Intro: Hey, everybody. Welcome to episode 115 of How I Built It. Today my guest is Jan Theleiman. I met Jan through the Freemius Slack channel, and you might remember the episode where I interviewed Vova Feldman. He invited me into the Freemius Slack channel, and I got to meet a lot of really cool people there, and Jan is one of them. He was a bit of a digital nomad for a while, and he started making money writing pro-Divi modules which he uses Freemius to sell. So, if you are thinking about getting into plugin development or premium plugin sales, this has been an insanely helpful episode for me. It’s always something I think about doing, and then I can never make the jump. “Do I do too much?” Or whatever. Jan offers a lot of really great advice. We’ll get to that interview in a minute, but first a word from our sponsors.
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Joe Casabona: Hey, everybody. Welcome to another episode of How I Built It, the podcast that asks “How did you build that?” Today my guest is Jan Theleiman. Jan, how are you today?
Jan Theleiman: Good. Thanks for having me on the show.
Joe: Thanks for being on the show. We were connected through the Freemius Slack team, so we’re going to be discussing an interesting topic today. As you’ll learn very soon, Jan is a Java programmer by day and then sells products on the side. I’m very excited to talk to you about this. Why don’t we start off with, why don’t you tell us a little bit about who you are, and maybe more specifics about what you do?
Jan: My name is Jan. I’m from Germany. For the past three years, my wife and we’ve traveled around the world. Three years that is a long time. Originally we planned to only travel Australia for one year. But our car broke down, which we bought there, and then we decided to visit as many countries as we could with the money we saved. The money we saved, it lasted for about one year. But we didn’t want to stop traveling, so we had to come up with ideas to earn money while we travel. This brought me to the Divi WordPress premium theme. Some of you might know from Elegant Themes. Since I’m a programmer I started developing modules for my own blog, we had a [inaudible] blog, and I posted one of these modules in a Facebook group, and then some German guy told me, “You can’t give away this great module. You have to sell it.” This brought me to selling my modules, which made quite a good amount of money on the side compared to the amount of work I put into it. Especially if you travel in Asia and South America, you don’t have to do a lot of work to afford a very good life down there. Then my wife got pregnant, and now we are back in Germany. I’m back to developing Java during the day for a bigger company here in Germany, but I never gave up on developing my modules. That’s what I still do on the side because when I come home, developing my passion. Other people sit in front of the television and watch stupid shows, I rather do some developing, because it’s just so much fun and having the money on the side is also nice, so I can afford a good life for my newborn.
Joe: That’s fantastic. We were talking before the show, at the time of this recording Jan has a seven week old.
Joe: So, I remember those days pretty well. Sleep deprivation makes it hard to completely remember them. But, that’s cool. That’s such a cool story. You traveled around the world for three years, after one year you were like “Let’s keep the party going.” So you decided to sell modules for Divi. Had you used Divi before, or did you like stumble upon this in your quest to make money?
Jan: Yeah, it’s a little bit of a funny story. When we created our blog for the first time, I had no idea what themes to use. We also had a YouTube channel, and one of our viewers had a marketing agency in Germany, and she owns a limited license of DVDs. So she said “I have this super cool theme. Do you want to use it for your blog?” She basically gave it to me for free. So, that’s how I came to review it. Then at some point, I needed a certain module which did not exist, so I’m a programmer, and I thought “You can make this.” So I wrote it myself, I looked at the source code, dug through it, learned how everything worked together and then just came up with a plugin. Then I wanted to share this plugin with the word. That’s how I came to this.
Joe: That’s super cool.
Jan: After that time I created a second plugin, and then the third plugin it really– I don’t know how to say it. In Germany, we say, “It hit the tooth of the time.” I don’t know if that makes sense, but it was–
Jan: It was exactly on point and what people needed. Suddenly, I had all the income I needed to do full time traveling, and I only did a few hours of work per week instead of eight hours per day as before, when we lived in Germany. I only had to work maybe one or two hours a day and do some updates every now and then, and give some support. It was a great time. We had all this free time, we could see things and places, and it was wonderful.
Joe: Wow. Can you say that statement again? What was it? “It really–?”
Jan: “It hit the tooth of the time.”
Joe: “The tooth of the time?”
Jan: Yeah. I don’t even know if that makes sense.
Joe: In America we say, I think probably what you’re saying is, “Hit the nail on the head.” It was– Cool.
