How To Build A Multi-Million Dollar WordPress-Based Business
Learn the secrets to building a multi-million dollar business with WordPress. Transform your ideas into profit today with our special guest Ionut Neagu, Founder of Themeisle.
This video covers everything you need to know, from setting up your website to implementing effective marketing strategies. Learn from industry experts and successful entrepreneurs who have built thriving businesses on the WordPress platform. Ready to turn your passion into profit?
#1 – Ionut, can you give us some more background info on how you started Themeisle and when you felt you had a natural market fit?
#2 – If you were advising somebody looking to build a plugin or theme in the WordPress marketplace of 2024, what would be some crucial things you would share with them?
#3 – I wonder if you can share some of the biggest mistakes you have made connected to building up Themeisle and how you overcame these mistakes.
#4 – What are a couple of the biggest challenges that WordPress generally faces in the next couple of years?
#5—How do you see AI changing online business, including your own, in the next 18 months?
#6—If you had your time machine (H. G. Wells) and could travel back to the beginning of you?
This Week Show’s Sponsors
LifterLMS: LifterLMS
Convesio: Convesio
Omnisend: Omnisend
The Show’s Main Transcript
[00:00:01.050] – Jonathan Denwood
Welcome back, folks, to the WP-Tonic Show this week in WordPress and SaaS. It’s episode 921. We’ve got a fabulous founder of a fabulous WordPress-based business. We got Inuk from Femeas with us. I’ve butchered his first name. I’ve butchered his company’s name. He doesn’t care because he’s just counting the money and the success, so he doesn’t care. My co-host is just laughing at me because he’s got used to it.
[00:01:26.270] – Jonathan Denwood
I’m going to let both of them introduce themselves, and then we’re going to go straight into this fantastic interview. Inuk, can you introduce yourself quickly to the tribe? And you’re muted. Oh, you’re not yet. I’m glad to be here. I think you did great with the pronunciation. You’re a very kind man.
[00:01:48.820] – Ionut Neagu
I can tell I’m glad that you’re a decent guy because I wouldn’t be so lovely about that. But thank you. It’s much appreciated.
[00:01:58.050] – Jonathan Denwood
I’m Ionut Neagu. I co-founded Themeisle, maybe 12 years ago. I discovered WordPress, I think, 14 years ago. It feels like a long time.
[00:02:08.750] – Ionut Neagu
Along the way, I’ve been involved a bit in everything. I started as a developer, doing things on our products, then beginning to learn marketing, then learning more about content marketing, SEO, about investing lately. I’m just trying to do whatever I am curious about and trying to grow the business in the meantime as well. Yeah, it’s going to be a fabulous discussion. You can tell that Inuit have enormous knowledge about how to build a business in WordPress and in SaaS in general. It’s just going to be a fantastic discussion. I also got my very patient and understanding co-host. Kurt, would you like to Really quickly, introduce yourself to the new listeners and viewers?
[00:02:56.950] – Jonathan Denwood
Love to, Jonathan. My name is Kurt von Annen. I own a company called Manana Nomas. We focus primarily on membership and learning websites, and I work directly with the good folks at Lifter LMS and WP-Tonic. Thank you so much, Kurt. We’re going to be discussing how Inuk started his great business, what are some of the key things he’s learned on his journey, where he thinks WordPress is in the second half of 2024, and a load of other great topics. It’s going to be a fabulous interview. But before we go into the meat and potatoes of this great discussion, I’ve got a couple of key messages from our team. We will be back in a few moments, folks. Three, two, one. We’re coming back, folks. I’d like to point out that we got some great special offers from the major sponsors, plus a curated list of the best WordPress plugins and services for the WordPress professional or power user, plus a newsletter that I write every week, personally myself, with the best WordPress stories and text stories of that week. You can get all these goodies by going over to WP-tonic. Com/deals. Wp-tonic. Com/deals. What more could you ask for, my beloved tribe?
[00:04:21.390] – Jonathan Denwood
Probably a lot more, but that’s all you’re going to get on that page, folks. I’m sorry to disappoint. I’ve made a career of it. So off we go into this great interview. So how did you get in? I looked at your bio on LinkedIn. You did your degree in computer science. I think you said you tried to start… I think it was on your bio page on your company’s website that you tried to start a… You initially tried to start a company, but it wasn’t very successful, so you got into WordPress. So maybe you can give us some background, on what led you into the crazy world of WordPress and online marketing in the first place. Sure. I would be happy to share it with you. As you can see, I graduated in computer science, and I was very interested in how I could work from there… I was based in Romania, and I was curious about how I could discover the world, how I could travel, and how I could work from home, and those were really key motivations for me. So I’ve found Freelancer. Com. Now, it’s not as popular as it used to be. And I’ve read something in the newspaper, or I don’t know, it was 15 years ago, it was not as popular as today to work online.
