14 Comments

  1. Erlend

    I can only hope this trend keeps growing. Money flow is one of the last vestiges of closed data. We’ve grown up with this strange notion that how much you earn is a very private thing, as if this number somehow represents your worth as a person. (p.s., we have public records of income and tax returns in Norway).

    Another great example of revenue transparency can be seen in WordPress’ cool cousin, the Ghost project:

    http://blog.ghost.org/april-2015-update/

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  2. Rick

    It wont,

    Makes no sense from a business standpoint short of making any of them a target in part to GPL.

    If a biz has revenues, say $1,000,000 a year with plugin A, B & C. By exposing that all they are doing is putting a target in place for biz “b” to go, “Ok, take or recreate their codebase and take their thunder”.

    Even if licensing were not GPL that doesnt mean that its readily enforced one way or another. I know of at least three entities in the past two years that had varied forms o license (creative commons for example) and had projects slipped from underfoot and enforcement resulted in them loosing even more money in litigation and not recovering a red cent.

    This is all where these creative forms of licenses fail, they are essentially not enforceable. In order to be enforceable damages need be shown and thats not guess, estimate, etc. They need be tangible and thats near impossible in its own right. GPL for the most part these days has become “bottom dog up” or “top dog down”.

    Bottom dog up meaning other developers make the bottom dog become a top dog.

    Top dog down ends up in the control of what those same developers can then do to try and monetize. This is how and why Microsoft with MONO, .Net and free C# etc. are going to end up absolutely killing all but the strongest of commercial development firms. They have essentially the only fully integrated modern development platform that has large scale usage. It can develop anything from mobile to web to services, PC apps, games on and on all in one unified environment.

    This is exactly what has caught the attention of Microsoft, Adobe and others and its not new. They saw this happening as much as 8-10 years back. Its not like “just last year” they decided to target Open Source. They decided in excess of 6 years back and have methodically made movements. Its all quite planned and well thought out. Take CMS’s. Why would say Microsoft be interested in WP in their Azure cloud platform or Amazon’s cloud?

    Because it will have people use those platforms????

    Exactly.

    So now they are Microsoft or Amazon customers.

    It gets sold as, “What can we do for you!!!!!”

    Reality is more like, “Lets gather the flock” in our cloud. So when we deploy our solutions we have a sized customer base already at hand that have experience with a popular platform.

    Those folks will “yak” to others and the rivers of people come a flowin’ in.

    Its business 101 operations. Eat or be eaten.

    The bottom line is why would any entity who has found a niche and interested in making revenue expose to prospective competitors that they are succeeding?

    Corporations with investors its not optional but what is optional is displaying exactly how revenues are portioned. Amazon doesnt release how much revenue third party vendors make for Amazon. It’d be absolutely foolish for them to do so.

    But for a non-corporate entity its perhaps one of the worst things they could possibly do.

    The only other time its really nice and beneficial is if an entity is hoping to be acquired or open to that opportunity. But ALOT of ducks need be in a row for that to happen these days and GPL really can make a mess of that.

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    • Pippin Williamson

      There is so, so, so much more to “re-creating” some one else’s business than simply re-creating their code base, as you have implied by saying “Ok, take or recreate their codebase and take their thunder”.

      Success in business has very, very, very little to do with the code behind a product. Does it help? Absolutely. Do customers care what the code looks like or how it’s written? Not even remotely (with a few rare exceptions).

      Just because someone can take the code that another successful business has publicly released does not mean the “taker” can turn that into a successful business. In fact, knowing what kind of numbers a successful business has actually reveals exactly how incredibly difficult it is to build a successful business.

      There are so many examples of failed products where the founders took the idea, design, and possibly even code from someone else, yet they still failed.

      Overall, I have been pretty successful with some of the products I have created over the last 5 years. I would welcome with open arms anyone that wants to take on the challenge of building a business on top of one of my products by taking the code base. Seriously, all of my products are 100% open on Github and you can fork any one of them and start your own business on top of them. Just because you do that, however, do not magically expect to be pulling in $500-$800k per year from those products. The same goes for every product / business listed (and not listed).

      The beauty of revealing open metrics is that it gives true perspectives on these businesses. It is so easy to look at a business and think “they must be killing it”, or “how could they possibly be surviving?”. Unless numbers are revealed, it’s all speculation, which is perfectly fine, but having the facts leads to some really great changes.

      Public metrics take away “I wonder how well they do” questions and replaces them with “what have they done that I have not?” type questions. It leads to inspiration and ambition.

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      • Vishal Kothari

        Very well said Pippin. Though we do not post numbers publicly, but I totally agree on taking away the thunder from any business by taking their code. That’s simply not possible.

        I used to worry about that at the beginning when we started selling plugins. When clients asked for refund, I used to be suspicious. Is he a developer? What if he just wanted my code? But after educating myself by reading articles of other people like you, I accepted the fact that it is not easy to just take the code & steal the thunder.

        The thunder of any business is in every little thing they do everyday & have done over the years. It’s not just their code.

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      • Dave Chu

        A very interesting exchange. I can see merit in both points of view, but I would like to hope that Pippin’s approach will work for him and others.

        From a customer’s perspective, as opposed to a competing business perspective, I prefer dealing with companies that have at least some openness in communication even if they don’t reveal sales numbers. It makes them seem human, and that they actually care.

        While reading, I was thinking about WooCommerce, which I believe is largely based on Jigoshop’s code. Although Woo pulled it off (and pulled way ahead), I’m sure there was a huge amount of work needed to make it happen. So I suppose that almost supports both of those opinions.

        Dave

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  3. MattReport

    As I eluded to in my article, I’m skeptical about this practice among new founders.

