Competition and positioning for WordPress products in 2021 and beyond
In 2013 just two caching plugins dominated the market: W3 Total Cache and WP Super Cache. Both products looked unstoppable with millions of installs and an extremely high level of brand recognition. The “make your WordPress site faster” problem looked like it could be permanently solved by a mix of these plugins and the fairly new category of “managed WordPress hosting”.
Since then, though, we’ve seen WP Rocket carve out a leading position in the caching space. Managed WordPress hosting hasn’t totally solved the speed problem, and whilst W3 Total Cache and WP Super Cache are still popular today, they don’t dominate the landscape the way they used to.
Friend of Ellipsis, Iain Poulson, told this story in a good Twitter thread late last year, and this got me thinking about competition and positioning for WordPress in 2021 and beyond.
Here’s the high level: competition for WordPress products is going to get significantly more intense, and we need to start looking at product categories with much more sophistication.
If WordPress products are going to mature further, we need to tackle bigger problems and start looking beyond the boundaries of “WordPress”.
WordPress powers an ever-expanding % of the internet, and I think it’s relatively uncontroversial to claim investment in WordPress products overall is lower than one would expect for an ecosystem of WordPress’ size.
Shopify, for example, powers 3.2% of the internet, compared to WordPress’ 38.6%. Shopify alone spent half a billion dollars on research and development last year. This dwarfs even the $300m invested in Automattic in 2019. R&D doesn’t make for a direct comparison to the Automattic investment, but my point stands: the money spent on other CMSs dwarfs what is spent on WordPress.
We’re going to see this change, but we’re currently in the transition period where the opportunity is clear to some and the race has started, but the funding hasn’t kicked in yet and those already underway have an unfair advantage.
We need a clearer understanding of customer segments
Let’s now review the implications of this, and possible steps you can take to ensure your product can survive and thrive.
Currently our understanding of customer segments, a term used to refer to different groups of customers, in the WordPress economy as a whole is pretty weak: the average product business will understand their customers are split into “developers, implementers, or agencies making sites for clients” and “end-users making sites themselves”, but we don’t see much nuance beyond this.
Many WordPress businesses experienced fast growth last year as “digital transformation” accelerated in response to the pandemic. This is only going to continue, but we need a much better understanding of customer segments so business owners can position their products in a way that delivers what people actually need. As April Dunford writes in Obviously Awesome:
Our markets are complex, overlapping and shifting rapidly. Our customers operate in a context that is often quite different from our startup or tech bubble. It’s easy to miss a shift that impacts nurses, housekeepers, insurance agents, restaurant workers or manufacturers while we’re drinking espresso and staring at our MacBooks in our exposed-brick, open-plan offices.
You can replace the open-plan office with your home office, but you get the idea. A digital-first WordPress business has a wildly different point of reference to a businesses creating a website for the first time. We need a much better understanding of customer segments to be able to make a start here.
This needs to be something done at the level of your own business niche, and we’ve been working on some research for the last couple of months which we’ll share soon on this. but
Positioning within a WordPress plugin niche is going to be more important than ever
Positioning for WordPress products is defining how your product is the best at something a specific market cares about. In 2021, WordPress products are facing more competition than ever, and positioning needs to become more sophisticated in order to reflect this.
In the past, simplistic formats like “WordPress [functionality] plugin”: “WordPress slider plugin”, “WordPress contact form plugin”, etc., have worked. Now we’re reaching the point where this positioning is no longer sufficient. Positioning within a WordPress plugin niche is going to be more important than ever.
The initial way to do this is what we’ve seen so far: within defined categories such as “page builder”, products differentiate with pricing, premium features, or claims of “great support”. In some instances these lead to market forces pushing products in different directions, but for the most part we just see price competition arising from this.
We need better differentiators: when everyone claims “great support”, what does this mean? No business believes that they provide bad customer support, after all. Price competition is a game which everyone loses in the long run.
Instead, we need more sophisticated positioning within existing plugin niches. This has a couple of implications, which we’ll explore next.
