Empowering Developers to Sell with Vova Feldman and Freemius

Intro: Hey, everybody. Welcome to the last episode of Season 5, Episode 105. Today I’m talking with Vova Feldman of Freemius. Vova is somebody that I met at WordCamp US a year ago. So actually about a year ago, right? This is the week of WordCamp US as this episode comes out. He is an incredibly interesting person. He talked about how he started a blog with WordPress, and realized quickly that WordPress is the largest and least monetized platform. He set out to change that by building Freemius.

His story is really interesting, he offers a lot of really great eCommerce, and marketing and sales advice. And he talks about how he dog foods his own product. He built a small premium plugin that he still sells on Freemius to this day. So I think this is a really great way to wrap up Season 5. It’s been a big milestone season for the show. I’ve had a lot of fantastic guests, and Vova is high up there as one of my favorite interviews. I’m really excited for you to listen, and get in on the action here.

We’ll get into all of that in a minute, but first I do need to tell you about our sponsors. Pantheon has made this entire season possible, they sponsored all of Season 5. You’ll be hearing about them later in the show, but I do want to express my thanks to them for this entire season here at the top of the show. The show would not have been possible without their financial support, and I deeply, deeply appreciate. So make sure to listen in on their pitch later in the show.

It’s also brought to you by Creator Courses. You’ve heard me over the last couple of weeks talk about how WordPress 5.0 is coming, and the editor is changing. Creator Courses has a lot of courses for WordPress 5.0. So if you’re interested in those, go take a look over at CreatorCourses.com/Gutenberg. Use the coupon code “BUILDIT” for a discount.

So that’s all the housekeeping stuff. Without further ado, let’s get on with the show.

Joe Casabona: Why don’t you tell us a little bit about who you are, and what you do, and the idea behind Freemius?

Vova Feldman: Sure. My name is Vova, I’ve been doing startups for the past 9, 10 years. Freemius is my fourth startup, and the one that I’m most excited about. In a few words, Freemius is the easiest way to say and market WordPress plugins and themes.

In a few more words, it’s an eCommerce engine, as a service that solves all the pains for developers. So plugin/theme developers can focus on building their product, instead of taking care of all the hassle, which is around the eCommerce side, the maintainings, etc.

Joe: Nice. Very nice. That’s cool. You say you are most excited about this one. How did you come up with the idea for it?

Vova: It’s not a short story, but I’ll try to be brief. Back in 2010 I was doing a lot of things related to natural language processing, and computer vision, and something that I wanted to share with the world. Because I gained a lot of knowledge. I was looking to build a blog, and to have a blog. I was not familiar with WordPress, or any other content management system. So for me, building a blog, the idea was actually to develop that myself. Because I’m coming from a technical background.

I started to collect different components that I wanted to have in my blog, and one of the things that I realized is I would like to have that interactive, right? I’m writing something, I want to get feedback. I want to write. I knew that comments are not converting very well because people are lazy by definition. So I thought about, like, five star ratings. [inaudible]

I started to search the web, look for some widgets that I could add to the website, because back then it was the widgets era. You know, you put some JavaScript when things aren’t working, and I couldn’t find anything for five star rating. So I said, “Okay, let’s just build it.” And I built it and deployed it, and people started to use that.

Moving forward two and a half years, I sustained that project as the [inaudible] thing. After my previous company got acquired, I decided to monetize it, join with another guy. We spend about a year to taking it from absolutely free project to a fully commercial, freemium product. It took us a year, but what was really interesting to see is, after that year we managed to build this boring, subscription based business, but nothing in the product changed at all. It remained the same thing that I built in a few weekends of my spare time in 2010.

So this disproportion between the time it takes to build a product, especially in the open source ecosystem like WordPress, to turn it into a commercial solution kind of blew our minds. This is where we said, “Okay, there is a big problem, but also an opportunity in the market. So let’s try to solve that.” This is where Freemius came as an idea.

Joe: Nice. Very nice. So you created a rating plugin, essentially. For WordPress? Or you built that standalone first.

