Syed Balkhi, Founder, WPBeginner
A BEGINNER’S GUIDE:
How 27-year-old Syed Balkhi rocketed to success by creating top-notch resources for beginning web designers.
The 21st century was still in its toddler years, the internet was hurtling toward ubiquitousness, and a 12-year-old boy sat in his room alone. He had just moved to America from Pakistan with his parents, and he spoke very little English, which also meant he had very few friends.
The young Syed Balkhi discovered, however, that computers didn’t care what language he spoke or what country he had emigrated from.
“I found computers to be my friends,” he says. So he gave them his time, energy, and attention, learning how to code and build websites. That very same year, he made his first dollar from a website he created.
At 27, Balkhi looks back on this as one of the most trying times in his life, but also the moment when the first bricks were laid in his pathway to success. The founder of WPBeginner, the first and largest WordPress resource website in the world, and co-founder of many accompanying businesses, was named a top entrepreneur under the age of 30 by the United Nations. His websites receive millions of pageviews each month, and his plugins and software are used on more than 5 million sites.
And to think, it all started with a lonely kid who just wanted to find a way to play video games in school. Balkhi began by creating a web proxy, allowing him to bypass his school’s firewall, and before he knew it, he was a high school student managing his own freelance web development business.
In the early 2000s, creating websites wasn’t nearly as intuitive or user-friendly as it has become since, so Balkhi taught himself to develop and sell websites at affordable prices using custom PHP frameworks.
However, when he headed off to the University of Florida in 2007, he decided that he wanted to devote his attention to something other than building and sustaining his clients’ custom websites. Rather than relying on him for updates and maintenance, he wanted his clients to be able to maintain their websites on their own.
He presented each of them with the option to either find someone else to maintain their websites for them or to have him switch their sites over to a five-year-old content management system that was rapidly gaining steam: WordPress.
Filling in the Gaps
When Balkhi made his offer to convert his client’s websites, some refused and moved on, but many accepted his suggestion. Nevertheless, he found that even months afterward, his clients would return to him with questions.
In search of answers, he spoke with several other agencies, asking what resources existed for beginning WordPress users. They admitted, however, that there weren’t any guides yet in existence that could help, beyond outdated PDF manuals and $400 training courses.
So, in 2009, Balkhi decided to fill that gap and created WPBeginner, a blog that answered client questions and shared instructional how-to guides. It was the first website of its kind for WordPress, and because of the immense, unanswered user need, it took off immediately.
Throughout the rest of his college career, Balkhi dedicated himself to building up his blog.
Between working toward his bachelor’s degree in anthropology and religion and meetings of the Entrepreneur’s Club on campus, he would search through Twitter for questions about WordPress and answer them via blog posts, tagging the original asker in the reply.
In the early days, Balkhi averaged about one post a day, but lacked consistency, sometimes skipping days at a time and occasionally posting three or four pieces of content in a single day if he felt inspired. He soon realized that his growing audience depended on him for a steady stream of content, and committed to one post a day Monday through Friday. Today, there are more than 2,000 pieces of content on WPBeginner.
Before long, Balkhi was partnering with various theme and plugin companies for promotions and asking users what needs they had that were going unmet. He realized he had the opportunity to turn WPBeginner into something much, much more than a blog.
After graduation, he fully invested himself in building his business and turning it into the one-stop shop for all things WordPress.
“We have a single goal: we want to build growth tools,” Balkhi says, “tools that help a business grow. As long as you’re helping your customers, your users, be successful, you’re going to find more success and more success and more success. As long as you stay true to that, you’re going to be alright.”
So, following the fervent requests of his users, he pursued the creation of a lead generation software, and in 2013, OptinMonster made its grand entrance.
Investing in Value
The applications designed to help WPBeginner users have continued to grow and evolve, and today have been downloaded over 12 million times.
Some of the tools Balkhi and his team invested effort in have proven to be resounding successes that contribute directly to their vision, while others, including two gallery plugins Balkhi sold in December, have come and gone. But he’s always searching for new ways to address the needs of his customers.
“We are just looking to fill success gaps for our audience,” he says. But how does he decide which versions of existing software to acquire and improve?
“We are looking at value investing, except on the software side,” he says. “We look at software that has a lot of value for our readers, but the value’s not being fully leveraged by the existing company that’s running it.”
In short, he places value on potential, and carefully considers every move he makes.