Note: this is often a problem we solve with our Marketing Audit and Strategy work. For more information about Audits, have a look here.
Catch-all niche plugins are going to have a much tougher time
Catch-all plugins, which do everything within a given category, have historically been the way to go, but with the exception of scope for one or two monopoly products in each space (more on those later), we’re going to see much fewer catch-all plugins.
The form niche is probably the best example of this. This is a highly competitive space: users can choose from Gravity Forms, Ninja Forms, WP Forms, Caldera Forms, Formidable Forms, Forminator, WS Form, Happy Forms, Jetpack, or an external SaaS solution such as Typeform.
That’s a lot of choice, and we’ve seen consolidation too: Syed Balkhi is often asked why his company is an investor in Formidable Forms when they make WP Forms. Similarly, Ninja Forms acquired Caldera Forms last year.
The answer is these plugins all serve different markets: you have the easy-to-use consumer plugins, advanced form and integration-heavy plugins, and developer-friendly extensible plugins. WP Forms and Formidable Forms aren’t competing for the same users, so it’s much more obvious to invest in both than it may first look. This is an example of the more sophisticated positioning and segmentation we discussed earlier.
Going forwards, there’s an opportunity to solve niche problems and coexist with different market segments. You can offer the best form plugin for businesses with a CRM, or the best form plugin for beginners. We see some of these segments show up already – which is why Syed owns multiple form plugins – but we’re going to see this in many more niches: eCommerce, SEO, membership, page builder, security, backups, site speed, etc. There can be multiple competing solutions in the same niche here, and that can be good! As the market grows, there’s more scopeto focus on specialising to solve specific problems.
But… there is ample opportunity for monopoly “platform” products
The flip-side here is that there is space for one or two monopoly products in each niche. There’s space for one or two SEO plugins which serve all needs. For a long time that’s been Yoast, but Rank Math and All in One SEO are making efforts to “disrupt” the space as the alternative choice.
This competition, though an inconvenience to product makers, will force everyone to improve, and so will undoubtedly lead to better products, more innovation, and probably lower prices too for consumers.
This 2019 data from 150,000 small business websites shows 50.2% run Yoast, compared to 8.7% for All in One SEO. Note: 23.9% of these sites are running WooCommerce.
The “category monopoly” is a huge opportunity for products whose businesses can position them as niche-dominating “platforms”. These platforms have a huge opportunity to dominate their space and create monopolies which serve them extremely well for the next decade and beyond.
Addons and extensions can be a winning solution (for some)
The “platform” idea is especially important: platform products will be able to deal with increased segmented competition as they either offer extensibility in-house or through a third party marketplace. If you can extend your plugin with addons, you’ll be able to both compete with competitors offering really specific functionality whilst offering a complete solution. You can offer that in-house, or let third party developers build solutions for you.
WooCommerce is the leading example as a platform plugin here, and the WooCommerce Marketplace has incredible potential for building out all the functionality eCommerce stores possibly need. Shopify’s App Store draws comparisons. At launch in 2013, the Shopify App Store had 100 apps and approval involved getting one of their team on the phone. There are now 4,600 apps, and 80% of Shopify stores use on average 6 apps. WooCommerce’s Marketplace has the potential to be as impactful.
We don’t know how many plugins the average WordPress site uses, but the Web Almanac CMS chapter I authored last year found at the 50th percentile, 22 plugin resources loaded per page. This likely translates to 5-10 plugins on the average site. Where sites are running a platform plugin – for example WooCommerce – we likely see these numbers move dramatically as sites install a collection of related plugins.
Thus, where platforms can guide or control the creation and distribution of the related plugins, there’s a massive opportunity to strengthen the platform and capture much more of the value in the ecosystem. We don’t see this for WordPress as a whole (mainly because the plugin repository is free), but for platform plugins the opportunity is still there.
