A couple of weeks ago, half of the WP Media team had…
Transparency is very important to WP Media. We have learned a lot from other start-ups such as Buffer and Baremetrics who often share about the management and the philosophy of their company.
This culture of transparency was so inspiring that we applied it to our own company. Through articles or conferences, we try to share our own experience on this subject so we can help other start-ups too.
Being transparent helps create good team cohesion, attract good candidates while recruiting, communicate about your company and much more.
We frequently write articles about our income, our strategies of acquisition or even product development management. We often talk about our successes, but less about our failures (except for the change of payback policy for WP Rocket).
Some people think it’s easier to talk about success. It’s always less complicated to talk about our company when it generates income and that everything’s going just fine. Well, they’re completely right!
Today, we’re going to talk about our SecuPress experience.
WP Media recently made the most important decision since its creation. It’s about giving up a product and refocusing on what we’re good at: performance.
WP Media assigned SecuPress exploitation rights and has released its ownership of the product. Through this article, we wish to explain why we made this choice, the mistakes we made and what we learned during the adventure.
A reason which seemed relevant
In 2015, we made an important choice. We decided that WP Rocket would be one of WP Media’s products but not the only one. We wanted our company to not depend on one product only.
Let’s take the example of a web agency that realizes 45% of its turnover could be with a single customer. How will the agency survive if its client decides to hire a new provider, reducing its revenue by 45%?
By creating new products, we wanted to avoid having to ask ourselves this question.
This can take more or less time.
WP Rocket still represents 85% of WP Media revenues so far.
It was also the opportunity to test new business models different from WP Rocket. WP Rocket is a “premium” product, which means it’s paid for without any free version or demo.
With Imagify and SecuPress, we went with a freemium and SaaS business model. Users have a default free subscription and then can get more credits, to optimize their images or to get more features in order to secure their sites with a monthly or annual subscription.
We wanted to offer products with a monthly or annual subscription system so that we could get more recurring revenue.
At that time, the choice of multiple products was really a source of motivation and we thought we had made a good choice for our company. We are going to explain why it has been our first mistake.
The decision to create two new products has completely changed our daily life at work.
First, we recruited new teammates to meet our needs :
- Émilie for the organization and project management
- Sébastien for Imagify development
- Grégory for SecuPress development
Other people have seen their routine change, such as Jean-Baptiste who used to work on traffic acquisition and WP Rocket support. He stopped working on WP Rocket to set up the network architecture of Imagify and develop the API.
Matthieu, our art director, and Geoffrey our full-stack developer had been recruited a few months earlier to work on a theme store.
We have paused this project in order to have enough resources to work on the development and the maintenance of our sites and plugins.
In addition, WP Rocket continued to grow and its team also. Between December 2014 and 2015, our team of initially 2 became 12 people working full-time.
We changed our organization several times to adapt. Nevertheless, multitasking is complicated to organize and it can slow you down if you do not have the resources. You’re in “emergency mode” often and you have to prioritize and re-prioritize your tasks again and again. It becomes unmanageable.
The redesign of WP Rocket website is a good example. In September 2015, we started designing new layouts for the third version of the site. While Matthieu was progressing well, we decided to pause the project. With the development phase of Imagify being over, we had to work on the design of this product before marketing it. The fact is we haven’t been able to work on WP Rocket’s redesign before January 2017.
This is only one example among others. Our progress has slowed down on various projects and we had to postpone the release of new products several times.
Unexpected growth can be harmful to your business. Our mistake was to recruit without defining and managing our future needs.
Not having a budget
We have mismanaged the growth of our staff. The reason is that we did not set a budget for new development or set a schedule with target deadlines.
Moreover, we did not respect one of the Lean Startup fundamental principles: It is preferable to launch a product, called M.V.P (Minimum Viable Product), and to make quick iterations according to the first users’ feedback.
If you’re satisfied with your product when launching, then you marketed it too late.
Concerning SecuPress, we commercialized it after revising the code several times and doing several designs of the options page and of the extension scanner.
The development of SecuPress took a lot more time than expected : 18 months. As a comparison, it had taken less than 3 months for WP Rocket.
Of course, we cannot compare the initial development time of SecuPress and WP Rocket. However, regardless of your product, the return on investment will be longer and longer depending on the time it takes to bring your product to market .
We made two mistakes on this part. We had neither defined a budget nor set up a schedule. According to your budget and your resources, the schedule will take more or less time . It allows for a centred project according to planned objectives, avoiding twists like a revision to code, and not postponing the launch of the product.