“We’re not the type of company that’s like, ‘We have to commit to buying this many companies.’ That’s not our way of doing it,” he says. “We make few bets, but big bets, and where we see the return is going to be immense.”
Today, the top three pieces of software under the WPBeginner umbrella are OptinMonster, WPForms, and MonsterInsights. Interestingly, Balkhi chooses to have each of the four teams, WPBeginner included, run entirely independently, from managing staff to bookkeeping.
Balkhi says he has found that this separation helps them to best leverage their content by increasing output and focus within the teams. Each team member can become an expert in a single application, improving their ability to help customers and find improvements for their particular software.
“If you don’t have the right organizational structure, you are going to run into issues where you’re not able to give focus to specific products and one side of the business will suffer at the expense of the other,” Balkhi says.
The 45 remote team members across all of the business entities maintain contact through regular check-ins and cross promotions, learning and borrowing from each other, but their workloads do not cross paths.
Balkhi says this division also makes it far easier to sell software that they have decided isn’t aligning with their vision, something he appreciated when the time came to sell the gallery software in December.
Always keeping his ear to the ground, listening for his users’ unmet needs, Balkhi’s ability to remain in tune with his customers is one of the primary causes of WPBeginner’s explosive growth. And frequent visitors wait with baited breath to see what tool he will set his gaze on next.
Balkhi is not that lonely little boy building basic websites alone in his room any longer, but he insists that were it not for the foundations he laid early and developed slowly, he would never have reached the heights he has since. He reminds all budding entrepreneurs dreaming of success not to get discouraged because all greatness begins somewhere.
“Everything starts small,” he says. “Don’t ever try to compare your chapter one with someone’s chapter 34 or chapter 100. You have to start small and build it bigger one step at a time.”
- How Balkhi decides which versions of existing software to acquire and improve
- Why managing four products independently helps his team increase focus and output
- How to build a business, one small step at a time
- The key factor behind his companies’ explosive growth
Full Transcript of Podcast with Syed Balkhi
Nathan: So the first question I ask everyone that comes on is how did you get your job?
Syed: I started when I was 12 years old with the Internet when I moved to…when my parents moved to the United States. I didn’t really speak English at that time, so I didn’t have any friends.
And I found computers to be my friend and started, you know, playing games and learning, you know, how to…how I could play games in school. And that’s what led me to build, like, you know, websites that bypass schools’ firewalls so I could start playing games. And then that one thing led to another and I started building websites for other people.
And then, yeah.
Nathan: Yeah, wow. Awesome. So what was your first company and when did it start and how old were you?
Syed: The first, first, first website was a proxy website. I was 12 years old and I was running ads on it. And if you’re not familiar with proxies, it basically helps you, you know, route your traffic through a different server, almost like a VPN. And I was 12 years old. That didn’t make me a whole lot of money, but like a few bucks a day on that.
And then, you know, kind of went on and started building websites and I was selling those websites for quite cheap at that time. You know, the ones that people really know me now is WPBeginner and OptinMonster. WPBeginner started in 2009 as a WordPress Blog and OptinMonster started in 2013. So in ’09 I was…when I started WPBeginner I was 18 years old.
And when I started OptinMonster I was 23.
Nathan: Yeah, got you. So I’d love to hear, like, how did WPBeginner start. Did you go to college and study? What exactly happened? Because you said you were building websites for other people.
Syed: Yeah. Yeah. So all throughout high school I was building websites on custom, you know, PHP frameworks, not necessarily WordPress. And when I started college… I did go to college. When I started college, I wanted to get rid of a lot of those clients that I had and I wanted them to switch to a platform where they could just maintain their own websites so they’re not pinging me or one of my guys, as I shifted my focus more towards, you know, like, higher level traffic consulting.
So I basically, you know, gave all the clients an option, “Hey, we’re not going to be able to maintain your websites anymore.You have an option, you pay us this upfront amount and we’ll switch you over to WordPress, and they you’d be able to make all the changes, etc., yourself.” And, you know, a good portion of the clients said, “Yes,” they would do that. Others said, “No, we’ll just go find someone else.” I’m like, “That’s fine.” So the ones that said “yes,” we converted their website over to WordPress.
And I thought that we had gotten rid of them, but that was not the case. They kept coming back to us asking, “Hey, how do you do this in WordPress?And how do you do that in WordPress?” Like different WordPress-related questions. So I asked like, you know, several of the other agencies at the time, “Hey, what resource do you guys recommend people to?” And there was none. You know, people were like, “Hey, yeah, we just have a PDF guide with, you know, a bunch of common WordPress questions that we get.”