Jan: Yeah, that would be appropriate, I guess.
Joe: Very cool. So that was your third one. I have so many questions right now because I think this is very cool. First of all, how long did it take you before you developed that third plugin that helped your shop take off? Was it weeks, days? Did you develop three right in a row? What was that like?
Jan: It was really funny. The first module I published on a marketplace site four or five days before the end of the month, and in these four or five days, it made like $50 bucks. That’s not very much, but it’s nice to see “I created something for myself, by myself, without being employed by somebody else. It made some legit money. The next month I started developing the second module and published it maybe a week or two after I published the first one. During that month it made like $250 bucks. So, I saw “The income is getting bigger by a factor of five.” In the third month I released the third– Actually, it’s the second month. Because it was only a few days before the end of the month when I released the first one. So, the second month at the very beginning of the month, I released the third module. I think it made $1,050 dollars. It was only like five weeks or so, and ever since I think I had not a single month since then that I earned less than $1,000 with these modules and the beauty of it is once you release a module it stays online. You only have to make sure that you update it if something breaks, but then your portfolio gets bigger and bigger and bigger. Which means that with less and less and less amount of time you spend working on it, you’ll get the same income or even more because more modules means more income. At the very beginning, my business model was a little bit different. It was the first time I ever sold something by myself online. I only sold VR unlimited license, unlimited site licenses with lifetime support, but now with Freemius, I switched to the yearly reoccurring payment. Because it after the first year it became clear that if I want to make this a sufficient source of income and I want to provide long term support for these modules, I need a way to make the income, and the Freemius model where you have these yearly recurring payments. It’s really beautiful. I still sell lifetime licenses, and they normally have three times the price of a yearly license. If you plan on using one of my modules longer than three years than it would be smarter to invest in the lifetime license. But depending on which module you want to buy, that can become expensive quite fast.
Joe: Yeah, absolutely. Very cool. I like some of your insights because I’ve been saying this to a few people now that I’ve been interviewing for this show. I have an idea for a plugins that I use personally that I think probably could sell okay, but I’m worried about the support aspect of things, or I am worried about the amount of time it will take me to get these to market and then marketable. But, it sounds like, at least initially, just some effort to get them to market, and then they can maybe start making money, and I can refine as I see fit.
Jan: During my travels, I learned a lot about a thing called “Passive income,” which you surely have heard of. People are always talking, especially in the digital nomad groups, they are always talking about the passive income they make. You have the active income when you sell your time, and you have a passive income when you let your money work for you. I believe that there is a third thing, which is the semi-passive, or half passive income. Which is what I am doing currently. I can’t stay away for a year and expect it to make the same amount of income every month. I still have to put some effort in it. Truly passive income is for example if you buy stocks and they give you a dividend each quarter, or whatever. That’s truly passive income because you don’t touch it at all anymore. But what I do is what I enjoy, and spending these few hours every week. Maybe half an hour a day, or maybe sometimes two or three hours depending on my mood, it makes me happy, and I can ensure quality. The downside is, of course, you need some initial time to put a new product into the market, and you never know if it really will hit like you expect it. So, with my third module which made this big impact in my life, I was really lucky. I still don’t know how I did this, because it was a quite simple module. It was a blog module which let you configure different level of elevation according to the material design from Google. So, when you hover over the module, it appears that it is coming closer to you by changing the box shadows around it. I thought it was not so difficult to make, and I would have never thought that people would appreciate this kind of module so much. Again, it was more something for myself, which I said, “I saw a similar thing on another page. Not as a module but they implemented it with CSS.” I saw it, and I thought, “It would be cool if I could have a module for my pages so I could easily implement this without writing the CSS every time.” So I developed it, and people liked it so much that they bought it over 400 times now.
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Joe: When I’m looking at other products, like what you just said, “Something so simple, how can it make such a big impact?” It has a very obvious application. People can search for a module that does this, and that comes up. “This is the exact thing I needed to do.” So, maybe that mental block is another thing that plugin developers need to get over. It’s not it’s not the simplicity of the thing you’re making, it’s the value it provides to the customer.