The Learning Management System (LMS) market also comes to mind: there are a couple of powerful products in the space, and whilst I find it unlikely any will “lose”, it does seem likely that one will clearly move ahead in the next five or so years. The plugin, which can position itself as a platform where in-house addons meet niche user/community needs, may well be the plugin that succeeds in the space
That said, pathway isn’t as simple as “let people build on top of your product and everything will be great”, though. Easy Digital Downloads is a halfway-house example: they offer 94 official extensions, with some of these originally sold on their site by third party developers in a marketplace model. As CEO Pippin explained in a 2016 blog post:
“We realized (and learned the hard way) that we do not want to run a marketplace. We want to build and sell our plugins, not the plugins of other developers.”
In 2017, the company spent $145k acquiring 37 third party extensions in order to bring them in-house. The marketplace is still strong – shown by the number of extensions they now offer – but in this case, having third parties sell them on an official marketplace didn’t work out. There’s complexity and nuance here. On the whole, however, platform products are a huge opportunity.
Start looking outside the “WordPress plugin” category
We’re going to see many, many highly successful WordPress product businesses in the next decade and beyond. Put simply, the “WordPress plugin” pie is going to be big enough that plenty of businesses can each take a healthy slice.
The biggest opportunity of all, though, is for those who can start looking outside of the “WordPress product” category, and start solving problems for customers which don’t have a prerequisite of “I’m looking for a WordPress plugin to do X”.
We’re starting to see this already.
Human Made’s Altis Digital Experience Platform is an enterprise-friendly “layer” built on top of WordPress. The copy for Altis is all about what it can do for its target audience, and the WordPress part is secondary.
Elementor, who raised $15m from a leading VC firm last year, launched Elementor Cloud within months of the funding. Elementor Cloud is positioned similar to Altis: it has “Top Features for Your Professional Website”, with WordPress as a secondary benefit.
Similarly, Jetpack CRM is another good example. Jetpack CRM is a straight-up fully-functional CRM which competes with standalone SaaS CRMs. See also MailPoet, a full email marketing platform inside WordPress. Automattic has acquired MailPoet to focus on WooCommerce, and we thus see the challenge for independent businesses to look beyond WordPress.
MailPoet was originally “Mailchimp, but on WordPress”, leading to high expectations and demands from customers who expected feature parity with Mailchimp. Meeting those expectations is a massive challenge to undertake, and, I think it’s fair to say with the shift to WooCommerce now they may never get there. Instead, with the acquisition, MailPoet has the opportunity to build a best-in-class eCommerce email platform which works perfectly with WooCommerce and does a better job than any non-WordPress third party solution, including Mailchimp.
An interesting challenge will be the role of WordPress here. Clearly some products, like Altis, want to manage the WordPress experience and hide the “WordPress layer”. Others, like Jetpack CRM or MailPoet, have WordPress as an “operating system”.
The latter option is more appealing for the WordPress ecosystem as a whole, as you’ll be able to run multiple products on your WordPress “OS” (for more on this, read this conversation with Matt Mullenweg where references the idea of WordPress as an “operating system” or this post by Jonathan Wold which builds on Matt’s interview). It’s also vastly easier to maintain. It is harder, though, to market your product when the first ten steps of setup involve explaining what WordPress hosting is, how to set it up, and so on.
The extent to which WordPress’ market share continues to grow will be key here: if there’s a very high chance you have a WordPress site anyway, then the open operating system model could be more appealing; if that’s not the case (or it’s just not the case for your target customers) we’ll see more of WordPress pushed into the background.
Competition will heat up and the winners will be rewarded
2021 is going to be a big year for WordPress plugins. We’re still at the point where very small teams can have a big impact, and this means there’s a lot of scope for things to change. With a couple of notable exceptions, the biggest plugins don’t yet have an unassailable lead. As WordPress gets bigger, though, the biggest plugins will be positioned to take disproportionate benefit from that growth.
Now is thus the time to put this into practice and provide the biggest benefit to customers you can. That may involve going bigger to a “platform” setup, or it may involve niching down to provide the very best experience for a specific use case. Right now, both are good and viable options.
If you need some marketing help figuring out what’s next, our Marketing Audit and Strategy work is an excellent starting point. You can see about the Audit here, or feel free to book a time to chat directly on my calendar here.