And then there was like, you know, some folks that were selling WordPress training and charging, you know, hundreds of dollars for it. And I’m like, “Well, I know these guys, my clients, are not going to go pay hundreds of dollars for, like, some video course.” So I said, you know, “PDFs are very, very hard to maintain, why don’t I just create a resource that my clients will find useful and I’m sure other people’s clients will, too?” And that gave birth to WPBeginner. And, lo and behold, you know, we were the first site at the time for beginners and it really took off.
Nathan: Yeah, I see. So it’s a WordPress resource-based site. And how did you build it up? Like where is it at right now? Like in terms of can you give us a bit of a gauge on traction? Just, like, because it’s quite a large site.
Syed: Yeah. It’s the largest WordPress user site on the planet, actually. It receives multimillion page views a month. And we use, you know, WPBeginner to, you know, acquire or build WordPress plug-ins or, you know, marketing software that now powers over 5 million websites.
Nathan: Yeah, wow. So how did you first…like how did you start to build that blog and build it out, man? Because, yeah, it just started off as content, but now, as you said, you have, like, a suite of software tools, as well, that you recommend or offer.
Syed: Yeah. So, you know, I started out with just answering a bunch of the client questions. And then really went on Twitter, at the time Twitter was quite new, and started looking at, “Hey, you know, there’s some serious, like, opportunity here.” Went on Twitter Search and just looked at what questions people were asking about WordPress. So, you know, if you go on search.twitter.com and, you know, click on the “advanced” thing, you can type in any keyword.
And then there’s a checkbox underneath that says “question.” And what that does, it lets you search tweets based on, you know, the ones that are questions. So I said, “Hey, show me all questions on Twitter that are about WordPress.” And at that time Twitter really didn’t have much spam, it was, you know, just like people’s tweets and not bot tweets. So I basically went through those questions and started creating blog posts around those and replying to each person saying, “Hey, you know, here’s…we answered your question.”
And that got a lot of word of mouth going. I also used digg.com. I’m not sure if you’re familiar. Back then it was similar to Reddit, but way bigger than Reddit at the time. And I had, like, power user profiles on Digg from my marketing side of the business. So I used my power user profiles and connection on Digg to also get, you know, WPBeginner on the front page on Digg several times and that got us traction.
And really we were the first of its kind, so a lot of other agencies, freelancers, and developers started recommending WPBeginner to their clients because we were doing the work for them. And then, you know, that led to other people started recommending WPBeginner, like other bloggers, let’s say Darren Rowse from ProBlogger started recommending WPBeginner, you know, for people who were looking for technical help.
You know, because he was talking about blogging and blogging strategies. And, you know, other influencers like Darren and several of my other friends in the affiliate space started recommending WPBeginner. So, you know, we started building quite a huge following and, you know, people would come to us looking for suggestions on which is the best software or plug-in to do X.
Right? And that was a huge opportunity for us. Or which is the best theme to do X. So we started partnering with different theme companies and different plug-in companies. And, you know, I started doing this annual census with our audience. You know, once a year they ask, “Hey, you know, what…if you could have us build one thing, what would it be?” And people would say, you know, “I would like for you to build an opt-in software,” or a contact form software, or what have you.
And we basically went from there and started, like, you know, building. Because I had a team, we built OptinMonster, a sharing plug-in. Those were, like, some of the top requests and that started, like, getting a lot of traction where, like, hey, this is…like WPBeginner could start to make a lot more money for us by just funneling the leads to our software side of the business.
So then we…then I went on and acquired gallery software for photographers, Envira Gallery and Soliloquy, because, you know, our users wanted it. And that turned out to be quite well. Then we built a contact form because people wanted a contact form software, because apparently there weren’t enough. I mean I thought there were enough contact forms, but people were like, “No, none of them are easy,” etc., etc.
So we did, you know, a bunch of client interviews, or user interviews, and get their thoughts on what’s not easy about it. And then we went out and built WPForms, and now that’s running on over 1 million websites. Then we acquired another solution for Google Analytics because people said, “Hey, it’s really hard for us to connect WordPress to Google Analytics and do it properly.”