[00:05:52.330] – Ionut Neagu
None of my friends were doing it. But for me, thought, Okay, this is what I wanted to do. From there, I started doing some JavaScript projects and doing anything, any project that I could take and figure out how to do it. This is how I learned PHP, WordPress, JavaScript, and so on. Then I was working as a freelancer. I was doing quite fine, but I thought the next step maybe would be to create a company. So one of my clients was interested in that, and this is how we started. At first, we started as an outsourcing agency. So we we will be getting projects from freelance websites. And then we hired, I think we had two people that would help us with those projects, including myself. And this is how we started. We knew a little about WordPress. But then we ran into a problem that was very frustrating there, where our success in terms of getting the projects was based on our reviews and our ratings. And that was completely fine because we had 4.9 or something like that.
[00:07:14.180] – Ionut Neagu
But often, we will run into clients who just ask for something extra so as not to give us a bad review. So we had some situations where, Okay, the project is done, but can you help me with this tiny little thing? Can you just help us rebuild the whole website? It’s only a small thing. It was getting very frustrating. I mean, this was one thing- That’s a very… I can tell you’re an extremely diplomatic individual. That’s a very diplomatic way of putting it, isn’t it? Yeah, but I try to focus on things I can control. I could not have done anything about that. I thought, Okay, that was one problem. Another problem was our work was all over the place.
[00:08:05.520] – Jonathan Denwood
So if I find some project on Joomla, we’ll take it.
[00:08:10.100] – Ionut Neagu
If I find some project on WordPress, we’ll take it. If I find some JavaScript, HTML, Java, or whatever, I get the sense that, yeah, I think we will figure it out. I just looked at the specs and said, Okay, this looks like something that can be done. So if it can be done, we can do it. This was the philosophy of it. It suited our personality, me and a person that I’m still working with today, very well because we like to learn new things and discover. It was challenging, it was fun, but it was not working very well because we were not an expert in anything. We were experts in getting anything done, but not experts in doing something well. I classify my whole life like that. Yeah. And then we had those two things. So I thought, okay, What if we create our own website where we focus on one thing? The clients, ideally, will find the website and they will give us work so we don’t need to rely on our freelancer profile and we will get a stream of clients on niche. Before that, I learned a bit about search engine optimization, and I started with a keyword.
[00:09:34.520] – Jonathan Denwood
I thought, what’s a keyword that can bring us clients that is not too competitive?
[00:09:40.360] – Ionut Neagu
Initiative. And we came across PSD to WordPress. I mean, later I realized it didn’t brought us the best type of clients because people came with a certain expectation, certain mindset, and certain way of viewing the value of the work. But we get started from there. So this is we launched first, we launched CodingWP, offering PSD to WordPress services. And in three to six months, we got ranked on the first page, and we started having people contacting us for this type of project. And this is how we started our journey into WordPress. All right. I think I could go into You got a lot of information there, but I’m just going to throw it over to my co-host. Over to you, Kurt. Well, thanks, Jonathan. I can’t help but resonate with Yona about the idea that you try to be everything to everybody, and you’re trying to figure out what’s going to work, right? And then that frustration with we’re not doing anything well. So how was it that you…
[00:10:51.030] – Jonathan Denwood
How did you decide to niche down in the direction that you were? I mean, besides a keyword search, was it like, this is what we’re best at or this is what we have the highest profit with?
[00:11:07.440] – Kurt von Ahnen
For me, it comes down to profit. I think about all the things I can do with WordPress and I go, well, what focus am I the most efficient at and what generates the most profit? At that point, we were more focused on survival. So we just thought we want something that will give us an extreme of clients. We didn’t care that much. I mean, we didn’t know that much about the whole space, about business, about anything. So we just thought, okay, this would be… We had no reason or no, let’s say, business logic on why we picked that.
[00:11:49.020] – Ionut Neagu
But just it worked. I think what I learned then, and I used it along the way, is I discovered that once you put your mind into something and focus that thing, okay, it might be that you learn along the way that maybe it’s the wrong thing, but oftentimes you will figure it out once you get to focus on it. I think for us, it was very important that we decided to focus on that. Of course, We had a lot of wrong assumptions about it, and we ended up after three years closing that agency component. But we got into WordPress because we wanted to get more clients through the products and so on at in the beginning. So the fact that we focused on and try to learn that space very well, like presented us with more opportunities along the way. Even the initial idea was not a good one. So I guess the next question then would be, if we’re going to think about other listeners and viewers of this show, people that are trying to survive, right? Like you said, if they wanted to build a plugin or a theme in the WordPress marketplace today, what would be a couple of crucial things that you’d want to share with them?
[00:13:17.330] – Kurt von Ahnen
What would be like, don’t do this or make sure you do this? Yeah, I think the first mistake that we did with 3Mile when we launched is that we put a lot of effort and money into the platform itself. So before having products or the products were not really great, we had a great website and a great shop, right?
