Professionalizing Pricing Models for Open Source CMS Businesses

Anne Bovelett:
Well, hello everyone. Welcome to another episode of Open Channels fm. Today is actually a very special one because we’re not recording as we usually do on remote. Today I’m in the studio called Studio 78 at the CloudFest Podcast Studio I should say, right? It’s a beautiful venue. I’m sorry you guys and girls can’t see it, but it’s wonderful. And what’s even more wonderful, today I have a very, very special guest so I’m going to give a little background first, otherwise you have no idea what we’re talking about. My guest today is Dr. Christian Kurze and he has created a product called Act Playbook and I’ve had the opportunity to use this and try this to see how it’s working. And from here on I would like to invite you Chris,

Dr. Christian Kurze:
Of course, of course, yeah, my name is Christian and I work with a lot of startups and help them to work on their B2B go to market and sales strategies. And I’m now in this open source ecosystem for about 9ish years, have a long standing history. Also in MongoDB where I had the pleasure to work a B2B sales ploy book that actually scales pretty well to billions of revenue, hundreds of sellers and now I invest a lot of time with local startups, with a couple of startups that I invested in and I was also working in stripping down this playbook a bit because you can’t do what you do in a public company, in a 10 person company or 5 people company or say 200 person company. And it was a very exciting journey and also had a pleasure to speak here during this event. And yeah, a lot of people actually reacted very positively to it. Hey, that’s something we couldn’t add act

Anne Bovelett:
on and maybe because not everyone in the audience is so deep in a matter like we are. Could you explain what a playbook actually is in this context?

Dr. Christian Kurze:
Exactly. And let’s start with a little example because if you ask people who they are actually selling to, so what is their ideal customer profile? You ask the people in your company, five people and you get at least 10 different answers. And this is the fundamental thing to work with proven playbooks that help you do the right steps in your go to market and sales strategy. Coming from what you need to do in a sales process to convert your Customers and to get your customers into this funnel. But what a lot of people miss, especially in the days now of AI, they start to scale things. You start to scale your outreach, your content generation. But what you have to do first is take a few steps back, think about this process, how you qualify the deals, of course. But what is way, way more important to define the value your product is creating? What are you actually selling to whom and why are these guys buying? And how can you translate your technical product features in actual business metric, in actual value, what people get from using your product? Yeah, and I’m also coming from a very technical background also still develop a lot of code on my own. This is very, very hard for product people and for technical people because you are in love with your product and you want to talk about your features and hey, that’s the best product on the planet. Right. And everyone needs it.

Anne Bovelett:
But yeah, right. And so I have met you within the WordPress ecosystem. Also, one of the reasons why you were yesterday you were speaking at the WP Business and Agency Summit. And I’ve had the opportunity to use ACT and to try it. And for me it was only on the side of content generation for a product that I actually know very well. And it’s absolutely wild. I mean, I wish I could show it to people right here on the spot, how effortlessly I can now generate posts and content. I’m not talking about AI generation that writes your posts for you. And you don’t have to look at it anymore, you always have to look at what you’re posting. But it, it relieves me of so much of the difficult thinking power. Who am I talking to? Because that’s been a question for a long time in this company. And like so many, the ones that you, the problem that you address and it gives you so much headspace to become more efficient and to address the right people. Now, can you first explain to the people because we’re using a lot of acronyms here. I know, it’s always confusing me as well because you’re using terms like ICP and your product is called act. What does it stand for?

Dr. Christian Kurze:
That’s actually a very good question. And the tech world is full of these three letter acronyms, right? So I said, yeah, I need an acronym as well, because you need to remember it. And actually got inspired by a former sales colleague because I needed an acronym that says what it does and I’ll explain it in a second. But it also inspires people to act on their stuff. So I thought, let’s use act and it’s the three steps you have to do. A is align on the value of your product. You need to build this value architecture, as I call it. Then you create an engine that means setting up your sales stages. What are the exit criteria? How do you qualify deals? What are the dimensions? We use a lot Medic, another acronym to define the nine dimensions. How you qualify your deals and what’s very important, that you also set up your systems properly. Not your CRM system in the sense of a data graveyard. Lots of old leads you never talk to, or deals that are really undocumented. Setting this up, that it really reflects this process, that it reflects your ICPs, your customer profiles, the Personas you’re talking to in these companies you’re targeting. Because this is the basis to not just qualify your deals, but to also constantly learn from it. What work, what doesn’t work. Play it back into your CRM system as a single source of truth. Not in documents, not in personal notes, the single source of truth.

