Pixelgrade Transparency Report #7

It’s becoming crystal clear that we’re in a marathon, not a sprint. The last six months showed us that running a digital business is a constant roller coaster and whenever you feel that things slow down another challenge is right around the corner. We gladly share our first‐hand adventures, so grab a cup of coffee (or lemonade since it’s getting hot outside) and enjoy our latest transparency report.


Overview

We’re living in an era where you can feel pressure on multiple plans. Pressure to have a successful career, pressure to build something long‐lasting, a pressure to grow both as a person and as a professional, pressure to deliver, pressure to lead by example, pressure to know the answer for any question out there. It’s not only chaotic, but this permanent state of mind brings a tone of damages.

However, we deeply believe that we need to relearn how to slow down, how to say no or I don’t know, how to take the time to make an in‐depth analysis, how to nurture relationships or accept failures and celebrate wins. We have our rhythm and we practice resilience on a daily basis since we’re confident that putting the best version of ourselves out there is the best thing we can do.

Read further to find out what we managed to create in the last six months and what happened across the team. Let’s dive in!

Product and support

  • one new theme released — Vasco for travel bloggers, and another one on the final lap — Noto 👀 (stay tuned!)
  • launched Pixelgrade Woof, a new marketing campaign for the shop with our dogs at the forefront (Paco and Arlo)
  • three new free themes for WordPress.org (the lite versions of HiveGema and Patch)
  • an active writing activity on our blog with 19 valuable articles (from case studies to interviews with our customers and educational resources)
  • scored 116 WordPress gems using our themes in the Showcase
  • a pilot yet promising episode around our attempt to run an ambassadorship program
  • a bunch of Thank You Letters sent to our beloved customers around the world
  • the beginnings of a new way of customizing the style of a website — Style Manager 👀 (more on this later)

Team and culture

  • two new great folks joined the team: Minela (to help us embrace the administrative ocean) and Andrei (to drive our products even further through marketing efforts)
  • our first intern is here: Răzvan (frontend developer) plus we’re on our way to bring another one on the backend side of things
  • a weekly leadership meeting to make sure we’re aligned and we’re sharing the same understanding on business and non‐business topics
  • a leadership workshop with an external consultant to help us better define the mission and the values to align and guide us all at Pixelgrade
  • better leadership roles to help us navigate with ease and agility (CEO, CPO, and CTO)
  • 1:1 sessions to keep track of everyone’s realities and perspectives
  • an intense recruitment journey both for filling the pipeline and having interviews and chats
  • some extra activity: Oana is an ambassador for The Watercooler (an online leadership community), and Radu made a 3‐months internship at Automattic
  • last, but not least, almost the entire crew attended WordCamp Europe 2018 in Belgrade, Serbia

Fun facts:

  • 🏍George traveled by motorcycle for a few days, but he never showed us pictures during his holiday
  • 🎤Oana was a speaker for a local marketing meetup and she survived (she even said yes to another one)
  • 🤩Vlad was, by far, the most energized and engaged teammate at WordCamp Europe #welldone
  • 🚴🏻‍♂️Alin finally got his dream bicycle, and now he’s riding it every single day #keepitup
  • 👑Răzvan easily became a CSS Grid connoisseur and discovered a bunch of exciting stuff
  • 📚Radu finished his internship at Automattic and started to create Lite versions of our themes by the blink of an eye
  • 🏡Andrei took good care of the house while we were in Belgrade, at WordCamp Europe #thankyou
  • 🎨Ilinca participated with other fellow illustrators in a live‐drawing session
  • 👩🏻‍🍳Minela cooked for us from her early days at Pixelgrade and it was delicious
  • ⚽️Adi went to play football and never came back (we wish him a speedy recovery)

Revenue

Our overall revenue has been a little bit smaller than the previous six months which is not something to brag about, not by a long shot. Despite this lack of [average] growth, we are glad we could offset the slow, but steady, decline in ThemeForest sales with our own Shop.

