Business

5 Tips I Wish I Shared During My Mixergy Interview

My interview with @Mixergy is live. Check it out here: https://mixergy.com/interviews/stranger-studios-with-jason-coleman/

It's great. We cover 15 years of business.

I like getting tactical on podcasts. I know Andrew likes it too. I missed some spots. So here are 5 tips I wish I shared during the interview.

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1) During recessions, get close to the money.

I talk a bit about what business was like in 2008. Besides some personal struggles, 2008 was also a time when individuals and businesses were clamping down on spending. So what can you do if you are freelancing through that?

Get close to the money. People will be cutting spending on things that seem superfluous, but any tools, service, or consulting that ties directly to the company's bottom line will be the last to go.

This was part of what encouraged us to focus on membership sites.

I remember some clients we built websites for, even friendly clients (maybe family members ;), saying to me "The website is nice, but it didn't really bring us business."

!!!

We weren't tracking it. The membership sites we helped launched had reporting built in showing $$$.

2) When going up against established competition, don't compete with them head on. Focus your marketing efforts on features and in spaces they aren't addressing.

There were already a couple established membership plugins for WP when PMPro launched.

Making PMPro free and open source was a decision that has lead to better software (what I go into in the interview), but it was also a Judo move to circumvent the competition at the time that was relatively expensive and not OSS.

We didn't waste money to compete with their Google or Facebook ad spend.

We didn't try to recreate the affiliate networks they had already set up.

We focused on becoming the best free membership plugin available on the http://wp.org repository.

3) Speaking of focus. Focus on one project at a time.

When I told Andrew about the frustrations of dealing with 3rd parties changing their APIs when trying to grow WineLog, he asked "Do you have to deal with that kind of thing with PMPro?"

Yes! We do. What's different? Focus.

When Google removed wine from their shopping results, it was the final nail in the coffin for WineLog, as we had just spent months building technology on top of those results.

We didn't have the energy, time, or desire to pivot and try something new.

In business, things are going to fail sometimes. What do you do when you have a set back?

If you have other active projects, you can turn to them for what seems like easier progress.

But if you only have one project to focus on, you HAVE to make it work…

… and you will do what what's needed to try again.

Stopping work on WineLog, InvestorGeeks, and the other side projects we had back around 2010, gave us the time and attention needed to make PMPro a success.

In 2015, we made 80% of our income from making membership sites for others.

When we made the switch from consulting to 100% products-based revenue, we turned down $90k in new work over 3 months to focus on a PMPro relaunch.

The relaunched PMPro 4x'd revenue immediately. Focus.

4) Our Auto-Renewal Checkbox Add On caught Andrew's attention while he scanned our site during the interview.

https://www.paidmembershipspro.com/add-ons/auto-renewal-checkbox-membership-checkout/

I glossed over that one to talk about other add ons, but ARC is pretty cool. The idea behind it is insightful even if you don't use PMPro.

On some sites, customers will purchase a recurring subscription and then CANCEL RIGHT AWAY.

They maybe want access to something right away, but don't really see the benefit in extending membership another month or year.

Auto-Renewal Checkbox tries to address these customers.

ARC gives customers an option at checkout to pay just a one time fee for a membership that expires or to lock into a recurring subscription.

You see this kind of UI all the time when donating online.

However, if you notice this pattern on your site, you should try some things.

Why do your customers only want to pay you one time? Figure that out.

Think about how you could create a separate 1-time-payment product. Maybe your subscription is giving TOO MUCH value, and you should break part of it off into a separate product.

People are really focused on getting recurring revenue on their site. It is nice, but you can find yourself shoehorning what's basically a one-time purchase into a subscription product. Don't force it.

I talk more about timing and pricing here:

5) Finally, I missed a chance to talk about the value of disconnecting.

I said it was easier to step away from work in a products company vs a services company.

Andrew said, "Yeah? What's the longest you stepped away?" Maybe hoping for a great sabbatical story, but I had none.

The longest I've stepped away is 1 or 2 weeks, but I'm definitely able to REALLY get away and disconnect 100% when I go on vacation now. And that is HUGE.

*Every single time* I step away from the day to day of my business for a week, I come back with ideas that grow our business at least 10-20%.

I'd say 4 days in the minimum to really get away. Shoot for 7. More could be better.

If you haven't done that in a while, work it out.

Those are 5 tactical tips that I wish I shared during the interview. You get them for free here on Twitter and my blog. ๐Ÿ˜€

If you can, watch the interview anyway. Like it on the site. Ask a comment there. It really helps to show Andrew you're listening.

Originally tweeted by Jason Coleman (@jason_coleman) on November 9, 2020.