Anne Bovelett:
You say something very significant, right? Because this is done at such a professionalized level that I wonder how many product companies in the WordPress space are doing this? Because what I’ve seen in WordPress in the last 10, 15 years, it was growing, things were growing. And I mean this could go for typo three, Joomla. Whatever, Drupal, you know, but okay, my head is in the WordPress space and it always felt like all these companies were growing naturally as the CMS was growing. SEO plugins, custom field plugins. In E commerce, we do not have that many plugins, but I think they’re coming more around the corner. But the pricing structure in many WordPress project is actually pretty wild. There are a lot of them who have given out lifetime licenses without doing a monthly pricing and well, you know, I’m gonna let you take a bite of that topic because lifetime licenses, I think is not a very sustainable model. And I wonder if ACT can help WordPress product companies to climb out of that misery, out of that hole that they’re in.

Dr. Christian Kurze:
This is a very tough question. And that also is a mixture of the last letter of this playbook, the T, right? Where you can start to turn on your scale if all the systems are in place and you can have this closed loop learning actually. And that also puts you in a position to play with your pricing model, work with that, learn what works, what doesn’t work, how the conversions work. All of a sudden you increase your prices. And this is, I mean, a topic on its own. We can talk for hours about it. But I think giving out lifetime licenses is a very, very tough thing because what should you do? Right? You can’t increase your prices anymore, you can’t play with the prices. It’s out, your product is out. And if we look at all these new AI companies, it’s definitely a lot of hype. But if you analyze these companies and go into the details, they do something very. Am I allowed to call it boring in the monetization mode? They sell good old subscriptions. Yeah, if you look at them, they sell you a monthly subscriptions which is basically a no brainer for you. If you look at the big ones, OpenAI, ChatGPT, Claude, whoever you name them, it’s usually a small subscription, 15, 20 a month. I personally when I think about myself, I don’t think about it right. You click the buy button, you’re in the subscription, you use the tool, that’s it. Then they need a good onboarding and all of a sudden you realize I’m running out of credits, I need to buy something more or I hit some other limits. Whatever the limits are, if it’s amount of users, amount of websites, when we think about site builders, whatever this metric is. So you can easily monetize on this as well. Start with this subscription, get the people in as easy and as fast as possible. Maybe $100 a month or $100 a year if you want to start with very low price point. But then think about good metrics on usage based pricing. What could be this good volume marker, what could be this base that you further monetize on and then don’t grandfather your customers. Right?

Anne Bovelett:
Yeah, exactly. Because I think the open source space, and this is why I was so happy to get you on the show today, it has a connotation for some. Like open source is not allowed to cost money or it needs to be free or it needs to be cheap. And I think people forget that there are people behind these products. There is a support process behind this. Before you were talking about a CRM. I mean using a CRM is costly if you don’t do it right. But if you do it right, you really get some data on who your users are and who the users are that you would want to have. And you can actually start telling when they jump ship. And I think in these day and ages we’ve just recently heard about another humongous WordPress company laying off a lot of people. I’m really worried about that because WordPress is a fantastic CMS. It’s very solid, no matter what people like to claim because it has this solid technical foundation so AI can actually work with it. So there’s an incredible chance for product companies. I think the thing missing is something like what you offer the people who create products on a professional level.

Dr. Christian Kurze:
And this is a big challenge. As I said in the, in the introduction, I’m now in this open source space for eight, nine years. How do you sell something that you can actually download for free? Everyone can go there, download a WordPress instance, install a few plugins and you’re up and running. We all know this is not the full story. If you think in a website, end to end and day two operations, there’s more to it, but you can do it. And like we like to say in German, the engineer is nicht schwer. So nothing is too difficult for the engineer. And they, they love to do it right, they love to engineer stuff. And this is what makes it very, very important to take this step back. What does your product do in a different way? And why should I pay for it? Why should the customers pay for it? And then you can think about the monetization way and can start to play around in a structured way with the pricing as well.

Anne Bovelett:
for example, for the audience. So the company that I have had the pleasure of testing act with really put a lot of time and effort into deciding their ICPs who are the Persona they’re talking to. And in that they even have on top of my head 28 variations. And it’s unbelievable when you start testing with this and then you say, okay, I want to write content that’s going to interest CTOs from big enterprises, for example, whereas I was used to write for everybody because We’ve always tried to be chocolate. We tried to talk to everybody. I’ve had people coming onto the website of this company and Bob, you still can cut and clean from this recording, right?

Dr. Christian Kurze:
Yeah.

