Transparency Report #14: rumbling skies across Pixelgrade

Quick navigation in this article:

Weather forecast
Revenue and Expenses
Dryland on WordPress.com
A squad under the weather
Upstairs Community rays of sunshine
Scattered to the four winds

Weather forecast

This report’s approach is more in tune with the latest and a bit different from the rest. What we’ve been experiencing in the last six months blew our minds and souls. We still don’t know how long it will take us to recover from the thunders, but it’s our duty to try.

Before jumping into details, I want to give ourselves a tap on the shoulder for being brave and showing some leadership stamina. In such foggy times, most companies would gracefully hide some details to keep a positive image out there, or they would entirely drop writing the transparency report itself.

We committed long ago that we would show up, regardless of how the landscape appears. We will not cherry-pick moments, nor will we use cookie-cutter strategies to look good on the catwalk. Once again, we will embrace our vulnerability and flaws, even though it’s easier said than done.

In this report, we are going to reveal how the heavy rain left us drenched to the skin.

Context is important, therefore we provide it gracefully, even though it’s painful to recall some moments. On top of that, who said that entrepreneurship is easy like a Sunday morning? Or who thinks that a ten-year company is nothing else than the ultimate example of success? As if the years per se are the most crucial reference in an organization’s life. NOT-AT-ALL.

That does not mean that we didn’t make room to celebrate ten years of activity. Quite the contrary. I was beyond happy to plot a surprise party with my teammates for George and Vlad, the founders of Pixelgrade. It was an exciting challenge to experiment with, and I will be forever grateful for how things turned out.

After six months of whispering around the office, making hidden lists on Paper, drinking too many coffees, and gathering our best buddies around, we did it. We threw a party that will stick to our affective memory in the long run, even though it’s so f*****g easy to forget its ripples. We even had a band singing live for us, can you imagine? Pics, or it didn’t happen.

So please do yourself a favor and rip off the fail better posters from your office and hang something more realistic, such as be gentle, you will f**k everything up.

Revenue

These past months pushed our revenue down further still. While we have a budget allocation in place when it comes to actual numbers, the last six months look like this:
$19,716 total monthly average revenue (−32% down from $29,187)
↳ $8,264 from our shop at Pixelgrade.com (−38% down from $13,359)
↳ $9,988 from the WordPress.com marketplace (−20% down from $12,557)
↳ $1,463 from the Envato marketplace (−53% down from $3,157)

I suspect that the best explanation we have for these low numbers is that the market for classic WordPress themes is shrinking faster than we thought, the effects being visible both in our shop and in the marketplaces on which we operate.

In order to meet this change, behind the scenes, we’ve been working for the last 2-years on a new system to build sites based on the new Full Site Editing (FSE) experience that the WordPress ecosystem will shift towards in the future. We’re excited about the potential that this project has and how well could empower our clients—as long as we manage to successfully deliver it.

Expenses

The decisions that we made two years ago seem to lend us a good helping hand in these times. Our average monthly expenses hovered around $26,200 (–5% from $27,500), broken down into:
→ 76% of salaries
→ 19% maintenance (rent, software, accounting fees, suppliers)
→ 5% occasional expenses (office remodeling, hardware)

The negative cash flow is suppressed by the resources accumulated so far, and we’re confident that we have what it takes to navigate further through this journey.

🏜️ Dryland on WordPress.com

On the 1st of September 2021, WordPress.com initiated the retirement of all premium themes, our included, of course.

Not sexy news. We always had this scenario in the back of our heads, but it does not mean that it’s fun when it turns into reality. Even though the timing was awful, (synchronized with one of our frontend developer’s leave), we tried to grasp this move with maturity and professionalism.

It’s not an easy feat to establish such collaborations in today’s business landscape. We’re thankful for the chance.

Sometimes, you just need to tell yourself it’s going to be okay even though you don’t believe it fully either. It might be the only option to get out of the bed in the morning and show up.

Seven years ago, we uploaded our first theme on WordPress.com. We started with Hive, and one after the other, we brought more products in front of WordPress.com’s customers. And oh boy, they use them massively!

It was a beneficial partnership for quite a while, and we’re grateful for having this experience. It’s not an easy feat to establish similar collaborations in today’s business landscape, so we’re thankful for the chance.

George, our CEO, was in touch with both the guy in charge of the decision and other theme authors to better understand the harsh line in the sand. It was some back-and-forth in trying to get a better deal or even drop the plan at all, but with no real chance to turn the ship around.

The fellows at WordPress.com have quite an optimistic promise around the new program, but the truth is that this move hit our cash flow and our trust as a meteorite. We don’t know yet which one left the unsightly scars.

At the time being, we’re still making around 8,000$ by selling our premium themes on the platform, but our guess is that the revenue there will get smaller because of the v2 Premium Themes Program. This new endeavor is 100% focused on the Full Site Editing (FSE) and block-based themes. Today, we have no real incentive to invest in this scheme, so yeah, it’s probably a matter of time until we will hit the final lap.

☄️ A squad under the weather

We are only five folks left: George, Vlad, Răzvan, Andrei, and I (Oana). We split ways with Mădălin (3 years), Alin (8 years), and Alex (3 years).

It was a decision from both sides, but not necessarily reciprocal. Let me explain.

Due to dozens of reasons, some obvious (running thin on money), some more on a subconscious level (lack of direct contribution or a low level of motivation), Mădălin and Alin decided to go to interviews for other companies*, far bigger and profitable than ours, while Alex was let go by us.