Vova:It wasn’t a JavaScript, it was a service, right? That you just inject the JavaScript, and over the years I started to receive requests from people saying, “Hey, maybe  we don’t know how to take that and put it into WordPress. Because it’s still not trivial to add JavaScript into WordPress. Maybe you will build the plugin.”

After we received a few dozen of those I said, “Okay, let’s check what’s going on. What is this thing called WordPress?” And then I got exposed to this whole community, and everything. Which eventually led to building  wrapping the service also into WordPress blogging.

Joe: Gotcha. So that realization kind of spawned or maybe, awoken something in you to say, “Hey, we can build a really good business off of this open source software.” Then where does Freemius come in to all this?

Vova: As I said, Freemius came after we actually turn it to a fully functional business. Actually a rating widget, like we have a bunch of extensions for different platforms. Not only WordPress, but Shopify, Wix, things that don’t have official marketplaces like Squarespace, et cetera. And we’ll learn the different dynamics, and also zone numbers from different ecosystems.

The reason we kind of said, “Okay, WordPress is a great place to start with this,” because, obviously this is the largest, right? Right now it’s 31% of the web. That’s what they say. I don’t know. And it’s the least monetized. There’s so many plugins and themes, most of them are built by developers, and many of these developers are really passionate about these side projects. They wish they could turn that into their full time gig. But they can’t really afford themselves, you know, to quit their job and see if it will work or not.

So most of them just keep maintaining that, and one day they will either move to that, or most likely, they will ditch the project. Because, you know, they have to bring food to their families. So that was the reason to start, and focus on WordPress. More than the other platforms.

Joe: Gotcha. Cool. I’m looking at the website right now. You compare Freemius to things like WooCommerce, and EDD, Code Canyon  what kind of research, I guess, did you do, as you were building out Freemius?

A lot of people on the show talk about how they were scratching their own itch, which it sounds like you were doing something very similar. But as far as deciding what features to bring, and pricing model, and stuff like that, what kind of research did you do?

Vova: I would say there was like the preliminary research about where we should whether we should work on that all. Before taking the features. And for that, I started to  I was not involved in the WordPress community at all. Even though I was running a company that sells to that community, I was never involved.

So I started to poke relevant people that are from the target audience. Cold emailing them, chasing them on Facebook, going to WordCamps. Every relevant event that has plugins and developers, I tried to be there in order to talk with these people, understand their challenges, their pains. And also show them an [inaudible] of what we’re thinking to build, and get their feedback. See how they react to that.

That was the initial phase. To understand whether it’s compelling to the target audience at all.

Then the second stage was kind of evaluate the potential of the market. Specifically me, okay, I’m looking to build larger things. Not small businesses, or lifestyle businesses. So WordPress is probably not the space for the plugins and things. It’s not the billion dollar market today, but it’s not far from that. Okay? It’s not real estate, it’s not automotive, and things like that. But we had to do the calculations and see there’s a big enough opportunity for us to actually step into that journey. Because it’s a long journey.

I prefer whatever business  and this is something that, I had these discussions with multiple people in the WordPress ecosystem, is, it doesn’t matter whether it’s lifestyle, or a startup type business, because when it’s our baby, we usually tend to really work hard on that.

So if I’m already committing a suicide on some idea, on some company, I would rather do something that is very big, and could lead to a life changing event, and not work on something for many years and then just sell that, and it doesn’t change anything in my life.

Break:  Today’s episode is brought to you by Pantheon. WordPress 5.0 and the new editor, Gutenberg, are coming! Are you prepared? Do you want to learn about the changes in advance? Pantheon has gathered resources to help you prepare, including webinars and tutorials. Pantheon also has made it easy and free to try Gutenberg with your site before the official launch. Visit Pantheon.io/Gutenberg. Let them know that How I Built It sent you. And now, back to the show.

Joe: I feel at least being in the WordPress community basically my whole life, I started in 2004, there’s a lot of, just build it and see what happens. But I like what you said, “When it’s our baby, we tend to work really hard on it.” If we’re going to put everything we have into it, then–

Vova: It better be big.