What I Learned During the Mixergy Pre-interview

When I am a guest on someone else’s podcast, I try my best to deliver value to the podcast’s audience. I want them to learn something from the stories I’m telling. For the first time the other day I realized that *I* learn from these interviews too.

This week I did a pre-interview with Arie Desormeaux for the Mixergy podcast. Arie and Andrew have been doing this a while and ask questions that are effective at pulling useful tidbits out of the entrepreneurs they interview. While chatting with Arie, even though I was telling stories I’ve told numerous times before, I had a couple big realizations that I hadn’t thought of before.

These things might come up in the full public interview, and when that happens, I will share a link for y’all to get the full story. But for now, I’ll share the 2 tidbits I hadn’t realized before doing the pre-interview.

(1) In 2008, our son Isaac was born with medical complications that kept him in the hospital for 2 weeks and kept us from working for 2-3 months. Isaac is fine and healthy now, but it was a scary time for us as new parents. We were freelancing at the time and unable to work to bring in money, while also spending somewhere around $15,000 on unexpected medical expenses. (Thank god for the insurance we had and the ACA for allowing us to later get better insurance for our son with pre-existing conditions.)

This moment in our lives was important and pivotal for numerous reasons, but I just realized the other day during the pre-interview, that these months after Isaac were born are part of what motivated Kim and I to move away from consulting into products. We wanted enough money to be able to weather situations like this, and we wanted a business we could step away from for 3 months without risking our financial safety.

(2) We also talked a bit about WineLog during the chat. Arie asked what was the struggle we had with WineLog, and I mentioned how we had a string of issues where crucial technology and business partners made updates and pivots that made it harder for us to monetize our traffic.

For example, at one time Amazon announced they would start selling wine on their site. We spent a lot of time writing code to integrate with Amazon’s APIs. Then Amazon changed their mind and stopped selling wine, making all of that work useless. Similar changes at Google, Facebook, Apple, and others threw us off at different points.

Anyway, during the pre-interview Arie asked if we ever had the same issue with Paid Memberships Pro. At first, I thought no, but in reality we still deal with constantly changing technologies, APIs, and business partners. We have many weeks and months even, where we are doing development we aren’t always expecting, working to fix integration with tech partners. Why are we better able to deal with those things now? One reason is that we are fully focused on Paid Memberships Pro and can spend the time needed to work on these things. Being open source helps as well, allowing other developers to help us with these things. But there are likely other things we’re doing better this time around. Arie’s question really prompted me to think about it.

I’m looking forward to the full interview. I’ve been a Mixergy fan for years. I’m excited to share some of my story and some of the things I’ve learned in business over the past 15 years or so. But I’m also excited to talk with talented interviewers that can probe me so much that even I learn something during the chat.

If you are interested, watch this interview between Andrew and Arie going into the pre-interview process they use at Mixergy. And stay tuned to the Mixergy podcast for my interview whenever it comes out.

How much money can you make during a Black Friday/Cyber Monday sale?

How much can you make during a Black Friday/Cyber Monday sale?

Here are our numbers from last year. We made an extra $20,855 over 10 days.

For comparison, we made just about $20,000 total over the previous 10 days, including renewals. All told, revenue is about 2x normal when running a sale.

Can anyone else out there share numbers from their own BFCM sales last year? Hit me up on twitter @jason_coleman.

BTW, this report is from our plugin Sitewide Sales.

You can run awesome BFCM sales like us, with reports like these when using @pmproplugin or @WooCommerce.

We also had a "Pre Black Friday Sale" Oct last year… to promote the Sitewide Sales plugin when it was just an addon for PMPro and our other content around BFCM. To give customers time to setup their sales and move some of those Nov sales to Oct to even things out.

Originally tweeted by Jason Coleman (@jason_coleman) on October 20, 2020.

More info on how much you can make during BFCM in a post by Kim at the Stranger Studios blog.

PMPro Business Update

I wanted to post an update on our Paid Memberships Pro business. In the style of other “transparency reports”, I will share real numbers for our business. I will also share some of my current goals and planning for the business.

Business is Growing

  • $3,000,000 in all time sales.
  • $810,000 in revenue in 2019, a 23% growth over 2018 sales.
  • Active on over 80,000 sites. We had about 4000 paying customers last year.

What About Profit?

Kim and I are the only 2 owners of the company. We also work roughly full time in the business.

Of that $67k/mo we made in 2019, the expenses broke down like this:

  • $50k for salaries and benefits, including for Kim and myself.
  • $5k for travel and marketing, a big retreat, going to and sponsoring WordCamps.
  • $3k for credit card fees and affiliate payments
  • $2k for server and other IT costs.
  • $7k of profit. (A nice portion of this was distributed as a bonus in December.)

