Leaving My Equity Trading Career to Build a WordPress Business

Hello! What's your background, and what are you working on?

Hi, my name is Michael Hebenstreit, and I'm a former stock broker and entrepreneur located in Frankfurt am Main, Germany.

I'm the founder and CEO of MH Themes, a WordPress theme company specializing in professional magazine WordPress themes for online magazines, news websites and advanced blogs.

Today, we're making around $360k in yearly revenue.

What motivated you to get started with MH Themes?

My background is very different from what I'm doing today. I started my career in the banking industry, working as a stock broker (institutional equity trading) for various banks and broker firms in Frankfurt am Main.

A few years ago I didn't even know what WordPress was, so of course I didn't have any idea how to code a WordPress theme. Nor did I have have any education in design, development, or IT.

However, I tend to get bored quickly, and I often have crazy business ideas (which usually don't become reality), and back in the early days I experimented with creating HTML sites for all kinds of things as a hobby. That was long before WordPress existed.

In 2010 I became interested in online marketing and SEO, and at that time I launched 2-3 online magazines in order to try things out. That was also when I first learned about WordPress, and it was exactly what I was looking for at the time.

This business basically started as a one-man show, and even today it's still just the two of us.

Running my online magazines with WordPress, I wasn't always happy with my themes. They just didn't do all the things I wanted them to, so eventually I started digging into the code and tweaking things without really knowing what I was doing.

But learning by doing is one of the best ways to learn, and I got better and better at tweaking code as I want. I started to understand how WordPress worked under the hood, and I read tons of tutorials and the WordPress Codex while I kept experimenting with code.

One day I decided to design and code my very own WordPress theme from scratch, and while that was quite time consuming, it was certainly the fundament to what I'm doing today.

I also noticed how much money theme authors were making on ThemeForest. What really impressed me was that even though there were countless themes available, most authors were still very successful in selling their products. I'd already gotten great feedback from friends and family about my first amateur theme, but when I noticed this huge market and potential, I decided to dive right into it.

What went into building the initial product?

Developing a WordPress theme for your own site is completely different than selling a reliable product to thousands of people. I was fully aware of this, and in the initial phase I kept improving my skills and my understanding of everything involved while still working my day job in the banking industry.

Then one day, after I'd come to realize it would require all my time and energy, I made the switch to work full time on my theme business. Luckily, I'd saved enough to not have to worry about the financial aspect of the decision.

Once I felt comfortable coding in PHP and using the tools and resources I'd need, I started coding my first commercial product. As I mentioned before, I'm not a designer, and I'm probably way too logical and business-oriented to design creative stuff or even do art work. I've never used Photoshop or any other design software in my life.

For these reasons I initially worked with a professional designer. His job would be to design a great magazine theme, and I would take care of the coding part. We would then release the new theme on ThemeForest and share the revenue.

Well, that didn't work as expected. After submitting the theme to ThemeForest, they rejected it right away because in their opinion the theme design wasn't good enough or unique enough.

I was close to dumping the idea entirely and returning to my job in the banking industry.

This, of course, was a very frustrating and daunting experience, especially after taking a designer on board and putting in all that hard work. I was close to dumping the idea entirely and returning to my job in the banking industry. But after thinking it over for a few days I decided to end the collaboration with the designer and start again from scratch on my own.

I had no idea how to use design software, so I simply started coding and building my WordPress theme while previewing it in the browser. I wanted to code the kind of magazine theme I'd always personally wanted, and I applied the CSS styles to my own taste, without thinking too much about web design best practices or what other people might like.

My code editor is Coda. I run my development environment on MAMP. And for version control I use Versions for SVN, combined with Assembla.com.

It took around 300 hours to ready my first commercial product for release. This was mainly because I was still learning and trying things out. But in February 2013, the time arrived: I launched the MH Magazine theme, which today is one of the most popular magazine themes for WordPress, running on thousands of websites worldwide. (You can see some great examples in the MH Themes showcase.)

You can't imagine how my wife and I felt after we'd made the first sale. It was such a great feeling that people actually liked what I'd built, and I was very grateful for their support. I still am.

How have you attracted users and grown MH Themes?