Anne Bovelett:
Because the company we’re talking about is great. I’m just not sure if I can mention them. I can. Okay, Well, I tried to be discreet, you know. Okay. So, yeah, the company I’m talking about actually is by now well known in WordPress. They’re called Greyd. They built something called Greyd.Suite. And I remember when I started using their product four years ago, I was fine with the pricing range of, I think €69 minus VAT a month. And people in the WordPress space were like, what? That’s what I pay per year for a license for 500 websites. And I’m like, well, when are you going to build 500 websites? But they are revolutionary in the WordPress space. And this, this proves it. And so when they told me they were working with ACT and go have a go at it, I was like, okay. I was a bit skeptical. But this is because it’s unusual in the WordPress space for people to take this very clean business approach. WordPress is very emotional. We have a community, we have community events where people, 3,000 people, where we do not have business tracks. But I’m convinced that we have to start being more business focused to survive because it’s the businesses that can support the contributors so WordPress can continue to grow and to be maintained. And so I’m elated that there are professional products showing up and that we had WP Business and Agency day yesterday on such a professional level and you gave a talk. How did people respond to it?

Dr. Christian Kurze:
I got a very, very good feedback on some very details, some very nitty gritty details that I talked about. Something like using innovative outreach approaches, structured outreach approaches. How do you do some cold outreach with 16 touch points over at least 20 to 25 days? People don’t do this manually. I try to do this manually. You never ever do this. There are good tools out there, good sequencing tools.

Anne Bovelett:
I think. Yeah, I think we may have to explain that to the audience. That is not so much into the sales process. 16 points outreach.

Dr. Christian Kurze:
Yeah, I mean, the, the basic idea is. And now we are starting with the second bot already, right? How you create your engine that you need to find a way to make people aware of your product, that you are there. And I’ve been there out of research, many years ago. Hey, we had a wonderful product. Four global competitors. Everyone has to buy this product. The fact is no one cares and no one knows about it. Right. So the outreach phase is, how can you do some cold calls? Write emails, write them LinkedIn messages, send them connection requests on LinkedIn so that you warm up these people before you actually give them a call. They should have read your name. They should already know a bit who you are, what pain you solve. And after the fifth email or so, if you call, or depending on the process, maybe after the third email, oh, I realized his name. I know who Christian is. I know what the Eggplay book can do for me. And maybe you have through an email already. So this call is actually not a cold call anymore. And that’s the stage where we need to. And this has changed a lot. A few years ago you sent 10,000 emails and you got 100 leads out of this. Today you sent 10,000 emails. Maybe you get 30% open rate. 50,000 people read this email or at least open it. If they read, it’s a different question. But nothing happens. So that does not work anymore. So this is the outreach. This multiple touch points or from multiple channels. And you need sequencing tools that automate that for you. And then we talked about some details. I asked the question, how many people ever got a LinkedIn voice message in their life? I only got two and I only had three hands up in an audience, right? Yeah, it was quite a big room. So that was one feedback. Getting a little bit creative and getting more structured in the things you do. And also on the tool that we built, walked through some screenshots, did some demo after, after that, demos after that, and people are actually reacting. Okay, wow. I never sat down in such a structured way to think about my customer profiles, to think about a business value, to think about actual value drivers. What is a value driver? How you generate more revenue, reduce the risk, or you increase the security of your customer, make them compliant. So there are a couple of value drivers out there, standard value drivers in B2B sales. And then we sat down and the feedback I got is we never thought about it in this detailed way. So that actually helps to structure the thoughts. And we also demonstrated them how you can use AI to chat again with this value framework. Now you can start to do basic things, but they are super efficient. Put your website URL and extract the value framework from your existing website and you immediately see, oh, I have gaps.

Anne Bovelett:
Yeah, from your own website.

Dr. Christian Kurze:
From your own website. And it takes two, three minutes. Right?

Anne Bovelett:
That’s just what I just thinking this is a very creative thought. I might be going somewhere where you’re like oh Ann, come on, let’s not go there. But I wonder, for example, Open Channels FM is a well known podcast. It used to be known as do the Woo and it rebranded to Open Channels so we can talk about all things open source. And even recently Bob Dunn introduced something called Channel 4 for all those topics that do not fit into that already big bucket. And I wonder if a podcast productions could profit from something like act.

Dr. Christian Kurze:
That’s a question I never thought about, to be absolutely honest. But I would say, why not, right? It’s a product, you try to produce value. What’s the value? What value? For me, I mean, spontaneously thinking about reach, people start to know about you, right? Getting awareness, talking about some good success stories and thinking about a little bit longer actually maps to all the value drivers we can have, right? But the clear answer is yeah, why not? Right? Can also help for podcast productions. And I mean my goal is that. And I was a founder myself, right? A tech founder, had no idea how to do this, what is this sales thing, how to do outreach, how to make people aware of what I actually built. And my goal is to enable all these tech founders out there. If it’s an early stage company, later stage or an established company, it doesn’t matter. You always have the same problems in early stages. You need to find your product market fit. You need to understand what problem do I actually solve for whom? What can I charge for it? What is the premium? What’s the value I create? Yeah, yeah, Even open source products, right? Because as you said, the companies need to live from something, right?