Joe: Yeah. We don’t want to end up in the same place six months, or two years from now. We want to be in a different place, because, well, we might as well have gotten a full time job then, right? If we’re–

Vova: Yep, absolutely. Probably work less hours, by the way.

Joe: Yeah, that’s exactly right. What you said about not wanting to build a lifestyle business too, right. If you’re going to go all in, then you’re not just working 9 to 5. That’s great advice. And you called people, that’s another piece of advice that comes up a lot. I’ve been hearing that a lot more lately, and I think it’s maybe something that bears repeating because it’s easy to market to an email list, or ask for a poll, but actually talking to people about their pain points forges, I think, a better connection with those people.

Cool. So you mentioned that you are a developer, you were working on natural language processing, which, in and of itself we could probably talk for like an hour on.

I’m excited to ask you the title question, which is how did you build it? Because I’m curious, do you still work with code on an everyday basis?

Vova: I do. I try to do more. Unfortunately I don’t have much of the privilege to do that, because, you know, there’s a lot of management, and marketing related stuff. This is actually something that many people in ecosystem are kind of missing, is that developing is great, and it’s fun, and you build products. But if you don’t sell it, it doesn’t matter. So yeah, I still try to develop.

And actually right now it’s kind of a period where I have more time to work, to do some development. In terms of how we built Freemius, a lot of work, many hours, and tears.

Are you asking from the technical point of view? Or–

Joe: Yeah, whatever you feel most comfortable answering. A lot of developers listen to the show, so if you want to get into dev stack, that’s great. If you want to talk more high level that’s good too.

Vova: Okay. I will try to be in between. Even though we are targeting the WordPress ecosystem, we don’t use WordPress much. Because WordPress, it was built for  it’s a content management system. Yes, they’re eCommerce right now, and other things on top of that, but it’s probably not the best solution when you building something custom. It won’t work efficiently as it could, et cetera.

So we built the things ourself. Over the years, I know I’m sure every developer has this evolving library of infrastructure related stuff, just getting better and better. Like your own personal framework. So we didn’t choose Laravel, or something. I’m not sure if it was there when we started, by the way.

So it’s mostly custom built code. It is in PHP. Because, again, we’re in the WordPress space, and it made sense to kind of be in line with that. We also have components, like front end components. Like Angular.js, and Angular 5. And what else  yeah, the rest and we recently started to actually use page builders for marketing stuff.

Joe: Oh nice.

Vova: It took us  we wrote an article about that, I think a year ago or something. Which is actually  many developers are against page builders. I was against that as well, but on the other hand, if you build everything yourself it takes development resources. When your team scales, and you are limited on dev resources  the website, and the things are more marketing related. So if you can delegate that, in pretty good shape. You can’t do everything with a page builder, what you can do yourself, obviously.

But if you can do it close enough, and today’s builders are good enough to make it close enough, then it’s great. Because we don’t need to involve development in work when we want to release something on our website, right? Something which is marketing related. So I would actually recommend people to start  at least check out what’s going on with the new page builders.

Joe: Yeah, absolutely. I think that’s fantastic advice. Because, even like, I’m a one man band. I’ve got a few things going on, including online courses, a little bit of freelance work, this podcast, and I’m a developer as well. If I wanted to develop everything myself, well, all of my time would go to development, and not to content creation.

Yeah, when I built my online courses platform I used WordPress, and LearnDash, and I vowed to put in as little code as possible. Because I wanted to focus on building the courses, and not the platform.

I love page builders, there’s one specifically that I really like. I think that’s probably a smart move. Because then you can focus on putting those development resources towards building the product.

Vova: Yep, absolutely.

Joe: Cool. So you use your own PHP framework, you mentioned Angular  do you have a development workflow of use GitHub, or testing platforms, or anything like that?

Vova: We use Bitbucket for the private stuff, because it’s free. As a startup we try to save money. We also have GitHub repositories for the public stuff. We don’t really use any code before it goes through code review. It’s super essential. Everyone makes mistakes, okay. Our developers review my code, we have to do that process.