After my encounter with the gatekeepers at ThemeForest, I sought other ways of selling my product. I don't like running a business with dependencies, so I figured it would be best to start my own shop. I coded a suitable theme and launched the MH Themes website.

But of course people won't suddenly start buying your product just because you have your own site. So I started doing SEO, writing blog posts, building social media channels, advertising on related sites, and more.

I also launched a lite (freemium) version of the theme on WordPress.org to attract more users. This worked really well at that time — back in 2013 — and revenue grew quickly, often by more than 100% on a monthly basis.

In November 2013 I launched the theme on Creative Market, a platform for design content, thinking it would be a great alternative to ThemeForest. Instead, I ended up discovering that WordPress themes don't sell there at all.

In spite of this, Creative Market became a great choice for us. Not because of the marketing advantages (which are non-existent, at least as it pertains to WordPress themes), but because it allows us to sell WordPress themes without the need to deal with taxes, invoices, and legal stuff.

Running a business in Germany (or in the EU in general) can be quite a pain. There are a lot of regulations and tax issues to deal with, especially when you sell globally. So I decided to outsource this to Creative Market.

Early in 2014 we exceeded the milestone of $10k in monthly revenue for the first time. Business was running very well, and outsourcing the administrative stuff to Creative Market was paying off. It allowed me to spend my time solely on development, support, and marketing.

Because we were redirecting people from our website to Creative Market our theme quickly became popular on that marketplace. It ended up being the most popular WordPress theme on Creative Market in 2014.

In January 2014 we were also contacted by Automattic, a company run by WordPress co-founder Matt Mullenweg. They asked us if we would like to become a premium theme partner and sell our WordPress theme on WordPress.com. We were thrilled about the offer since it would make our product available to millions of new users.

So I signed the contract and started to prepare our product for their environment, which turned out to be quite an effort. But more on that later.

What's your business model, and how have you grown your revenue?

Obviously the main source of income for MH Themes are theme sales. Sales are generated partially through organic, word-of-mouth growth, but some others come in through upgrades from the freemium business.

We've also been doing quite a lot of PPC (pay-per-click advertising) through Adwords and Facebook, which is working as well.

To top all of that off, we have an invitation-only affiliate program which currently accounts for around 10% of our revenue.

Today we're making around $30k in monthly revenue, which is almost 10% lower than it was in 2016. In my opinion the stagnation is due in part to changes in the overall market environment, which I'll get into later.

What I'm especially happy about is that our website itself has started generating more and more revenue. We get around 225k monthly visits, and we receive quite a lot of requests from plugin and theme developers who want us to review their products. (Here's an example.)

On our site we've started recommending WordPress hosting companies, and we've produced a WordPress themes directory where we recommend 3rd-party themes. Both of these generate affiliate income.

Over the years we've launched a bunch of additional WordPress themes, but none of them is getting even close to the success of the first product. We've also launched several free WordPress themes, but they're not really taking off. This shows that a freemium model doesn't always work well.

I think people notice that we mainly focus on MH Magazine and gravitate toward purchasing it over the new additions. That said, we've created pricing plans that include all of our WordPress themes as a bundle, and it's been popular with our users.

One of the things I'm especially proud of is that I was able to scale MH Themes quite reasonably while running on extremely low resources.

My wife assisted me from time to time with answering emails and other small tasks, and she eventually joined as a full-time employee in February 2016. This business basically started as a one-man show, and even today it's still just the two of us.

We also work with contractors to whom we've partially outsourced support, content creation, and other stuff when needed. But I still take care of the core business by myself, and it's worth mentioning that for me this means working 7 days a week and at least 10 hours per day. So the success hasn't come without a cost.

However, I've seen competitors who are making comparable revenue with 10+ employees and 30+, 40+, or even 60+ released WordPress themes. And sometimes I've wondered: If we're equally successful with only two people, where would we be with 10+ employees and the same resources?

Learning by doing is one of the best ways to learn.

But I also know that managing people can be hard, and while more resources would be great, a lot of time and energy might go into managing staff and dealing with other unexpected issues related to that.

Obviously, when your monthly revenue is around $30k while your monthly costs hover between $1k-3k (depending on the amount of work we outsource), there are quite a lot of funds left to work with. We've used that money partially for various acquisitions in the past few years.