[00:13:42.440] – Ionut Neagu
So I mean, that was helpful along the way because it worked. But initially, when we launched it, we had a couple of themes. We had the website, like nicely designed, the story created, but zero sales. I would say, nowadays, it’s very easy You don’t need to get started. You don’t need the store, you don’t need the website. You can just use Gamma Road, free news. Just create the product and make sure that the product is good, that people like it, and so on. So don’t try to think too much and concern yourself too much with, Okay, I need to create a brand, I need to create a platform, whatever. When you are at the very beginning and you are just one man show, right? So that was one thing for us. That was a mistake that we did at the start. Something else that we did to get started, but again, I think a lot of things that worked for us were, because it suited my personality quite well, we actually got into WordPress teams and saw that can work and can generate revenue by acquiring a business. So first, what we did with all the savings that we got on the client’s project, we acquired a website called readyteams.
[00:15:10.080] – Ionut Neagu
Com. It was quite all the websites with teams that were not looking that great. It was generating 1,000, 2,000 per month, something like that. Not even that. I mean, we got to that. It was generating a couple of hundreds, I think. It was very small, and as we were. But that was, for me, was helpful to see that it’s possible, to see how it is done. Then I just assumed the mistake that I did further. The idea was good, but then I just assumed that, Yeah, it looks so easy. I can try to do it much better on a new project and so on, and I didn’t really understand how that was working. But for me, all It always worked well. I’m quite impatient, so I don’t like to start things from scratch to think through all the stuff. I want to get started. I want to try it out. That’s why I like to acquire existing projects that I can start directly changing, improving, raising an update, and learning about it and so on. It gives me more interesting for me, more fun. But again, this is it in my personality. I don’t know if it usually doesn’t work out for most of the people out there, I think, to start like that, to just acquire a small product, so to see how everything else works.
[00:16:44.130] – Kurt von Ahnen
Yeah, I really appreciate the way that you answered that, especially at the beginning when you were talking about a minimal viable product and launching simply and not- That’s something we don’t preach, is it, Kurt? It’s It’s all the time. It’s all the time because whether it’s a course creator or a product developer or someone trying to build a brick and mortar business, people have these dreams of what they want something to be, this awesome thing. But it’s like, you got to get some customers first. You got to have an audience. You have to have something. And I like that part of your message there quite a bit. Jonathan, over to you.
[00:17:24.360] – Jonathan Denwood
Yeah. So what do you… It’s It’s a bit like our romantic life. We tend to remember our disasters, don’t we? We tend to remember our school life, the things that went wrong, don’t we? I think we’re all like that. Maybe I’m a little bit more than normal, but we tend to remember our mistakes. Are there a couple of real bulls-ups, a couple of real big mistakes that you’ve made that you’re prepared to share on your business journey that comes to mind that you’re gracious enough to share? Or has it all been perfect?
[00:18:11.340] – Ionut Neagu
Of course not. I think I’ve already I heard a couple of them.
[00:18:18.930] – Jonathan Denwood
At the very beginning, one mistake that we did was No, it was actually something that I’m thinking at the same time.
[00:18:40.990] – Ionut Neagu
I think the biggest and the most recurring because it’s It didn’t happen only once. It happened along all those years to, at times, get disconnected from the customers. We start by being very focused on the product, talking with… Starting with the customers on customer support and releasing things. They ask something today, tomorrow we release it. The product get great traction. Then I try to step away from that and try to look, Okay, how we can grow things, and et cetera. But at the same time, sometimes I step away too much. When I’m becoming disconnected on what people really need and how they really use the product and start to develop some superficial thought on how I think things are working or what I think that people need without being very in touch with the customer. And I think for me and for us, this happened a couple of times already where at times we grew a bit too… Maybe too many layers of people from the actual customer We will have the customer support team, and then we will have the project manager and the product owner, and then me sharing some ideas, but I’m already five levels from the customer.
[00:20:12.670] – Ionut Neagu
Then I don’t talk with the customer support. This got us into trouble. I think we got back to it and we saw improvements, and now we are again in a phase where we had this issue as well. We are trying to see how we can have more direct people that, me or other people that make decisions, how we can be more directly connected with the customers, but without necessarily being overwhelmed and still having an overview on the business, not being overwhelmed with the day-to-day things, but managing to get a sense on how people are using things and what they like, what they don’t like, and so on. I think that would be…
[00:21:08.320] – Jonathan Denwood
I think that’s fantastic. I think that’s a fantastic insight, actually. What is the size of the company at the present moment? How many people work with you?
[00:21:18.460] – Ionut Neagu
Now, we are around 25 people. We used to be 35, so we… Yeah, around this.
