The website builder market is red hot

Or is it?

The do-it-yourself website builder market is heating up. Right? One thing’s for sure it’s super crowded. A Google search for ‘website builder’ turns up the usual suspects…Squarespace, Weebly, Wix, Strikingly, Jimdo, Yola…not to mention the longtime market leader: Wordpress. And dozens of other vendors.

Choices, choices…

Just when the market seems saturated and commoditized, new entrants make big splashes on Techcrunch. Startups Pagecloud and The Grid both launched in 2015, hoping to disrupt the sleepy website builder market.

Ooh, this looks disruptive!

Small businesses need an online presence

There’s no doubt most small businesses need a web presence. In a recent survey, 400 small businesses were asked what the primary purpose of their website was. A whopping 71% of respondents said to create an online presence and generate awareness.

“What is the purpose of your website?”
A modern, professional website should produce a steady stream of leads, whether by way of phone calls, emails, or directions to a physical location.

VC funding: Follow the money

Venture Capitalists appear to view website builder startups as market darlings. Squarespace and Wordpress announced massive rounds in 2014, and Wix raised $127 million in 2013 in the largest IPO ever for an Israeli company. Is this where the unicorns are hiding?

VC money raised, in millions

Google data shows that 55% of of small businesses don’t yet have a website. And there are 28 million small businesses in the US alone, according to Forbes. So the addressable market looks impressively large. And there are a few monetization strategies that could work: Ads or subscription, for example.

Is the website builder market huge?

As of 2014, Wix claims to have 50 millions users. Watch out, Facebook! But that most likely just means 50 million people have registered for accounts. How many people still manage active websites on Wix? According to Built With, only 1.2 million websites are running on the Wix platform. In 2012 Squarespace claimed to have 1.4 million websites running. Weebly may have close to 680,000 websites, according to research posted on OS Training.

Google Trends

Why no growth?

It appears that the growth of the self-serve website builder market has been over-hyped. Why aren’t individuals and small businesses adopting these DIY platforms? And why haven’t any of these DIY platforms put a dent in WordPress’s market share?

Pagecloud would say existing tools like Squarespace don’t offer enough design control. The Grid would say the problem with DIY is that web design is too manual. The Grid wants to avoid the expense of creative website design altogether by offering automated design. Will creative website designers be replaced by AI? It’s a helluva bet.

The agency model is still king

According to an Ibis World report, the web design services market is $24B strong. This huge number implies that the digital agency model is alive and well. Digital agencies (and freelancers) offer front-end design, project management, and handle all the mysterious back-end development that clients want to avoid having to do themselves. These agencies help create content, design the site, and build all kinds of website features using complex web frameworks or (CMS) content management systems.

Hm, this looks complicated. Maybe we do need an agency

But even more importantly, the purpose of the agency is to provide digital marketing expertise, tech support, and accountability — this is what small businesses really want for their website.

The “web guy” is just a phone call away when something goes wrong. And something always goes wrong.

Cost of DIY vs a freelancer

Wordpress Developers charge $50/hr on average and there are tens of thousands of them on sites like Upwork. Basic websites can be set up for as little as $1,000–2,000 plus monthly hosting of $10/mo. How does this compare to paying Squarespace $36/mo and doing all the design and building yourself? Assuming these costs are rational estimations, the break-even point is about four and half years. But either way, website costs — and complexity — will always creep up as you add functionality and make updates.

The promise of cost savings with a DIY solution may not be resonating with individuals and businesses.
The Wix editor: Looks simple, right? Hm.

DIY’s fatal flaw: The customer does all the work

The DIY approach may appeal to a subset of business people who are comfortable getting hands-on with their website. But the reality is that too much design control intimidates the majority of business people.

Beautiful, intuitive drag-and-drop editing functionality appeals to everyone at first glance. But the average business owner get frustrated almost immediately. For business people who don’t design websites for a living, the website building experience is stressful and feels like a chore that someone more qualified should handle.

DIY means the customer has to do all the hard work

That explains why so many businesses sign up for a self-serve website building service but quit the service. The trial experience leads them to decide to hire an agency or freelancer.

Great products create customer value by doing heavy lifting for the customer. While DIY platforms save customers from having to do difficult coding work, they leave the customer with far too much non-coding work and responsibility.

So while the website building market may seem red hot at first glance, an overwhelming volume of businesses still do it the old fashioned way, by calling the “web guy.”