Productizing Your WooCommerce Agency Services

Shadi: Here we are, the agency chat interview with Bob. Thanks for inviting us. My name is Shadi Manna from Progressus.io and…

Jimmy: And I’m Jimmy Rosen from Angry Creative.

Shadi: Where should we get started, Jimmy?

Jimmy: I don’t know. How about we do a little background about ourselves maybe and a little bit about our agencies? And then do some challenges, wins. And I’m really into productizing our services right now, so let’s do that.

Shadi: Sounds great. I can go ahead if you like. My name is, as I mentioned, Shadi, founder of Progressus.io. We are WooCommerce experts platinum partners with the WooExpert program. And we essentially focus on plug-in development for enterprise customers. We also do complex integrations and full builds on e-commerce. And we have been running the agency for close to 10 years.

Jimmy: Cool. And I run Angry Creative. We’re a distributor company, and I think we do two different things usually. We do either CMS websites for enterprise clients or we do e-commerce for SMEs. And we are VIP silver partners and we are WooExperts platinum partners. So that covers it. And we’ve been running, I think the first time I saw WordPress was in 2005. And it wasn’t love at the first sight, but it got me interested.

And then actually, in ’07, I started from my dorm room because I was younger, I didn’t have all these wrinkles. So then I started doing websites for people as a freelancer. And then in ’09 in a raging recession, that was the last one, then I decided to go full-time and I did. And in 2011, I did my first hire. And it’s been going since. And it’s been fun and challenging and sometimes not so fun. But I love this. So this is what we do.

Shadi: I think that’s part of the ride of entrepreneurship. Similar, we used to work for corporate companies, got tired of it. Said, “Oh, let’s just do a startup. It’ll be fun. Everyone will be rich within a few years.” But we did get funding and that was fun. And we went through that for two, three years. And then started consulting and then freelancing. And now running an agency. So it’s funny how that happens. But here we are. I do recall using other e-commerce platforms and then using WooCommerce, and actually being quite impressed at the time, at least with WooCommerce and the ease of use. So I figured that’s what I wanted to niche into in terms of my agency.

And that’s worked well for us, become very well-versed in e-commerce and it’s allowed us to land some pretty large enterprise. So that’s always my recommendation is to try to niche as much as possible and get your reputation out as an expert in X or Y. Otherwise, be Jack of all trades and it’ll be difficult. People can identify you and recall what you’re good at.

Jimmy: Now we’re full stack these days. So especially for WooCommerce, for the publishers and whatnot, obviously we work with WordPress VIP and that’s a good platform for them. For e-commerce, that’s very complex and it requires a ridiculous amount of vertical integration.

Basically, what we sell today is every single project starts out with the same agency boilerplate and that is fully jacked into the hosting. So it is basically a bunch of microservices doing things that maybe WordPress isn’t that great at doing. It’s a product that’s been around for a long time, and the responsibility as basically the software running most of the internet, almost half of the internet. Then that means you really need to be careful of what you do because that responsibility is huge.

But for the more enterprise clients, they want the best of both worlds. They want something that works and that everyone knows how to use, simple. And then they want that super cool, new shiny stuff as well that they’ve heard about. And we’re trying to do some hybrid there. We sell them hosting and that has, like I said, a bunch of microservices. And all of those microservices are integrated into plug-ins and every single block basically.

Because we’re all in on Gutenberg. I think Gutenberg is getting great. I’m so thankful for what primarily automatic is doing there. And then we also have a particular marketing agency thing going for some of the clients. So we are broad, but we also have a niche. So we work with these clients that has these kinds of-

Shadi: Requirements essentially.

Jimmy: … Yeah, exactly.

Shadi: And I think that’s a fair way to define your niche. It’s not only platform-based, it can be very customer-specific in a specific vertical or in specific size or both. And I think that’s a great way to do it. For us, it’s been a bit more plug-in development for enterprise. And that’s worked well for us. But we do of course run web shops and help people custom integrations there.

Some of the things we’ve been working on internally on that side is essentially trying to standardize all of our processes so it’s very clear from the beginning how we do things. So having pre-kickoff surveys just to set expectations with the client on communication on how we do things on our project management system, two-week bimonthly cadence, just so we update them on what we’re doing.