*Alin landed at Automattic, as did Robert, our ex-customer support teammate, a few years back, and Mădălin joined the local chapter of Deloitte. We wish both a serene journey ahead!

I blame none because I believe we have a finite number of tools to navigate through life. Depending on where you locate yourself on the map, some are more suitable than others. Mixing this with the fact that the landscape has been shaky in Pixelgrade (full of uncertainties and anxieties) for almost two years in a row, set us off the rails.

When you have an elastic stretched on both ends, only one thing can occur: it breaks.

The five left don’t wear any badge of honor for still being around here. Because it’s not about that. While the Romanian culture often cherishes people for sacrificing themselves (check the Miorița reference if you’re curious), we don’t think it’s neither healthy nor sustainable. So keep the emoji with 👏 for yourself.

The truth is that the reasons we’re still playing the game are different, and so are the incentives. We can still resist these weather conditions, even though not equally. Some of us have broader bandwidth, while others do not. Some of us have bigger expenses than others. Some of us are in a more balanced moment in life than others.

But for these amazing guys (Mădălin, Alin, and Alex), things looked terrifying. And I get that. When the pandemic is still playing hide-and-seek and leaves marks on our lives, we could all use more safety and support. If another professional adventure can provide a reliable ground, with a higher level of joy and excitement, why not?

The rumbles will continue in Pixelgrade’s life for some time, while the tolerance of my teammates got close to the limit.

It was hard to handle these months and even tougher to keep our ducks in a row. Often, the emotions caught us off guard and made us blame others. When we were tired of finger-pointing ourselves for landing here, we threw arrows externally.

It’s just human nature. Our brains needed a certain kind of closure to let it go and move on. This is how some of us manage to get pressure off our chests.

As a CPO, I’m at peace with how I’ve handled these crushing episodes. I mean it. Even though I’m in the process of letting go of a fair share of self-doubts and critiques, deep down, it feels liberating. I went through everything with an open heart and mind. From my side of the world, my teammates’ leave would have happened in a way or another. Our weapons to avoid this ending are simply too fragile.

When you have an elastic stretched on both ends, only one thing can occur: it breaks.

We have various ways of digesting these internal events, and while everyone has their own rhythm, I know that we will continue to tell ourselves nuanced versions about what happened. But that’s okay. Time is the best filter, so I’m hopeful it will bring clarity, stillness, and acceptance.

🌞 Upstairs Community rays of sunshine

During 11 years of doing community work within creative industries, I realized there’s no such thing as the right time to celebrate our members’ contributions. I learned that I need to consciously create space because it does not just happen out of the blue.

Community building is all about relationships building. There are no magic tricks, no gimmicks, or shortcuts. It’s all about trust, reciprocity, and shared goals and identity. All of them need fuel and consistency.

Eighteen months after launching Upstairs Community by Pixelgrade for creative professionals worldwide, our team ran a unique campaign for our members. As a small gesture of gratitude, we created a digital Hall of Fame that contains a designed avatar of our contributors to celebrate their involvement in the community.

The ripples it echoed gave us fuel to keep nurturing the Upstairs Community and make it even stronger. We got plenty of taps on the shoulder and cheerleading messages from the members featured and the broader community. You are amazing!

We don’t have 3954 pages of a master plan to grow this community up to the sky, but we’re confident we will continue iterating and making it more valuable one step after the other. As with anything in community building, it takes time, and a lot of fine-tuning, but Andrei and I have the energy and mood to keep playing, and that’s enough for the moment.

💨 Scattered to the four winds

On the product side, it’s still work-in-progress on multiple levels, so there’s not so much to share at the moment. There are plenty of moving parts that George tries to put into an order and makes sense of them all. Sometimes, it feels like Sisif’s work, while other times, the light at the end of the tunnel appears.

As for motivation, it comes at the surface in every corner of our activity, so it will be hard to pretend.

Innovation needs a high level of energy and a clear head, which we did not have with all the changes. Considering that we have even less manpower and a black hole regarding motivation, we can only hope to get our shit together and focus on things with high priority.

How? We don’t know yet, but it will probably be a different route for each of us remaining.

What’s distinct from other hard times we endured in ten years is that now we have an articulated deadline. Even though it’s a mix of internal (drive) and external (money) pressure, it paints reality in an accurate manner. If it’s something good about numbers, then it’s the fact that they’re more neutral. You either have big numbers or not.

You can’t lie about money, or, at least, we don’t want to do that. Nor are we okay with tricky alternatives such as credit loans. We’ve been bootstrapped from day one and hopefully, we will continue to do so. As for motivation, it comes at the surface in every corner of our activity, so it will be hard to pretend.

If we succeed with our existing resources (team, money, product), great. If not, not. Something whispers to me that I will write a book in my 50s about all these experiences I’ve been through.

Transparency Report #14 might seem like a casual article picturing business as usual, yet it’s not. It’s far from it. It took me a lot of internal talks, therapy & coaching sessions, and chats with my current and former colleagues to get here. On the other side, this is life. It’s full of ups-and-downs, of shitty moments, of losing and the like.

It’s hard to adequately explain what here means and feels like, but I’ll give it a try.

Walking through these events fully awake made me more humble. It also revealed, clearer than ever before, that adaptation and flexibility are the best bets we could make in today’s reality. A combo of breadcrumbs of faith and trust plus the delicacy in front of life’s waves.

As would Leonard Cohen beautifully puts it: