Welcome to the Joomla SEO Club and Book

Some Background

Last year when Joomla made the decision to encourage Joomla developers to move towards the GPL license we posted a lot about the topic. For those of you not up on the GPL, essentially it asks developers to move away from locking customers into products with licensing and encoding. Instead the aim is to make money from providing support, documentation and custom coding to the software's users. In short, software as a service rather than software as a product.

Back then, I discussed the pros, cons and impact of a GPL business model. I also interviewed 5 people who were using the GPL: David Deutsch from AEC, Rob Clayburn from Fabrik, Andrew Eddie from the Joomla core team, Achim Fischer from Primezilla and Ryan Demmer from JCE. Those five people reflected my own thoughts. Between them they expressed enthusiasm, nervousness, optimism and pessimism. No-one had enough experience to know if it was possible for an individual developer or small webdesign team to pay the mortgage via a GPL business model.

About two months later, we decided to stop selling our Joomla SEO Book as a PDF download and change to a membership model where customers could also get consultation in our forum. We switched from selling a product to a service. Other SEO companies have made similar moves - SEOmoz before us, Aaron Wall and Brian Clark afterwards.

Thursday will be the six-month anniversary of our SEO Club. Did we make a wise decision?

Total Number of Members

Plans Chosen by Registering People

• Free: 88%
• Basic ($37): 7.8%
  
• Medium ($99): 2.7%
  
• Advanced ($250): 1.5%
• Percent who renew: 68%
  

Total Number of Unique Visitors

But the rate of growth really hasn't changed compared to the 6 months before the club's launch:

Total Number of New Visitors

Pages Per Visit

The Bad News

• Overall, 0.1% of unique visits turned into members.
• Averaging things out, it takes us a million unique visitors to produce 1000 members.
• Our experience has been that many people had been reading the blog for months before deciding to become members. A much larger presell is needed.
• I'm still a long way from being able to pay the mortgage via the club.
  

The Good News

• PayPal chargebacks dropped from around 3% to 0%. Not one single chargeback since we started the club.
• Aside from the chargebacks, informal evidence shows that our members are happier than the SEO book readers were. We get more people providing testimonials and more thank-you emails.
• More members come to us for additional work. With the SEO Book, very few readers contacted us about custom work.
• Our renewal rate is 68%. Quite a few of those who didn't renew wrote thank-you letters to explain that the were leaving because they've got what they needed from the book.
  

Open to More Questions

With the exception of the data removed from the images above, consider this an open thread. I'd be happy to answer any questions at all about our move to a service club business model.

Equally, I'd love to hear from you if you have or a considering a similar change.

Comments (25)

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written by Good Web Practices, April 15, 2008

I've been looking forward to seeing these figures since you announced that you'd be releasing them.

It makes an interesting read.

I guess the key question is how do you intend increasing your 0.1% conversion rate Steve?

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written by Steve Burge, April 15, 2008

Thanks David

I think I'd say:

1) Yes, we need to do better.
2) Its not quite our conversion rate. About 10% of our visitors come here for our Drupal vs Joomla comparison, another 10% just for our component downloads.
3) The GPL model really ain't easy.

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written by Gillian MB Tyrer, April 15, 2008

My experience has been;
I kept an eye on what you were doing after you switched to being a club.
There were enough links on the website that told me I needed to be a member to make me want to be a member.
I kept looking at your RSS feed via a reader (Netvibes) until I spotted a promotion that gave me a discount, then I signed up for the basic subscription.
I will renew, probably for the next level up, because there is no doubt that you provide value added information.
And finally, probably the most important decision I took on SEO and my Joomla sites was to use sh404SEF and the Joomla At Work patch because of articles I read here.
Congratulations Steve, the club is an invaluable tool.

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written by Ansiklopedi, April 15, 2008

Hi Steve;

it was intresting to read your article. I have a recruitment component ( is done) which is going to work in Joomla 1.0.x and Joomla 1.5 (legacy mode).

I was reading articles about bussiness model. I have found you from google .

regards

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written by guido, April 16, 2008

Sorry Ansiklopedi, may I throw my 0.02 cents telling you that a 1.5 native version would be better?
I know that it's more difficult to develop, but Joomla goes faster without legacy plugin...
at the same level sh404 is great, but apparently slows down every site I have put it into!

