Jean Galea

Health, Wealth & Happiness

Are Acquisitions in the WordPress Space a Good or Bad Thing?

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This is an article that reflects on the high number of acquisitions we’ve seen happen in the past few years (2018-2021) within the WordPress space. There are basically a handful of companies behind all the big acquisitions, so there is no doubt that the product space is becoming more centralized, and these big companies now wield enormous power.

This article is an adaptation from a comment I left on the article on the WP Mayor blog entitled Is There a Future for Small WordPress Businesses?. Check that out as well.

Having moved out of WordPress myself (aside from being a normal user, running my own blogs on it) a few years ago, I can empathize with Pippin’s reasons for selling. It’s never easy to let go of a successful business, even if there is good money to be made in selling it, and I’m really happy for him. I remember when Pippin was just starting out in WordPress, and he’s been a massive positive influence on WordPress over many years, putting a lot of energy into not only building his products but also educating thousands through his articles on development and later his insights on running a WordPress business. He deserved every bit of success while running his businesses and the handsome payout one gets when selling a company of this scale.

I happened to write some of my thoughts on WordPress last year, so check out that article for my opinions, which remain relevant today.

While the streak of acquisitions we’ve been seeing in the WordPress space are to be expected, they are also a sign that the space has changed a lot over the almost two decades since WordPress’ inception. Particularly the last 5-10 years have seen accelerated growth. Leaving aside any emotional reactions one might have, I think it’s important for everyone involved with WordPress to be clear on what WordPress is nowadays and where it stands in the grand scheme of things.

For that, we need to start with an understanding of the web’s history and where WordPress fits in. WordPress caught the wave of the transition between Web 1.0 and Web 2.0.

Web 1.0 refers to the read-only, static, version of the internet, where there were relatively few sources of information and there were high barriers to publishing your own content and obtaining visibility. The web in those days was just an extension of traditional one-way media like TV and radio.

Web 2.0 changed everything, and it became known as the read-write web, meaning that now we could interact with things on the web and more importantly publish our own content. That’s where WordPress and other similar open-source projects came in. WordPress eventually came to dominate the open-source blogging and CMS market.

At that point in time, it was very cool to have your own website or blog, and people were relishing the prospect of being able to share their thoughts online. The revolution was huge, and we saw a big shift in information decentralization, moving from the big-money media to independent small publishers and individual bloggers. Knowing HTML and CSS as well as your way around domains and hosting was a badge of honor, this stuff was very cool back then.

Over the years, however, many of the ideals that WordPress and Web 2.0 stood for were lost by the wayside. Users started preferring the ease-of-use of centralized platforms like Facebook and Instagram, and web blogging itself went into a decline. Of course, WordPress moved beyond being just a blogging platform, and the addition of e-commerce capabilities made it a very nice all-rounder tool. However, it also lost its way for a few years (more on that in my blog post) before the big push for Gutenberg in a last-ditch attempt to stay relevant in the publishing space when faced with formidably polished publishing interfaces by Squarespace, Wix and other hosted platforms. Only time will tell whether this move was even successful, as the Gutenberg plugin is literally one of the most hated plugins I’ve ever seen, with an overwhelming number of 1-star reviews in the WP repository as of today.

In any case, I think that WordPress is by no means the web darling it once was. The spate of acquisitions we see happening definitely increase centralization and move away from one of the core ideals that the early WordPress community espoused – that of decentralization and power to the small guy. Let’s remember that WordPress enabled thousands of young web enthusiasts from all over the world to make a living online and even start their own web businesses selling themes, plugins or related services. In those early WordPress years, it was one of the only avenues for geographically or financially disadvantaged people to get out of the rut they were in. It was definitely a lifesaver for me and I will forever be grateful to WordPress as an open-source project and the wonderful people I met in this community.

Now, the big deal is that we are moving towards Web 3.0. It’s already happening, driven mainly by the invention of Bitcoin, which paved the way to more expansive blockchains like Ethereum that enable smart contracts, decentralized finance and even governance structures through DAOs.

In many ways, I feel the same about crypto and Web 3.0 as I did when WordPress and the shift to Web 2.0 happened. The focus is again on the principles of decentralization, permissionless access, censorship resistance, as well as the new ideas of monetization and privacy.

