Recently I've been doing a lot of thinking about revenue / business models related to WordPress (especially after my post about stagnation and a lack of innovation in the WP community). On an evaluation of the different models out there, I've made it my personal mission to somehow replicate the success that Automattic has had with VaultPress as a SaaS-like product that plugs into the WordPress dashboard via a plugin.

Premium plugins have been a notoriously difficult space to crack (Gravity Forms is one example of a plugin that has done this very well) and whilst I believe that this is possible (I'll explain this in a separate, follow-up post), in my head a SaaS-like model is probably easier to execute.

Having a free plugin that is available via the WP.org repository, means that marketing (distribution too) and traction is relatively easy to engineer initially. Thereafter the plugin simply links into your hosted infrastructure and provides all the goodies from there. With subscription-based revenue models being the holy grail amongst online entrepreneurs, this model would make loads of sense for WP users too. VaultPress' success has proven that emphatically.

I can even see this working incredibly well with a freemium model as well, whereas a plugin author can offer some free, basic functionality via the free version of the plugin and once the user decides to subscribe to the service, they'll unlock all the major goodies. This is something that I think iPhone & iPad apps are doing really well and if I could find accurate data on app sales versus in-app purchases, I'm sure we'll see you a growing trend where in-app purchases will soon be much more than single app sales. I think this works well, because you tap into customer loyalty and longer term relationships, since repeated purchases are made incredibly easy.

On that note, I also think that Automattic have laid the foundation to do some interesting things with Jetpack in future. From where I'm sitting, they'd love for everyone to install Jetpack because it obviously extends the WP dashboard experience. But instead of simply bundling it into the WP core, they've released this as a separate plugin which they control and I'm sure that they will soon start pushing VaultPress via Jetpack. This would be easy, because the user - who has installed the plugin - has essentially given them permission to push further additions / functionality to them via Jetpack; regardless of whether that functionality is free / paid (would still require opt-in, so wouldn't be spammy or forced).

The implication of this is that they can simply roll out new services with similar SaaS-like models and corner a big part of the "premium plugins" space. Brilliant business IMO. Jetpack has essentially secured Automattic a very premium distribution channel and I'm keenly awaiting their next move.

I do however also believe that whilst Automattic has the headstart over any of us that would like to do something similar (this is if I'm correct in my guesses / assumptions about what they're planning with Jetpack), it won't be impossible for anyone else to replicate this. Ultimately it would come down to creating something that is super-valuable and something that WP users are willing to pay for; replicating this model is the easy bit after you've stumbled upon the right idea.

What do you think?

I wanted to elaborate on my thoughts about creating a business model by firstly solving a problem for yourself. Whilst this is an incredible way of building a business, there’s a few thoughts that I’d like to share on the matter:

• If you are solving a problem, it is likely that someone else may have that problem as well (and subsequently they may opt for your solution). If your problem is however very unique to yourself, the likelihood of widespread adoption of your solution becomes much less likely.
• The bigger and more generic your problem; the more potential profit & significance your business may have.
• The problem you’re solving may be more unique / niche / specific, but your solution needs to be simpler and more generic.
• Your idea has a greater chance of success if you are being sincere in solving the problem i.e. solve the problem first & foremost and then figure out whether it’s possible to commoditize & monetize that solution.

If these guys don’t rely on banking fees to make money, I’m *really* curious to see their revenue model.