On the WordPress.com front , things haven’t moved since they are still not accepting any new premium themes in their marketplace, at least not until they manage to decide on a new attitude towards themes and what they should offer (especially with Gutenberg coming). The revenue here has remained relatively stable compared with the previous six months. Not bad, but not great either.

The place that fills us with hope and around which we can build with confidence is our own shop. It has been growing steadily, actually picking up quite a bit of steam recently. We are more empowered and happier to play the long game in this scenario.

$32,826 total monthly average (–3.8% down from $33,682)
$20,814 monthly average from Envato (–16.3% down from $24,877)
$4,857 monthly recurring revenue from Pixelgrade Shop (+240% up from $1,467)
198 new active members in the Pixelgrade Club out of 408 that started the free trial

Expenses

Thankfully we’ve managed to keep our expenses in check and in line with the revenue. We are grateful for what we have and what we can afford, especially since our team has shrunk a little bit since a year ago.

We’ve managed to mostly shield the team’s income from the downturn of the previous year. We are glad we’ve been able to pull this off and we are confident each one’s efforts and loyalty will bear fruit in the not so distant future.

The average monthly expenses hovered around $28,491 (very much the same as before –  $28,292), broken down into:
— 69.5% salaries
— 19% maintenance (rent, software, accounting fees, suppliers)
— 11.5% occasional expenses (hardware, marketing, traveling)

There is one more relevant thing to note about our revenue and expenses: the currency fluctuations. This is especially important for businesses like ours that are not based in the United States, or to some extent the Euro Zone, that have most of their expenses (salaries) in a local currency.

Early on, we’ve decided that since we are targeting the whole world we should keep things simple in terms of pricing: the same price in the same currency for all. We’ve chosen the US Dollar as we believe it is the de facto currency of the internet. This was advantageous while the dollar was strong against the euro (some predicted parity a year and a half back), but not so nice in the current times where tides have turned towards a stronger euro. This can have as much as 5–6% of an impact on our revenues in our local currency (conversion fees included). Just something to factor in when trying to make sense of the numbers.


Going back to basics: Values and Mission

When things are going great, who has the time to pause and consider the fundamentals? Why change it if it works, right? It seems out of place, even the wrong thing to do since you risk disturbing that wonderful momentum. The picture changes completely when the tide turns (and it always will). Suddenly we find ourselves in a storm of questions to be answered and decisions to be made, with our feet sinking ever deeper in the mud of uncertainty. This is when frustration sets in, people lose their focus, their drive, and bad decisions are made, if any at all (don’t know which is worse).

For too long we’ve been trying to fight our way out of the swamp by doubling down on the same things that served us well in the past: can do attitude, work hard, resilience, loyalty, technical ingenuity, trying to come up with the next cool product. These help and shouldn’t be taken lightly. We’ve managed to rebalance our revenue and expenses, or successfully shift our efforts toward our own shop – this should be enough, right? The reality showed us that things are a lot harder to turn around once uncertainty and confusion take over the hearts and minds of people. Our best efforts [as leaders] were faced with excruciating reluctance and lack of forward progress. Something else was at play here.

Going back around two years now, we’ve come to grips with the main culprits: insufficient clarity around who we are and why we exist as a company and as a team, on the one hand; our personal difficulties as leaders to convey and reinforce whatever clarity we have in the hearts and minds of those around us, on the other hand. It turned out that there is a huge gap between facing this reality and working towards a better scenario. Thankfully, we are a stubborn bunch that doesn’t give up so easily.

Right from the start, we knew this was too hard and too important to try and tackle it ourselves. After all, how could the same thinking that got us here could pull us out? We’ve reached out to people around us who’ve been there before and asked for their assistance and advice. We’ve been truly blessed in this regard: wonderful people responded and agreed to help us out at various stages. Lucky as we are, it turned out that there was no easy fix and the bulk of the problem lay with us [the leaders], or better yet, in us. We needed to find the courage to look in the mirror, and accept and embrace whatever we would find there.