For the technically-inclined, here’s a nice overview of Web 3.0 architecture. If you haven’t yet dabbled with Web 3.0 apps and want to know more, it’s a great read. It requires quite a paradigm shift and from a development standpoint, I feel that it’s a bigger leap to make compared to the one we made from Web 1.0 to Web 2.0.

Zooming back into the WordPress space, I do believe that these acquisitions are not great news for product owners in general. In this particular case, there are the specific hazards that Carl Hancock and Mark mention. This is one reason why I feel that the WordPress space has grown a lot but at the same time remained very immature in certain areas. The lack of an official plugin store (app store) has driven almost all premium plugin developers to use either EDD or Freemius. These two businesses in turn become excellent acquisition targets, and if you’re worried about the EDD acquisition, wait till Freemius gets acquired. The latter is a hosted service, so they hold all the important data and metrics on their end, and they’d be visible to any company that acquires them. The founders of Freemius are friends of mine, and again, they provided a sorely needed product in the WordPress space, and worked extremely hard at making it a success, but this big danger remains in the case of an eventual acquisition, which in my opinion is only a question of time.

Now, whether you like it or not, the future of WordPress involves many more acquisitions and centralization. With the big players getting bigger, it is undoubtedly harder for the traditional single web enthusiast or developer to develop a product that generates meaningful income. This is not something new, however, it’s already been the case for several years. There will be success stories, but they will be fewer and further between.

The first decision you need to take, in my opinion, is whether you want to be in the WordPress space at all. As I mentioned, personally I find Web 3.0 much closer to my ideals and so I’m devoting my time there. You could also be building apps for Shopify or other platforms, or building a SAAS. I don’t see any special advantages in building a WordPress business over some of the alternatives I mention. It used to feature a lower barrier of entry technically and financially speaking, but I don’t think this is the case anymore.

If you still love WordPress and feel strongly that you want to build products for WP, then perhaps it’s time to focus more on building businesses that are “built to sell”, as Pippin himself mentioned in his announcement post. You might want to think twice about building a competitor to EDD, Yoast SEO, AffiliateWP, and other major plugins, because it’s extremely hard for you to compete. Instead, you might want to focus on businesses that the big companies in the space will find interesting as an acquisition target. That will provide you with a potential big payday as well as a very probably job with a successful company should you accept that proposition.

I hope this was helpful, as always I like to be honest about things with no bad intentions. I am really curious to see what’s in store for WordPress in the years to come, and as a user I hope it remains a major player as a publishing tool, not only in the much-touted market share, but in actual functionality and ease-of-use. Who knows, maybe WordPress also somehow crosses over to Web 3.0 as well.

Making Money in the Second Wave

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Over the years I’ve come to realize that my best investments happen during the second wave of the product or industry lifecycle.

The idea is loosely based on the Gartner Hype Cycle curve, the Chasm concept, the Hero’s Journey and the theory of Diffusion of Innovations. Let’s take an abbreviated at these models that have inspired my strategy.

This style of investing is also driven by the fact that by nature I love being somewhat of a contrarian, and am quite unlikely to invest in something when it’s in hype mode and everybody is getting in on it.

Two roads diverged in a wood and I – I took the one less traveled by, and that has made all the difference. — Robert Frost

So let’s take a closer look at the concepts and models that have (mostly at a subconscious level – I rarely feel I’m being very methodical with my strategies) been framing my investment decisions over the past few years.

Gartner Hype Cycle

The Gartner Hype Cycle aims to visualize the typical path that most new technologies go true until they reach mass adoption.

In the Gartner Hype Cycle, we find 5 main stages for a new technology:

  1. Emergence: “The Technology Trigger”
  2. Excessive enthusiasm: “The Peak of Inflated Expectations”
  3. Excessive disappointment: “The Trough of Disillusionment”
  4. Gradual adoption: “The Slope of Enlightenment”
  5. Mainstream adoption: “The Plateau of Productivity”

I’m most interested in the 3rd and 4th phases. Let’s see how they’re defined by Gartner:

  • Trough of Disillusionment: Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investments continue only if the surviving providers improve their products to the satisfaction of early adopters.
  • Slope of Enlightenment: More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.

Now let’s take Bitcoin as an example. Perhaps it is a bad example as the whole cycle has not yet played out, but it’s the best example I have right now. After the 2017-2018 peak that crypto went through, there was a bit drop in both asset prices as well as media coverage and public opinion. Clearly we hit the “trough of disillusionment” at that point. In the meantime, nothing changed for the builders in the Bitcoin space, and that was an amazing time to get interested in the technology and educate yourself as well as get invested.