[00:21:29.070] – Jonathan Denwood
Yeah. So you got a focus in themes, but now you got your plugin side as well. I don’t know if you had both historically. How have you coped? Is it Now, I’m only surmising this, this is why I’m asking this question, is are you going to focus more on the plugin side or maybe buy some additional plugins? Because I don’t know the world of themes, I’m just presuming the world of page builders. But on the other hand, you got the whole… The WordPress market is in real flux, isn’t it? Because you got everything, all the opportunities, but also all the flux of Gutenberg, haven’t you? So I don’t know, mentally, or how your company views prospects, really. Are you going to focus more on plugins, or do you see great opportunities in Gutenberg in general for historically a theme shop, really?
[00:22:46.380] – Ionut Neagu
I have a lot to say, but I will start first by answering your question that, teams for us have have been decreasing for the past seven years or so. So nowadays, even if the complexity increased, so when we started with Zerif and we were I think I was writing about it, we were making 80,000 per month or something with a team that was very basic team. Nowadays, we- Oh, they were happy days, weren’t they? Yeah. Nowadays, things are much more complex in terms of JavaScript and Gutenberg and all those in terms of technology. So it’s not just simple HTML, PHP, and CSS. How was back then? You need people that are way more qualified. Then the revenues are smaller than they used to be because the patient is- So complexity is market opportunities gone down a bit. Exactly. Definitely, it is not something that we are not very much interested in that specific market in terms of growing it. But because we still have a significant position there and we have recurring customers there, we are still We’re putting quite a bit of effort, but focusing on our existing user base, on people that renew their subscriptions, what they need, how we can improve their experience, and try to focus on that size of the market, maybe Maybe they don’t like Element or they don’t want to use something else.
[00:24:48.800] – Ionut Neagu
They are familiar with our solution and they are happy to renew and try to work with them. This is on the team Teams are also still good because in some customers’ perception, they see teams as a gateway to build their business. So they think like, Okay, I need to build a membership website. Some people still think, I need to start with a membership theme. We all know that that’s not really the backbone of the- Well, it’s just the The terminology starter theme, starter website, starter template, it’s just the terminology for the saying thing has just exploded.
[00:25:42.230] – Jonathan Denwood
All these terms for trying to describe a starting point, isn’t it?
[00:25:49.040] – Ionut Neagu
Yeah, but this is an interesting opportunity because if you control that customer interaction, then you can guide them to whatever membership plugin you think it makes the most or it can be your own membership plugin if you develop it further and so on. They still have some business value from that perspective.
[00:26:12.000] – Jonathan Denwood
But obviously- I’m so pleased that great minds think the same, actually. There we go. I totally agree with you. I think it’s time. You’re laughing at my jokes. I do appreciate. And your English is excellent because my Romanian is nothing. It’s been a great discussion. The guest has been laughing at my pathetic jokes. Even Kirk has been smiling. But it’s holiday. It’s the fourth of July. It’s the day of independency. It’s been a great discussion. We’re going to go for our mid-break. We got a couple of messages from our great sponsors who are really appreciated. It enables us to keep this show on the road. We will be back in a few moments, folks. Three, two, one. We’re coming back, folks. It’s been a fabulous discussion. We’ve covered some great topics. It’s met my expectations. Before we go into the second half, I just want to point out that WP Tonic has got a fabulous partner program. If you’re looking for a technical partner, a hosting, and a partner that’s got real deep roots in the WordPress community that can help you with your complicated buildouts, if you’re a WordPress professional or power user, why don’t you look at becoming a partner with WP Tonic?
[00:27:58.540] – Jonathan Denwood
To find out more, and we are very generous to our partners, to find out more details, all you have to do is go over to Wp-tonic. Com/partners. Wp-tonic. Com/partners. Find out what we got to offer and have a chat with me. We love you to become a WP Tonic partner, me and Kurt. We love that. Over to you, Kurt.
[00:28:30.210] – Kurt von Ahnen
Thanks, John. I have a question that’s not really part of our questions, but I think it’s related. And I’m excited to ask because you’re not someone directly with WordPress. You’re a third party guy that offers both products. So you have a full site editing theme, and then you have block oriented themes. And I always wanted to ask somebody that wasn’t under that WordPress umbrella, what’s in your opinion, just your In your opinion, I don’t need facts and figures, but in your opinion, is full site editing being adopted at a decent rate, or are you still seeing a lot of people really clinging to the block editor at this stage?
[00:29:13.930] – Ionut Neagu
Okay, so I think there are two things. In terms of adoption, I think adoption is quite slow on full-site editing. That’s my opinion.
[00:29:24.560] – Jonathan Denwood
Yeah, but it shouldn’t be. They need to be educated, don’t they? They just don’t see the light, do they? It’s so obvious that they should just… These people, they just don’t understand, don’t they? Sorry, that was English flippancy there. I’m sorry.
