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How can WordPress.Org become a 100 Billion Dollar Product?

Automattic is a billion dollar company. That is nice. But I think the future is in WordPress.org, not in WordPress.com, it can reach a 100 billion dollar valuation! In this post I am going to tell you exactly how to get there.

Some Background

Automattic Inc., the company behind WordPress.com, did a very good job. The company, founded by Matt Mullenweg, worth over 1B dollar. They develop the WordPress.com publishing platform and the WordPress.com VIP cloud services. But they are working in a very competitive market with many high quality players, providing much better products.

It took automattic 10 years to earn the 1B dollar price tag. I think their entire strategy was wrong. Instead of focusing in hosting and other niche services, where they have tons of competitors, they should have focused in their platform ecosystem.

Learning from Others

Apple Inc., for example, created a new ecosystem with it’s mobile iOS. They offer free and premium applications in their App Store. Apple earn 1B dollar annually by selling apps developed by others. Why? because they control all the aspects of the ecosystem.

Just like Apple, WordPress created a great ecosystem with its easy-to-use CMS. And just like apple, WordPress offers free themes and plugins in it’s repositories. But, unlike apple, WordPress has no premium themes/plugins. Players like envato took over this segment, earning tens of millions of dollars each year. And many more medium theme shops and a long tail of plugin developers earn extra few more millions.

What do they need to do?

The foundations are already there. WordPress has the largest plugin repository (40K plugins) and the largest theme repository (3K themes) in the world. They just need to offer developers to sell their premium products from the main repositories. Controlling the payments and usage licences on wp.org ecosystem, and charging minor fees for each purchase.

It’s a win-win situation for everybody! WordPress.org can earn money and invest even more in the platform. Developers are always looking for new ways to market their products – using the official repository will make it easier for their user to install plugins from the sites dashboard. No more zip file downloads! No more long install instructions!

And the most important, the users (site owners) will have access to good premium products from their dashboards. They are already willing to pay money to improve their website, if you offer them new products inside their dashboard, the entire category will grow. More paying clients -> more plugins -> more fees to wp.org.

Conclusion

WordPrss.org has more potential than WordPress.com. In my opinion, implementing this strategy, they will reach 100B dollar valuation in 5 years!

As a site owner, I buy many themes and plugins, and I would prefer to search for premium plugins from my sites dashboard. It will make the process easier for me. I prefer to pay to WordPress than to some unknown market place or anonymous developer. And I prefer to install premium plugin like do with free plugin, from my dashboard, with a few mouse clicks, no zip files.

As a plugin developer, I will no longer have to maintain an e-commerce site for my plugins. I will no longer have to pay fees for several external market places. My plugin will be hosted on wp.org, I can easily setup localized versions using the community translate platform, I can see reliable usage stats, and I will receive payment from WordPress or use the credit to buy other plugins (wp.org as an electronic wallet for websites). When you control your own ecosystem the opportunities are endless.

So, what do you think? Would you like to see premium products in your dashboard?

Rami Yushuvaev

I'm an entrepreneur, a web developer and a blogger. I’ve contributed code to each and every release since WordPress 2.8. I'm the Hebrew GTE responsible for the translation and the release of WordPress Hebrew version. The founder GenerateWP.com and several other WordPress related projects. I work mainly with Israeli startups and hi-tech companies, providing development services.

7 Comments:

  • Tom J Nowell

    Keep in mind the WordPress foundation is a non-profit and WordPress.org is an OSS project, selling premium themes when viewed from that light creates a lot of strange complications. If this were ever to happen I expect the first reaction would be criticism

    Reply

    • Rami Yushuvaev

      Automattic is a private company, all the earning from wp.com go to owners. wp.org is an OSS. The trademark belongs to WordPressFoundation.org.

      No one said that the foundation can’t earn money. If the profits are too high, they can lower the fees to 1 USD per purchase or donate to wikimedia foundation, mozilla and others. The important thing is that the money will go to a charitable organization focused on promoting open source.

      (Read between the lines, I don’t care about the earnings, I just want to see premium product on the official repository.)

      Reply

  • Ahmad Awais

    Enjoyed the article Rami, I am writing one along the similar lines about what’s next with WordPress and what I expect.

    I agree on the WIN-WIN part.

    Reply

  • Vova Feldman (@vovafeldman)

    Based on what we all see the focus of the foundation and WP.org community is distribution and not $$$. It would be hard to get to 50% of the web and in parallel turn the .org repo to a paid marketplace.

    With regards to your $100B number, even if you monetize the whole repository, the market opportunity is ~$1B (https://freemius.com/blog/540-million-active-plugins-makes-wordpress-a-billion-dollar-market/), so even if in some magical way Automattic will take control of WP.org and monetize the whole thing, they won’t cross the $10B.

    Reply

    • Rami Yushuvaev

      Yes, I remember your post. You wrote:

      If an average plugin is worth $100 a year, we get to over $1B market only for plugins–boom!

      According to your numbers, the current plugin ecosystem have $1B of sales each year. Assuming WordPress.org fee will be 25%, It’s a total yearly income of $250M. With a price–income ratio of 20 (hi-tech sector), it will give us a valuation of 50 billion dollar – only from plugins. With themes it’s more then double valuation.

      Reply

  • Jamil Ahmed

    Nicely written and informative article. Indeed WordPress have a bright future.

    Reply

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