So, you know, I went out and looked at different solutions in the market, the most popular one was by Yoast. And I approached Yoast and it was the right timing for them and they sold us Yoast Analytics and I rebranded it to MonsterInsights, and that runs on about 1.9 million sites. So, you know, it was like one thing led to another, but really taking what our users wanted and just giving it to them.
Nathan: Yeah. Amazing, man, this is really interesting. So quite a few questions here. I love what you’ve shared, you know, just polling and getting a census and finding out what your audience wants, and then essentially using WPBeginner as that hub, so that media entity, to build your audience, build your community, then finding out other ways to serve them.
Just coming back on WPBeginner. Like, just out of curiosity, like how much content were you posting, or do you post right now, on the site and obviously to build its traction and maintain it?
Syed: Yeah. So in the earlier days it wasn’t very consistent. We would average like, you know, one content piece a day on the business days. But, you know, there would be times when we would skip a day in the beginning, and then just have, like, three or four pieces on one day. Just because we were basically looking on Twitter and seeing, “Oh, there’s a bunch of questions today that we can answer,” and we would just go answer it on the blog.
So there wasn’t a lot of consistency in the earlier days, but over time it was like, okay, you know, as we started building a regular audience, we have to post content consistently. And now we’re posting one piece a day, Monday to Friday. And then, you know, we’re constantly updating older articles that might get outdated, which is something that many websites don’t do.
But because our users come to trust us to provide them the best information, we go back and, you know, we’re constantly updating. There are over 2,000 pieces of content on WPBeginner right now.
Nathan: Got you, so you got about 2,000 pieces. Awesome. And, you know, you’ve mentioned that you acquired a few different software companies, so the first thing I’m curious around is how big is your team when you acquire these companies? Are you bringing in the team, as well, inherently and everyone is working remotely, or how does that work usually, what’s the strategy there?
Syed: Yeah, so our entire team is remote. I am based in Palm Beach, Florida. The majority of us are in the United States, but we also have people overseas in Pakistan, India, Singapore, you know, other countries, as well. And, yeah, so when we are acquiring these different software, like the Yoast software that we acquired, that was just a software acquisition, no team was part of it.
Because Yoast also had another software, Yoast SEO, which everybody knows about, it’s the most popular SEO plug-in. So he wanted to keep his team for that and really focus on the SEO side, and analytics was not really getting the attention from his team and for their business it didn’t make sense. So we just bought the software and the user base of that plug-in. The other one that I acquired, Envira Gallery and Soliloquy, it was more of a merger than a straight-up acquisition because it was like I bought into it.
My cofounder in OptinMonster, which is a product that we built form the ground up, he had created those other two companies before this and, you know, he was a developer by trade, so he wanted to partner with me to help with marketing on that. So we ended up rolling those two softwares into the company and, yes, there was one employee that was, you know, working on that.
So it was a small rollout on that side. And then we just acquired another analytic software for WordPress. And, again, this was developed by a solo developer. He just…you know, he had built it, he was not really monetizing it very well, and he wanted to go do something else. So we basically acquired the software piece of it and the user base, but not the team because, you know, he was working on it by himself.
Nathan: Yeah, got you. So from the sounds of it a part of your strategy is to acquire, perhaps, like, assets, or assets that are not maybe performing as well as they could. Or you’ve got…or they…like they might be a good piece of software, but doesn’t really have a significant user base.
But you guys have a massive user base because you’ve got that hub with WPBeginner and, yeah, just seem to bring on these tools. Is that a good…
Syed: Yeah, absolutely.
Nathan: Yeah, okay.
Syed: Yeah, that’s a very good point. You know, we’re looking at, you know, pretty much like value investing, except on the software side. You know, we look at software that has a lot of value for our readers, but the value is not being, you know, fully leveraged by the existing company that’s running it. And we just go in and try to make a deal that happens because we know what we can do with it.
Nathan: Yeah, yeah. I wouldn’t call it a distressed asset, but, yeah, it’s an underutilized asset.
Nathan: Yeah. So basically part of your strategy, like how do you value these plug-ins? Like obviously I know SaaS, you know, you can get a multiple revenue of 7 to 15X. How are you valuing these plug-ins?
Syed: Yeah, so WordPress plug-ins don’t trade at the SaaS multiple.
Nathan: Yes. Why?