Also we do automated testing that we’ve built. It’s actually relatively new. When I send you, it’s about a year. But we didn’t have that for a while. We did have like a sequence of tests that we run through every time before we release something. Which took us about a day of testing, and we spend probably a week to automate the whole process. Right now it reduced from a day to 20 minutes of testing. That’s pretty amazing, saved us a lot of time. And it’s great because we always just can extend that. We can test more use cases, and regression tests, whatever we need.

We using something  it’s called Catalog Studio. I don’t know if you heard about? It is based on Selenium, which is like the infrastructure for all the testing. I think it’s built with Java. So Catalog has  it’s like [inaudible], it’s an eclipse environment, custom environment for unit testing. Not unit testing, for testing. It’s a free project, I think it’s open source as well. It’s pretty awesome.

Joe: Wow, that’s great. You mentioned, I think, something that more people need to hear. Which is, when you test something it took about a day. It took you a week to set up automated testing, and now that testing is down to like 20 minutes. I suspect that automated testing is probably more thorough than QA, human-based QA testing, right? Because you mentioned like regression testing, so you could probably do things like  that feature that worked before this new thing you built? It’ll be tested after the new thing you built.

I know that I’m not the greatest tester in the world. I test the things that I just built, and I have a good understanding of, when I’m working with a team, what I’ve built, but not necessarily what they’ve built. And so, automated testing alleviates all of that. So you probably have better testing, and it takes less time now. Does that sound right?

Vova: Yep. I think the key is actually to build a sequence. And be consistent, that every time before they release, to go through the whole sequence. That’s the first phase.

And later if you have the time, the resources, to prioritize that  actually build that to run automatically. And our sequence is pretty complex, this is why it took us more than usual. If your plugin, thing, whatever, product, is simpler, than it may even be less than that. Because it provides you like a chronic section that you can use, and you can click record, and do a bunch of things, and add a bunch of asserts. Right? To say that this is the expected element to show up on the screen, or something, and it will just record it. So you don’t really need to right that down.

In our case, it was more complex because it was actually involving sending emails, and fetching the data through SMTP. So it’s checking database related stuff, so it was a little more advanced than just clicking things on the user interface, and checking if it works as expected. But it can be easier, depends on the product.

Joe: Gotcha. That’s, I think, very valuable advice. I really like that. It’s very cool to hear about stuff like that. Cool. So we talked a little bit about your dev stack, about some automated testing  we’ve got about 10 minutes left here. I’m going to ask you just a couple of questions I really like to ask, which are what are your plans for the future of Freemius? Are there big features that you could talk about that are coming down the pike? Or things that you’re thinking about as, maybe, seeing plugins online evolves?

Vova: Sure. So actually we just released pretty huge feature. We haven’t announced that on our blog yet, or email about that. It’s only  we have a Slack community where we share things first to them. So they’re already using that. It took us almost three and a half years  or a little more than that, to release a user’s dashboard.

So, the way we built Freemius is that we tried to put everything possible inside a WP-admin dashboard of the users. Or customers. Because we believe that that’s the comfort zone of the users. That’s where they’re seeing, and they don’t really need additional interfaces, right? So, if you are purchasing for Freemius, you were basically, as a customer, managing your account directly through the WP-admin of the plugin, or whatever thing.

After three and a half years we learned about various use cases  why an external user’s, or member’s dashboard, right? This is the usual terminology  is actually important to have. Because, for example, just a few use cases, if I already uninstalled the plugin, it means that I don’t have a way to cancel my subscription right now. Which usually you’ll buy support tickets. Or, there are a bunch of more different use cases.

But we just released this fully featured, user’s dashboard that any of our customers can easily embed inside their website. It’s responsive, and everything, and it’s pretty advanced. So you as a user, or as a customer, can manage everything directly through that dashboard. Update your payment methods, move from one subscription to another, move licenses from one place to another. So that’s pretty big for us. We’ve been working on that for a while.