[00:29:44.110] – Ionut Neagu
But I will share a second thing that you might find interesting because we launched normal teams and we launched full-site editing teams. And what we see in terms of traction, if we look at the number of people that try out the team, be it classic team or be it full-site editing team, the number of people that try it out and then keep it, it’s the same. So people are equally They are equally happy. Once they are in front of it, they are equally happy with it in full-site editing versus classic. I think this is what we see. If you’re looking, we launched to I believe FCE and Raft both have around 10,000 active users. They are quite high in terms of popular teams. I was monitoring closely the numbers and I was surprised to see that new users are satisfied. I mean, for me, I measure satisfaction if they keep the team or not, because they don’t switch to another team. I would say this is showing me that people are happy to use it once they discover it. I think the adoption will grow on that. From a business perspective, the whole Gutenberg thing, the whole full-site editing, whatever, it’s just a nightmare, I think, because a challenge that we see is that if you think about it, we have, for example, let’s say, a charts plugin.
[00:31:33.130] – Ionut Neagu
And we have a charts plugin. It’s generating, I don’t know, a number, $10,000 per month. And it’s a classic editor, short code-based, whatever, interface plugin. But here comes Gutenberg, and your market overall is the same because there are not more WordPress users. It’s just some users use Gutenberg, some users use the old way. So you need to build a new version of the plugin for one that works for the old people with short codes and stuff, and one that works in Gutenberg for the new editor and new users. But your total revenue is the same, and your market is the same. This was, I think, something that I didn’t really thought too much about it when Gutenberg came, about this complexity and how to to deal with it, and potentially for some products not even trying to develop a Gutenberg integration just because of the cost and complexity to maintain two plugins for the same revenue. Now we ended up in Visualizer, for example, removing the Gutenberg integration after four years just because it was difficult when we want to launch a new feature or make a change to the product, we need to think the two scenarios.
[00:33:02.320] – Ionut Neagu
I mean, how this would work in the Gutenberg editor, how this would work outside. So, yeah, overall, I think it was a difficult transition for product business, but it also showed opportunities. I’m not very… Let’s say, I think it’s for the good of the WordPress, but it was, yeah, I think those years are quite challenging from that perspective. And as a product owner, you need to be careful. I think we also jumped too early on the Gutenberg train and the adoption was very slow.
[00:33:39.230] – Kurt von Ahnen
Yeah, and I really appreciate your transparency on that, Yona. For me, I’m not a product person. I’m an implementer at best. When I talk to people that develop products- You’re much more than that.
[00:33:53.360] – Jonathan Denwood
You got all your business insight, you’re an implementer, but you got the experience of being a hardened business consultant, haven’t you?
[00:34:02.910] – Kurt von Ahnen
Yeah, but I’m thinking more from the development standpoint. I think about how does someone say, I want to make this product and then develop it for all of those different environments and then maintain it? I always see it like, wow, that’s an ongoing thing. Page builders, are they a nightmare for you or are they something that your products blend into easily? Like Elementor and bricks, and everybody’s got a new thing. Someone just hit me the other day and was asking about WP Grid Builder, and I had never even heard of it before.
[00:34:36.250] – Ionut Neagu
Yeah, I think I saw it.
[00:34:40.660] – Jonathan Denwood
In terms of- He’s probably invested in it, actually, Kurt.
[00:34:44.230] – Ionut Neagu
He said, I bought that last week. In terms of teams, of course, the page builders are just getting the market share, right? So of course, it’s no good. But then that’s clear. But in terms of plugins, they also introduce complexity because, again, there are more things that you need to consider. For example, we have an image optimization plugin. We have a feature called Optimal. We have a feature where we try to lazy load the background images. For that, we need to know how that is generated. We identify that in Gutenberg, but we also need to identify that in Elementor. We need to identify that in Oxygen because each Each one is doing it in their own way. Depending on the plugin that you are having, this can pose a problem because those builders, they have a significant market share, so you cannot ignore them. You need to worry yourself about all this user experience because basically, I think for me now, Elementor is just another WordPress in a way. I mean, people that get into the Elementor ecosystem, they They use… They have their own forms, their own-I think that’s very insightful because I recently had their chief marketing officer, whatever his title is, They’re part of WordPress, but they’re not part of WordPress.
[00:36:22.990] – Jonathan Denwood
They’re in a strange… And you can see that in how they position themselves or have. It oscillates from one to the other. You can see it. Do you think I’m on the right track there?
[00:36:38.450] – Ionut Neagu
What do you mean by on the right track?
[00:36:40.220] – Jonathan Denwood
Well, it’s obviously part of them wants to build a Wix environment. But when the sales decline, because it’s the developer, it’s the independent developer agency market that really grew Elemator, and they’re not really interested because they’re in the WordPress world, so they’re looking more for a plugin, not a Wix. They’re always oscillating because the driver of their growth is the agency, the small power user, individual agency model. They’re always Because they’re driven by income, because the figures collapse a bit, they get more focus on WordPress then.
