Over the past few weeks, we’ve seen a number of WordPress.com initiatives trying to touch on niche business segments. As happytables is fairly known within the community, some chatter came up when the most recent vertical relating to restaurants was released. I’d like to take this opportunity to clear some things up as well as discuss what lies ahead. I think this is an important discussion to have as many are either interested or curious on the topic of WordPress as SaaS.
Is happytables involved?
We were approached by Automattic earlier this year (2012) to see what possible opportunities existed. Tom, Joe and I went to the drawing board and in turn pitched the wordpress.com/restaurants concept in April ’12 (see the presentation deck here). We were open to ideas where recurring revenue was an option. The only opportunity available at the time was becoming a traditional premium theme partner, which given the nature of our solution didn’t make for a viable business case (certainly not a long term one, more interesting would have been the same partner model but with the recurring element). In other words, we would have seen a potential relationship structured in a more incentivized manner. Whilst we are still open to ideas, there currently is no business relationship between us. We’re happy to see our concept validated though.
Impact for happytables?
A big misconception is that we’re now some sort of “fierce” competitors, which couldn’t be further from the truth. Running a business targeted at a vertical comes with quite some baggage, 90% of which has absolutely nothing to do with WordPress. Whilst we are miles apart in execution and depth, I guess we expect some minor cannibalization given their existing reach and reputation in the overall “website builders” market (they did after all land a TechCrunch TV segment on day two). That said, we’re confident in our business and the foundation we’ve built both online and offline whilst being bootstrapped. With myself being the “face to the client” and evangelist for happytables, I’m grateful for the successes we’ve had to date in the areas where larger companies will find it hard to; developing a relationship with clients, understanding the challenges they face and trying to be part of their growth online.
This all leads up to the most important point. That is that we’re genuinely trying to help independent restaurants succeed as small businesses, it’s something that I believe in deeply, this sort of democratization of opportunity. Solutions such as Kiva or Kickstarter provide liquidity and tear down barriers to entry, enabling individuals or groups to overcome the initial hurdles of competing in spaces filled with larger players. It’s the same reason we have a free plan that allows you to connect your domain and doesn’t contain any 3rd party advertisements. This enables us to give a free website to restaurants just starting out, or those in less fortunate countries. Whilst we’re far from having perfected our revenue model, we feel good about what we’re doing and would like to think that we’re adding value to the web as opposed to polluting it further.
This is what motivates us and allows us to approach the problem from a different angle, thus adding value in completely different (and hopefully new) ways. Long story short, you can’t compare the dotcom vertical with happytables, not that easily.
Impact for other WordPress SaaS businesses?
So who has to worry? With these new verticals, Automattic will in my opinion continue eating away at profits generated by “web assemblers”. You’ve heard me use the term before. These are individuals that do not develop, but rather assemble hosting, theme, plugins and basic support to create and sell a “custom” website (in other words a large part of Theme Forest customers). If a WordPress SaaS platform was created as an extension of this mindset, then they won’t last long either. This is because there isn’t a great deal of creativity or specialization involved, it’s easy to replicate and scale. WordPress.com has established itself as the leader in that segment a long time ago and has turned this assembly into a seamless experience (especially with the frequent improvements to onboarding and user experience). That isn’t to say that there aren’t exceptions. If you sell and provide support in a language other then English or are physically present for your user base, you certainly have a unique advantage.
If on the other hand, you’re passionate about the industry you’re targeting and are genuinely interested in finding solutions that can help your customers grow and be more productive, then I believe you don’t have anything to worry about. Automattic is great at what it currently does and is quite amazing for only having a c .130 employees, but even they can’t be everywhere at once. Kudos to bringing Xzibit and others into the music vertical though.
Your thoughts?
I can imagine from the recent news post at WP Realm that there are quite a number of different views and ideas. Where do you think this is going and what sort of impact will it have?