And even internally, having communications set post-mortems and making sure how we enter task dates and schedules as well as estimates, having standards just so we can try to predict the future of capacity and resource management, which I’m sure is a challenge.

Jimmy: Yeah. Oh, my God, that’s a challenge. I know we are live and all, so you don’t have to give me the full deets. But the thing we are seeing right now is that because of the war in Europe and we have a lot of European clients, we have a lot of clients in the UK. We have some American clients and then a lot of clients in the Scandies, because Angry started as a Swedish company and then we acquired a UK company.
Anyway, what we’re seeing is basically everyone is actually buying. The agencies are getting work. There’s a lot of work out there. But what we’re seeing is basically for the big projects, if we used to spend this much time just waiting and dating them and catering them, now we’re spending this amount of time. It’s just gotten ridiculous.

But all of our existing clients are like, “Yeah, do that piece of work, do that piece of work, do that.” But no one really wants to plan anything because there’s a lot of instability in the market and our shareholders, blah, blah, blah, or the board, whoever. We are slammed with work, but only for couple of months.

And then it takes a very huge spike down, but that always gets pushed forward and forward and forward. And we’ve had that for basically almost since the war started. First when the war started, everyone relaxed and then, “Whoa, what’s happening?” And then it went back up and now it’s fully up again. But you can’t really plan anything.

Shadi: … A lot of uncertainty.

Jimmy: Yeah. That’s what we’re seeing. So big projects, you get them, it takes a huge amount of time. The lead time is just insane. And then the clients you do have, they don’t want to plan either. So they will be like, “Yeah, I know it’s Thursday and it’s 3:30, but can you still pull this off?” And it’d be like, “Yeah. But that’s 60 hours of work for one person.” “Yeah. But you can probably pull this off over the weekend.” And like, “What?” That’s kind of what happening.

So you’re getting a lot of work all the time, but you can’t just plan right now. And in a business, when you start getting people, you want to make life easy on them. So you want to be good with planning, and then you plan like, “Okay. So in the next year we see this and we can do these hires.” But how do you cope with that right now? Or do you even see it?

Shadi: Yeah. So I think in a sense, we’re lucky in that we have a range of clients from all over the world. We are remote as well, similar to yourself. But we don’t particularly focus on a geographical market. So we do have clients in the United States as well as Europe. And they are distributed within Europe and the US.

We have received some tighter budgets and cuts on a few larger projects. So we are feeling that, which is, I think, common right now given the war and somewhat of a recession. So we do get that. But at the same time, let’s say, the mid to smaller projects, the ones that are few months out that just need to have an end date, clear requirements, those are moving along relatively well.

It’s clear requirements, clear scope, but needs to be done within three months, it’s X amount. And so those are flowing relatively well. But yes, to your point, definitely there are some cuts on the larger enterprise budgets. And you have to be cautious. Essentially, we have full-time and part-time. So you have to try to balance that. And then try to make sure that under-utilizing them, but at the same time, you have enough projects in order to continue to have everyone working.

So I try to keep a sense of what the capacity and where we are in terms of utilization of everyone is. The way we’re trying to do it more and more is essentially ensure that all the tasks, all the projects are estimated upfront, do discovery as much as possible. Make sure that’s all entered, plan that out. And make sure everyone is clear on their priorities. There is also this really amazing view, I have to click up for it. It’s called Workload.
I don’t know if you’ve seen this thing. But it’s pretty amazing. It gives you capacity by person, and you can enter their specific task with the estimates. And it plans out the next week, two weeks, three weeks, month. And it allows you to at least have a sense of what’s going to happen the next month and then you can plan accordingly.

And again, because we have a mix of enterprise and smaller clients, we can plug in smaller projects where necessary while planning out the larger projects in a way which allows us to continue to be efficient and utilize our resources as much as possible.

Jimmy: But we’ve seen that too. Many of our enterprise clients has been like, “Yeah. So we’re making good money, but our owners are a bit scared. So during 2023, we will be pulling this much off our budgets.” So that’s the enterprise clients has been doing that. And then they still buy things ad hoc. So there’s like, “Yeah. We need these five things done ASAP. Can you have them yesterday?”