We've taken over several theme shops and WordPress-related websites. We use their content and traffic to strengthen our site, and then we retire their themes while trying to convert their customers to our own products. This has certainly worked quite well to strengthen our business.

We're still looking for interesting acquisitions today, though it has become harder to gain a decent ROI on WordPress businesses within a reasonable span of time.

At the moment we're trying to increase recurring revenue. In addition to the new customers coming in every month, we have thousands of existing users with expired licenses.

We've never introduced automatic renewals, and at the same time we didn't make it obvious enough that a renewal was even possible. So we have lots of users who are still running their sites without any awareness that their license has expired. Currently we're working on notifying these users so that they can renew their license in order to get product updates again, which is working better than I expected.

I think another valuable insight for other entrepreneurs, especially those who are selling digital products, is that you can save lots of time, money, and trouble if you focus on your core business instead of dealing with administrative duties like taxes, invoicing, legal requirements, and what not.

I already mentioned before that we initially outsourced this to Creative Market, but since 2014 we've used FastSpring to process the business for us. This works really well and is way less expensive and more straightforward than selling through 3rd-party marketplaces.

What are your goals for the future?

In my opinion the market for WordPress themes has changed quite a lot within the past few years.

Back in 2013 it was much easier to launch a WordPress theme and make it somewhat popular. Today the market for WordPress themes has become heavily crowded and oversaturated. It's near to impossible to make a theme highly successful without investing lots of time and money in marketing and building a community behind your product. Every day, many great WordPress themes are released, but most of them won't become a popular product or even attract a reasonable number of users. It's sad, but true.

However, due to the huge potential and reach of WordPress, it's still manageable to release a new WordPress theme and generate some sales for a few months. It's just not a good strategy, in my opinion. I don't consider a WordPress theme that makes $1k-2k per month a successful product or a reliable business.

Select an interesting niche, build a single product, and make it the best of its kind for that audience.

For example, there are lots of theme shops that release a new theme every month (sometimes more) and make a few bucks on each of them. And then one day they end up with a portfolio of 50+ themes which all need to be supported and maintained. Good luck with that approach in the long run!

I think it's much better to select an interesting niche, build a single product, and make it the best of its kind for that audience. It's also much easier to market such a niche product, rather than doing marketing for a portfolio of products that all serve a different audience or purpose.

Accordingly, we've planned to further focus on our main product and to continue improving it as WordPress evolves.

In a couple of years WordPress probably won't be what it is today. We're already seeing the direction it's heading in with projects like the Gutenberg editor.

As I've recently written in a post, I can't say that I'm a big fan of Gutenberg or that I think we're heading in the right direction (especially when you take the entire WordPress ecosystem into consideration), but it seems this is what has been decided by the people in charge.

We understand that WordPress certainly needs to evolve to make it future-proof and competitive, but the uncertainty with Gutenberg has led us to put all major development on hold until it's clearer how these changes will affect the existing WordPress ecosystem.

As soon as the future clears up we can plan ahead and think of upcoming releases and improvements. I've spoken to many other WordPress developers, and most of them are doing the same. It's certainly not a comfortable situation to be dependent on what will happen with WordPress core, especially when backwards compatibility isn't a priority anymore.

Speaking of dependencies, I've mentioned before that we started selling on WordPress.com in 2014. For a number of reasons we stopped selling on WordPress.com in June 2017. Unfortunately they were making some changes that weren't acceptable for our business, and we preferred keeping full control over where and how we were selling our products.

I think other WordPress companies will need to evolve as well in order to survive in the future. We'll probably see a phase of mass consolidation within the coming months, and possibly also a few more surprises. I think more and more companies will convert into SaaS businesses, offering all-in-one solutions with a focus on onboarding and usability. We may look into that possibility as well if it makes sense for us to establish further growth.

In addition, I think it's a good idea to look for business opportunities outside of WordPress. We're currently highly profitable and have a very solid financial foundation that would allow us to expand into other areas.

I'm very open to investing in other interesting business ventures, and I'll keep my eyes open for those. In 2015 I founded another company (Array Internet) which currently acts as a holding company for our WordPress business. But I also plan to use that company to invest in other online businesses for diversification.

