This week, WP Engine acquired Advanced Custom Fields, along with the rest of the Delicious Brains plugin suite, which includes Better Search Replace and WP Migrate. Normally I celebrate acquisitions, and I’ve discussed our acquisition strategy in the past – but this one has me a little shook.
My trepidation stems from the fact that Delicious Brains acquired Advanced Custom Fields – by far the most important WordPress plugin for custom theme developers – exactly one year ago. That means that in June 2021, the Delicious Brains team thought ACF was so valuable that they presumably spent millions of dollars on it (the actual price is not public). They have been working hard on it – Brian even wrote a glowing review of the recent improvements in February. And as recently as March 31, they renamed their WP Migrate plugin, presumably as part of a plan to broaden its appeal and expand their plugin sales.
How do you go from all-in to selling-out in less than a year? To me, it seems like a sign that something went wrong. Should plugin creators be worried, or was this truly just a personal choice by Delicious Brains CEO Brad Touesnard to shift his focus to other ideas?
Focus vs. Opportunity
Matt Medeiros at The WP Minute had a chance to chat with Touesnard after the sale was announced, but (since most of the important stuff is confidential) that conversation didn’t really answer my big questions.
Tousenard said in the podcast that his goal is to focus exclusively on SpinupWP, a tool for quickly creating WordPress servers. He said that he’d never really considered selling until recently, and that “if I sold my software company, I would probably just end up starting another software company.” He said he was currently only spending about one-third of his time on SpinupWP, and that the sale (in which the assets and all plugin-focused employees will go to WP Engine) would allow him to focus entirely on Spinup.
Although this is the official story, I don’t totally buy that it is the only story. If the plugins were rockin’ it and you wanted to focus on something else as CEO, why not just appoint a “VP of Plugins” and let them run the show? Presumably a healthy plugin business would allow for this, and you could expand it without burning a ton of the CEO’s time. It also strikes me as odd that someone would sell their plugins to a web hosting company in order to focus on… running a slightly different type of web hosting company. In the interview, there’s even a joke about selling SpinupWP to WP Engine someday.
Clearly Touesnard did not invest millions in the ACF acquisition with the goal of selling his assets to a hosting company a year later. He says something changed in December and that he realized he could sell part of the company (the plugins) and keep the rest (SpinupWP), but it’s unclear exactly what prompted that change. He doesn’t seem to want to retire or stop building software – but he seems to believe SpinupWP will be a better use of his time than ACF and the rest of the Delicious Brains software suite.
There is a school of thought that you must be laser-focused on a single project or idea in order to accomplish big things. I think this is more myth than reality – and it tends to coincide with the belief that the success of tech companies is mostly a result of the vision, personality and grit of the individual founders. While the spark of innovation is important at the very early stages, most companies in the WordPress ecosystem are well beyond that point, and instead would benefit most from a CEO who is a good manager, a good delegator, and willing to juggle priorities and experiment with multiple business models.
This is one of the reasons I am intentionally diversifying my business – we’ve added MasterWP, WP Wallet and Understrap in the last two years, but we are not slowing down our client-service business, because I like the diversification of having many different branches of the business that naturally feed into each other. I believe this opens us up to serendipity – for example, we have been far more successful (in part due to serendipity) in the first four months of owning MasterWP than I would have forecasted. If we weren’t able to dive into new branches of business, or if I had to do it all myself (rather than delegating to our amazing editors and podcast producers), it would have been a stressor rather than an opportunity.
The ‘Lifetime License’ Crunch and the Future of Fields
Back in November, WP Tavern took Delicious Brains to task for asking its ACF “lifetime license” holders to consider buying a subscription to support the company. I think it’s safe to assume that Delicious Brains found these licenses to be a bigger problem than they expected – they must have been aware of the lifetime license data at the time of acquisition and felt the plugin was still a good deal. Maybe this lifetime-license hulabaloo truly was just a messaging mistake – but I think it is also plausible that it was an indication that Delicious Brains was getting less financial value from ACF than they anticipated.
I use ACF every day, and I think it’s a fantastic tool and that Delicious Brains has done a wonderful job with it over the past year. I own a lifetime license and don’t remember getting the e-mail about “upgrading,” but if I were forced to do so, I would definitely pay an annual fee even though I purchased a lifetime license a decade ago.
In my view, ACF continues to have incredible potential – though I certainly understand the struggles around licensing. I am sure there are also questions as to whether the Block Editor and Full Site Editing will someday overshadow ACF – but I am personally betting that those low-code tools will never really serve custom developers as well as ACF and the high-code suite of WordPress tools.
ACF lines up very nicely with Understrap, the renowned custom theme framework for high-code, handcrafted sites, that we acquired in Spring 2021, just a few days before Delicious Brains acquired ACF. At that time, I was well aware of the shift toward low-code features like Full Site Editing, but I actively chose to focus on the opposite end of the spectrum – the really powerful solutions for building high-code, highly custom sites. Understrap continues to do well, and I believe both Understrap and ACF will be excellent tools for high-end development for many years to come. While the custom development market is not as big as competing with Squarespace, it’s a perfect fit for our decades of experience in selling high-end services.
That said, if Delicious Brains really did acquire ACF for millions, discover its business model was less solid than anticipated, and then bail on the idea, it certainly does not bode well for other plugin developers. I suspect that this episode will result in a higher level of scrutiny on future plugin transactions – as much as we love FlipWP (co-founded by a MasterWP co-founder!), I don’t think anyone actually wants to flip plugins like they’d flip a fixer-upper house. The fact that ACF flipped so quickly – even when it is, in my opinion, the best WordPress plugin in existence – seems like either a blunder by Delicious Brains or a really bad sign for the plugin ecosystem.
What is WP Engine’s plan?
WP Engine is an awesome web host and throws a hell of a conference. We use them for the vast majority of our clients. Still, I think I speak for a lot of WordPress community members when I say that I am highly skeptical that everyone being acquired by a web host is our ideal future.
The challenge in the web hosting industry is that it is so poorly differentiated – it is a proverbial red ocean, brimming with bloodthirsty sharks who are devouring each other (and destroying profit margins) in a perpetual race to the bottom. WP Engine is a great example of this – five years ago, it was innovative, but now all of its killer WordPress-centric features (caching, one-click staging) have been copied by larger competitors.
WP Engine’s growth strategy, in part, appears to be differentiating itself by acquiring popular software. They did this with the purchase of StudioPress in 2018 and got a lot of press as a result. However, the software has been almost completely stagnant since then. It’s almost like they acquired the company just so they could send out the press release – the StudioPress themes now collect dust in a submenu of “resources” available to WP Engine hosting subscribers.
I think the ACF acquisition strategy is similar – especially if the plugin was struggling financially, I suspect that a big part of the value for WP Engine is being able to proudly announce that they own a world-renowned piece of software, even if they never make a dime from license fees. (It worked – they got this amazing article in a highly authoritative WordPress publication!) That said, I hope they put much more emphasis on ACF than they did on the StudioPress software. ACF truly is the best and most important plugin on the market for custom developers. When Elliott Condon, the original plugin creator, sold it to Delicious Brains, he said “these are the people who I want in control of ACF’s future.” I guess he was wrong about that – but I hope WP Engine makes us proud by treating ACF as a serious branch of their business, not just a marketing gimmick.