Syed: Primarily for the biggest reason is that SaaS is monthly recurring revenue and most WordPress plug-ins… Because WordPress is still a relatively new-ish economy. Like it’s maturing, but it’s not like, you know, as mature as SaaS. WordPress plug-ins are downloadables, so one can download it and never renew the subscription. Okay? Kind of like…think like Adobe Photoshop. If you had Adobe Photoshop, let’s say, whatever 4.0, 5.0, one of the older versions, right?
You downloaded it, you paid one time, and then you didn’t upgrade for two years or three years. So the recurring is not as predictable. And WordPress companies in their earlier days didn’t even have automatic recurring billing. So, you know, because these are run by developers who…and it was, you know, their, usually, first rodeo to business. So that’s why WordPress companies don’t trade at a SaaS multiple, because they don’t have recurring revenue.
Now some of them do. Right? The more sophisticated WordPress businesses do have predictable monthly recurring revenue and they will trade at that level. But the ones that we are acquiring are underutilized, often don’t have significant revenue, so multiples are, you know, quite attractive for us.
Nathan: Yeah. Can you give us a…are you doing a multiple of revenue, EBITDA? Like can you give us kind of a gauge? Just out of curiosity, man.
Syed: Yeah. It really, really varies per deal. Like, for example, we bought ExactMetrics. Well, it was formerly called Google Analytics Dashboard for WordPress. The plug-in made no money. Okay? So you can’t really value it based on EBITDA or any revenue trade because it had no revenue.
What it had was over 1 million users on it.
Nathan: So how did you value it? On users, software?
Syed: We valued it, you know, of course on what we could do with it, but not to its full potential, obviously. And, yes, we did give a multiple on the number of installs. But really I’m not at the discretion to share the numbers on the acquisition numbers.
Nathan: Yeah, of course.
Syed: But it’s like, you know, it’s the highest price we were willing to pay and the lowest price the seller was willing to sell, let’s put it that way.
Nathan: Yeah, okay. All right. Yeah, no, this is interesting, man. So, you know, you said that a lot of WordPress plug-ins, I know we’re getting quite technical, but just out of curiosity, don’t really trade at, like, a SaaS-level valuation. I’ve always wondered, like, you know, I looked at Thrive Themes.
We literally installed Thrive Themes for Foundr just for various reasons. And I was looking at it and I was like, you know, they gave me like a…you know, $19 for a one-off license. Like, “Why isn’t this recurring?” And then I saw that they do have another option, which there is a recurring option. But, yeah, like why is that? Because there are some plug-ins that I do see that are recurring.
Like, yeah, so I’m really curious, why don’t people do that?
Syed: It has to do with a little bit of technical and a little bit of the…you know, the rules around WordPress. So when you build a WordPress plug-in, you’re not really making it…most people at least don’t make it connect with their host server. You know, whereas with a SaaS application you’re connecting with an API, you’re connecting with something that’s giving you all the stuff.
WordPress, with us being a self-hosted platform, everything is running from your website. So the cost to, you know, run a plug-in or whatnot is zero for the…well, almost zero for, you know, technical cost, it’s almost zero for the business. Their main cost is, you know, feature development and support, not necessarily, you know, how much bandwidth it was going to cost, that never comes into question.
And because it’s a lot easier to just build a downloadable software, often WordPress companies don’t think about building, you know, a hosted solution offering, you know, APIs and SaaS, like, that they can charge, you know, a recurring subscription for.
So that’s the number one reason. The other reason is, well, you can say, well, you can technically lock the plug-in with just a key and never, you know, connect it to SaaS. While you could do that, that’s not allowed by the WordPress Foundation because WordPress is licensed under GPL. Which means that the user should have the freedom to use your software however they please.
So the only way for you to really lock the software is to offer your service behind a SaaS portal, like we do at OptinMonster. Right? So OptinMonster is an app and our WordPress plug-in is just a connector for our app. Does that make sense? So, like, if you had a live chat company, your live chat, you know, offering is an app, the WordPress plug-in just embeds the code on your website.
Nathan: Yes, yes, yes. Like Hotjar. Hotjar, I think, do something like that, yeah.
Syed: Exactly, yeah. You can take Hotjar for example, that’s an app and their WordPress plug-in just embeds the code. Whereas if you were getting Thrive Themes, you’re getting everything in a download. Right? So technically you don’t really have to renew it to keep that. Of course, like, you know, let’s say WordPress updates and now for some reason one of the aspects of Thrive is not working.
Well, you don’t have access to updates unless you pay them. So that’s the model that WordPress has gone. You know, more and more WordPress companies are becoming sophisticated and are able to tie their, you know, services to an API, so then they can, like, you know, kill off the access once the license expires, but it’s a tricky balance.
