Good Business Ethics

Good Business Ethics

Tired of the Woo drama? Then skip to this section.

Earlier this month WooThemes announced a price increase. For this they have been praised by some for ensuring “their sustainability” and “that their lifetime will be much longer than it would have been just days ago”. Some very high profile and well-respected developers also came out in support, to name but a few Carl Hanock,

Brian Krogsgard and Pippin Williamson (albeit with some reservations about how it was handled).

However the changes caused a furore among a vast majority of their customer base. While some were angered by the perceived opportunism, the main focus of customers’ anger was towards the following paragraph in WooThemes’ announcement:

Any purchase made before today will be grandfather-ed into the new system with access to support and updates for 2 years. All theme purchases will also now have a license, which you’ll be able to use with the WooThemes Updater once all themes have been updated.

That is the changes would be applied retrospectively: customers who had purchased a product (license) with the understanding it was unlimited with regard to both sites and duration were told that this would no longer be the case. This is compounded by the fact that the in the month preceding their changes, WooThemes ran a sale – pushing sales with conditions that would abruptly change.

As noted, however, there were some who backed the changes, pointing to the fact that if WooThemes didn’t survive, then the licenses would die anyway along with their product, and possibly even parent company. However, this potentially illegal1 and highly unpopular move forced caused such a stir that it forced WooThemes to backtrack and give customers the option of moving back to the terms they had agreed to.

Even then, you have to opt out of the new license conditions, which is dubious to say the least.

… but haven’t they got a point? What Carl says is entirely true:

A lot of businesses, making a lot of money (so we’re told) rely on WooThemes to exist and continue to provide updates and support for their products. But here’s my point: when a customer makes a purchase from you, it’s a promise. The customer pays you money, and in return you provide them the product, and any promises of updates and support that went with that purchase. In legal terms, it’s a contract.

If you’ve promised more than you can provide, then the company must bear the cost of that. The customer cannot be penalised for the mistakes the company made – that’s good business ethics.

Good Business Ethics

But I don’t want this article to be focussing on the bad. Because, at around the same time another WordPress company realised that their current business model wasn’t working. Like WooThemes they too had offered liftetime support and updates, and like WooThemes they realised that this wasn’t sustainable and needed to change. In fact, this change was the third in one year. The man behind this business admitted his mistakes, and corrected them without punishing existing customers.

In fact he went one step further. He even gave existing customers – regardless of which model was in use when they purchased the product – lifetime updates and support.

The company is Thomas Griffin Media, and the founder Thomas Griffin and the product, Soliloquy.

Thomas has written up an excellent summary of the four business models he experimented with, along with the reasoning behind the one he’s chosen to stick with. It’s an insightful analysis, but more importantly it’s a demonstration of how businesses can do the right thing.

At the heart of any business, including WooThemes, are people – who, like everyone, are prone to making mistakes. We need to bear that in mind, and have grace for that, and resist temptation to consider them faceless entities whose sole intention is to extract money from us. And it has been good to see – as I’m sure Adii will appreciate – customers stating they would be willing to pay more to see the business thrive.

But businesses though must recognise that their promises need to mean something and that they should, at the very least, treat customers fairly and honour the commitments they make. The burden of doing that cannot be imposed upon the customer.

As consumers in a relatively young, albeit fast growing, marketplace we have the opportunity to define the characteristics we want to see in businesses. Do we value low cost, or high quality products? Do we value established brands, or indie developers? Do we value profit-driven businesses, which are able to grow and invest? Personally, I think we should be encouraging characteristics such integrity, transparency and honesty in our businesses. These are not white elephants. They can be found in businesses of all sizes. And I urge you to promote such businesses.

  1. In UK law there is enough to suggest that courts would deem this ‘unfair’ and so illegal.‎. But it’s really South African Law that applies here. Nevertheless, I would be willing to bet it is in fact illegal. 

2 thoughts on “Good Business Ethics

  1. Great write up Stephen. I’m not sure what to make of the WooThemes sale and then the sudden change in terms. I have no quarrel with pricing increase – I think it should have been more expensive / limited licenses for a long time. I want to see WordPress businesses grow and thrive, as I wish to myself. Honesty and transparency are what I want, and I think for the most part the quality WordPress businesses (you know who I’m talking about) do so.

    WooThemes is making a change for the better. I hope to see younger companies learn from them, and start in the right place. Be willing to charge for a quality product and be open with your customers.

    Again, nice article Stephen 🙂

    • Thanks Alex! I have serious reservations about unlimited licenses: I think they devalue what is being offered and in most cases are simply not sustainable. That said they can be used to accelerate adoption of your plug-in and secure your dominance in the market. Gravity Forms did this to great effect, and arguably WooCommerce did too in drawing people away from Cart66. But if what WooThemes says is true it seems they left it too long to switch. Unfortunately, and unlike Gravity Forms, they took the awful decision of trying to retrospectively change their contracts with customers. The sale immediately before that doesn’t reflect well to say the least either.

      But, yes, hopefully younger companies will look at companies like WooThemes, RocketGenius and Thomas Griffin Media and learn from them, and avoid making painful mistakes. I certainly have a lot to be grateful for to RocketGenius in how I’ve tried to model Event Organiser – and Thomas for his very open and frank articles.

      My main motivation was to highlight a company that I felt had handled themselves well. And that in a relatively small marketplace we’re in a better position to influence company behaviour by who we choose to do business with and who we promote. On a much more broad note, we as customers find it easy to ignore unethical business practises for convenience / low cost, and we don’t generally promote businesses that ‘do it right’. I’d like to see that change 🙂

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