Jan: Yes, exactly. I think that is the point. If people need it and it makes their life easier, then they are happy to spend a few bucks on it. It doesn’t have to be a super fancy suit of different modules and everything, which takes you three years in development. Sometimes it can be something really easy. I made a second product off the blog module, which is a collection of CSS classes you can simply add the style sheet to your site, and then you have one class which is a cut class, and you can edit to any element on your page. It will apply the hover effect with the elevation. I offer it for a really low cost. I think it’s $3 dollars or so, but people like it so much because they can do so much with it, which they can’t with Divi out of the box, so they simply they only have to remember this very one class. Put it in the field, on the theme, on a module, on a row, on a section, a column, whatever they like. It just works. So it’s really simple to use, and the effect is cool, so they keep on buying it, and I think that’s the– How do you say? The hourly wage of this particular product. It’s the best I’ve ever had in my life because the hourly wage it grows and grows and grows. I spent like half an hour to develop this style sheet, but it already brought me like $300-400 dollars or so, so that’s an hourly wage of like $800. Please tell me where you get $800 dollars an hour.
Joe: That’s incredible. So, maybe for the–, We’ve been talking for most of the show about different aspects of the business and how you came across this, but I love the topic. I usually like to ask what kind of research you did for the product, but we got a little bit of that. I’d be interested to know what kind of research you did for pricing, or maybe how you decided to price your plugins? Because some people are like “$99 bucks. If it saves somebody an hour of work, $99 bucks, it definitely is.” But you also mentioned $3 dollars, which was clearly totally worth it for you. So, how do you come up with pricing?
Jan: That’s a difficult question actually, I’m still looking for ways how I can do this, because normally what I do is I sell myself underpriced. For me, it’s really hard. I’m a very helpful person, and if somebody asks me anything in my support, I will help them no matter if it’s the fault of my plugin. Today I had a customer, and he bought one of my plugins, and he put it on his site, and the plugin didn’t work. So I checked out his site, and I saw that he put some strange J query script tag on his page, which is absolutely not necessary because Divi comes with J query built in. But he told me, “No I need this or this or that won’t work.” I told him, “Then whatever you do there is not working properly, and it should work like this or that, and I’m happy to assist you to make it work so that it works together with my plugin.” It’s basically not my plugin’s fault, but I’m happy to assist. I won’t charge him any money for this, and that makes it difficult for me to put the right price tag on my stuff. What I normally do is I think about what would I spend for such a plugin, and I normally don’t spend much money for things. Especially if I can do them myself, so normally I put them a little bit underpriced. Recently, I tried one thing out which is making one of my products ridiculously expensive, but apparently, it gives so much value to people that they still buy it. I think you can try a little bit out, and you can– If you say, “OK when I make it this price I get around these many purchases a month. Then next month I maybe make it a little bit more expensive, $10, $50, $100, depending on how much value it adds. Then you can see if people still buy it, OK. If nobody buys it at all, make it cheaper again until you hit the sweet spot. I wish there was a recipe for finding the price, but that’s simply not possible. You can guess and see if people are willing to pay whatever you will want to charge.
Joe: Nice. I like that a lot. I especially like the part where you said that you raised your price of a plugin significantly, but people still found a lot of value in it. So, there’s nothing wrong with price experimenting.
Jan: Right. I read a blog article from Freemius, and it was also about product pricing. The story goes that he goes into a meeting with a corporation and he has a super awesome plugin, and when he came to the slide with pricing nobody said anything, and he never heard back from them. The problem was that it was way too cheap, and big businesses, they expect to pay a good amount of money. So before the next meeting, he quickly added two zeros to the price. The business, they just bought it. They didn’t even cringe or whatever, they just said “Looks good. We’ll buy it.” After I read this, I as well, I added a little bit to the pricing. Before it was, I think, $39. I raised the price to $299, and people keep buying it. I couldn’t believe it. But apparently, it’s so much of value for them that they’re willing to pay it. That makes me think if I should maybe play around with pricing a lot more. One particular pricing tip I have is that if it is possible always try to display a higher price and cross it out, so people think “That’s a limited offer.” That’s one thing I now do with each of my plugins, even if they are not on a special deal or whatever. It’s the psychological effect.
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Joe: People are always willing to get the deal. I’ve learned the opposite, in that when I first launched my online courses I had a bunch of coupons and things like that, and then when I got rid of them, I had people who only wanted to buy my course if there was a coupon. I made them think that there was always a deal, and when I got rid of that deal, it backfired a little bit. But I found a good happy medium there though, so that’s interesting. I would love to get to the title question now which is “How did you build it.” I want to talk specifically about your online shop, and you use Preemius– I’m sorry, Freemius. You mentioned that you might use other marketplaces as well, so maybe we could talk about some of the decision making that went in there.