Anne Bovelett:
Yeah, they do. And it’s exactly what you said. You can download things for free, but it’s not free. Time is not free.

Dr. Christian Kurze:
No, it actually costs you something. And that’s another feedback I got from the presentation yesterday. I also asked in the room, who ever calculated a business case for a WordPress website.

Anne Bovelett:
I think I was there, I was

Dr. Christian Kurze:
one of the hands, your hand, was raised, another hand was raised and another halfish hand was raised and so immediately triggered me said yeah, we need to definitely need to work on this. Because if you build products and a lot of agencies build their products or also worked on products, not in the web space, but coming from consultancy where we did some automation toolings and all this stuff, right? If you’re an agency that builds websites or if you’re a consulting company, build data warehouse systems in those days, you still need to work on the product value that you create and how to talk to your customers because this is Something very different selling services from a product.

Anne Bovelett:
Yeah, I think, I think that’s really a gaping hole that I observe in the WordPress space. I also see this with hosting companies.

Dr. Christian Kurze:
Exactly.

Anne Bovelett:
Like I always get confused when I, when customers say, okay, we already have our hosting company and then I’m looking at what that company is offering and then I see something like, yeah, we offer managed WordPress hosting. And then I’m like, okay, and what do you manage? How do you manage it?

Dr. Christian Kurze:
How are you different?

Anne Bovelett:
Yes, how are you different? Why should I trust you? Exactly. And then nowhere on these websites, they’ve been there like forever. It’s like, it’s maybe a very weird analogy, but I used to work with people who build hearing aids and actually that market also has the same pains as I see in Riveras. They just sit back and wait until the doctors send them the 70 year olds for a hearing aid. Whereas hearing problems start when people are 40. If they went to the discotheques too much or had too many headsets on, maybe earlier. And they’re not targeting that group. So they’re not targeting the group that it could have for 20 years, only the ones that might not be there for so many years. And I know, it’s the weirdest comparison and still it is the same thing.

Dr. Christian Kurze:
It’s the same problem you talk about. It’s the same value create. And I also do music on my own, right. I play the trumpet. And that reminds me, I always wanted to buy these earplugs that protect your ears, Right. Sometimes I go home after concert and I think, oh my God, it was too loud. Sitting right next to the drum set and you can still hear it. So that’s the same target group, right? It’s an ear, a hearing device. I mean, not that you hear better, but that you hear less. But you still need a very high quality of these devices because you still need to hear your bandmates, right. And you need to hear the fine frequencies. If it’s just oral parks, the basic stuff that doesn’t work, right?

Anne Bovelett:
Oh yeah, yeah, no, it doesn’t work. Yeah. So to go back to act, what are you dreaming of when I take it? Keep it into, let’s say the CMS market, let’s not just stick with WordPress, but the CMS market, open source, CMS market in general. Is there something where you say, I wish I was talking to a so or so company just to bite into this challenge together with them to make them grow.

Dr. Christian Kurze:
I definitely thought about it. What am I dreaming of? What’s My goal, what’s the mission behind? Not necessarily specific to the CMS market, but more specific to these technical founders, early stage companies. And everyone only talks about the success of startups, right? We talk about, I mean the prominent AI examples, OpenAI or whoever that is, but no one talks about the hard groundwork, the blood, sweat and tears. And I’ve seen it personally, fire sales, getting sold for a dollar because you can’t pay the bills anymore. Founders going to court against each other because they start to blame each other. So companies dying and not because the product is bad, but because we were not able to monetize it. Right. We didn’t bring our horsepower to the street as we like to say in Germany. What I’m dreaming about, if you ask me particularly about this, is how can we increase the success rate of these early stage startup if it’s not 1% making it, but let’s bring this to 2%, it’s a very high goal. But if I can enable, let’s say 10,000 startups to get over this barrier, that would be awesome and enabling. These guys do not go through too much tears, right? You still have to invest the blood and the sweat, but hopefully don’t arrive at the tears.

Anne Bovelett:
Yeah, yeah, absolutely. So, well, Christian, I think I’ll be talking to you maybe six months from now, maybe a year from now and we will pick it up from there and see how things went. Where can people find you?

Dr. Christian Kurze:
Yeah, actually a very good question if you go to the website actplaybook.com, so that’s actplaybook.com in one word.

Anne Bovelett:
Thank you for joining the show and well, we’ll be speaking some more in the future.

Dr. Christian Kurze:
Yeah, thank you for having me and looking forward to the next conversation. Thank you.