Investing in Amazon after the dot com bubble is another example of second-wave investing in the trough of disillusionment.

Hero’s Journey

This monomyth is not typically used in relation to new technology lifecycles, however, I think it also fits in quite well, especially as I consider my own personal journey with new technologies.

Humans react to great story-telling because we are programmed to respond to an elemental story arc. The Book of Jonah, The Odyssey, Rocky or Star Wars: the details don’t matter because although the contexts are different, the story is the same. They appeal to the masses because of our deep desire to progress from the mundane, fight through challenges and then achieve a great victory.

Taking Bitcoin again as my example, it started its “call to adventure” as a result of the financial crisis of 2007-2008. It then went through its own challenges and temptations, with the scaling wars that lasted a couple of years, as well as the Abyss of 2020 (huge drop in price) and the rebirth and fast adoption by both public corporations, institutional funds and even countries.

The Chasm

The “crossing the chasm” model is based on the theory of diffusion of innovations. This is a theory that seeks to explain how, why, and at what rate new ideas and technology spread. It was Everett Rogers, a professor of communication studies, who popularized the theory in his book “Diffusion of Innovations”. He argues that diffusion is the process by which an innovation is communicated over time among the participants in a social system.

In most product adoption curves, there’s a point that can make or break the success of the product. It’s called the chasm. It’s the point between the early adopter stage and the early majority stage.

As the chart above represents, crossing the chasm means breaking into the mainstream market.

Again, with Bitcoin, I believe that as of 2021 we are just beyond the chasm, or possibly on the way to crossing it the final part of it. I’ve long held the belief that in order for Bitcoin to be successful, it would need to be properly regulated and also adopted by big institutions and possibly even countries.

Over the past two years, we’ve simultaneously seen governments and regulators all around the world take strong and detailed positions on the crypto space, as well as huge investments by public companies and even countries (El Salvador is the first).

We’ve also seen a tremendous amount of innovation in the crypto space over the past year, with the resurgence of the Ethereum VS Bitcoin debate as well as a ton of DeFi projects, NFTs, and most recently DAOs.

Having looked at those models and theories, I will come back to my simplified way of describing when I’m most likely to be interested in investing in a product or technology.

Let’s take a look at the first wave first and why I’m rarely that early.

The First Wave

In the very early stages the stakeholders and investors tend to be a mix of the following:

  • builders of the technology
  • rich people with money to burn on new things (e.g. venture capital and angels)
  • those who happen to be in the right place at the right time, or have friends deeply immersed in the technology

If you don’t possess one or more of those characteristics it is very hard to get in on something very early. Chances are you won’t even know the product or niche exists until the first wave has already passed. If you do happen to catch an early glimpse at the new technology, I feel that it will be an extremely time-intensive process to decide whether to invest at that stage, and even then, it would be a very risky investment.

Therefore, at the first stage, the risk-reward-work ratio is not worthwhile for me. To take an example with the internet, this first wave would be the 90s decade. Typical big risks, even though the technology would be wonderful, include:

  • not gathering enough traction, or being too early to market
  • regulation risks
  • scams
  • ridiculous valuations

Many products never make it beyond the first wave and there is a very real risk of your investment going to zero. Think ICOs in 2017, and Kozmo.com, Garden.com, Pets.com, Flooz.com, Webvan.com during the Dot Com boom and bust years.

Typically, during the first wave, a subset of people become immensely rich in very short periods, and they make the

The Second Wave

Almost every new product or technology that gathers enough traction to become well-known then experiences a period of hype, and it is usually during this period (typically earlier rather than later since I read a lot) that my interest is piqued. However, rather than rushing in to invest along with the rest, I tend to go deep and isolate myself from the news and hype to truly understand the tech, the main players and ideas behind the technology.

By the time I have developed a decent understanding, the hype is usually gone, prices have plummeted and the technology is bordering scam or trash status in the popular opinion. On the other hand, because I would have invested a lot of time into the subject, provided that I was convinced about the future of the technology, I would be pretty bullish myself.

That means that when there is the next growth phase (growth is much slower and almost imperceptible at first), I am able to go all in and take a sizeable position that looks like madness to most others who didn’t do their homework properly.