Jan: First of all, of course, you have to know where you can sell. Do you want to sell on your own website? In your own shop? Do you want to use a provider like Freemius which handles all the value-added tech stuff? Especially here in Europe, that’s a real pain if you want to do it yourself. You have to get a lawyer, which is expensive to write terms of service for your shop. You have to check where the customers come from, and then each European country has a different value-added tax rate. In Germany, it’s 19%, and in Spain, it’s 15-16% or whatever. That alone made me think, “No thank you. I never want to have my very own shop. I’d rather pay the 30% for a platform which takes care of everything, and I get my pay out which I put in my income tax, and I’m good to go. I don’t have to take care of anything, and I don’t have to deal with refunds and stuff like this. So at first, I didn’t even know that Freemium existed. But this German guy, he told me “There’s this page called ElegantMarketplace.com,” and at the time it was the one of the very few or maybe the only marketplace especially made to buy and sell Divi related products. Like plugins, modules, themes, courses, stuff like that. That’s the first one I started to sell on. Then later there I was contacted by the owner of another page called Divi cake, which is also a site especially for Divi products, but it’s newer and smaller. The good thing is they have the customer base. When people in the Divi community look for a plugin or a theme, they first go to Elegant Marketplace because it’s such a name. They had a Facebook group with some 30,000 members, and if you search for custom Divi modules or whatever you would normally find them in Google on the top places. That alone adds so much value over selling on your own page because you can have the very best product at the cheapest price. But if people don’t find you, you will not make a single dime. Then later I started to think “What if Elegant Marketplace suddenly starts to raise their share?” Or, “What if the owner runs away, saves the income for two months from all the developers selling there, and then just goes wide?” Or what if, I don’t know, a fire destroys all the backups they have, and the site goes down? Or, Google decides to delist them? Things can happen all the time, intentionally or not intentionally, it doesn’t matter. But it’s always good to put not all your eggs into one basket. So I stumbled across Freemius, which was recommended from a friend, and that is when I started to rebuild some of my old plugins to another structure. Because what Freemius allows you to do is you can put your premium code in the module, and then you upload it to their page, and you put your premium code in between an if and a statement and they have a compiler which strips out all the premium code. Then you get a plugin which you can upload on the WordPress plugin directory. So now, I not only have an Elegant Marketplace with their huge user base, but I also have– I can advertise my product directly on WordPress. So if you go to plugins at new search for Divi, you will find my plugin. You can install it, test it out, get the free modules I have added there. Then there’s this wonderful add on architecture which allows you to purchase different add ons. So I already converted two or three of my modules to add ons, and that is a nice distribution of your risk. You also get all the people who might not know about Elegant Marketplace, but who regularly search the plugin directory for Divi modules.
Joe: That’s cool, so I like that. You’re piggybacking off of other audiences like Elegant Marketplace and Divi cake that have that trust in the specific industry that you’re trying to be in, but also I didn’t know that this was a feature of Freemius that– I guess it makes sense, because their name is based on like “Freemium model.” It lets you easily up sell your add ons. Because that’s another hard thing if you have maybe a free version of the plugin and then you need to convince them to go off somewhere and pay for the premium if they want.
Jan: Freemius makes it simple when you write the code on your computer you only have this one code base. You don’t have to do any branching with good, and you develop as normal. Simply put it in the bracket, zip your product, upload it to Freemius. There’s even command line tools which can do this automatically for you. You download the free zip, put it in your WordPress repository and you’re good to go. Then when people decide to buy it they have two different options. You can have a free version of your plugin, and when they buy it, they get a premium version of the plugin. I didn’t want that, because I didn’t want people to have to re-download, remove the plugin, and download a new premium one. I have a free one which everybody can use. Everybody has the same features, but there is the add on structure, and this is also built right into Freemius. They even provide you with the manual structure so you don’t have to do anything, you just upload your add ons onto Freemius. And when I add a new plugin I just flip a switch, and it will appear in the list of add ons at your back end. So it’s always present, people know “OK. This is the free version, I can use it. Everything is good.” But there’s always this little add ons menu, which you can click and then you see all the beautiful add ons I created. The third really awesome thing about Freemius, which was also one of the main reasons I started using them, is they have affiliate program built right into the platform, so people can register themselves and become affiliate marketers for your plugin, and they can start earning money with your plugin, and if they recommend your plugin people will get plugin recommended are more likely to buy it if somebody they knew recommended it, over when they find themselves. Then they might be a little bit skeptical. But if I say to my friends, “I found this super awesome plugin. It’s really helpful. You should check it out.” It’s a lot more likely that he’s going to buy this plugin.