And that’s what I mean. So we have one person spare, and we need to do this, this week and it’s 60 hours of work and it’s Thursday 3:30. So that’s what you get from the enterprise company. But we have a lot of SMEs. And from them, they’re also afraid to commit. But they’re more fine with it. But actually, the enterprise companies, from their boards, it’s been like, “No, you’re not allowed to commit to a budget. You just have to do things ad hoc.”

Shadi: But your question is how do you manage ad hoc requests at Thursday at 3:00 PM with such clients? And how do you manage that given what you have to work with?

Jimmy: Yeah, exactly. I just got to tell them, no. You do your best and be like, “Yeah, we can give you some hours maybe.” You do your best. But obviously you can’t pull it off. It’s just too hard. So then you plan it. But like I said, we used to measure, like, “So the coming month needs to have this utilization, the coming two months after that. So three months needs to have this utilization, and then the coming three months needs to have this utilization.”

So that we knew, so we could pretty much visualize it. And if that curve went up there, then we know six months from now, we’re going to need four people or we’re going to need whatever. And then we can do the hiring thing because it takes some time getting good people. But now that is just out the window.

So instead of having a nice curve, it’s basically like, “Chaos, chaos, chaos, boom.” Because they won’t commit and then everything is just ad hoc and they just push it in. So we are looking for people now, great developers and whatnot. But it’s still a lot of insecurity for us, but obviously not want to stress our people out.

Shadi: And did you ever in the past, or is it possible to at least have them commit to hourly packages, prepaid, just so then you can plan a bit better? It doesn’t have to be the whole year, but let’s say you can give them two choices: it’s one, you prepay 40 hours this package and we’ll dedicate someone for those. And it can be ad hoc. But then at least, it’s dedicated. Versus if you want it ad hoc and you cannot commit, we can’t give you an exact deadline. It’s one or the other.

Jimmy: Yeah, obviously. But they’re like, “Nope. I’m not allowed. Not for my boss. So just got to buy this.” This year we’ve never seen… So we have a emergency rate that’s higher than the regular rate. And I’ve been doing this for a long time. And we’ve never had to use it as much as this year because everyone just doesn’t want to plan.

At the same time, we’re working really hard with productizing services as well. And when you start doing that, it means that as an agency or any company, there’s three kinds of sales you can do. You can do transactional sales. And in our line of business, that’s basically selling a plug-in. I’ve got one plug-in on WooCommerce.com. So yay. I could almost buy you a beer. Almost.

Shadi: Products are a tricky business. We’re buying a bit more than a beer, maybe a meal.

Jimmy: Nice. But there’s that. So that’s our transactional sales. Then on top of that, there’s traditional sales and then there’s complex sales. So traditional sales is basically the… No, I’m going to start with complex sales. Complex sales is usually what every agency does. We do things super custom or bespoke depending on how fancy English you use.

So you do that type of work. And how you start productizing, you do these custom things over and over and over again. And then you see a pattern like, “Hey, we’ve done 10 gigs of these and they’re so similar. Some tweaks here and there, but for some reasons we haven’t reused the same thing. So let’s do that. Let’s solve it really good once and then push that everywhere.”

And that’s actually when you go from complex to traditional, because traditional sale is basically buying a car. That’s a traditional sale because you can choose the color and you can choose what’s inside and you can do some modifications. But basically, you make some tweaks on it,. And if you got a lot of money or a lot of time, you can go with a complex sale. And that’s like, “Let’s build it from scratch,” basically. And usually, the complex work is very rewarding. But in terms of monetary value, that’s when you get your people like, “Oh, yeah, I forgot to tell the client I spent a day on this. Oops.” And then you got to like, “This is going to be hard for me to charge the client because we didn’t tell them.”

Or if someone promised this. Stuff like that happens or you gave them a fixed fee upfront and you tried to scope it out as well you could, but you missed these parts. And now you painted yourself into a corner and now you got to do those two, three days for free or whatever. That happens in complex. So you want to push that down to more of a traditional approach because then you’re actually productizing your service like, “We’re doing this. That used to be super complex and now we’ve got that locked down into a more traditional approach.

Thanks to our Friends, GoDaddy and Jetpack

Shadi: Specifically, what are you trying to productize? Because I found it quite challenging to productize at least, let’s say, from a coding perspective where you’re trying to figure out can we build a product or plug-in out of this. I always find we can productize an approach or a process more than an actual full set of functionality because we do so much custom stuff. That’s really why they come for us.

