This is part of our “Bootstrapped, Profitable, & Proud” series which profiles companies that have $1MM+ in revenues, didn’t take VC, and are profitable.
In April of 2009, Adii Pienaar (from Cape Town, SA), Mark Forrester (London, UK) and Magnus Jepson (Stavanger, Norway) met up in London at the FOWD conference. It was the first time they were all together in the same room. Rather surprising when you consider they’d already been running a successful company called WooThemes for over a year together.
The backstory: Pienaar had started a business called Premium News Themes which released the very first premium WordPress theme in November 2007. Soon after, he got an e-mail from Jepson about collaborating. A month later, they released their first collaborated theme.
Then Forrester entered the picture. He was visiting Cape Town in January 2008 and Pienaar met up with him to discuss working together. They released their first theme together a month later and continued working on more. All the while the trio continued to do freelance work on the side.
By July, sales were far exceeding the earnings from freelance work. So they gave up the freelance work, formalized the relationship, and began focusing exclusively on the company they dubbed WooThemes. Now it’s a full fledged business that designs and develops templates for WordPress as well as Tumblr, ExpressionEngine & Drupal.
10-15% month-on-month growth
In the two and a half years they’ve been operating, they’ve had a consistent growth in revenue (doubled it in the last 12 months actually). Pienaar says, “I think the important thing for us is that we have organically built a revenue & business model that is based on sustainable growth (approximately 10-15% month-on-month in the past 18 months).” They also now have five employees working with them (the team).
Bootstrapping the whole thing meant no investors were needed. “We’ve been making money from the very first minute we released our first themes, which means that we didn’t need to pay back loans or really invest in any infrastructure when we started out,” according to Pienaar. “We also had the benefit of being able to cover our own lifestyle costs in the initial phases via doing freelance work; so we bought ourselves a bit of time.”
This ties in with the company’s firm belief in organic growth. Pienaar comments, “We’ve found that organic growth is much less risky in terms of only investing in growth when it is already justified. As a company, we’ve never been afraid to reinvest in either growing the team or expanding our products, but both of those decisions where made at times where we had a much better idea of how viable the return on those investments would be. The only downside to organic growth is that it inherently requires patience. Funding is not used to ignite a growth spurt so instead we rely on the customer base and community.”
According to Pienaar, the key is avoiding bloat. “We are extremely ambitious and we’d love to grow the company as much as possible, but never getting to a stage where we have a bloated team, where daily tasks are about chaos management and where work starts influencing our personal lives negatively,” he says. “To a large extent, WooThemes is a lifestyle business for us, where we want to enable ourselves to work on stuff we’re passionate about, while pursuing financial success and security.”
Pienaar’s fine with the moniker of “lifestyle business,” even if it means some view it less seriously than “real” businesses. “Serious businesses are always on the hunt to increase ROI & the financial bottom line,” he says. “With WooThemes we’re trying to find that balance between financial ambition and the happiness that WooThemes creates in our individual lives.”
Collaborating across continents
Half of the team is located in the Cape Town office, and the other half is working remotely from European locations. The team rarely meets and gives employees freedom in terms of how and when a team member works. Pienaar explains, “To a large extent this hasn’t mattered at all. In terms of building a team & company, we’ve been unaffected as we have e-mail, Skype & Basecamp to collaborate with each other irrespective of our location. This has also meant that we can hire top talent from anywhere in the world.”
It’s not just the tools that make the collaboration work. “I think the main reason we managed to make that arrangement work is our trust of each other and also our interest and passion for a shared goal,” says Pienaar. “A lot of what we were doing was never formalized on paper and we were just working based on the friendships that we forged online; friendships that could only be formed as a result of the passion & ideas we shared.”
The company also has a community of around 26,000 designers, developers, bloggers and business owners. “We have created a niche, micro-economy, where a lot of our users — specifically the designers and developers — are selling add-on services that relate to our themes in one way or another,” according to Pienaar. “So we’re finding that users are helping each other on our support forums, while also building their own businesses using our themes.”
Oh, and the team is trying to avoid going another long span without ever seeing each other. Now they try to organize a WooTeam meetup at least once every 6 months.
Advice for others
Pienaar’s advice to others who want to start a business:
- Start your business anywhere in the world; especially if you’re online. You definitely don’t need to be Silicon Valley based.
- Stick to creating a business that you love, because once you lose that passion, you’ll lose your drive to improve your business.
- Only take on funding as your absolute last resort; most of the time, it’s really difficult judging whether you are making the right decision to take on funding so early on. Stick it out (without funding) for as long as you can, as that’ll give you a more accurate basis to make a decision.