Success Story: How Migrating ThemeKraft’s Plugins to Freemius Saved Them from The EU VAT Mess

This success story will focus on Sven Lehnert’s amazing entrepreneurial journey. Sven is a developer and a businessman from Germany who most famously created BuddyForms. He’s also the CEO at ThemeKraft, which partnered with Freemius to monetize all of their WordPress products.

Sven, thanks for agreeing to tell us your story! Can you give us a quick overview of yourself: where are you based, and how did you get started as an entrepreneur?

I’m actually from Germany Düsseldorf but live in La Gomera at the moment. I’m a father of two children and the CEO of ThemeKraft. I’m a project driven person and have always more ideas than time. I became a full-time entrepreneur back in 2008 when I decided to create a startup with 3 other people.

When was your first encounter with WordPress and what’s the impression it had left on you?

My WordPress journey started actually with BuddyPress. I learned about WordPress while searching for a social network solution. Back in 2006, I built a niche community for an internet radio targeting the subculture in my town. We used BuddyPress for radio listings, shows listings, radio moderator, and user profiles. It was a great project, but the German law made it very difficult in the end to run an internet radio and so we stopped.

The theme and plugins we had created during the time were still out there, so we decided to continue as a WordPress driven team and company.

As I mentioned at the top, your most recent project and what you probably spend most of your time on is your freemium WordPress plugin — BuddyForms. How did it come to life?

BuddyForms has a long history. Back in 2006 when we ran an internet radio there was no plugin that supported user-generated content and was compatible with WordPress. The only solution out there was called ToDoMiniForms and it was really limited and very hard to use. From our own experience, we deeply understood the needs of a great form builder and we knew we could do it better.

One script evolved from customer to customer, and one day we decided to make a WordPress product out of it.Tweet

After the Internet radio was closed down and ThemeKraft was born we became BuddyPress experts with a strong focus on user-generated content. We got more and more customers asking us for posting functionality in BuddyPress, which made us create the first ever plugin that allowed one to install custom post types for their BuddyPress. This script evolved from customer to customer and one day we decided to make a product out of it. This was the moment BuddyForms was born. We rebuilt all of the functionality into the plugin it is today.

The WordPress form builders plugin market is very big and many site owners need one, however, competition is fierce with all of the established major players. What makes the BuddyPress plugin special when compared with other form builders for WordPress?

BuddyForms is best for front end posting of user-generated content. It is not only a contact form builder. You can create post forms for any content and post type and let your users create and edit the content from the frontend. They can manage their post submissions without the need to access the admin backend. It is the only plugin with full moderation and revision control, in addition to other features many sites with user-generated content are in need of. You can create individual workflows and even moderate the post edits.

Other form builders are focused on other 3rd party services and integrations via APIs. This is a common practice at the moment, but with a crucial side-effect which makes your data get saved all over the different services. Buddyforms saves all of the data within WordPress, as post or user meta. Most importantly, user data is not handed over to any 3rd party services. Instead, it’s carefully stored in your WordPress Database, under your control.

BuddyForms works as a standalone product or in combination with BuddyPress or Ultimate Member. There are many extensions for WordPress to create a marketplace as an example to optimizing the user-generated content for one’s specific needs.

Why do you think WordPress form builder plugins are so popular?

Nowadays everything is about automating as much as possible to save time, energy and money. Form builder plugins provide templates that can support your business, and may even replace expensive employees. Besides that, every site needs a contact form which is mostly provided by form builder plugins.

Is BuddyForms your first commercial plugin, or did you have other WordPress products prior to it?

No, my first one was called ‘SeoPress’ and it was used to optimize user profiles for search engines in BuddyPress. We also created the Custom Community theme. In fact, it’s been one of the first Buddypress Theme Frameworks, and for a long time very popular and featured on wordpress.org. There are quite a lot of plugins that I have built, but BuddyForms is definitely the biggest project.

You migrated BuddyForms (as well as all your other plugins) away from EDD and into selling with Freemius. What were your main reasons for migrating?

We got tired of the maintenance and from having to be responsive while running the store. It is a big part of the company and we find it works best when we focus on our products, on support and marketing, and keep the technical part of the shop outsourced.

Running a software shop in the EU is a lot of work.Tweet

Another big motivator is that we do not need to manage all of the orders, which makes our accountant very happy with our decision :). The EU laws are not easy to manage and follow. Running a software shop in the EU is a lot of work.

How did that transition to Freemius go for you?

