Five months ago I made a decision to no longer pursue one of my dreams from a few years ago. The decision stung. It wasn't an easy one to make. But as I write this five months postmortem, I am confident it was the right decision.
In short, after years of dreaming, planning and coding, I realized that pulling off a CMS add-on business — at the quality I wanted — would severely hurt Focus Lab. It would be profitable, no doubt. But it would also take away from our client services which we’re quite passionate about. That was all I needed to realize to justify no longer pursuing the dream.
I wrote my first ExpressionEngine add-on about four years ago. Initially I was simply solving problems I came across in client projects. It didn’t take long for me to really enjoy this aspect of EE development.
To get better faster I started seeking out people in the EE forums who had problems of their own to solve. I would see if an add-on could be written to solve the problem and then I would go to work. If it was a simple enough solution, I would just upload the add-on to the forums and confirm that it’s what they needed. I get a lot of joy out of helping people. This was the catalyst to my interest in starting an EE add-on shop someday.
At the time, there were only a handful of people or teams actively creating and distributing EE add-ons. The market was fairly small and the competition even smaller. Focus Lab was comprised of just Bill and myself, both still working full-time jobs. I saw add-on development as a natural and obvious way to generate revenue for the company. So I continued on helping people, writing about add-on development and learning everything I could about it.
Around Fall of 2009 I worked on a short list of add-ons we could start with. I wanted to make this part of my business, so some revenue would need to be involved. The plan was to have some free add-ons and some commercial ones as well. I had a working list of ideas and started writing code.
As I came closer to “1.0” for a few add-ons I knew it was time to plan out the distributing and selling of the software. That’s when I turned to the wonderful community for input. I wrote a blog post aimed toward discussion about pricing for these add-ons. I was ecstatic when many of the existing commercial add-on developers chimed in with feedback about their experiences. I sat on the feedback for a few weeks and then wrote about my pricing model intentions.
My pricing model had been determined. I was near complete with a number of add-ons. Only the small details remained. I needed to build a website that sold, distributed and supported the software.
Holy crap. That’s a lot of work.
Now, the young whippersnappers in the EE world are probably thinking, “So what. Just use devot:ee.”
At the time of these decisions, devot:ee was only an archive of EE add-ons and some articles. The store aspect hadn’t been developed. The EE market didn’t even have many options for ecommerce. This all pre-dates Carthrob, BrilliantRetail and Store. Solution for selling: roll my own. Not ideal.
Due to the amount of work required to getting that up and running, I decided that the timing simply wasn’t right. I had a baby at home and would much rather enjoy time with her than moonlighting to build the support and payment pieces to selling add-ons.
Fast forward to May 2010 and devot:ee announces they’ll provide the ability for any add-on developer to sell add-ons through the site. That’s fantastic news for people like me. But there’s a problem.
Just one month prior I quit my day job to officially launch Focus Lab. I had to spend all of my time on things that I knew would generate revenue. In addition, EE was painfully and slowly making the transition from 1.x to 2.x. If we were going to launch an add-on arm I wanted to only feel obligated to support EE 2.x so I felt the time just wasn’t right.
I continued to focus on client work with the strategy of letting EE 2.x settle in the community a bit before launching the Focus add-ons.
A little over a year later things were smoothing out in the EE marketplace. The EE1 to EE2 upgrade process was less daunting and happening more and more. It seemed like a good time to start thinking about selling add-ons once more. I revisited my earlier add-on list, scrapped a few ideas and added a few more. I had a new working list and started spending spare time on the add-ons. Add-ons included things like a handy developer toolbar for the front and backend, a client-friendly URL redirect manager, a full CRUD Restful API layer for EE and a few others.
At this point Focus had a few more people on the team so I got everyone on board. In order to prevent diluting and segmenting the Focus Lab brand we needed separate branding for the new venture. This would include a website for operation. With that our design team hopped on board and we started planning.
We landed on the name Sidecar. Sidecar, like all other businesses, would be limited by the size and quality of the market it serves. In my early days I intended for this to specifically be the ExpressionEngine market.
However, over time and after consideration, we planned to not only serve EE, but also other markets such as Statamic, Craft etc. Sidecar would be our home for add-ons, training materials, books and more. It would be the sidecar to Focus Lab’s client services.
And it still may be. Some day.