Joe: Very cool. It sounds like, I sell online courses and I do it through WooCommerce. I spent a lot of time getting the right infrastructure, and I’m glad I did that for this particular case, but if and when I start selling premium plugins I think Freemius will be the way to go because I would want to focus all of my development time on the premium plugins, and not any development time on the actual shop.
Joe: That’s very cool. We are coming up on time here. What are your plans for the future? I know that you have your full-time job, you just had a baby which I know probably affects the way that you approach certain things. I left my full-time job when my daughter was three months old to start my own business because I wanted to have as much time as possible with my child. But what are your plans for the future? Are you going to continue doing the full-time gig and then this on the side? Or do you eventually want to make this your full-time gig?
Jan: The plan is to do both right now, for a while until the boy is a little bit bigger and fit for traveling, and then maybe in two or three years or so I want to have my business grown so much that I can quit my day job and then I want to buy or build adventure mobile and drive around the world. See places and show my baby boy the giraffes in Africa, the zebras and the lions and the kangaroos in Australia, and the giant guinea pigs in South America, and all the cool things my wife and I have already seen. That is a dream of mine. Divi is not the only business I’m doing. I’m doing a lot of other things, but talking about them would probably take a few hours.
Joe: Gotcha. It goes back to what you said about having a nice distribution of your work, not putting all of your eggs into one basket. That’s cool. I love that. My wife is a nurse but I work from home, and so we do have a little bit of flexibility. We want to do the same thing for our daughter. We want to travel as much as possible with her, and give her the same travel bug that we have. So, that’s cool. I’m going to end with my favorite question to ask which is, do you have any trade secrets for us?
Jan: I’m not sure if I understand the phrase “Trade secrets” correctly, but the secret I would like to share is that you should go out there and try things out. Don’t be afraid to fail. Just try it out and see what works for you and what makes you happy. I hope that makes– Answering the question.
Joe: That’s perfect. That’s great advice. I feel like you were talking directly to me, but I know that this is stuff that is applicable to everybody listening.
Jan: I wanted to talk to the listener.
Jan: With you, I mean you, my very dear listener.
Joe: Yes, absolutely. Definitely, advice that I need to take advantage of too. Especially in the premium plugin space. Jan, thanks so much for joining me today. Where can people find you?
Jan: They can find me or my Divi related modules on my website, Divi-Sensei.com. I’m also on Facebook, search for Divi Sensei. I’m hanging around in the Freemius Slack channel so we can have a chat there, I also have a website, [inaudible], but it’s in German so the audience probably can’t make much sense of it.
Joe: The Hoff didn’t take advantage of Google Chrome’s auto-translate feature. I will be sure to link all of those in the show notes. Jan, thanks so much for joining me again, I appreciate it.
Jan: Thank you for having me.
Outro: Thanks again to Jan for joining me today. He offered a lot of really great advice. I loved his story. I like what he said about premium plugins being half passive income, because investments are truly passive, selling digital goods are about half passive. Because yes you do make money when you’re not there, but you have that support aspect, and some of the things he said, like him being happy to assist people even if it’s not the plugins fault because he knows overall it will leave people with a good impression of him. Lots of great advice, you should definitely check out Jan and his work. If you want to find all of those links that we’ve talked about you can do so over at HowIBuilt.it/115. My question of the week for you is, “Are you thinking about selling a premium plugin? And if so, what is it? What’s stopping you?” I can wax poetic about that for a long time, but let me know. Email me Joe@HowIBuilt.it or on Twitter @jcasabona. Thanks so much to our sponsors, Plesk, Pantheon and Hover. Be sure to check them out and thank them for their support, because the show would not happen without them. If you liked this episode be sure to leave a rating interview on Apple podcasts or wherever you listen to podcasts. It helps people discover us. Until next time, get out there and build something.