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Adii Pienaar

Now working on Receiptful. Co-Founder & ex-CEO of WooThemes. Author of Brandiing. New Dad. Ex-Rockstar.

Lessons Learnt From Being First

(This content was originally designed to be part of my Wordcamp Europe talk of the same title. Since I unfortunately couldn't make the conference, I didn't want to let the content go to waste. So here it is.)

Being first is never easy, because you don't have the luxury of the knowledge of others' mistakes (which can help you avoid similar mistakes). Being first means that you're mostly walking around in the dark, figuring things out for yourself. This in turn mostly means you're making mistakes and learning through trial and error.

When I released my very first paid WordPress product back in November 2007, I didn't know much about the space. Much less did I know that this release would eventually kickstart the behemoth that is WooThemes today.

One of the recurring themes in this six year journey though has been that there's definite lessons to be learned from being first. Whilst being first generally holds some kind of first-mover advantage, for us it also meant that we were very inexperienced and that we were mostly figuring things out whilst making loads of mistakes.

In this post, I'd love to share some of the lessons that WooThemes learnt from being first and thus being forced to experiment with things for which we had no prior framework or point of reference.


1. Build Purpose-Driven Products

The Mistake: For that very first product I released in 2007, my product strategy was very clear: throw everything and the kitchen sink into the product features, because I assumed that's what people wanted and I believed that it was easier to market something with 100 features than something with only 10 features.

The Problem: This strategy caused severe issues in the medium-term. Whilst it was easy to support this kind of code base and feature-set initially, it didn't scale once we reached 1,000 customers. Support and ongoing code maintenance became a huge issue and also started to carry a significant financial overhead.

Lesson Learnt: Build products that are lean and purpose-driven. Do not try to be everything for everyone.

2. More Is Never Better

The Mistake: Similar to how we bloated our initial products, we took the same approach to our product catalogue. Since we had great traction initially, we figured that we might just as well multiply that by releasing more products that catered to a whole bunch of different niches. We also sometimes compromised on quality in the pursuit of this quantity-approach.

The Problem: In the medium term, we started to see that a big majority of these products were never gonna deliver appropriate ROIs. On top of that, having to support and maintain such a huge product catalogue generated a huge drain on our resources and capacity.

Lesson Learnt: Always pursue quality over quantity. More is almost never better.

3. We didn't invest (enough) in critical aspects of our business

The Mistake: In April 2012 we got hacked and lost about 6 weeks of data. This was one of the most brutal experiences in our history and we ultimately got a bit lucky in how we managed to resolve this.

The Problem: We trusted our hosting provider too much and when they said that our backups were sorted, we took this for the absolute truth. What happened though was that while our backups were running on a separate box, it was also accessible from the main box. So the main box and subsequently the backup box got hacked.

Lesson Learnt: Make sure you fully understand all the most important parts of your business; don't just trust a 3rd party with this. If you're an eCommerce or SaaS business, your server (environment) is the most important part of your business.

4. We thought free stuff makes money

The Mistake: In our early days, we used to regularly release free products as a way to introduce more (prospective customers) to our brand and products. This was based on the initial traction that I had created doing this on my own blog prior to releasing that first product in November 2007.

The Problem: Our hypothesis was that if we could convert even a small percentage of free users, we'd be rich. The last time I ran an analysis on these numbers (late 2012), less than 1% of free users ever paid us anything, and the average spend was a measly $1.97.

Lesson Learnt: Traffic generated from free stuff is great, but, if you can't convert it, it's a vanity metric. The only way to earn revenue from free stuff is if you can easily close the loop (i.e. the "upgrade" consideration from free to paid is very obvious to the user).

5. Legacy mistakes have exponential (future) costs

The Mistake: Our initial business model (pricing, revenue model and support) was based on our very early data and traction. Whilst we tweaked our pricing about three times in the first 3 years, the model always stayed the same.

The Problem: Years later our data started to show that this model was never gonna be sustainable and we had to take decisive action to ensure that we would be profitable in the longer term. We also used to always grandfather existing customers when we did change things, which meant that we were also grandfathering legacy mistakes and inefficiencies.

Lesson Learnt: Sometimes you have to make hard decisions, but you'll always be better off making them. Grandfathering is a great idea, but not always the best option. Your business model needs to progress and evolve with your business, not stand still.

6. Measuring All The Things

The Mistake: We used to be really bad at analytics and measuring of any kind. And then lean startup happened and we were scrambling trying to get better at this. Because this was an important part of the business which we were just ignoring. Right?

The Problem: So we made the mistake that we would just start measuring everything and we'd make decisions based purely on that data. If the data said no and our intuition / experience said yes, we'd decide no. Very binary.

Lesson Learnt: Data should always be balanced with intuition. Entrepreneurship is still a skill and no amount of data alone can make you better at running your business.

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