    Consider these two points:

    1. People are liars — sorry — promoters, as to say, I don’t believe some of the reported numbers. It’s easy to attract “entrepreneurs” with your “entrepreneurial” story. Sharing revenue is an attractor, especially when the numbers are exciting. It’s also a conditioning mechanism, those that are reporting record profits, are sure to have a great product!

    Says who?

    As a podcast host, I’ve pre-interviewed people that wanted to share numbers with me. After doing some reverse engineering, I found that those numbers just don’t line up with the evidence I’ve accumulated. When asking for proof, I would get a round around, which inevitably lead to no interview.

    For the business reporting, it will more than likely lead to an artificial injection of traffic/revenue that will eventually tail off. Or it won’t. My point here is, be cautious of what you read, revenue reports are becoming another form of content marketing.

    Which leads me to my next point.

    2. It isn’t always healthy. Pippin’s business is a great example.

    There are folks that feel like “competing” with him isn’t going to be possible. Look at those numbers, how could they? We’ll never compete! So they don’t launch.

    There are folks that *are* competing with him, looking at his numbers asking why they haven’t achieved what he and his team have. They become stressed and overworked.

    They aren’t looking at the big picture, the long game, and the fact that he’s been doing it for *many* years. People are (still) convinced that this stuff will magically happen overnight. It won’t and it didn’t for Pippin.

    Entrepreneurs are blessed with a grand vision and a passion to win. Thus, they pile guilt and criticism onto themselves daily in the pursuit of greatness. A constant doubt and remorse becomes the norm. This leads to burn out, super-amounts of stress or the extreme, they take their own lives. If you don’t think founder suicide is real, look it up.

    There’s always going to be someone else that has real growth and gains, while others are yet to “figure it out.” As someone that helps folks in this space, and has even offered coaching, the #1 question I get asked is — what’s the blueprint?

    Sure that question takes on various forms:

    – How did you do it?
    – What should I do to be like xyz company?
    – Where do I find a market like them?

    There is no accurate answer for *your* business. Looking at someone else’s bank statement isn’t going to change the course of *your* success. Don’t get lost in the hype and just because someone else is reporting their numbers, doesn’t mean you have to.

    Save your disclosures for a professional mastermind or better yet — your mentor.

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    • Pippin Williamson

      Here are two primary reasons (with many more subtle reasons) that people share numbers:

      1. To boast about how well they’re doing. These are the people looking for praise and admiration.

      2. To be transparent and help remove the questions so many people have about business.

      The businesses that fall into the first group are the ones that will inflate their numbers to make them look better. They do this because they want to seem bigger, they’re hoping to be acquired, or one of many other reasons. This, unfortunately, happens all the time. I’ve been told face-to-face that a particular business had over 100,000 customers/websites, only to discover within 5 minutes or less that it wasn’t even remotely possible for those numbers to be close to accurate by looking at publicly available data.

      The businesses that fall into the second group have no reason to inflate their numbers because that’s simply not the purpose of sharing them.

      Stay within the second group and share all you like. Join the first group and no one will be surprised (or sad) when the business fades away.

      I know that Matt and I differ on our opinion about sharing public stats (and that’s okay!), but I for one love them, and I applaud those that choose to take that route. I would urge, however, that anyone who wants to share numbers listen closely to what Matt is saying. Just sharing numbers isn’t enough because numbers alone don’t mean anything. What does have a lot of meaning, however, is sharing the numbers AND the journey it took to get there. Did you build a business up to $1,000,000 per year? Magnificent! Now tell us how you got there and how long it took and all the heart ache you went through, not just that you reached 7 digits. The same goes for businesses that don’t succeed. How far did you go? How long did it take and what did you give up to try and get there? What will you do different next time?

      TLDR: numbers by themselves are just shiny objects. Numbers combined with the journey involved in getting those numbers is pure gold.

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    • Scott Bolinger

      I agree with Matt that seeing numbers of successful companies can actually cause extra stress and depression in people who “aren’t there yet.” Most of the companies in my post are at the top of the heap, which can make it seem like you suck if you aren’t making that much. Like Pippin said, there’s a lot of backstory to each company, and revenue numbers by themselves are misleading.

      For example, Ninja Forms didn’t make any money for 2 years, and they had to completely rebuild their product. Pippin worked his butt off for years before he struck gold with EDD. For every success story, there’s hundreds of products not doing near as well.

      I hope people look at these numbers as just data to learn from, not a measuring stick to compare themselves by.

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  4. Darren

    I saw the title looking forward to a great read. However I find little in the article about how “business owners benefit from publicly sharing revenue stats”? You open with mentioning the recent WooCommerce acquisition by Automattic, where’s the public revenue stats for Woo? Has there been public sharing of how much they were acquired for? Poor title.

    However, I do agree with pippen and others in the comments that there’s very good value in a business built on the open source model for their code.

    Disappointed that the article didn’t deliver on what the title promised.

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    • KTS915

      @Darren,

      I agree completely. The article simply doesn’t reflect the (misleading) headline.

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  5. Darren

    To add to the conversation (rather than just griping). A question I have had (when discussion comes around transparency in revenue reporting), is whether its only happening when numbers are “good”. In other words, its much easier for businesses to be “transparent” when:

    – numbers are on an upward trend
    – reflect a “healthy” business
    – support a recent decision.

    But what about when:

    – revenue is on a downward trend
    – indicate the business is struggling?
    – prove a recent decision sucked?

    I think transparency has greater value to the consumer of that information when FULL transparency happens. But what benefit is it to a business to report those “negative” numbers? How does that help their bottom line?

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