Evaluating the Market
There were a few questions I looked at while planning Sidecar’s business. The biggest of which was our market and how to sell to it. The most obvious concern was how to support the software and not allow the cost of support to kill us financially.
At this point everyone in the EE world was selling a license for anywhere from $10 to $100 and support just came with the purchase. This seemed unsustainable so my plan was to sell the two separately. The license would cost $X and support would be some type of recurring cost model based on the amount of support a customer needed. Interestingly enough, EllisLab announced that type of model not long after. This supported my view of the unsustainable model.
The goal for Sidecar was to be the best in the market. We wanted the best add-on website. The best brand. The best support structure. The best release testing. The best experience. Simply, the best.
The EE add-on market was much more saturated by this point. There was more competition but it honestly didn’t worry me. Rather, it excited me. I knew that with more competition we would shine that much brighter if we really could pull off being the best. I knew we had the team for it, so my confidence was high.
I should have done the numbers sooner. The numbers could have saved me a lot of time and energy. I’ve had this dream for years though, so I was sold internally on making it happen. Finally, at the end of last year I started looking at the important math.
The numbers are speculative but necessary. Here are some areas I was doing math in:
- Pricing potential (what’s the highest price a typical purchaser is ready to pay for each add-on; same question about support)
- Cost of customer acquisition
- Upfront investment (mainly just time)
- Cost of support delivery
- Cost of continual development and competing
After reviewing everything I realized the opportunity cost was exceptionally higher than the probable revenue from Sidecar. Focus Lab is too small, too young and way too interested in maintaining an exceptional level of quality with client services. Starting this add-on arm was possible, but only at the expense of our current services. That was unacceptable.
After this realization I talked it over with Bill. He agreed on all points so I sent the following email to the whole team in early January this year.
Bill and I have a Sidecar update for the whole team. I’d like for you to read this in full but the short of it is that we’re canning the project as a whole. I want you to know why though. Here’s the info:
Why create Sidecar?
I’ve always loved building add-ons for EE. For years I’ve wanted to get into that market because I like to build software. I’ve built dozens of EE add-ons that help people get things done and it’s a great feeling. I always wanted to sell them at some point, but I recognized the big responsibility (and hassle) that support would be. It never made financial (and thus business) sense to start selling the add-ons with support attached.
After a lot of thinking and interviewing of other commercial add-on developers (P&T, Solspace & other long-timers / big dogs in the market) I landed on charging for support. This was a solid direction that we were pleased with so we proceeded with the model and started branding the name Sidecar.
Setting our bar high
The only way I was willing to launch Sidecar was as “the best” in the market. That would mean having the best brand, best website, best documentation, best support experience etc. I have confidence that we could absolutely reach the bar we’d be setting high for ourselves. And our customers would love us for it. However, in order to be the best we would have to invest like we want to be the best.
Being the best at product support would mean setting up a near 24-7 support window. With timezones and our culture’s (and industry’s) current work habits/trends we would need “around the clock” response times in a sense. (Again, we’re talking about being the best here.) Well, there’s a problem with that.
Clash with work philosophy
I’m working to build Focus as a company that supports each of our lives. Not something that demands anyone be “on call” for any given reason. Building Sidecar in the way I think customers deserve would require building a team and structure that I’m currently not okay with. We’re too small for that right now. Perhaps if we have a few more folks on board this would be easier to swallow. But right now we’re basically EST people and I want to honor and respect everyone’s schedule today.
The alternative is to acquire an existing add-on developer and his add-ons. I considered this as a possibility and even started drafting an email. That scenario would consist of us making an offer to buy out the add-ons of someone already working in these hours and then have them as a part of the Focus team. At the end of the day, though, that would still require a lot of time and investment with little to no return for a little while. Not a good move for the time being.
Ultimately I think Sidecar would segment our already-small team and slow us down from providing even better service to our branding and dev clients. With Sidecar out of the way we can make 2013 an even more amazing year for these projects and devote the time needed to our big goal of producing our branding book.
Thoughts or questions?
Let me know if you have any feedback on the project. Thanks for the role you played in brainstorming, designing and helping create the vision for Sidecar. You guys rock!
Laid to rest
The add-on arm was officially laid to rest. We archived the project and haven’t looked back. Our client services have continued to thrive and we’re all the better for it. The Sidecar brand may be revived someday, but likely not as an add-on arm.