What are the biggest challenges you've faced and obstacles you've overcome?

The biggest obstacle I'm facing is hiring the right people. We're highly profitable, and we easily could hire a whole team of talented people to take our existing business to the next level (or even experiment with new business ventures).

However, it seems hiring people is not easy at all. I tried it once, and it didn't work out very well. I hired a developer so that I could focus more on management and marketing, but in the end it turned out that the developer didn't have the necessary skills. I had to redo a lot of his code, which was huge waste of time and money.

Maybe this is a mistake on my part, but I don't like the idea of a hire and fire culture. So even after the bad code dilemma I just mentioned I didn't fire the developer. Instead I tried to use him for other things — graphic works, video production, content creation, customer support, and other roles.

In the end, however, it just didn't work out, and I had to end the collaboration. The overall experience cost me a lot of time, money, and energy. And as I resumed taking care of things myself soon after, I noticed I was becoming much more productive again — the reverse, in my opinion, of how it should be.

I still take care of the core business by myself… this means working 7 days a week and at least 10 hours per day.

Steve Jobs once said, "It doesn't make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do."

In reality, however, finding these sorts of poeple seems to be a tall order. Many people are just looking for a job so they can earn some money and make a living. Finding people who are hungry and interested in actually contributing to the success of the company is hard.

We need people with their own vision and ideas to move things forward, and not really people who just do what you tell them to do. But exactly the kinds of people who have great skills, ideas, and visions often start their own businesses and aren't available for hire — at least not at a rate that would be reasonable for a company of our size.

If you had to start over, what would you do differently?

If I could start over again, I would completely focus on one niche product and make it the best and most popular product on the market. Unfortunately I've been tempted in the past to release additional stuff in order to (possibly) increase revenue, mainly just because the competition was doing the same thing.

That was definitely a mistake. I mean, we basically have focused on one product from the beginning, but now we also have nine other products that we have to maintain. There are enough WordPress theme companies which release one theme after another. We don't need to be another one.

Our motto from the beginning has been quality over quantity. So in retrospect, I should have followed that motto even more strictly.

Have you found anything particularly helpful or advantageous?

I think timing has been the greatest advantage for our business. As I mentioned before, the market for WordPress themes was much different in 2013 than it is today.

If you want to start a WordPress theme business today and don't have something very unique and special to offer, then there's probably a better way for you to spend your time and money. Especially given the upcoming Gutenberg changes. Maybe WordPress themes with the new Gutenberg editor will only become a bunch of CSS files, taking care of design only, which will lead a lot of different companies to create similar designs and make it even harder to compete.

What's your advice for indie hackers who are just starting out?

Whatever you do, try to focus as much as possible. Make a decision about what you want to offer and then work towards making it the best product on the market.

Don't lose focus by watching the competition too closely or even copying what they're doing. Do things differently, and try to find your audience and listen to their needs.

If you can, hire the right people who can help you grow your business. Let them participate in your success, and motivate them to contribute their ideas and visions. And if you've done that, please contact me to let me know how it worked out! :-)

Probably the most important advice I can give you is to not make yourself dependent on 3rd-party companies or marketplaces.

In the end I'm very thankful that ThemeForest rejected our first product back in the early days. Otherwise, we probably wouldn't have focused on our own site from the beginning, and we'd be in quite some trouble now.

Nowadays many theme authors on ThemeForest are dealing with decreasing revenue due to saturation and changes by Envato, which directly affects their business. I've seen theme authors with great products who have already gone out of business because of that.

It's important to keep in mind that each of these marketplace companies are running their own businesses with their own objectives, which may not always align with your best interests. So keep as much control as possible, and use marketplaces for promotion, if for no other reason.

Where can we go to learn more?

You can find me (@m_hebenstreit) and MH Themes (@MHthemes) on Twitter and Facebook. Make sure to also have a look at our blog, where we share insights, tutorials, and news on a regular basis.

I also want to especially thank you for reading until here. Thanks for your time, and I hope that the insights were helpful for you in making your own business decisions.

If you have any questions, please leave a comment below. (If you'd prefer to talk privately, feel free to reach out via our contact form.)