled with how good he was straight away. I couldn’t believe somebody could represent our product so positively. And while having other people do your support. Will never be as fast as me doing it myself. You have to go do that and go there and have the processes to support that, like canned content and things like that to save some time. And.

Yeah. And I I would actually encourage anybody whether they’re running a plug-in company or running a dev agency or running even a design agency, figure out a support, a trend that’s not just ohh. I’m going to e-mail the owner because that, frankly, is a recipe for disaster. To say that. Is even I use the support ticketing system for my clients because that’s the only way to function properly and to organize I mean organization when you’re doing support is one of the biggest problems and having multiple tickets on the go is another problem. I mean it’s. Just it can explode very quickly on you if you’re not careful. So I would say so developing plugins and we all know plugins are coat and I you know it’s a conversation I always like to have with people is. Run into any big security issues over the years with your plugins and how did you handle?

Amazingly, we actually have never had a security vulnerability discovered in any of our plugins. I’m not quite sure how that happened. Training and security and testing and audits and things, but you know a lot of very reputable plugins get. It might be because most of our plugins are add-ons for WooCommerce and it’s WooCommerce itself which is handling the ordering process and the payments and the more sensitive stuff and we’re using that infrastructure to add additional features. So it might be because we’re that kind of company rather than say a membership plugin or something where. You’re maybe more responsible for user data and things, but we have been very lucky. Fingers crossed.

Yeah, I think you have. Yeah, I think you should find a big pile of wood and touch it like now, because now that you’ve said, yeah, you know what’s gonna happen, right? I just. It’s just you. You just have to be aware, I think. And that’s, you know. And frankly, I I’ve said this on this show and with many people I’ve talked to.

I know now I’ve said that. Yeah.

They play in the security space, so in a big way and I always say security is based on trust and you know, I again what I think helps you guys is you’re really transparent with your users on X or otherwise. Anytime I’ve heard you speak so I think that goes a long way. Too. So that’s that’s. Good. We’ll commerce, we all know WooCommerce is the number one CMS outside of probably Shopify on the Internet, right like give or take I would have.

Believe it’s a lot better Shopify as well.

Yeah. And and I would personally stay away from Shopify having troubleshooted enough client sites over the years. I don’t like going there. What’s the most popular woo plugging up on 2 plugins or?

Our most popular Woo plugin is woo Commerce product table, which was an offshoot from that client project. I told you about who wanted a table of blog posts. We were overwhelmed by the number of people that wanted to list with commerce products with specific features of with commerce in the table like multi select checkboxes. To add to the cart more quickly and variations and tons of stuff about with comma. So we thought should we just add that as like an add-on for our generic post table plugin. Then we decided the demand was big enough that it justified A standalone product table plugin and we definitely made the right call because that plugin since 2016 we’ve done like more than 1.2 million. Revenue on that one plugin, which is significantly more than any of our other plugins ever. And while it’s not our current best seller, it it’s our biggest with Commerce plugin and continues going strong and it used to be the only one on the market which was a really good opportunity for us. And then obviously there’s lots of copycats since then because people realise. So now there’s tons and tons of product table plugins. But hopefully ours is established enough that it continues being good.

Did I hear right saying your revenue on that plug in was about $1.2 million, did they they had?

Yeah. Lifetimes. Since October 2016, yeah.

Yeah. Congratulations for that. That’s not an undertaking that should be treated lightly. That’s really well done in this space. So well done, Katie. That’s great.

Great. Thank you. Yeah, it is amazing, particularly since it’s not an idea we had. It was just an evolution of feature requests on other products, but we never came up with that idea on our own. So I think that’s how you just need to do what you know in the space that you know and listen to clients and potential.

Yep.

Yeah.

I think that’s the key. Now when you sell plugins. And you know, plug and shops and theme shops always have this problem, lifetime deal or no lifetime deal. And why?

Now I don’t understand the controversy about this because if you have the right business plan behind your lifetime deal, there’s nothing wrong with it. Yeah. So our average customer stays with us about 2 1/2 years and we charge for lifetime licenses at 3 1/2 times. The annual. Cost. So that technically makes the lifetime customers more profitable. So we get the upfront extra cash flow and we actually make more out of the lifetime of that user. And so even if they have lots of support tickets five years away, you have to balance that against the.

Ah.

All of the people that buy a lifetime license and then leave after a year. And in addition to that, because we are a multiple product company with lots of plugins, we get a lot of sales from lifetime customers of other plugins. So we have quite a lot of processes for cross selling for example where we will cross promote our plugins using various methods. So somebody might have bought a lifetime license, but that doesn’t mean they stopped spending money with us because we can then sell them our other product. So I think it’s a good opportunity. I wouldn’t want to only do lifetime licenses because you need to know that that recurring revenue is coming in for financial stability in the future. But I think lifetime licenses are a good extra boost.