Nathan: So for you with all these software…you know, different services that you’re acquiring, are they all…are you going for that model, recurring…offering, like, you know, recurring revenue plans, no one-off plans? Or what’s the play here, what’s the strategy?
Or are you going to keep acquiring more and more, and then offering some sort of recurring revenue for the whole bundle, you know, you’re whole kind of everything-you-need WordPress resource?
Syed: Yeah. So there’s a few ways you can mitigate in the WordPress ecosystem to make recurring revenue. The easiest thing is to have automated billing. Right? Like, which most companies don’t do, by the way, which is surprising. Right? You buy a plug-in, they will actually ask you to renew manually.
We have automated renewing. Right? So most people, a majority of the people, would…you know, would never cancel that subscription, so they will continue to renew because it’s automated billing. The other thing that we are doing is, yes, we are finding ways to connect our offering to an API, a SaaS, so that we can kill, you know, some of the features that are connect to our API.
Which means that they will…those features will not be available once your premium license expires. For example, MonsterInsights is the plug-in that we bought from Yoast and, you know, rebranded it to MonsterInsights. It helps you connect with Google Analytics and, you know, like, basically send all the data to Google, and then bring all the data back. While, you know, if you were to not renew your license, let’s say, after a year, while, you know, MonsterInsights will continue to send all the data to Google Analytics, but you will not be able to see the reports inside your WordPress dashboard.
Which is one of the main reasons why people use MonsterInsights, is because they don’t want to learn Google Analytics, they just want simple stats that are right inside their WordPress dashboard. Well, they won’t have access to that because that is coming from our API. So that’s an example of how, when we acquire a plug-in, we, like, connect it to a SaaS so that, you know, there’s more reasons for people to renew.
Nathan: Yeah. So basically, you know, just for everyone listening, the overarching strategy is, I guess, you know, like if you’re going for this software…you know, doing a software type business, I think the real power is creating a tool or a utility that serves that or impacts that person’s business.
So in the case of WordPress, if you have a plug-in that’s really, really useful, really, really valuable, for a small fee of, you know, anywhere between $5 to, you know, $10, $15, $20, whatever dollars per month, people will openly and happily pay for that tool. As long as it keeps providing value, you can see that return on investment or, you know, it’s fulfilling that purpose and it has strong lock-in, there’s no reason that anyone would leave. So from a business model standpoint it wouldn’t make…like it just doesn’t…it’s not as sound sense to just sell it as a one-off as opposed to having some form of lock-in, providing that value, make it a utility-based tool that you have recurring revenue.
Not only does it breed predictability with recurring revenue, but also from a valuation standpoint is, yeah, just way more powerful, right? Is that a good kind of summary?
Syed: Absolutely, absolutely. That’s right on point. And to answer your other question in terms of what are our plans for acquiring and whether we’re looking to bundle or not. I wouldn’t say we’re looking to bundle, we’re just looking to, you know, fill the success gaps for our audience, right? We know that there is massive…there are massive gaps in the user, an average business owner, and their ability to be successful with their website, whether it is through an opt-in form, like OptinMonster, or whether it is through a contact form, like WPForms, or whether it’s through analytics.
And there’s like a suite of tools or, you know, areas that are missing or not doing their job properly. We’re just looking at those success gaps, identifying those with our user census, identifying those with, you know, what people are searching for in our website search bar and things like that, and then going out and filling those.
Nathan: So one thing that I’m curious with around the strategy, Syed, is, man, like, you know, when you’re building a business, right? You kind of want to…like, I guess your lane is WordPress, right? And a lot of people, you know, do well and they just focus on, you know, one certain lane, like let’s say it’s just opt-in forms or it’s just analytics.
And you’re going for really like a very, very broad, kind of whole-package solution. Is focus difficult, do you think that this will be a problem over time? Because you’re…you know, like once you bring on that plug-in, yes, you can recommend because you’ve got your hub with WordPress Beginner, so you’re targeting anyone that’s technical that has a WordPress site.
But, yeah, like are you concerned or has that thought crossed your mind around focus and niching down?