[00:37:39.960] – Ionut Neagu
Do you think-Yeah, I think I agree with you here, and it’s not only Elementor. We are trying actually the same thing with… But with Elementor, I agree. I think they are trying to create a Wix platform, but getting users from WordPress, right? Of course, like you are saying, it’s a difficult transition to make. People don’t really want that. WordPress is not happy with that behavior neither. I mean, the automatic and so on to trying to just move people away to some other things. It’s a difficult game that they are playing, and I think it’s difficult. We are a little bit in the same position with with our SaaS solution that I was mentioning, Optimal. We started it as a SaaS. It’s a WordPress plugin. Most of our revenue is coming from WordPress, but at the same time, we have the features to be like, let’s say, a digital asset management solution that integrates well with the Laravel project. We are trying to go that way, but at the same time, 90- It’s tricky, is it?
[00:38:58.360] – Jonathan Denwood
I was discussing this with Kurt because there was this concept, WordPress as a service, it was banded around a lot, and a few people tried it, and I don’t think anybody’s really successfully… The only people that really, in some ways, is Animator, but they’ve got their own problems. They’ve got their own problems with trying to do that. But I think it’s a bit tricky. I think there will be somebody that will be able to do it, because I’m not sure it’s a technical or a marketing, messaging, positioning problem. I haven’t really worked it out myself, really.
[00:39:47.490] – Ionut Neagu
Yeah, I think it’s… I think in my view, Optin Monster managed to do it very well.
[00:39:56.390] – Jonathan Denwood
You’re mentioning Willy Wanker and the chocolate factory, are you? Willy Wanker, have you been tempted just to sell your business to Willy Wanker and just take the money and retire or invest just become an investor? Have you been tempted to take the coin from Willy Wanker?
[00:40:21.580] – Ionut Neagu
Not really, but I was talking with Zahid on various occasions. He doesn’t talk to me.
[00:40:27.620] – Jonathan Denwood
He only sends me letters.
[00:40:30.440] – Ionut Neagu
Okay. No, for me, I’m talking with him. I mean, he was also very kind to give me some good advice in the past. But I was never interested in selling the business because I like doing what I’m doing. So to answer that, not really. But I think we share some- Can I interrupt?
[00:40:55.130] – Jonathan Denwood
I’m being rude here, but for the right reason. Why do you think, because so many businesses, obviously, they’ve got a good price. But why do you think there’s not more opportunity when you want to sell a mature WordPress business that’s making good returns, that’s well-managed like your own, I get the feeling that there isn’t a lot of choices in the market to sell a well-run WordPress business, and the multiple that you should get is much lower than a SaaS-based business. Have you got any insights why you feel that? Because you said you’re interested also being an investor.
[00:41:47.930] – Ionut Neagu
Yeah, we are doing this. I think more than half of our products are acquired. Both businesses worth a couple of millions. So we are doing this as well. It’s much lower scale than Syed, but we have been doing it since 12 years ago.
[00:42:06.240] – Jonathan Denwood
For your chocolate factory mini?
[00:42:08.920] – Ionut Neagu
Yeah. We are trying. We have our own approach and our own mindset about it and so on. But it’s something that I like as well. I have a perspective on that, I mean, on what you are saying. When you look at the WordPress business versus when you look at other type of business, why sometimes the valuation is more? There are a couple of reasons. One, it used to be a problem of the lifetime licenses. When I look at the business that sold lifetime licenses, that for me is a liability. I will subtract that from the… I value the business, and then I will subtract the lifetime licenses that were sold, because that means people that I need to support, and that means people- That’s lifetime support commitment, isn’t it?
[00:43:02.220] – Jonathan Denwood
With no opportunity to make any money from it.
[00:43:07.170] – Ionut Neagu
Yeah, but also people that I cannot sell in the future because they are already bought for their life. That’s one thing that’s pushing down the valuations. Recently, this is changing. Then you have this thing on… All the WordPress businesses rely on WordPress. They are not independent businesses that have a SaaS business. You have a direct relationship with the consumer. In a WordPress business, if some volunteer in the WordPress team, Teams team, or Plugins team, decide that your plugin is no good in the repository, that’s a risk that you are taking. When you run a SaaS business and you have, let’s say, a contract, a relationship with the client, they are happy, you are happy, it’s fine. When you have a WordPress business, in the same that you have an app in the App Store, it’s not only about you and the customer. If automatic or people that are running the repositories decide to make some change in the rankings, in the design, in getting your plugin out of the repository for whatever reason, that’s a risk. When you are looking at the valuation, Basically, valuation is a question of risk. A WordPress business, due to this thing, it’s more risky business that a business that it’s direct.
[00:44:40.990] – Ionut Neagu
You are selling directly to the customer. And your acquisitions channels are diversified. Here for 90% of the WordPress businesses, WordPress repository is more than 90% of the, let’s say, I think that’s one of the key factors, the lifetime deals don’t help.