Yeah, I think we’re the controversy, especially in the WordPress space goes is people. Try and sell lifetime deals cheaper so they don’t like you’ve explained this really well. Your your average customer stays with you for 2 1/2 years, so you price it at about 3 1/2 years, so you’re getting more income that way. Well, a lot of companies kind of say we’re going to offer a lifetime deal as as a deal.

Hmm.

We’re gonna offer that the discount and I think that’s where a lot of companies make that mistake because. Then they get into all these discounted customers in there and then they start opening support tickets and then the ongoing cost becomes how do we pay for the support costs when we don’t have more reoccurring revenue coming in, right? And then it’s it’s kind of a domino effect whereas you guys have been smart and said this is what it’s worth to us. This is what the average customer stays were priced at above that, and then we’re fine. Kind of. And I think that’s the big difference for you.

Hmm.

Well, look at Envato and all the theme forest themes that stopped existing and they had loads of websites, but it just ultimately for most wasn’t a sustainable business model because they were just selling once. I know they’ve tried to claw it back a bit by you have to pay again to get support in the future. But I bet that is a tiny proportion of their old. Customers, whoever come back and pay for support again.

Yeah, I would tell you the only thing that’s ever done well on avocado on a consistent basis, believe or not is. Aveda and Aveda is the only avato theme that’s ever sold over $1,000,000. Living or not, the only one and.

Yeah.

Yeah.

Partially because they’ve they have their own built-in page builder. It’s kind of, in my opinion, it’s kind of a little resource heavy. I wouldn’t go there, but it it does provide a market for some people, but the rest of them now they they just don’t do well and they provide lifetime updates. So if you don’t need support, you’re not paying reoccurring revenue.

Yeah.

So that’s that’s a bit of an issue. As a founder of a plug-in company, what kind of challenges do you run through in terms of balancing your work? And your husband’s a partner, and your marriage. Does that cause interesting balances or not? I have to. Ask.

Well, fair enough. Well, with my own work, the challenge is how much to do myself and how much to delegate, because it’s very hard to hire people who you think are as good as you in certain areas. So like we talked about support, I’ve got great support people.

Mm-hmm.

I know that.

But they’re still not as fast as me, for example, and with because I’ve been marketed by background, I’ve it’s taken me a long time to get to the right marketing team and I still do far too many hands on marketing tasks myself, which I should be asking my team to. Do. Yeah. And with regards to working with my husband, it works better than we might because we have different roles. So he’s a developer by background, whereas I’m more project management and marketing and I handle the business side of things. But I cannot get involved with the technical processes I am involved with the technical project. Management and requirement setting and things, but not the actual how things are implemented technically. So that helps to create a division of responsibilities and he knows not to touch the blog for example as well.

Yeah. And and it’s funny you mentioned you have a background in project management, so do I, doesn’t that really help streamline the processes when you’re you have to be a process driven company a little bit?

Yeah, that’s the thing. I think one reason that’s made us successful is because Andy and I have different skills. Yeah. And you see a lot of so solely technical founders or you might have two software developers that get together to build a company, which is great. And lots have been very successful. But that isn’t a full complement of skills, so they might need to get those skills from elsewhere, or skill up in certain areas which they might not even be interested in. I’ve seen a lot of developers starting a company and feel that they must do some marketing, but they’re not interested. They just want to do the coding. And they, if they might hire someone if they can afford it. But often the marketing then gets neglected, which obviously makes their product less successful, however. What it is so having a fuller complement of skills really helps.

And when you and Andy aren’t working, do you manage to regress and forget the work and, you know, get on with life, so to speak, or does work enter the conversation all the time?

It does, but sometimes we want it to because the other parts of life take over everything as well, and sometimes we’re like we wish we had more time to talk about work. Often we don’t tell each other important things that are happening in our side of the business. So sometimes actually if we’re out for a meal or something, it’s nice to have the opportunity to sit and talk about.

Yep.

Not work, but as you say, not all the time. You need to talk about other things as well.

Right.

Yeah, it’s just interesting. Different founders handle it different way. Running my own business. I know I’ve got a partner in life and I know she’ll ask me how it’s going, but we she’s in a different industry than I am. She’s in the insurance industry, and we’ll talk a little bit about work, but we we really don’t talk about work on purpose. Because it’s for us, it’s better headspace. So it it’s all what works for everybody on your road map. Do you have any big projects or new plugins you’re working on for Burn 2 plugins?