While some technologies or products fit this idea perfectly, others share similar properties but are not that easy to explain. For example, I feel that I entered the WordPress space back in 2006 at an excellent time. Rather than the product itself having been through an early hype cycle, however, it was the overall theme of self-publishing, blogs and website creation that had gone through it. WordPress was the phoenix that emerged from the flames produced by the downfall of highly centralized products like Movable Type and the closed-source CMS solutions of the time. I had been creating websites and blogging for a few years already and I remember there being a peak of excitement about the “power to the people” idea of giving a voice to anyone to create a space online and publish their thoughts, closely followed by a deep sense of frustration with the expensive or inadequate tools available at the time. When WordPress came along it ticked all the boxes for me and immediately left everything I was doing at the time to focus on building things within that space.

What’s your take on the above? Let me know in the comments section below.

Notes about the Pandemic and the Future

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Much has been written about the pandemic and I don’t want to litter the web further with my own opinions.

Clearly, the rise and spread of the virus have been a terrible blow for humanity. There have been some who profited wildly from the changes, but overall we are undoubtedly worse off from the effects of COVID.

On the other hand, the pandemic has made things that were somewhat clear and made them blatantly so, while also accelerating trends that had been building up for many years in the background.

We Are Being Brainwashed and Manipulated

The one thing that definitely stands out to me is the fact that governments and media companies have extreme power of manipulation, and the vast majority of the population acts with a herd mentality, blindly following others and their own governments’ mandates. To think independently and critically is almost demonized.

The rise of pandemic lockdowns will go down in history as one of the worst examples of global oppression caused by states to their own citizens. Never before have the day-to-day lives of so much of humanity been so radically upended. And, outside of wartime, never before has there been such a widespread and extreme rollback of human freedom.

I grew up with an inherent disdain for imposed authorities of all forms. Perhaps it was due to the way my parents brought me up, the fact that I was an avid reader from an early age, or the reality that I never quite fit in within school and felt misunderstood and coerced into behaving the way the authorities wanted me to behave, even though deep down I knew it wasn’t the best thing for me.

As an adult, I learned more about how the world really works and refined my thinkings and beliefs, and I understood what level of brainwashing takes place on a daily basis through political party propaganda, religions, and company advertising, and how effective they are at manipulating our behavior.

However, never before 2020 has it been clearer to me who is on each side of the fence. This alone is a brilliant silver lining to this whole shitshow that has been the COVID pandemic so far.

Here are some partial notes for me, my family, and anyone else on the same wavelength to keep in mind going forward. This is by no means an exhaustive list of conclusions, and I might come back to this post and flesh it out further in the coming months.

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How to Invest in NFTs

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nft-guide

It looks like the summer of 2021 will be remembered as NFT (Non-Fungible Token) summer, following the DeFi summer we had in 2020.

Non-fungible means that something is unique and one-of-a-kind. NFTs are therefore unique digital tokens representing something.

NFTs have grown on the Ethereum blockchain, but they are also available on other chains like Solana. The future seems to be pointing towards a multichain space. One major problem with Ethereum is that gas fees needed to make transactions go through are very high, thus pricing out many smaller investors.

Anything digital can be made into an NFT on the blockchain; however, the most common form of NFTs is digital art. Images, audio and video files can also be sold as NFTs. Once a digital asset has been made into an NFT, it will be unique on the blockchain and can be traded in exchange for money, just like physical art would be.

I find the NFT space to be extremely fascinating for many reasons, and I’ll be gathering my notes here. The one thing that I would start off with, is that after looking at NFTs for a while, the regular crypto space (Bitcoin, Ethereum, etc) starts to look downright boring and run of the mill. If you thought understanding the valuation of cryptos like Bitcoin and Ethereum was very hard, the NFT space is just wild in comparison.

Buying Blue Chip NFT Projects

One of the best strategies for getting exposure to NFTs as a beginner is to stick with the so-called “blue chip” NFT projects.

While the prices for these projects are currently quite prohibitive (some popular ones have sold for more than $1 mln), you can invest in their fractionalized versions on the following sites:

Apart from fractionalization, investors are increasingly forming Decentralized Autonomous Organizations (DAOs) to pool their funds and gain exposure to the priciest NFTs. Here are some examples:

Trading NFTs

The biggest NFT platform is OpenSea, and that’s where most of the trading happens. You can also get a quick overview of which NFT projects are the most popular at any point in time. Make sure that you interact with original projects, as there are a lot of fakes and copycats. Look for the blue checkmark next to the project name to make sure it’s the original project you’re looking at.