Syed: Absolutely, yeah. That definitely has, you know, crossed my mind. So a few things. Number one, you have to have an organizational structure to address that. Because if you don’t have the right organizational structure, you are going to, you know, run into issues where you’re not able to give focus to specific products or one side of the business will suffer at the expense of the other, other
So that will definitely happen and you have to have the right team members in place and the right organizational structure. For example, I am not day-to-day involved in OptinMonster anymore. You know, there’s a President of OptinMonster, that’s my cofounder. And he’s running the whole day-to-day of OptinMonster.
And, you know, the same thing happened on WPForms, right? I have a cofounder in WPForms. And these are all separate entities. So while the connecting glue and hub to all of this is WPBeginner, as the media and the marketing, but each of the other software entities are its own entities, its own businesses. Which has advantages because we can, at any time, sell any one of them, you know, for the right offer.
We had a very successful exit from our photography suite in December of 2017 where we sold our gallery and slider software that we had as package suite and it was very, very good deal. And it was a lot easier for us because we had them as separate entities instead of all being part of one umbrella entity.
Because our finances were very clean, our books were very, very clean, everything was, you know, very easy for anybody to read. And, you know, when you have that, it makes it very easy. So whenever I’m going into a business, I also have an exit in mind. Of course you shouldn’t go into a business without an exit in mind. But, you know, no, in terms of like, oh, acquiring new software, would that hurt your overall strategy.
I don’t think so. Because we have a single goal, we want to build growth tools. Okay? Tools that help a business grow. A photography suite, while it was a really good utility, did not, you know, fit in the bigger picture, we were not as easily able to cross-sell our other software.
So when we’re acquiring plug-ins and user bases, our goal is, okay, not how much money we can make by improving this existing software, but also how much, you know, we can make from cross-selling and upselling our other products. And so, you know, with our future acquisitions we’re going to be staying within a small niche, which we believe is, you know, the opportunity right now.
Nathan: Yeah, growth tools. Yeah, I like that, that makes sense. So that brings more sense to that. And it kind of answers that focus question, right?
Nathan: Yeah. So still though, like, with these different software that you’re acquiring, do you put them under separate… Like obviously they have their own domain. Do they have their own blog, or do you focus all content side on WPBeginner and that collects all leads and does all marketing? Or can you talk me through that part, and support and stuff?
Like are you using, yeah, shared support, like using economies of scale?
Syed: Yeah, no, so everything is separate, you know, in terms of economies of scale. Support really does not scale when you have products as big as the ones that we have. You know, just training a support agent, onboarding a support agent, and have them be well-versed in all products is just impossible. So no, we actually have dedicated people for each product.
We have a process that scales. Right? And that’s where we’re really, really good at, in onboarding a support agent, you know, putting them through the same process that we’ve learnt, you know, and then applying that to every new product that we acquire. We do have, you know, a unique website, a new payment account, etc., and all that for every product that we acquire, every business that we have.
Each of the websites also have their own blogs. Some are more active than the others. For example, OptinMonster’s blog is top-notch, really focused on the conversation stuff. It’s killer, the content that the OptinMonster team puts out is completely killer. Again, OptinMonster content team is separate from, you know, the WPForms content team or the WPBeginner content team.
Now they all talk to each other and help cross-promote each other, but they are…you know, their workload is completely separate and they’re working on their dedicated projects. And, you know, like, so, yeah, so that’s the part. Like, for example, MonsterInsights’ blog is not as active as WPBeginner’s blog, right? So, yes, our biggest content arm is WPBeginner, but we also have new pieces of content going out on OptinMonster and WPForms and MonsterInsights, etc.
OptinMonster content is, you know, by far, like, the most top-notch pieces of content compared to, let’s say, WPForms, which is a form builder. There’s very…your content opportunities are not as big as it is with, you know, a niche like conversion optimization. But we still do put content out on WPForms as well as MonsterInsights.
Nathan: Got you. So you’re running all separate siloed companies?
Syed: Yes, to an extent they’re siloed. But, you know, we’re all part of the same Slack, everybody has access to everybody and you’re learning from each other’s processes. And you get to improve very, very fast this way. You know, maybe something worked on OptinMonster and WPForms can borrow it, and something worked on MonsterInsights and OptinMonster can borrow it.
So they’re all talking to each other. But, yes, in terms of focus they are working on, you know, siloed focuses.
Nathan: Wouldn’t you get more leverage though from a content standpoint or some kind of, I guess, functions of the business to, I guess, make it one?
Syed: You know, we had it as one.
Nathan: You did?
Syed: Yeah, we did. In the earlier days we had it as one.
