What we talk about when we acquire WordPress companies

Building a virtuous cycle, not just buying every random plugin.

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Quite by accident, I started buying companies.

Back in 2019, I was the owner of a small WordPress firm – a bunch of good clients, a few independent contractors, and a comfortable and stable income. Then, about a year into the pandemic, I found myself with a strange mix of challenges and opportunities:

  • We had a decent amount of cash on hand thanks to growth after the initial pandemic shock
  • We were systematizing – in particular, training everyone to use the same starter theme on every project
  • The team behind that starter theme suddenly decided to sell it or abandon it

One of my team members sent me a post: the Understrap guys are selling! Should we just fork this thing and build our own?

That was an option, but it would have cost us a lot of time (and money) and been a sad farewell to a piece of software we really loved. So instead, we joined the bidding war and eventually won an auction (against at least one other large agency) for ownership of Understrap (a combination of Underscores and Bootstrap), along with its world-renowned reputation and large audience of developers.

Since then, we’ve launched multiple new versions, new premium child themes, and lots of cool courses, more than making our money back and also invigorating our team with the ability to work on cool, powerful, well-known tools (instead of just client projects).

Last month, a similar opportunity arose when Alex and Ben decided to sell MasterWP, the newsletter you’re reading right now. We jumped on it because we knew it fit our vision for developing an ecosystem of WordPress products and services – and you’re reading the results right now. 🙂 

But in the meantime, we’ve also passed up a lot of acquisition opportunities. In fact, MasterWP co-founder Alex is also the co-founder of FlipWP, a service I subscribe to that allows developers to post their plugins and other tools for sale.

For example, right now, I could buy anything from a free theme for $2,000 to a font plugin for $200k to a larger suite of tools for $1.5 million. So, what makes an acquisition catch my eye?

  • First, I like to deal with the high-end, high-code side of WordPress. That’s what our clients value and what our developers enjoy. We’re not attempting to compete in the same sandbox as Elementor and Divi, which are targeted at novices who want DIY site builders.
  • Second, I like to acquire meaningful brands. Understrap and MasterWP are two great examples of this. By contrast, there are a lot of plugins for sale out there that few people have heard of (or that are so generic that they don’t have any brand recognition of their own).
  • Third, I look for things that we have the power to improve on and expand. Understrap was languishing under its previous owners but had a vibrant open-source community, and it was perfect for our developers to take over and improve. MasterWP was a perfect fit for many of my team members’ backgrounds in journalism, writing and advertising. We could really bring a lot to both products – whereas if we bought a “good enough” plugin, there wouldn’t really be much room for us to make it even more awesome. Likewise, I think we have the potential to make both Understrap and MasterWP the best in their market segments (starter themes and WordPress publications), whereas that’s not really possible for many of the generic software out there.
  • Fourth, I love e-mail. Understrap had a very large e-mail list when I bought it, and of course MasterWP is itself an e-mail newsletter. E-mail is by far the most powerful communication platform – it beats social media, pay-per-click ads and content marketing all day, every day. If you want to build a brand online, you do it with a great e-mail list. If your company doesn’t have an e-mail list, it dramatically reduces its value in my eyes.
  • Finally, I want to build an ecosystem of products and services that feed into each other. Our Understrap brand sends us clients who want us to build sites for them. Our clients also buy our courses, which are co-branded with Understrap. Now we have MasterWP, which will also feed into both our client services, our information products, and our premium themes. We also have a very cool software-as-a-service tool that fits nicely into this ecosystem coming in a month or two. Everything that we build has a dual purpose: we make money off it directly, but it also builds our reputation in the industry and feeds clients and customers into other parts of our business that they might not have discovered independently.

We’re thrilled to welcome MasterWP to the family, and have a lot of exciting new stuff to announce soon. 🚀

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Rob is the CEO of HDC and the Publisher of MasterWP.

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MasterWP contains no affiliate links. We’re entirely funded by the sponsors highlighted on each article. In addition to MasterWP, we own EveryAlt, WP Wallet, Understrap and Howard Development & Consulting.

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