A couple of months ago, we’ve really managed to smash through long‐standing barriers thanks to Adriana Truong who really clicked with us and knew how to adapt its approach to the given moment. There were a couple of days of careful scrutiny around who each of us is and stands for, around having a firm grasp of our reality, all culminating with three days of intense, mind‐bending introspection and sincerity. It felt like a month’s work, but it was all well worth it because we’ve managed to achieve a level of clarity unknown to us up until that point.

There were three clear outcomes: our core values, our core purpose or mission and our long‐term goal (BHAG). These have served us well in staying sane and tackling whatever life throws at us. Things are still early and all could very well be undone and reduced to a couple of empty words on a flipchart. That’s the trick with these “soft” areas of a company and team: they require constant communication for reinforcing and reframing them throughout our time spent together.

Style Manager – Rethinking the Way You Personalize Your Site

If you’ve kept tags with us throughout the years or had a quick look at our products, I am pretty confident you know we have a thing for design [thinking]. We drool over things that look and feel right, well thought, things that have human ingenuity and passion embedded in them. This is the fundamental drive behind our products. It often leads to leaps of faith and going down the rabbit hole with nothing more than the self‐confidence and trust in the ones along for the ride.

One such endeavor surfaced from our belief that there is always an easier, smoother way of doing things – we’ve rarely shied away for tackling elusive problems (at least from where we stand). While interacting with our customers, probing at the unexpected ways people are using the tools that we provide, trying to gauge how much are we helping them on their road to success, something seemed out of place.

Many customers kept the default styling that we provided, and more so, tried to stay as close to the demo that showcased our product. We’ve strived to bundle a decent amount of flexibility with our products so each person could adapt it and infuse it with its’ own character and personality – to make it their own. Some took advantage of the customization controls, some even took things too far, but a fair amount of our customers were missing out, at least from our point of view.

It turned out that people really took our “we are the designers” stance to heart. The styling options that we provided, limited as they may be, were still too much and things felt too easy to mess up. Our customers were right. We’ve also been right. We are the designers and it is up to us to do better, much better. Challenge accepted.

When we envision a product, when we create a website around that product, we make hundreds of design decisions, big and small, often just by following our [trained] instinct. To help people navigate a similar path we needed to find a way to grab those decisions and distill them into principles that could be set in code.

We decided to create a customization system that would be highly intuitive, flexible enough to allow for true personalization, but smart enough to keep the overall look and feel consistent and in line with the design thinking that came with the product. Like the saying goes “Easier said than done”. And no, we haven’t thrown machine learning at it. Not yet, at least.

A list of mood‐related Color Pallettes which will get your website closer to what you need.

After rewiring our customization logic, trying things first by hand, then distilling decisions into code and determining the satisfactory point of compromise, we are now in a position to say we’ve managed to lay a solid foundation for the whole project. Our customers can already play around with the first version of Color Palettes and we hope in the not so distant future to be able to complete the styling picture with Font Palettes options.

These are the first two stages of the vision we have for the Style Manager – the third one being Layouts. The road is long and with lots of unknowns, but we are confident this a worthy undertaking to take our products to the next level. Stay tuned.


The next lap

We will continue to invest our best efforts into what’s already in the pipeline, but we’re also going to keep an eagle eye on both the market and the WordPress ecosystem per se. The only thing that slightly changed is our ambition to be even more agile and on top of things while bearing in mind that we’re here to stay for the long game.

In just a blink of an eye, here’s what we are going to focus on:

  • Style Manager — we’re going to iterate, improve and ship the actual system to many more customers.
  • Pixelgrade Shop — all speed ahead in this direction: from new products to a smoother experience for our customers.
  • Goals and Objectives framework — to help us work better and more efficient across the entire team.

🍸Summer is here

We wish you all an inspiring summer, full of new challenges and great memories. No matter the nature of them, don’t forget to enjoy the ride and make the most out of it. Thank you for reading the Transparency Report #7 and feel free to share your thoughts with us. We’ll gladly answer any questions. Stay awesome and be brave!