Howdy! This piece is an active work in progress and was last updated on September 29, 2022. Have questions or suggestions? Leave a comment or hit me up on Twitter.
I’ve been thinking about the benefits and tradeoffs of decentralization and my hypothesis is that the concept of a guild for WordPress product businesses might be just the thing we need to mitigate the tradeoffs of decentralization faced by extenders. So I started doing some research.
I love contrast (most of the time) and these two books offered it. Guilds, Innovation and the European Economy, 1400-1800 offers a history and analysis of guild formation and activity that, overall, presents a positive perspective on the influence and impact of guilds in shaping markets and driving innovation.
The European Guilds: An Economic Analysis (published about a decade later) concludes with a different perspective, offering the “distributional” approach as the most reasonable explanation for the introduction and longevity of guilds. That is, guilds existed as a result of conflicts over the distribution of resources and created concentrations of power that benefited the select few. The book argues that while the potential existed for guilds to create social trust and facilitate collective action to the good of society and their markets, on the whole guilds did more harm than good, particularly at the cost of those not in power. That is, unless two particular ideals hold true.
The ideal of a guild, my research suggests, is to facilitate social trust on behalf of its members (which reduces transaction costs within an economy) and orchestrate collective action that benefits all participants.
As The European Guilds: An Economic Analysis illustrates, concentrations of power tend to promote the benefit of a select few at the expense of those outside the group.
My thinking here is that just as within a decentralized ecosystem we enjoy benefits and tradeoffs, a guild, which introduces aspects of centralization, offers benefits and tradeoffs. The opportunity before us is to design a guild that works towards solving the problems of our decentralized ecosystem that affect product businesses while introducing constraints to mitigate the tradeoffs that guilds tend to gravitate towards.
What I’m wrestling with is that concentrations of power and influence carry tradeoffs of their own. Guilds can have far reaching unintended (or even intended) negative consequences. So I took a step back to consider the problems we’re trying to solve.
The Three Problems
As I see it now, there are three main problems faced by WordPress product businesses today that limit their growth and, thus, opportunity to provide value to the broader WordPress ecosystem.
- Monetization – WordPress products struggle with effectively monetizing their businesses. They’re undervalued, under priced, and as a result often lack the financial resources to properly invest in their growth.
- Distribution – Getting in front of the ~43% of the web on WordPress is difficult because of the ecosystem’s decentralized nature. Product businesses, especially newcomers, struggle to get traction.
- Compatibility – Compatibility and the related interoperability and portability (looking at you “Page Builders”) cause a wide range of difficulties. The more products come into the market, the more the problem intensifies.
The idea is that if WordPress products can monetize more effectively, are able to accelerate adoption through distribution, and standardize their approach to compatibility, then the businesses are healthier and, accordingly, the ecosystem benefits.
Designing a Guild
The idea, then, is to design a guild that:
- Facilitates social trust – Help the ecosystem make confident choices about the WordPress products they use, which benefits the members of the guild, and thus the ecosystem.
- Orchestrates collective action – Take effective action on behalf of members, guiding and directing resources to the benefit of ecosystem, and thus the members.
And do so with an explicit focus on helping WordPress product businesses solve the problems of monetization, distribution, and compatibility.
Solving the Problems
Alright, so the guild exists. How does it make progress towards solving the problems? As best I see it now, it looks something like this:
- Guiding Monetization – Providing inspiration, guidance, and support to product business founders. This includes business models, pricing, investment, acquisition, etc.
- Facilitating Distribution – Working closely with distribution partners (e.g. ecosystem plugins, hosting providers, SaaS integrations) to create aligned incentives that facilitate members businesses getting in front of their addressable market.
- Enforcing Compatibility – Providing standards and tools to streamline the work of compatibility then providing graduating enforcement of those standards on guild members in the work of promoting social trust.
And the idea is that the act of investing energy and resources into those three lines of work allows the guild to facilitate social trust and orchestrate collective action.
Inclusion and Exclusion
One of the attractions of guilds is “exclusivity”. Members want an advantage that others don’t have. Historically, though, that exclusivity is to the benefit of those already in power and to the detriment of those who aren’t.
How do you address that, then? Personally, while I am optimistic about human potential, I don’t trust human nature. Power tends to corrupt and the more power concentrates, the higher the risk of abuse.
My current conclusion is that the simplest and best approach is to both include and exclude based on only one factor: behavior.
Anyone is welcome who agrees with the principles and adopts the practices of the guild.
And what are the principles? There’s work to do here to figure this out, I suggest, though, that Andrea Middleton’s work on articulating WordPress’ core values gets us most of the way there.
She advocates that the WordPress community holds five core values:
- Autonomy – We do what we want and respect the freedom of others to do the same.
- Do-ocracy – Work = merit. Those who do the work get to decide.
- Utility – We make stuff that works, that solves problems.
- Skepticism – We ask why and keep asking.
- Credit – We give credit where credit is due.
And the tools of Open Source that we adopt in WordPress are:
- Open Access – Starting with source code and moving on.
- Transparency – So we can understand why.
- Altruism – The good of the many.
- Collaboration – We work better together.
- Iteration – Small changes, frequently made.
For a guild to be successful in the WordPress ecosystem, then, we connect inclusion to adoption of the values and use of the tools and exclusion to the opposite.
As an example, the GPL aligns beautifully with our desire for autonomy. You can take code I write and do what you want to with it. To line up with the rest of our values, though, give credit where credit is due. To take and benefit without providing credit is behavior that erodes our values and serves as the basis for exclusion.
Guild Business Model
Alright, so let’s say that’s well and guild. How does the guild generate revenue to do its work?
In my current thinking, there are two types of revenue:
- Operating Revenue – Revenue generated by the guild itself.
- Member Revenue – Revenue generated by members and paid to the guild.
For member revenue, I am imagining two types of membership:
- Free – Available to organizations creating free products that benefit the ecosystem, relying on sponsorships and donations.
- Paid – Available to businesses generating revenue from WordPress products.
For the paid type, I’m thinking of three tiers of membership, differentiated based on the amount of revenue you allocate to the guild:
- 5% – Baseline membership, intended to be a direct connection to Five for the Future. You enjoy all the basic benefits of the guild and 100% of the money you contribute goes directly to the Core project.
- 10% – A mid-tier membership where you enjoy additional benefits and services such as training. Half goes to the Core project, half goes to specific member benefit.
- 20% – The most a business can contribute to the guild, positioning the guild, in many cases, as an effective co-founder / partner in the member business.
Now, what I got to thinking about is how do you ensure that the money is actually being spent to the benefit of the members?
The answer, I think, is to draw inspiration from charity water’s 100% model. And current conclusion is that 100% of all member revenue goes entirely to member benefit, none of it is spent on the operating expenses of the guild.
So how does the guild make money to run itself, though? That’s where the operating revenue comes in.
The guild would own product businesses that generate revenue. This can take multiple forms. The idea, though, is it would acquire products then manage and grow them, generating revenue that goes into the member pool (the 20%) and then revenue that is split between growing the product and covering the guild’s operating expenses.
This provides an incentive for investors to put money into the guild (as those product businesses grow and benefit from their position as guild-owned, they’ll generate returns) and has the added benefit of positioning the guild as a potential home for members who want to sell their businesses.
The last topic on my mind at the moment is dealing with success. How do we mitigate the tradeoffs of the guild’s growth in power and influence?
Topics I’m thinking about and gathering feedback on include:
- Preventing Capture – Ensuring that the guild isn’t taken over by a select few, no matter how well or ill intentioned they may be.
- Ongoing Monitoring – Ensuring that member behavior is sustainably monitored.
On preventing capture, one of the ideas I’ve been working through is how to ensure power is systematically defused throughout the organization. One basic example is ensuring that there are minimal restrictions on members, encouraging innovation and productive competition amongst members.
With ongoing monitoring, the idea is to ensure that the guild’s operating capital is sufficient to cover the costs of monitoring and also transparently directed into growing the guild and keeping the balance of power with its members, versus the guild itself. The guilds own revenues, for instance, might ideally range between 5-20% of the member revenues and have built in limiters, with additional revenues automatically being returned to the members.
Based on feedback I’ve received so far, here are some the questions we’re exploring:
- When does a product business become a product business in the WordPress ecosystem? What, if anything, is the different between a solopreneur with a commercial product and an enterprise?
- How do we ensure the focus remains on product businesses? (Service providers and hosting providers I’d argue are welcome in the guild, yet not the focus).
- How do we think about ecosystem wide topics certification?
- How do we ensure a steady flow of knowledge and inspiration from other ecosystems into ours?
Have any questions to add? Let me know!
I like this direction a lot and in my conversations so far over the past few weeks I’ve received consistently positive feedback that while there are lots of details to work through focusing on monetization, distribution, and compatibility are worthwhile and, at least as I see it now, the concept of a guild feels like the best vehicle for this time and place in the WordPress ecosystem.
Stay tuned for more.
A special thanks to Andrea Middleton, Josepha Hayden Chomphosy, and Lesley Sim for their writing and talks that have served as inspiration for my work here.
And special thanks to Adam Weeks, Anna Maria Radu, Matt Fields, Kelley Murro, Scott Kingsley Clark, Cory Ferreria, Daugirdas Jankus, Eran Shor, Spencer Forman, Matt Geri, Bob Dunn, Verdi Heinz, Zach Stepak, and Kevin Ohashi for early feedback on this piece.