Not calculating the ROI from the outset
The return on investment of your product depends on two fundamental parameters : time and development cost.
You have to define these two parameters the best way you can from the outset. It means you have to define your budget, provide a schedule and recruit the needed resources to ensure it.
In our case, we had defined neither budget nor schedule. We started to organize ourselves long after the beginning of the project. Even worse, we asked ourselves too late when the product would begin to be profitable.
With its development time of 18 months, the investment in SecuPress is estimated around $250,000.
We had established projecting sales for 3 years, so we could know how long it should take for the product to be profitable. We had expected a positive ROI after two years and with optimistic growth.
With a ROI that long and because we had not planned the budget, we knew we had a financial strain from the beginning of product marketing.
A financial debt which kept on growing
Unfortunately, the financial growth of SecuPress was very different from what we had expected.
Below, the monthly revenues of SecuPress since it was launched
In ten months, SecuPress made $3,200 per month on average. The thing is SecuPress staff and service subscriptions would cost more than $15,000 per month. Each month SecuPress’ financial debt was increasing by $12,000. The total investment in SecuPress has been around $370,000.
Patience is a virtue of the most successful entrepreneurs. A lot of people lose courage after a few months of sales.
With WP Rocket, we’ve had this patience. In April 2014, 10 months after its marketing, the monthly turnover was $6,100. We were 2 people full-time and it was unthinkable to get a salary. We could have easily lost courage.
The good side is that we were freelancers and we were able to have a minimum income along with our days on WP Rocket. This way we had no financial debt accumulating every month.
Our patience eventually was rewarded. Today, WP Rocket generates a monthly $160,000 turnover.
The reasons why we decided to release ownership of SecuPress
We made this choice for several reasons. Before making this decision, it took us months of observation and discussion.
The sunk costs and the reinvestments
In behavioural economics there is what we call “ sunk cost”.
Sunk costs (also known as retrospective costs) are sometimes contrasted with prospective costs, which are future costs that may be incurred or changed if an action is taken. Both retrospective and prospective costs may be either fixed (continuous for as long as the business is in operation and unaffected by output volume) or variable (dependent on volume) costs.
One of the main reasons is a logical basis of sunk costs.
Following the losses of the first months, we knew SecuPress would not be profitable for many years, even with major efforts.
Instead of waiting months if not years to be profitable, we decided to reinvest in our projects that do work.
It’s a chance for WP Media to focus on its main field of competences : performance.
But also to improve the quality of its products – WP Rocket and Imagify – recruiting new candidates: marketing, SEO, product lead and support agents
A new vision of our company
Before deciding to release ownership of SecuPress, we remembered why we created WP Media. Our company DNA is performance. This is what we do, what made us famous and what we are good at .
Plus, and in a very pragmatic way, we saw how “simple” it is to sell Imagify to our WP Rocket clients. So far, 30% of our Imagify subscribers are WP Rocket clients too.
When we engage marketing actions for WP Rocket, it affects Imagify and vice versa.
That being said, and for these reasons, we decided to refocus the company on the performance part.
We lost a lot of time because of our project management missteps. By reducing our activity to two products, we will allow ourselves to be more available and responsive for WP Rocket and Imagify.
Questions you should ask yourself before launching your product
If you’re an entrepreneur and you wish to launch your product, you should ask yourself these questions after reading this article :
- What are your motivations for creating the product?
- Do you have the staff to develop and sustain it?
- What is the specific budget?
- How long will it take to become profitable?
- What is your expertise and do you have the skills to create the product?
These questions may seem trivial, but you should really consider them. It will allow you to start your project on a good foundation and it can determine the future of your product.
Failure is part of success
Do not take a failure like a death sentence. The most important thing is to understand why you have failed. You’ll then be able to avoid making the same mistakes for your next project.
The future of SecuPress
SecuPress is a project intimately linked to Julio Potier. It’s his concept and he was in charge of its evolution.
At the very beginning of WP Media, we were 3 co-founders : Jean-Baptiste, Julio and myself (Jonathan). We founded the company with a single spirit and similar vision.
As time passed , we have all evolved and our point of views have become too different to keep on working now and in the future the way we used to. We decided to go our separate paths.
Since the future of SecuPress was not possible without Julio, we asked him to take ownership of the product.
Today, WP Media has officially transferred SecuPress property rights to Julio.
We take this opportunity to thank Julio and wish SecuPress the most successful future!