Nathan: With that idea of leverage, like I said, yeah?
Syed: Right, right. And we found that we can keep the leverage going while increasing our content output by having more focus and just cross-communication. And that has tended to work really, really well for us and we have been able to, you know, grow our domain authority, you know, grow our organic rankings for just about every single one of our software.
So yeah. So we had it as one, you know, in the earlier days to keep cost down, and we were very measured with our content output. Now, you know, as every single business has grown and has become, you know, its own beast, that, you know, we need dedicated folks that are specific in that team. And, you know, this is the only way you can have a remote company communicate efficiently and know exactly what’s going on with that product, when each product is its own organism and ecosystem.
Nathan: Yeah, that makes sense. Yeah, because you guys are all remote. Because I was going to say, I was just about to ask you, like, man, it sounds very messy. Like is it difficult? Like how do you check in with so much going on? You know, like how often do you check in with each kind of, I guess, president or COO or CEO of each entity?
Syed: Right. So I don’t know if you have read the book called Traction?
Nathan: Yes, yes, great book. Yeah.
Syed: Right. So, you know, we use a lot of the concepts shared in Traction. We have a weekly L10 with, like, you know, all the presidents and, you know, where I get an update on what’s going on and their stuff. And then after that whatever meetings they’re having with their team and communication, that’s kind of their thing, I’m not part of all those meetings. You know, and we are…we’re 42 people right now and 3 more joining over the next two weeks, so it will be 45 people.
And, you know, I don’t know any other way to operate, I’ve always worked remotely, so I don’t know what I’m missing.
Nathan: Yeah, yeah. No, got you. No, that’s awesome, man. And, yeah, you know, you’re killing it. So tell me, like, are many more acquisitions in mind, how many do you have on the horizon, when do you think it will stop? Like, you know.
Syed: I wish I knew when it would stop. But, yeah, you know, we’re not like the type of company that’s like, “Oh, we have to commit to buying this many companies.” Right? That’s not our way of doing it. We are always in the market looking for, you know, the best deal. You know, we make few bets, but big bets.
And where we see the return is going to be immense. So it’s really like taking the value investing concept and bringing it to our industry.
Nathan: Yeah, got you. And when it comes…because they’re all separate entities, how do you pull the cash to actually fund these acquisitions then?
Syed: Yeah, so the way I’ve structured it is very similar to a private equity company does, where you have a limited partnership entity that…you know, that has, you know, ownership stakes in all the other companies. And it makes it quite easy to manage and it’s a proven method. Right?
PE firms have been doing it for forever. So yeah. So that makes, you know, cash flows… You know, if you want to learn about how PE firms, you know, get cash flow rolled up, that’s how we do it. In terms of management, one of the things that, you know, I discovered that was easier is that we…like I have an entity that’s entire purpose…it’s an empty entity whose purpose is management only.
So that’s where we hire all the employees from. So, and that just makes payrolls, legal compliance, etc., etc., very easy. So essentially you can say we have our own outsourcing company. But it’s not really outsourcing, it’s the management company. And that company has contracts with individual entities that I have to, you know, source employees from.
Nathan: Yes, got you. That makes sense. Man, yeah, it sounds like you got it all working pretty smoothly. Awesome. So, look, we have to work towards wrapping up, Syed, but, dude, great conversation, I’m really enjoying just really understanding how you roll and everything you got going on.
But two more questions. Kind of the first one is where’s the best place people can find out more about yourself and your work? And my second question is just any parting words that you’d like to share with our audience just from your journey of being, you know, I guess, a longtime successful founder and just, you know, dominating a really, like, competitive market?
Syed: Yeah, for sure. You can find everything about me at syedbalkhi.com. I’m @syedbalkhi in just about every other social platform, if you want to follow there. In terms of parting wisdom, a few words. Number one, everything starts small. Don’t ever, like, try to compare your chapter 1 with somebody’s chapter 34 or chapter 100.
You have to start small and, you know, build it bigger one step at a time. It’s a journey. You know, building businesses is a journey. And then the other thing is really leverage success gaps. If you don’t know what I’m talking about, success gaps, go google it. As long as you’re helping your customers, your users be successful, you’re going to find more success and more success and more success.
As long as you stay true to that, you’re going to be all right.
Nathan: Awesome. Well, look, thank you so much, Syed. Absolute pleasure, mate. And, yeah, really appreciate your time.
Syed: Thank you for having me, Nathan.