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written by Joseph LeBlanc, April 16, 2008

Thanks for sharing these trends. I've been doing a lot of thinking about software business models (especially within the Joomla! context). The Internet has definitely made Software as a Service possible. However, I don't think that customizations of GPL'ed software is SaaS unless you have some sort of recurring maintenance agreement in place. Customizations tend to fall more "bottom right" where revenue is high, but profits are limited: http://www.designvsdevelop.com...-industry/

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written by Steve Burge, April 16, 2008

Thanks for the kind words, Gillian. I just tested the new version of sh404SEF on Virtuemart and all I can say is ... WOW! Having worked with so many bad shopping cart scripts, sh404SEF is really taking Virtuemart to another level.

Good luck with the component, Ansiklopedi. Do you think you'll sell it or offer subscriptions?

Hey Joseph - I definitely agree. The price and scarcity of talented coders does mean that margins can be pretty tight. It seems like a lot of the more ambitious companies are skipping the "Software as a Service" and moving to a "Software as a Hosted Service" with the ability to upsell with more higher-margin services. I wonder if the GPL model as envisioned by some of the Joomla team is inevitably a small-team, low-margin business model?

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written by Barrie North, April 18, 2008

"I wonder if the GPL model as envisioned by some of the Joomla team is inevitably a small-team, low-margin business model?"

Its interesting to consider Dries's recent moves towards SaS....

Regarding your stats, you should filter for language and then look at your goals... your current conversion estimate probably isn't strictly accurate....

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written by Ansiklopedi, April 20, 2008

@steve: thanks for your kind words. i have finished the main functionality and i have a demo site. i did not choose the license yet but i think i will give free (GPL) or a subscriptions with a small fee.

if you have time , i can send the demo url to you.

regards

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written by Daniel Chapman, April 23, 2008

Nice to see things are generally positive Steve. I was going to put the full figures up for Ninjoomla at some point on a wiki as an example. We are running with a team of 8 right now, but all part time. We could probably afford to have 3 or 4 of us paying our mortgages if we really wanted to though. It's tough tough because even though we are a club there is a constant demand for output so it's like Joseph said. (reasonably) High revenue but low profit.

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written by Steve Burge, April 23, 2008

Hi Daniel

That would be fascinating to see - you've better data than me on whether selling extensions under the GPL can work.

Templates are more scalable business and have a proven success with subscriptions - extensions much less so.

You've also got an interesting case because your products are useful rather than essential (no offense meant - I hope you know what I'm trying to say).

I'd originally suspected that only extensions with a very clear profit motive for users (subscription components, shopping carts etc.) would be able to make it.

Congrats on doing so well!

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written by Daniel Chapman, April 23, 2008

@offense - None taken, I am well aware of the lack of a 'killer app' we have several much more solid aps under development, but yes the bulk are nice to haves right now.

The draw is though, that the nice to haves are much easier to put out en masse. If we chose to try to make something the size of CB or AEC etc into a club there just isn't enough meat in it to get people casually. But when you have 50 to chose from, there is bound to be at least 2 or 3 you really like at least and more to come.

We also have just announced the 'special projects' set of extensions. Which are specifically profit motive extensions.

@congrats - thanks. It's been tough and still is, but it's been fun.

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written by Good Web Practices, April 23, 2008

It's really fantastic to learn how you guys are making $$$ through extensions, clubs etc.

Correct me if I'm wrong, but wouldn't it very feasible to start a template club and or extension club and simply get all the work done through Joomlancers? I.e. I have ideas for extensions and templates, get them realised by someone else and use them to make a club?

I am pretty sure this is how some of the template clubs function... It's an interesting business model... Think it boils down to having good people constructing the templates and extensions in the first place and being able to run a site professionally enough to get people to subscribe (marketing and PR skills necessary!).

I've thought for a while that there is nothing stopping Steve branching out more serioulsy to extensions and templates if he wanted to. Steve, you could sell the angle "SEO Joomla templates" and actually use all the techniques there are for actually doing it (as opposed to all the clubs that claim their templates are SEO optimised etc.)

I personally think that you could have value added by providing templates in addition to SEO guide/advice. Why? Because SEO should be done at the beginning of building a website along with finding the right template.

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written by Steve Burge, April 23, 2008

"Correct me if I'm wrong, but wouldn't it very feasible to start a template club and or extension club and simply get all the work done through Joomlancers?" Rumor has it that this has been done already, although not with clubs. Not very professional, IMHO.