And it’s always been the challenge, either you go all the way on a product which fits the bill for some and maybe you make some sales as you can tell. Or fully custom, which is that’s what people typically want if they’re coming to agencies like us. And then this productize is this gray area where you think you can make a sort of product.

But I always wonder, is that really a product or is that a process packaged? And then can you even do that internally for your own processes before you even try to sell it as a productized service? And once you’re clear internally on how to be efficient, then you can see how you can package that efficiency with a value-added proposition and the deliverables, the timelines et cetera. And it’s challenging. But I think possible only for some services and not for all. And in fact, maybe it’s nice to start some productized services, and then eventually get them into custom or a mix of both.

Jimmy: … I think we’re some kind of hybrid. Because basically what we’ve done, and I think we’ve spent six years now working on it. So we started with like, “Okay, so all of our clients has this need.” So we made a plug-in for one client who paid for it, and then we pushed in some extra time. So it started as a theme. Because every agency needs a theme that you work on.

And back then, we used the old but sturdy custom fields. So it could be custom fields or ACF or whatever. But it was custom fields-driven and it was more like it had plug-ins. So we added one plug-in and then we improved that and added another. Because we felt that this and this is… So we started off all of our project like that. Basically, what it is today is it is a very thought through design system.

And then like I said, it’s a bunch of microservices that align with the plug-ins and/or the blocks. And then we use that because every single gig requires the same foundation every single time. So if you do a marketing website, you’ll need this, that, this, that. And you’ll need that every time. And then it’s easier just to remove a few bits than to invent them. So basically, we’ve got a little thing, it’s like, “I want to do a new project and it’s this type of project.”

And we’ve got tiers. So depending on how much hosting and what microservices and whatnot that you’ll need. So you pay monthly. So hosting is included and maintenance is included. And the maintenance is we’ll fix any bug that happens, period. It’s like an insurance basically.

Shadi: But does that include plug-ins and issues…

Jimmy: It’s one single fee that you’ll pay. And it’s between $500 to $3,000 roughly. Usually somewhere around there are the clients. Some are over that but that’s exceptions. And like I said, everything is included. And since we’re using the same thing both for old clients and for new ones, that means that we’ll be able to ship you the new stuff that we’re building as well.

Because the big thing really happened for us with Gutenberg. Because prior to going hard on Gutenberg, it was like, “Yeah. We’ve got these plug-ins with our boilerplate, and then we had the beginning of a design system.” But then with Gutenberg, we could go all in because then we could construct basically a system of blocks that covered whatever we threw at it.

And then we could basically create integrations to the microservices. And all of a sudden, we started having a whole ecosystem. And everything fits together because the one major issue… If you go out on the internet, there’s tons of stuff, but getting it to work together is a nightmare.

Shadi: … And that’s interesting that you say that. And I wanted to ask in terms of we use blocks as well, of course. And are you using the new checkout blocks for part of the microservices? Or what are the examples of microservices you’re currently using?

Jimmy: So an example of a microservice can be we’re running a super nice software called imgproxy, for instance. Basically, what it does is that we hijack, a little bit like WordPress VIP is doing with their hosting. We’re doing that as well, but obviously we’re covering more WooCommerce clients.

So basically, we just jack into every single image handling block thing. And with blocks, it’s easier because it is a nightmare integrating with Elementor and Divi or any other sales. That’s just like, “Wow,” your mind just explodes and the error logs just scream. So you can integrate that pretty easily because then you have the standard methods and whatnot. So for example, we call this Qala, and that’s new beginnings in Zulu I think.
And so the light tier, basically, it compares to any agency website using Gutenberg. And you can take that anywhere to any hosting. It will just work. And then we got the standard tier. And then we can turn on all of the microservices. And then your page feeds goes up a lot, and all the images, for example, they’re all either… We even support ADIF, and no one is using that yet. But that’s probably been the most efficient format.

But obviously webp is the standard right now. So it just takes all these clients that upload huge TIFF files and whatever crazy stuff they do, and it just converts them to webp or whatever you set it to with a fallback on JPEGs. And then it also calculates, it takes the most common resolution, screen resolutions that enter your site. And then it makes them into the most common for the different devices.