In terms of looking for the future, I see Freemius as a solution that resolves all the pains of plugins for the developers. I want developers, and I think that’s what the developers really want to do, is focus on their products. They don’t want to deal with marketing, they don’t want to deal with eCommerce maintenance. They don’t have, many times, the knowledge in user experience. They don’t want to talk with designers. They are not best in design, etc.

They are really good at building their specific product and functionality, and this is what we want to solve. It means three components. First of all, the eCommerce side. So this is something that we’re already solving. I think we have the most advanced product, in terms of the feature set, or the most feature reach, and it’s also coming as a service. Which means that you don’t really need to deal with maintenance. If there’s a problem, you tell us, we release a fix, and it’s out there. You don’t need to wait for some version to release, or something. So the eCommerce headache is something that we’re solving.

The second layer is actually about pricing  the business aspect. Okay, developers, many of them, they don’t have the knowledge, the experience as  and one of things we’re doing is we’re proactively trying to help our customers. We actually treat them as our customers, as our partners, because our business model is a revenue share. So we have a selfish interest to make them more successful, right? They make more money, we make more money. It’s very simple equation.

When we see things where they can get better at, maybe they can change the pricing a little, or something, we get involved. Proactively try to help them to get better. So this is the second layer. The third layer is actually distribution, which means bringing them the customers and users. Right now we’re not playing in the distribution world, we’re more about the advising, monetization thing. And the technological solution. But we also want to get into the distribution, which means bringing new customers. There are many ways to do that. We going to launch a bunch of exciting stuff on 2019. I can’t talk about it yet, but that’s the goal basically.

Break:  Today’s episode is brought to you by Pantheon. WordPress 5.0 and the new editor, Gutenberg, are coming! Are you prepared? Do you want to learn about the changes in advance? Pantheon has gathered resources to help you prepare, including webinars and tutorials. Pantheon also has made it easy and free to try Gutenberg with your site before the official launch. Visit Pantheon.io/Gutenberg. Let them know that How I Built It sent you. And now, back to the show.

Joe: You mentioned your business model was a revenue share, which is a “very selfish business model.” I think that’s a really great business model, because it makes you more invested  if I’m thinking about selling a couple of my own plugins very soon, and Freemius is, I know it’s revenue share, so they are more invested in me selling more, right? As opposed to I mean WooCommerce is a free plugin, right?

I love WooCommerce, I use it for my online courses, but the first thing they do is hit you with, “Oh, you should install Jetpack,” and then when you install Jetpack it brings you to a big sales page, right? Like, I’m using a platform where I’m trying to sell, that is now actively selling to me. And I understand why. But this business model is more like, “We’re going to help you sell, because we’re going to make more money in the long run as well.” Like you said, it feels more like a partnership.

Vova: It is. You actually mentioned the difference in the business models. If we can look at that, every company have slightly different KPIs. The way WooCommerce is, or EDD, are making money is by selling add-ons, right? They’re all focused on efforts is to make sure that new people will buy their add-ons, and you will keep renewing their add-ons. So as long as you do that, they don’t really care what’s going on behind the scenes. Whether your business is successful or not. I’m not blaming them for something, it’s just very different business model.

On the other hand, if you will not make money with Freemius, it means that we are not making money for you. Which is a problem, right?

Joe: Yeah, absolutely. Right. It’s the difference between a business doing just enough to see enough value to keep paying for the add-ons, versus a business helping my business actively grow. Because we essentially grow together.

Vova: Yep.

Joe: That’s great. On that note, I’d like to ask you, maybe my favorite question, which is do you have any trade secrets for us?

Vova: Trade secrets. I think if you want to build a company, there are many aspects that you need to focus at. But over the years, what I’ve found is the two that are very important is  first one is, I think it’s called in English, dogfooding, right?

Joe: Yeah. Dogfooding.

Vova: You have to use your own, to be your own customer. Or user. Because, if you’re not using your own product, you don’t have the right intuition. Where to steel the wheel, or the ship. Because you are getting  hopefully you have users, and customers. You know, there is so much feedback. Many of the feedback is conflicting as well. This is why it’s really important to be your own customer.

