After reading through John Rowles’ post about Glenn turning things profitable. (Hope that sticks for you Glenn, way to go.) And reading Michelle’s comment, where she rightly noted that Glenn has made changes to his model to get profitable, I thought some further comment is in order.
When I raise my glass to toast Glenn’s accomplishment, I am toasting HIM, and not his business model. Of course he has made changes (in my opinion–they were needed). Yes, he made a hugely difficult decision to cut staff in order to GET profitable. He made many other changes as well that were equally crucial.
It was countless moves that many others in his shoes might not have done and it was agonizing (I am sure) for him at times.
There have been numerous firms that have gone under trying to see “how low they can go”…commission limbo is VERY hard on the dancers as opposed to selling value. Looks easy, but it ain’t. How many caracasses of those companies have we seen strewn along the way.
After reading Rowles’ post I then flipped over to Joost De Valk’s post on his blog about the business model for WordPress and how theme developers vs plugin developers are being treated.
He argues that there should be commercially supported plugins (read: not free) as well as free plugins (GPL- or gnu public license) on the WordPress plugins site.
I agree.
Plugin developers (if they are good enough to develop commercially viable plugins SHOULD be able to charge and charge what the market will bear.) Those who want to work for FREE are able to do so. (They will starve.)
In my own business at EricOnSearch, I have used several models (started with full service SEO, then went to Coaching, and now emphasize joint ventures with select partners).
There are lead generators out there who are profitable and there are many who never will be and will die or sell out due to lack of cash. (How’s the burn rate, fellas?)
I guess the bottom line is this. I like freedom. I like people who succeed. I celebrate profitability. (and there are some profitable lead generators out there) And I toast the winners and console the losers in a Vince Lombardi sort of sadistic way. (grin)
Here’s to Joost trying to get the WordPress folks to quit insisting on giving away the plugin store and putting the tin cup away in favor of the cash register. Here’s to Glenn for making the tough decisions (including sending leads outside, right?).
And here’s to me making the 18 hour days turn into peltless kitties and giving Mrs Eric and the rest of Team Eric the lifestyle that I would wish for them. (grin)
Best to all.
Ryan Hartman says:
Nice to see Joost getting some props here. That guy’s the man, and heck yeah, most of the plugins we use every day are worth some coin to those who create and support them…[I guess I better walk this talk and stop ignoring those donation icons.]
Cool post mr. onsearch…
July 14, 2009 — 6:37 am
Eric Blackwell says:
Thanks Ryan…hope things are well with you.
@Joost- Yeah, he is a great guy.
@Plugins-
I (as a rule) do not donate to FREE themes and FREE plugins. Either they think it is worth something enough to say “Pay for it.” or they give it away.
I donate to churches, starving kids and the truly needy and I try to be generous. That said, can you imagine a Real Estate office that said “We won’t charge you anything. Just give us a donation if you want.” Would they survive?
Giving a freebie in hopes of selling premium services is fine. That’s a loss leader. But when there’s all loss, the leader only takes you to oblivion. 😉
Best
Eric
July 14, 2009 — 7:04 am
Sean Purcell says:
Laud the man, not the model. Well put Eric. It’s the man (or woman) who puts in the hours and sweats the details and pours their heart (and money) into their passion. Just as we’ve been watching you do for a number of years now.
If I were to be more open than I should, I would admit that unless I’m involved I rarely toast the winners and even when I am involved I almost never console the losers. But I do loudly celebrate that incremental improvement to humanity that happens when someone… when one of the good guys… reaches for more and succeeds. The effort is inspirational and its reward is validating. You are one of the good guys Eric and I loudly celebrate you.
July 14, 2009 — 7:15 am
Dick Baker says:
Nobody ever got rich giving everything away and asking for donations. It’s human nature to take the freebie and walk. It’s guilt that motivates a few people to toss a quarter in the jar.
There’s a webmaster who created a free dating site. It competes with eharmony.com and the other big dating sites. This site is #3 in the US for traffic for an individually-owned site, with monthly page views in the billions.
He beats the big sites by offering the dating service for free, where the big sites charge a fee. However, he makes literally ten million a year by running ads on his site. In fact, some of the big dating sites pay to run ads on his site, hoping to skim some of the visitors.
It’s possible to appear to give something away for free and be successful, but to really give it away and expect to make something is nuts.
July 14, 2009 — 8:22 am
Teri Lussier says:
>Here’s to Joost trying to get the WordPress folks to quit insisting on giving away the plugin store and putting the tin cup away in favor of the cash register.
I think less of a company who attempts to guilt me into paying rather than having the, um, backbone to state a price upfront. Otherwise I, as the customer, have to tell the vendor what their product is worth. Now I’m under pressure. Now I’m uncomfortable. Just name the price and take the pressure off me.
>peltless kitties ???
But…but… ::sad weepy eyes:: That’s very different from skinnin’ cats. Good for you, Eric. 🙂
July 14, 2009 — 8:42 am
Michelle DeRepentigny says:
I think Glenn deserve the toast also. My prior comment was not to critize his initial or changed model, just to recognize that the linked post heavily emphasized what I felt was an earlier model of business for Redfin. I applaud Glenn’s brilliance in doing whatever is necessary to survive these challenging times.
July 15, 2009 — 8:40 am
Eric Blackwell says:
@Michelle- exactly. I was glad that you said it, because I think the Tech Crunch article toasted the model at the expense of seeing who really deserved the credit.
@Teri- my apologies for the visual (grin) I do NOT want to make you sad!
@Dick- Absolutely. There are lead generators in the real estate sector that sell ads off of the listings that they solicit from REALTORS as well. (Example Trulia, Zillow) So far (to my knowledge) they are not running cash flow positive. (hence the “how’s the burn rate? comment”.
July 15, 2009 — 10:48 am
Bob Wilson says:
This may sound redundant, but bear with me. Plugins for WordPress are based on a product (WP) that is licensed as GPL. That means that while you can release a plugin and charge for it, but if it is released under GPL, then anyone is free to modify after the fact and re-release it.
Same with premium themes released GPL. They can be bought, then released by another.
July 18, 2009 — 11:37 am