Our Team is Growing

  • Went from 8 employees to 10 in 2019. (We hired 2 more in Q1 2020, for a total of 11 full time employees and one part time employee.)
  • We had our first full team retreat in September 2019. All but one of our employees was able to come to our home (and a nearby AirBnB) to spend a week getting to know each other better and planning for the future. Five of us hit up WordCamp NYC the weekend before and really made a presence there in our Nugget shirts. Good times bar hopping and eating pizza and ramen in NYC.

Product Developments in 2019

  • We launched PMPro v2.0, with a newly designed dashboard and support for Gutenberg and the REST API
  • We overhauled our proprietary customer support system used on the PMPro and Memberlite sites.
  • We ran a successful Spring Sale for PMPro and experimented with other sale formats in the fall.
  • We revealed Nugget, our PMPro mascot.
  • We released the Payfast Add-On for PMPro. Payfast is the payments processing service for South Africans and South African websites.
  • We launched PMPro v2.1, with SCA support for Stripe and native 8 decimal support for Bitcoin and other crypto currencies.
  • We finished the initial version of the Sitewide Sales plugin for WooCommerce, our first, non-PMPro ecommerce product.

Why write a transparency report?

Our primary goal as a business is to support the Paid Memberships Pro open source project. Our customers and partners will want to know that our business is sustainable and we will continue to maintain the project and provide quality support.

Many people will have ideas about how big our business is and how well we are doing. Some will think we’re bigger than we are and wonder why it takes so long to reply to support or push new features. Some will think we’re smaller than we are and wonder if we’ll be able to stay in business. If we share our real numbers, we won’t avoid criticism or concern, but at least these interactions will be based on facts.

I also want to help others looking to start a business like ours. By sharing our story, I hope others can learn what to expect when launching a WordPress plugin or a paid support plan around an open source project. These numbers are specific to our business and product, but they can be one more data point for someone deciding whether they should get into a business like this or keep pushing on a side project.

Hang in There

This is what $3,000,000 in sales looks like.

In 2012, one year after our launch, we were making little more than $1000 per month. I hear of so many projects at this stage of income, with the founders wondering if it’s worth it to continue working on the project or move on to something else.

When I hear someone taking a project to $1000 per month, I usually quip “That’s awesome. You’re halfway to $10,000 per month.”

I can only share our own experience, but it is as hard or harder going from $0 to $1000 than $1000 to $10,000. For Paid Memberships Pro, it took 2 years, 2010-2012, to get to $1000 per month. Two years after that, in 2014, we were making almost $10,000 per month. Two years after that, in 2016, we were making about $34,000 per month.

In 2019, we averaged $67,000 per month. If we can grow just a bit more than we did last year, we will cross the magical $1,000,000 per year milestone.

Targets and Budgets for 2020

We are targeting another year of 20% growth for PMPro, which would bring our average monthly revenue to $80k. With that in mind, we have hired 2 more developers to help with technical support and maintenance of the core plugin and Add Ons.

For the past few years, we’ve had this neat little cycle of reinvesting in PMPro that goes something like this:

  • Target a 20% annual growth in revenue.
  • Target a 20% profit margin.
  • Hire and invest in marketing such that we will break even if we match last year’s sales.
  • If we hit our growth targets, we will be on pace to earn 20% profit going forward.

Starting out with a breakeven budget, then growing 20% in revenue throughout the year, means that we typically end up banking about 10% of our total revenue, which has allowed us to save enough cash to build a comfortable cushion for the company. We could have been taking on debt to grow even faster, but this has been the right level of financial risk for Kim and I with this business.

What if we don’t hit our revenue target? Then we’ll have some hard decisions to make to cut costs or dip into cash or debt. If sales are flat or just growing more slowly, we can adjust our goals for the next year.

Onward

What are we working towards this year besides 20% revenue growth?

We’re looking to officially launch the Sitewide Sales plugin and along with it a generalized platform for us to release future non-PMPro products.

In Q1 of 2020, we implemented a new development planning and scheduling process based on the Shape Up book by Ryan Singer and the Basecamp team. It is going well so far. We will have a true feel for how this has improved things for us as we get through a few development cycles. “You should bid on that next cycle” has become the new “patches welcome” in our chats.

I’m hoping to pause at 12 employees working on PMPro, with a focus on scaling up the skills and effectiveness of the team we have vs hiring new people. This is about the size company I am comfortable with for now. I believe we will be able to figure out the natural boundaries and needs of this PMPro business and make it work with the team we have.

I’m freeing up some time and headspace to explore the various business opportunities related to PMPro and will consider pursuing those projects with smaller independent teams. Some other great companies in the WordPress space have spread out successfully this way. We can look to them as models and also figure out a version of that that works for us.

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