And the reason rating widgets is still alive, and when we want to experiment something, we first do that on rating widgets. So we don’t need to reach others. So we try that, it’s working great, we can deploy it for the others. If it doesn’t, we move on.

The second one is community. I think many people talk about that in all spaces, but community is super important. Actually it’s, like if you have a competitive product, and you have a stronger community, you are probably going to “win.” Okay, so I’m putting quotes here, “win,” I’m not sure if it’s the right word.

WordPress is a great example for that. WordPress is a mediocre product, let’s be frank about that. But it has amazing community, and that’s the only reason why it got to 31% of the market. Because if you put it to someone’s hands, like you give Wix, or Squarespace to your mother versus WordPress, they will choose the other solutions. They won’t go to WordPress. But the community, and the things that going on, and the fact that the community is actually involved, in some way, in the future of the product  it feels like, you know, like there is a collective mission here. You are part of something that is bigger than you.

People are really engaged into that process, into the project. And if you manage to build that around your company and product, most likely you will succeed. It doesn’t have to be with that specific product, but you will have the community that will help you to steer the ship toward the right direction. This is something, two things that I think are really essential to build a successful business.

Joe: Yeah. I love that. “WordPress is a mediocre product with an incredible community,” might be pull quote–

Vova: I love product, okay? Sorry, I love WordPress.

Joe: Yeah, we both love it, but I mean you’re absolutely right. My sister-in-law said, “I need a website,” and I said, “You should use Squarespace, because I don’t have time to hold your hand for the WordPress stuff.” And then when she was ready to kind of grow I was like, “Alright, let’s talk about using WordPress now.” But just starting out, I knew that she would be able to build her own site much faster. And then when I had time, and when she was ready, we talked about using WordPress.

So that’s fantastic. If you want to build community, you need to dogfood your own product, you need to use it yourself. And you need to build a strong community. Vova, thank you so much for joining me today. Where can people find you?

Vova: You can catch me on Twitter, it’s @vovafeldman. Just like you hear it. You can also email me. It’s vova@freemius.com. I always happy to help with pricing, business side of things. You should also check out our blog, freemius.com/blog. The sole focus of the blog is the business side of the WordPress, and plugins, and things, economy. We cover literally everything.

Also, we are open for guest posts from other product people, to share their experience about different, unique, knowledge stuff. So feel free to email me, or catch me on Twitter. I’m available.

Joe: Awesome. And I will put all of that, and everything else we talked about in the show notes over at HowIBuilt.It. Vova, thanks again for joining me. It was a real pleasure talking to you.

Vova: Thank you so much, Joe.

Outro: Thanks so much again to Vova Feldman for joining me on this, the last episode of Season 5. Episode 105. I really appreciate his time, and his advice. I think he had a lot to offer. Especially when it comes to things like pricing, and having a good mission. And thanks, once again, to our season long sponsor, Pantheon. They’re doing great things over there at Pantheon and you should definitely check them out.

Thanks again to Creator Courses. If you want to learn about WordPress 5.0, whether you’re a user, a freelancer, or a developer, check out the courses over at CreatorCourses.com/Gutenberg. My question of the week for you is somewhat related to Episode 103’s question, which is, what is preventing you from selling a premium plugin? Freemius focuses on that. And so, my question this week is, if you are selling a premium plugin, what platform are you using, and why?

You can let me know over at @jcasabona on Twitter, or joe@streamlined.fm. If you liked this episode, you can go over to Apple Podcasts and give us a rating and a review. Season 5 has been the best season yet as far as growth, and I appreciate that. And that’s for all of the people who are listening, and leaving ratings, and review. I really appreciate that.

If you want to join in on the conversation in the off season, you can get more How I Built It over on our Facebook page, which you can join at HowIBuilt.it/Facebook. For that, and all of the show notes from this episode, you can go to HowIBuilt.it/105.

Thanks so much for listening, and until next season, get out there and build something.