Shadi: But from a business perspective then, are you charging per microservice? And is that the product type service part? Or is it just the flat maintenance three-tiered?

Jimmy: From going from light to standard, it’s a little bit of work for us but not that much. So we can pretty much turn it on and off. And then we just charge you a higher fee because then we have to maintain it as well, make it. Because we make you a promise it will work, period. And it’s more product-driven. So we do fixes internally, and we just distribute them to you. And you don’t pay anything extra unless you say, “I want this.”

But we treat it as a product internally. And then from standard to premium the big difference is then we have more microservices. But the largest one that we do a lot of stuff with is Elastic. And we have a lot of things going. We are making weird, different personalizations like segmentation tools with it and doing all kinds of stuff where we need to personalize the experience for the end client.

And database lookups isn’t that great in WordPress, to be honest. It doesn’t go super fast when your tables are not super optimized, let’s just call it that. So then you just bounce that stuff to Elastic and then you can do all kinds of stuff with it. But that’s more of a premium and sky’s the limit really. But that’s more of a framework. Then that’s the biggest thing that we work with, Elastic and doing weird stuff with Elastic. Or maybe not weird. It’s interesting. Let’s just call it interesting instead.

Because it’s a lot of fun but it can be challenging as well. So that’s basically it. So that means that for all the gigs that we get, 80% of the foundation is done. And the thing we’re doing now, we’re taking a package from that automatic open sourced. And so basically when we do a gig, we can be like, “All right, click new gig and read this Figma file. Pop.” And then you’ve got the basic website with all of the customizations through the blocks and the colors and whatnot for that particular client.

And then people can just get to work from that. And so this whole thing has really transformed the entire business. And some things are really awesome and some things are sad as well because you can’t do a productization without changing the business. And we’re not really a full-on product because that would be even more. But we grow into an ERP type company. They’ve got ERP. That’s their thing.

And they charge for that on a monthly basis. And then they’ve usually got some stuff built on top of that. We have special API or we’ve got this. And then their consultants go out to the businesses and roll that thing out. So that’s how we transform ourselves. So it’s like a hybrid product thing, but we have fixed fees for a lot of things. It’s kind of easy to grasp, but still it needs customization for every single build. But we can basically… really cool stuff, and time to market is quite low.

Shadi: But how many of your clients fit into this productized service versus your normal ones? And do you think they will transition? Because from our perspective, we’ve got so much custom requirements, it’s essentially close to impossible. That’s why we focus on process and streamlining our processes internally, being efficient. So even if it’s a custom project, we’re still making sure that we’re profitable in that project.

And even if we miss something, we have a buffer in order to compensate. So I’m just wondering that’s the way we operate and we can give productized services in audits or speed optimizations or packages. We do agile packages of development ongoing, and it’s charged depending on when the client stops. But it’s never at a point where the agency starts to lose money essentially, because that wouldn’t make any sense business wise. So we ensure that it’s profitable by making sure we set the right expectations with the client.

Jimmy: We started just that as well. So it’s taken us six, probably, eight years getting here from the humble beginnings to where it’s now. But I’d say 100% from clients. This is what we do now. So in the past, 80% of our clients was like, “Okay. Yeah. We work with this freelancer, and they messed up our site and blah, blah, blah, blah.” They didn’t have enough back-end skill or whatever. Yeah, that happens.

So we took them on and we took their build and we helped them grow. It’s actually cheaper for the client and a lot more satisfying for us just to be like, “You know what? We’ll take your site, we’ll migrate it to our thing. And it’s still open source, you can just dump us and move to any other hosting. But obviously you won’t get the coolness of the microservices, but you can still do it. And you can run these microservices because they’re also open source like yourself. You always have the option to bring it in-house. But why would you want it? Because we have economy of scale with us.”

Shadi: And these are all prepaid ongoing arrangements. So that solves your problem of cash flow and development.

Jimmy: We have, what is it? I think it’s 35%, 40% of revenue is now in these. We basically would sell it as a care package with hosting included and whatnot. But I’d say at least 35%. I don’t have the exact number in my head right now, but somewhere around there. And we are trying to get to 100% so that it covers all costs.