[00:45:05.180] – Jonathan Denwood
I’m not against lifetime deals, I want to make that clear. I think if you’re looking to get cash flow and offering periodic… We’re doing a lifetime deal on one or two days of the year. I don’t see anything because the marketing buzz that you can get from it and the goodwill that you’re building can be beneficial. But out of those scenarios, it’s the kiss of death, isn’t it? But I think this last point that you’ve pointed out is one of the biggest drivers, isn’t it? Dependent, especially if you got a free product and your company’s driven by having access by turning so many of those free customers into premium customers, isn’t it? I think that’s where it gets really dicey doesn’t it?
[00:46:01.310] – Ionut Neagu
Exactly. I think that’s the main issue. And most of the successful WordPress plugins, they have a premium model. There are very, very few that are very successful, like WP Rocket or there are some others that are premium only. And they can afford to use whatever license they want. They can afford to restrict the products in ways that they want to limit the distribution. So it’s a different business. And I think that be more valuable. They are still at the… Let’s say, they are still the risk of WordPress changing things in the core and so on. So they don’t They don’t rely on the repository as an acquisition channel, but they rely on how WordPress works, like Gutenberg being released or not and whatever changes, or maybe some caching solution being bundled in the core and stuff like that. They are still They still have some risks. That’s my thinking. Then why there are not more people investing in business? I think there is a quite big risk. I mean, even on the things that we acquire, we are not accounting on very extraordinary returns. The returns that we are acquiring, usually, business is we are hoping for something like 25% per year, considering all those risks, and the The stock market for the past year’s return more than 10% in average.
[00:47:51.820] – Ionut Neagu
It’s a premium on that, but that’s correlated with all this risk that you are taking. I don’t think it’s necessarily, let’s say, a great deal. Of course, Syed can unlock much more through the network that he created and through the multitude of various businesses in different niches and putting all of it together, right? But that is a unique position to do it.
[00:48:23.640] – Jonathan Denwood
That’s one way of putting it. I would put it a different way, but we won’t go down in that road. I’m going to throw over the last two questions over to Kurt because he’s going to sleep, Kurt.. Sorry, I’m in a sarcastic mood. I’m in holiday mode, see, Kurt. I’m going to leave the next two questions to you, Kurt.
[00:48:45.670] – Kurt von Ahnen
Well, when I go through the menu on Themile, I can see that you guys already have some AI elements, right? So our next question is, how do you see AI changing that online business model, including your own, for the next year and a half? Do you think you guys are going to double and triple and quadruple down on AI, or do you think the hype is starting to dissipate and maybe we’re just figuring out how to actually really use the tool?
[00:49:17.690] – Ionut Neagu
Yeah, I think it was just seeing something the other day that the only people that are making money besides NVIDIA are the consultants, because every business is asking themselves the same question, right? I should pay someone to tell me what I should do with AI. No one is really making anything.
[00:49:35.040] – Jonathan Denwood
I wish you always were a nice consult.
[00:49:38.480] – Ionut Neagu
Yeah. Generally, I’m confused to where things will be going, what’s going on, and so on. But I do have some thoughts. One is, I think AI at this point is both underestimated and overestimated. It’s overestimated, but by people that are not familiar with technology. I talk with a lot of entrepreneurs, and they will believe that, I don’t know, AI tomorrow will make a building with computers and people inside, whatever. They imagine AI will create everything. It’s underestimated, I think, in fields like programming or content writing, where I think we I see that things are changing, but I don’t think we can grasp the magnitude of the change. I think the impact will be at a scale that we cannot anticipate. That’s my perspective now on AI. In terms of the business value, I was very concerned to get involved in it because I was always asking… The first idea that I had was, let’s use AI to generate WordPress websites automatically. There are now some solutions that are doing that. You can use different prompts to, okay, what colors I should use, what images, what sections. Ai will generate a dentist website for you, and that can be done.
[00:51:18.500] – Ionut Neagu
But then I was thinking, Okay, I can do that. That’s cool. But this is what Astra will do as well, and this is what other people will do as well. It’s just, I will will keep competing, competing, competing on the same thing, and everyone will just… Because to do it is not like a high barrier to entry. So that’s the challenge. We created an AI chatbot. I think there are a thousand of AI chatbots that appeared because it’s not, let’s say, trivial, but it’s not something that’s complicated. In terms of business value, I’m still struggling to see where How we can use it and if there is any opportunity or not, because I’m looking at an opportunity that can be defended and not something that I do it today, and Jonathan, you do it tomorrow because you see that I did it. It will take you another day to just- I’ll never take you on.
[00:52:20.460] – Jonathan Denwood
You’re too much. You’re too sharp for me. I’m not that stupid. I know my limits. I would never take you on in business. You’ve been much more successful than me. For God’s sake, I’m always just… I’m a nightmare, but you’re logical unlike me. Sorry.