Other trading and minting platforms you should know about are Rarible, Mintable and Nifty Gateway. The most interesting of these to me is Rarible. If you’re looking for a higher risk/higher reward investment, look into the RARI token, which you can buy on Kraken.

Buy $RARI on Kraken

RARI has a total supply of 25m and is considered to be a utility token. By owning RARI tokens, users gain the ability to submit and vote on proposals to change its rules. This includes voting on possible fee changes, how those fees are spent and the rules governing creator promotion.

It is important to note that voting with RARI is non-binding, and that the Rarible company still needs to accept user decisions and implement them. However, Rarible’s goal is to eventually transfer power to a software-based system controlled by users called the Rarible DAO.

The idea behind buying the RARI token is to gain exposure to the growing NFT and digital content market or to have a say in how one of the leading NFT marketplaces develops.

Some other useful sites for evaluating NFTs:

You can also exchange NFTs in a P2P fashion on the following platforms:

What I’ve Done So Far

I haven’t done much actually in terms of investment. I’ve mostly been curiously following things and trying to understand what all the fuss is about. I have limited time these days as my kids and training take up the majority of my days. Indeed one of the biggest issues with NFT investing is that things happen very fast, and if you’re not there at the right time you’re going to lose out on most of the gains. Those who do this professionally basically spend all their days on crypto Twitter and Discord channels, trying to separate the chaff from the grain and position themselves for a bet on the next big thing.

However, one of my close friends has been pretty active with NFT purchases, and I’ve thus been privy to the wild ride so far through him.

I’ve bid on one of the Nouns through a partybid, however unfortunately our bid was unsuccessful, and the NFT eventually sold for 200 ETH, while the party’s pool was around 190 ETH. From that experience I really understood why ETH’s gas fees are a problem as of mid-2021, since every transaction costs a good chunk of money in transaction fees alone, making any investment below $500 not worth doing.

The punkscape is the background image designed to accompany a cryptopunk.

I later managed to get my hands on an NFT, this time a OneDayPunk. This was a spur-of-the-moment purchase based on the recommendation of my friend. I’m not sure I’ll make my money back on this investment but it was quite an interesting project that helped me understand the buying process better. Two interesting factors of OneDayPunk:

  1. The actual value creation happens once the punkscapes are released, so at minting stage you’re betting on a future event creating value.
  2. There are 10k punks but only one is allowed per wallet, in a way preventing people from scooping up many punkscapes.

This purchase was another confirmation that with current gas prices it doesn’t make sense to make small investments. The price I paid for the NFT was 0.02 ETH but the gas price itself was 0.027177 ETH, even higher than the NFT itself. That means that in order to break even the value of my NFT has to double in price, and that’s not considering the gas needed to make the sale from my end.

The Future of NFTs

I am absolutely fascinated by the possibilities that NFTs are enabling, and beyond the current price bubble, I expect NFTs to play a significant role in the future of crypto, with lots of real-world applications up for grabs once the technology matures and regulations catch up.

What do you think of the NFT space? Are you invested in any projects? Let me know in the comments section below.

Should You Buy Solana (SOL) in 2021?

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should you buy solana

Buy Solana (SOL)

One of my latest big investments in the crypto space has been in the Solana token, SOL.

I recommend using Coinbase, Kraken, or Binance for purchasing your Solana tokens. All three platforms also allow you to stake your tokens and earn more income passively.

I’ll be writing more about this cryptoasset in the next weeks, so this post will be a work in progress.

One of the distinguishing features of Solana is that it uses a Proof of History algorithm for achieving consensus. As a reminder, Bitcoin uses Proof of Work while Ethereum is moving towards Proof of Stake.

You can view many of the projects within the Solana ecosystem on this Google Doc.

The best Solana-based DEXes are Serum and Raydium.

As I write this, NFTs have recently been launched and things are really heating up. While I don’t plan on splurging on the NFTs themselves, I believe they’ll bring a lot of awareness to the qualities of Solana as well as a big inflow of capital into the SOL token.

Check out the main Solana NFT projects Degen Ape Academy, SOL Punks SOL lions on Solanart.

Keep in mind that Solana is one of the newest of the big projects and so it should be considered to be in Beta stage. That means there might be periods of downtime and other similar incidents, and they shouldn’t be considered to be a huge deal at this stage.

Buy Solana (SOL)

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Jean Galea

Investor | Dad | Global Citizen | Athlete.