As for branching out - its possible. We've spoken with a bunch of people about it. As you say it would involve taking on more staff at least part-time. I'd like to get a Joomlaforge-based GPL version of Joomla 1.5 out that has been modified for the best SEO possible.

It certainly is a brave new world of business models. The SEO Club model was new 6 months ago but is increasingly commonplace. GPL extensions is an equally new model thats working for some people - however, the actual move from traditional retail is pretty daunting. As you can see from our figures (and I presume from Daniel's if he releases them) building a subscriber base takes substantial time.

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written by Good Web Practices, April 23, 2008

I actually had a sneaky suspicion that one of the clubs I'm a member of was run in the way I suggested... The support is soooo bad compared to the other clubs I just presumed they actually have no idea how to correct template bugs!

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written by Joseph LeBlanc, April 23, 2008

Not to jump down anyone's throats, but that sounds a bit like a "model" I see over and over again: "we'll find some customers, figure out what they want, then turn around and sell it to a bunch of people."

I've been involved in projects where this has been attempted (with the customer's permission). You wind up with some reusable code, but not a product you can just vend; it ends up being about the services and customizations you provide around the product. You get stuck in the bottom right portion of my graph.

If you want to create a successful product, you have to take charge and build it.

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written by Steve Burge, April 23, 2008

Hi Joe - just to be clear ... which business model explanation were you referring to?

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written by Daniel Chapman, April 23, 2008

I think he means the subcontracting one maybe?

I have tried to outsource at least 5 or 6 times to Joomlancers, but every single time I as disappointed with the quality and the price. Joomlancers guys make money via throughput so very few take pride in their work, they just want it 'done'. I have lost about 5k all together in failed projects from joomlancers, and also other already made extension purchases.

We have, and are constantly evolving, development standards, branding standards, communication standards, accessibility standards, usability standards, valid CSS an HTML standards etc. and you just can't communicate that to someone who is there for one project. Even if you can, they don't want to do it because it's just 'fluff' they want to do it there way and as quick as possible.

The sort of quality and pride in your work I am after is only possible when people have a commitment to the company which only comes from being a part of it.

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written by Joseph LeBlanc, April 23, 2008

@Steve and @Daniel I'm talking about the Product Centered Services: high revenue, low profit. A lot of people try to create a product for a specific client, then try to turn it into a pure product. This rarely seems to work unless you a) put more polish into the product and b) abandon further client customizations.

A lot of people think they can ease from Product Centered Services to a Pure Product, but have troubles giving up the steady revenue that comes from client work.

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written by Daniel Chapman, April 23, 2008

On a re-read, so many typos in that last comment :p Where was my pride in that work!

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written by Barrie North, April 24, 2008

I don't think subbing out development works very well. In our experience (Joomlashack) its the support that makes or breaks you. We have salaried (and health cared ) support staff and we see the difference in our customer experience.

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written by Steve Burge, April 24, 2008

On a re-read, so many typos in that last comment :p Where was my pride in that work!

Consider this being off-duty

I don't think subbing out development works very well.

Agreed Barrie. Better to have an employee with passion for the company on the other side of the country than to have a disinterested contractor close to home.

Even compared to 10 years ago, we live in a world where a whole lot more people want to and can be entrepreneurs rather than employees - its takes a good deal to keep them.
http://www.alledia.com/blog/business/the-impossibility-of-hiring-good-staff/

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written by OGO Sense, April 24, 2008

Steve, I have to say you are doing a superb job for a few visits that I make to the site. I renewed my site membership in hope I'll find time to read more of your helpful tips in the coming months I'm especially amazed by the amount of user generated content. Your jomcomment investment has definitely paid off

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written by Daniel Chapman, April 24, 2008

Yeah quality and support make a huge difference. We aren't quite to the point where we can afford dedicated support people but will be soon enough I think.

We have a dedicated artist and probably a dedicated documentation person soon.

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written by Steve Burge, April 25, 2008

Thanks Ogosense!

Its pretty impressive how quickly people like you Daniel are able to build up successful businesses. I think you launched about two months before us.

Even a pioneer in community-building like Rockettheme has being going only just over 3 years. I think they're at 8 employees - spread all over the world from Brazil to Poland.

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