So in that way, I want to run a business where I don’t have to change each hour and I don’t have to take, if it’s a client… Because this regularly happens. We have a great connection with the client and then they hire someone. And then it’s like, “Who is this hire? And why are they so mean?” And they’re just bad purchasers. And if that happens, we should be in a position to fire that client. But because of uncertainty and all of that, you hesitate at times.

So I want to have a business where I can have the best and smartest people around me that make me proud and that I can make proud. Sure, we’re going to deliver to the clients of course. But I also want to disconnect myself from having to chase that hour and just doing the best things. And then delivering that to clients. So I really want to get to us being covered 100% with these care packages. And it’s not really a traditional care package, it’s like a hybrid thing.

Shadi: Sounds like you’re adding a lot more value than that. But essentially, I think the conclusion from our conversation is productizing, standardizing, streamlining is a must in agency if you want to survive the unknowns of agency life, which I’m sure everyone has experienced. And it’s probably the best advice to give anyone starting out with an agency or even freelancing, to be honest, because we were all there at some point.

Jimmy: If you sell things by the hour, some people can make the same thing, but I need one hour to do it and another person needs a full day. And just productizing also for the client just flattens out that curve. So it’s an easier sale, productizing. And it’s being like, “We’ll give you this value and for this price, period. And we’ll take the risk.”

And then it’s up to us. But what that does to an agency is that when you start doing these things, it’s moves you from a… So you’ve got the consultancy over here, and then you got the agency and the mill and then you got the product company over here. 10 years ago, we were definitely fully consultancy. And that means that you have a bunch of juniors, you have some majors and a bunch of juniors.

Because when you’re renting out people, it’s easier to hire the juniors. And if you do a lot of simple stuff, that’s perfect for them because they can grow and you’ll make good money on it. But also, as the business climate gets harsher and also as the WordPress web industry gets more mature, definitely what I see is that all these… Because Gutenberg, what it does, means that it gives you the ability to productize.

So when we made a full design system for buttons, and that goes down into the theme.json and whatnot. And like I said, you can connect it with Figma and whatever. We used to have a junior only working with making buttons for new builds. That was his entire work. And that’s just gone now because with Gutenberg and the buttons block that’s just… and it’s done. You don’t need that.

What happens in a business: (a) the sales gets easier, simpler and more understandable. But at the same time, you as a business, you’ll get incentivized to move away from the consultancy thing and approach the product thing. And I don’t think you need to hit it, have a full-on product. You can do that too.

But you can be somewhere in the middle where we are. But still, going from having a consultancy, having an agency to being more productized, in my opinion, it can be a bit heartbreaking as well because you need to switch what type of people you hire and that you have in the business because it’s a big switch in mindset.

Shadi: And here, just to cut you off, Jimmy, I think we have one minute left. So if you want to give one last piece of advice and I can as well and we wind it down, that would be great. I think what you’ve built sounds great, technically. I think again, from our perspective, we’ve focused more process and standard and expectations.

And it’s worked for us, which is good for us. And it sounds like for you, what’s working is technically building out a kind of mini platform, if you will, with mini services. And do you think that should be the goal for a lot of agencies’ efficiency and effectiveness and value for the customer at the end of the day?

Jimmy: I’d say it’s a long process, and it always starts with you productize the simple services, the small ones. And then you move on to the processes and whatnot and really get them tight. And when you got that, that’s kind of when you… What’s The Matrix? What did he say? He starts seeing the redheads and the blondes and not just the code. That’s when that hits.

So for us, it’s been a long journey and we’re not anywhere near done. But it’s just respect the process. I think that having the mindset and actually working with your people to making it part of your culture and the business. I think that’s also important because the culture, you can work with the people to set that culture and set that expectation internally.

So let’s be efficient, let’s do this, let’s do that. And when you got that going and everyone can make their contribution to the business that way, that makes it fun for everyone as well and not just a whip.

Shadi: Perfect. Well, with that, thank you very much again, Jimmy, Bob and myself. I’ve enjoyed this and happy to come back anytime hopefully. I’m sure Jimmy feels the same.

Jimmy: I love talking about this stuff.

Shadi: We noticed. All right, Jimmy. Well, thank you very much and thank you, Bob. And hopefully, we’ll be back some other day. Take care guys.