Business Changes

Its more important what you say no to in life than what you say yes to. When we went open source, we stared at google analytics every day and rejoiced when we passed 100 visits a day. Now we average 10,000 visits in a day and were the fastest growing open source CMS out there. In the early days we were just flattered that anyone cared, so wed bend over backwards to provide any service we could to anyone who asked. As time went on, we tried out different ideas and dumped a few that turned out to be mistakes or just past their prime (pro accounts, support incidents to name just two). Were banking on 5.7 being a pretty big deal, so to make sure were positioned correctly to support and promote it, were focusing on a few things:

  1. No more budget hosting. To stay the size I want we have to choose where to put our hosting expertise, and were focusing on the big boys. Theres plenty of budget hosts willing to do a great job helping people get started with concrete5. Were going to have the free hosting with ads at, and those ads are going to suggest you get a paid hosting account to get rid of the ads. I dont expect to make much of anything on the ads (who knows) but I expect to make a lot on the hosting signup commissions.This would be awesome for us as it would help me track ROI on marketing spends.
  2. Enterprise Support SLAs. Since launching the enterprise site weve already sold a few of these guys with great success.
  3. Training. This is the #1 priority for growing the project. Weve got to offer more training in more ways and get certification working. Were seeing huge system integrators looking for ways to train 1000 developers on concrete5, and what weve got today is only now starting to meet that need.
  4. Services. Were still helping a handful of clients with concrete5. We like having our feet in the water so to speak, as we believe it gives us insight into ways the tools need to improve. Theres an old sales adage of you can have it fast, cheap, and well done - now pick 1 (or 2). It strikes me that we should be expensive and perfectly done. The more we move in that direction, the more room there is for the community to move up and be reasonably priced, fast, well done.
  5. The marketplace. For 2-3 years I talked about very little beyond the marketplace when people asked us how we were going to make money. I always got inquisitive looks when I was speaking to well informed folks, but I was passionate about it nevertheless. I believe weve made a more powerful solution to the module/add-on problem than all of our competition has today. I believe the PRB and community curated aspect of our marketplace is a key component to our projects success, and will always remain so. So many of us have been burned by Drupal modules that break other modules, or Wordpress add-ons that just dont work. Bringing the barrier to entry up a bit and using Apples App store as a guide was a good idea and I have no regrets about it.
    That being said, there are some real issues with it being the primary or only revenue model:
    1. Practically speaking, it has been flat for us for some time. Its just very dependable income each month but it never explodes and it doesnt seem to be that directly connected to our site traffic or demo signups. Practically the marketplace is not our primary revenue model today. Marketplace net profits cover of our monthly operating burn rate.
    2. We cant sell enterprise stuff there. People are outraged when we price an internationalization suite at $1,750 in the marketplace, but when I tell people through that our enterprise suite costs $250k for an unlimited license no one blinks an eye. Moreover any enterprise that might want to grab a simple add-on out of there instantly has support issues. A large organization needs one point of contact for support issues and is willing to pay for that. Since we really cant promise failsafe support on add-ons we didnt create, even with the PRB, its often difficult for the big boys to see the marketplace as anything more than a nice prototyping perk.
    3. Its a turnoff for the moral high ground open source crowd. The fact that were MIT licensed instead of GPL is already a hard sell for some open source advocates, and then they look at our marketplace and exclaim that all the good stuff costs money! I can (and do) argue that actually about half the stuff in there is free and you can buy stuff for Wordpress/Drupal/Joomla too. We just took the effort to make a curated destination with support and refund policies, but it still rubs folks the wrong way at a glance - and that is what it is. If someone thinks you smell, it doesnt matter if you know you dont from their position, you smell. The idea of making something and selling it in the marketplace tends to appeal to the 1-2 man entrepreneurial cowboy webshop looking for different ways to augment their services revenue with something more dependable. Speaking as someone in that camp, I think thats great. Speaking as the leader of a open source project with the goal of being a ubiquitous building material for the web, I wonder if we may be letting ourselves get unfairly compared to more truly open source offerings out there by always saying the marketplace is our primary revenue concern.
    4. Our own add-ons are priced in a way to try to cover the costs of developing the core. What ends up happening is our add-ons arent as good as they could be, because revenue that should be going back into improving them gets funneled into time on the core. We have too many small things in there which require too much support expertise. It also makes tracking ROI on any marketing spend difficult. The process of discovering concrete5 to choosing to buy an add-on is too squishy and hard to track for me to justify spending dollars marketing concrete5, so today I dont. Id love to change that.

To address some of these issues, we want to change the way the marketplace works:

  1. 5% gross of any sale should go to a non-profit the customer picks from a list on checkout. Ive wanted to do this from day one but foolishly never did. Theres a clothing store here in Portland called Buffalo Exchange that gives you a wooden coin to put in one of three boxes if you dont need a bag. The boxes are each for a different charity that they cycle out monthly or so. They keep them very safe (no politics, religion, etc - stuff like shoes for kids or saving dogs). I believe that by doing this we will address two branding issues: First I believe peoples expectations about support from our add-on developers will be more reasonable. Second I believe the I cant believe this stuff costs MONEY crowd will have the sense to keep their mouths shut, or risk looking very cheap.
  2. 2% gross of your purchases above $1,000 should go back to customers as rewards credits. Use them for more marketplace purchases or just cash it out and buy a beer. This gives me something to say to the shops looking for a reseller/affiliate/commission type deal.
  3. To make those happen, wed ask marketplace developers to give up a 30% cut instead of the 25% we ask today. ;) Seriously though, this is one of those places where making it up on volume actually works. These changes and the ecosystems changes will make me feel comfortable spending money marketing concrete5 (which doesn't happen today.)
  4. Were not going to call it a Marketplace any more. It's simply the community, as we now will have the free hosting site as well.
  5. Our Add-ons - were going to start selling fewer things in the marketplace. Some of our stuff should just be free at this point (superfish??). Some of our stuff will be rendered obsolete with 5.7 (discussions and calendar). With eCommerce we plan on having a basic free version, a $95 version that is a bit simpler to use than what we have today but is somewhat comparable, and a $295 version that includes complex product configuration and other goodies. Were going to start selling some themes as well.