[00:52:42.510] – Ionut Neagu
It’s hard to say. But it will change the business. I think it will change the business in my perspective. I don’t know if it was obvious to you by looking at our business, but in fact, the bigger part of our business was the content business that we had alongside the product business. We had a blog on CodingWP, and now it’s WP Shout. We have a very big blog on Thymile. Those were But the impact there was very, very major. Because basically, most of the blogs nowadays, what they do is you aggregate information. So you hire writers to aggregate information. So they will research online, three, four articles and put a nice summary together. But now that’s no value in that. Because it’s something that can be done unless you can do it exceptionally well, which 90 100% of the writers cannot do it. It’s no value in that because AI will do it. Even if you do it well, it will cost… Our cost were $300 per article and AI cost to do something that’s quite close to that. It’s like $0.1. It’s just a big gap. Also, there will be a major impact to that business.
[00:54:14.800] – Jonathan Denwood
Well, I think the way to get over that is you got to add video content. You got to be a podcaster. You got to be an influencer. You got to show Google. You got to So Google other signs.
[00:54:33.030] – Ionut Neagu
Yeah, exactly.
[00:54:34.540] – Jonathan Denwood
You have to make up with your article that you actually do actually know what you’re talking about. You got to give clear signals to Google, because Google is quite aware of what you’re up to. And they’re just making a decision. Are you somebody that’s just polling on 600 articles a month, and you know nothing about the niche that you’re just trying to build an affiliate site on? Or are you using AI in a logical, and by doing other things, you’re adding value? Google’s not stupid. They’re just making judgment calls on all these websites. Apart from the Chocolate Factory, he can do fuck all what he likes and gets away with it. I don’t know how he does it. He must send Google a big check every month. Don’t sue me. It’s only my opinion, sir. Please don’t do that. I’m sorry. Back over to you, Kirk. Sorry. I was mouthing off there, Kirk, weren’t I?
[00:55:36.440] – Kurt von Ahnen
Just a little. The coffee’s working.
[00:55:38.450] – Jonathan Denwood
It is, yeah.
[00:55:40.080] – Kurt von Ahnen
Our final question, the one that will get you time served on the show, if you had your own time machine like Doctor Who and H. G. Wells, something, and you could go back to the beginning of when your career started, what advice do you think you would give yourself?
[00:56:02.480] – Jonathan Denwood
Don’t cover this podcast.
[00:56:06.550] – Ionut Neagu
No, I had a great time, and the questions were quite lovely. But let me think. Let me think about it. It’s not something in particular that I believe when things work out for you as they work for me; I don’t usually believe that way. I don’t try to think, Okay, what I could have been doing differently? When things are not failing, for example, We got into this issue with content sites and Google changing everything. It’s at those times when I question everything, when I think, Why we got into this and how we do it and so on. Here, I do have a lot of answers on what I would have done differently if I had gone back in time. As Jonathan said, I would just try to hold to my belief of trying to create great content and not necessarily, at times, rush to publish too many things that the quality controls are not in place and so on. That proved how to cause quite big problems down the road. So in those scenarios, it’s easy for me to think. But when things work out, I would not change anything because they work out.
[00:57:48.690] – Ionut Neagu
I guess for me, but this is very personal; advice that I try to give to myself from time to time is just to not take things too seriously. And that’s true from when I started. I was working crazy hours. I was not paid. I had not been getting any money for three years when I started. I just wanted to make it work, and I was making a tremendous effort. I mean, this was the case because I was also very inexperienced and stupid. It was something in my own that caused the situation. However, the advice that I would give to myself is not to stress too much, not to take things too seriously, and try to enjoy the journey. Of course, there will be stressful times. There will be challenges, but try to be mindful and constructive, and don’t stress too much. But that’s, again, I don’t know if we apply to other people, but try to me.
[00:59:02.820] – Kurt von Ahnen
Perfect. I like that. It’s, Don’t beat yourself up so much. Give yourself a breath.
[00:59:09.030] – Ionut Neagu
Yeah.
[00:59:10.890] – Jonathan Denwood
Well, it’s been a fabulous discussion. I’ve enjoyed it. It’s met my expectations. Hopefully, later on in the year, you agree to come back on the show. I loved it. You might come to the Roundtable show if you’re up for it. Never know. Our monthly roundtable show is where WordPress developers and people like yourself come to the end of their careers.
[00:59:43.700] – Ionut Neagu
I’m looking forward to that.
[00:59:46.450] – Jonathan Denwood
Yeah. So what’s the best way for people to find out more about you and your company?
[00:59:53.600] – Ionut Neagu
So you can find out more about me. You can visit my website at ionutsend.com. I have a couple of articles there, and you can get in touch. On Twitter, I’m not super active, but @hackinglives7. And then you can learn more about Themile on Themile website. If you have suggestions or are using any of our products, I’m happy to listen to them and discuss them.
[01:00:32.510] – Jonathan Denwood
We’re going to end the show now. If you want to support the show, please share this great interview on social media, and comment. If you do that, that’s helpful. Our audience is growing, which I’m very appreciative of. We will be back next week. We got some fabulous guests in July. I’m always amazed at the quality of people who are prepared to come on this show. I think it’s shown in this We will be back next week, folks. Bye.
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