Well, we launched a big plugin yesterday, coincidentally. So we’ve been working on that for like a year. It’s called WooCommerce discount manager and it lets you create all sorts of discounts like normal discounts, buy one, get one free bulk pricing deals. The kind of the full range of discounts. Then we bought that because, again, it came from our other plugins, particularly our WooCommerce Wholesale Pro plugin where our biggest feature request for several years has been a way to add bulk pricing, which is quantity discounts to their wholesale store. And we thought, shall we add it to our wholesale plugin and we thought well, no, it’s too complicated. It’s a really big feature to add to an existing plug-in that not all the users would want. And we and we also thought it has a lot of use cases outside of the wholesale sphere, so. We built it as a stand alone plugin which integrates with our wholesale plugin and adding tons of features to it that the wholesale users won’t need because it’s has a. Their appeal, so that was very exciting, that it was finally launched yesterday and it’s had about 6 sales already, which is even more exciting.

Ohh good. That’s. I was gonna ask you. So that’s a good start off to racist, right. And then and hopefully your community will adopt it even more, which would be a a big help for you. So down the on the road map, do you have anything interesting coming up in the next couple of months or is it basically status quo for a while?

We’re working on a WooCommerce checkout plugin which will allow you to edit the checkout and so that will be our next big plugin release and then after that we’re planning to slow down on the new plugins and instead turn inwards to improving our existing plug. Things so because we’ve been putting so many resources into building new ones, we haven’t been getting through the feature requests for our existing ones as fast as we would have liked. And we have some quite major feature requests that will increase sales as well as keeping customers happy, of course, which we haven’t done and should have done before this so. We need to put those resources into that and in addition, as our development team has grown, we’ve got something like 5 developers now we need to improve our automations and internal processes so that people are working more efficiently.

Yeah, I I think it’s always that those people in the product space, it’s always that juggling. Do you fix your existing not fix or add to your existing products or do you do go and create a new product and it’s always how do we bring on new customers and then how do we keep our existing customers happier and. Happier that, I mean, that’s the balance, right and I think. And that’s what you’re kind of faced with is finding that is working on that balance.

Absolutely. Yeah. And we have too many plugins at the moment. We’ve got 24 premium plugins plus a handful of free ones, and we’re currently looking to sell some of the plugins because now we’ve launched them all. We know what the potential sales of each one are. And which ones customers tend to buy together? And so the ones that aren’t such a good fit, we’re looking at getting rid of and finding somebody to buy them, who will give them justice, I suppose, and keep putting new features in. Whereas from a business perspective, we need to be focusing on our plugins which make the most sales.

Yeah, yeah. And and I saw that on actually on ex. Formerly Twitter that about you were trying to sell them. Have you had a lot of interest in the potential? Sale of those. Against.

Yet so far I’ve had a lot of inquiries and a few offers, none for the asking price yet, but I’m in negotiations at the moment.

I I wish you luck with that. It’s it’s really hard to to say this doesn’t fit our business model and let’s find a good home for it, right? That’s a that’s a hard decision like. It’s your baby, right? So. OK.

Yeah. And we’ve got customers, like for example, we’ve got existing subscribers and we’ve got lifetime customers. And so part of the deal has to be that whoever requires them will look after those customers. Therefore, I need to trust that they will do so. They will maintain the technical quality and also the support. Side of things and honouring their end of the deal. I don’t just wanna sell to the highest bidder regardless of those facts.

As a plug in company founder, what would be the one or two pieces of advice you’d give to somebody who wants to start a plugging company? What would you say to them if you could?

I would say hopefully you’re in WordPress already and let’s assume that you are. Whether it’s freelancing for clients or whatever, look at what you know. Don’t. Just sit down with a blank sheet of paper and try and come up with plug-in ideas. That’s not how it works. You need to look at what you know and what the gaps are. For example, you might have built a custom plugin for a client that has wider potential. I mean, if that client wanted it and it didn’t exist in the market. Is quite likely that others will too. You might have customized existing plugins to add functionality that was missing and that might be a product idea for you. So look at what you know. What are the types of websites that you’ve built and what products might come from that. And. Don’t just think about plugins, because obviously SAS is another opportunity which in many ways is a Better Business model because of the guaranteed renewals and so on. And so think about the SAS potential of your ideas. Don’t just assume it’s going to be a plug in.

You know, Katie, thanks so much for this. If somebody wants to talk to you about burn 2 buggins or anything else, how is the best way?

The best way is probably to reach out on Twitter. I’m Katie Keith Barnes too, and our website isbarn2.com.

Yeah. Thanks, Katie. And also if you want to hear more Katie Katies or regular co-host on Bob Dunn’s do the Woo show as well, so you can go check out some amazing episodes there. Katie, you have an awesome day and we’ll talk soon. Thank you.

Thanks a lot. Good to talk to you.