The Freemius team helped us with everything we needed, and that included providing us with the EDD migration script and doing all of the testing afterward. So, overall the transition went really well because Freemius makes it very easy.

How long did it take to integrate Freemius and start collecting payments?

The process of integrating a new product to Freemius is very fast — it is possible to set it all up within a few hours. Switching established shopping systems to Freemius with all the customer data and licenses took a couple of days. But the workflow and Freemius’ support is very satisfying. I really like that you can do it all step by step and product by product since every plugin comes with its own small issues and drawbacks.

Have you changed anything in your business model since migrating to Freemius?

Yes, we have changed our business model from only annual or lifetime payments to a monthly, annual and lifetime subscription model.

BuddyForms offers quite a few add-ons to go along with the core plugin. How well have those been performing as added revenue?

Most of the extensions are free. You already pay for the core plugin so we do not want to make you pay for small add-ons.

At the moment, only the BuddyForms and BuddyPress Members extension are available as free and pro. We plan to build more paid extensions with complex functionality to be able to build a directory or to post inside groups. There are some exciting products in the pipeline around BuddyForms, like using BuddyForms as a framework for the frontend posting.

What does your growth & revenues look like with Freemius? Has it changed since the move?

It’s more stable than before. The monthly subscription is used a lot and gets a lot of acceptance. We are surprised, but it looks like monthly is what the people prefer even if it is more expensive than an annual or lifetime fee. Having monthly subscribers is also great for us — it’s just a stability factor. On the other hand, it also takes time to get back to the old income. In the first 6 months, it was much less than before.

Have you discovered anything interesting about your users as a direct result of the data you’ve gathered with Freemius Insights?

Yes, definitely. This is what Freemius is doing extremely well. You get all the insights you need. It’s hard to believe, but people really tell you what is wrong or where they came across some struggles using your product. That information helps us a lot with optimizing our support documentation and of course the UI and functionalities.

It’s hard to believe, but people really tell you what is wrong or where they came across some struggles using your product.Tweet

Freemius is collecting all of the important data from the registration and deregistration process. They are sending out emails asking why you stopped using the plugin or why you only tested it for a short time. You can find all this information on the Freemius dashboard. It’s working really well for us and gives us all the insights we wouldn’t be able to get from Wordpress.org!

I want to expand a little on your business being based inside Europe. You guys are bound by the European VAT regulations, which are known to be very meticulous: can you describe your experience handling EU VAT before using Freemius and after?

That’s the main reason we have decided to use Freemius. As an EU Company, you have to collect the VAT id and also you need to make sure it is valid. It’s a difficult process and even if you would have everything in place there is always a risk that your data will not be accepted if you get a tax audit.

Since using Freemius all this headache is gone and our accountant loves the decision. We are all very happy to only have one invoice instead of hundreds of invoices from 8$ customers.

How would you describe your experience working on your business in cooperation with the Freemius team?

It feels like we are one team that works together to optimize the experience for all parties, which not only increases the income but also makes for an overall better experience. It’s great working with the Freemius team and I hope it will be a long relationship. I’m sure it will be!

What is your favorite feature or “thing” about Freemius?

Apart from handling the EU VAT and the Insights, it’s the integration into wordpress.org free plugins with a pricing table + upgrade path and checkout and my account after the purchase. Brilliantly done!

Would you rather focus solely on one of your successful products, rather than sell various plugins & themes? If so, which one and why?

No, we have different products and we have a great experience that way. We believe that every product needs a responsive developer behind it, and we make sure that we have a solid team around every product before we make it public.

It’s not about the number of products. Rather, it depends on your business and if the product makes sense for your company. All our products are focused on the needs of our client work. We are focused on BuddyPress and user-generated content. We have a strong focus on marketplaces/learning sites, like online courses and directories of any kind.

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All our products help us make this process easier for every new customer. We believe in the symbiosis of products and custom development. If we create a functionality again and again and no other plugin is actually solving it like we would expect, we think about creating a better version of it. This also makes sure the product is built to handle a real-life scenario and covers all the real needs.

What’s one good tip you can provide for developers who are looking to create a sustainable business around WordPress plugins or themes?

To be honest, it has nothing to do with coding. You have to start networking, do marketing and create a solid team. Otherwise, it won’t work. You need to make your code become a product to generate some $$ out of it. Just code is not a product. Like I wrote before, we created many plugins but they are not products. If we decide to make a product we don’t start with coding we start writing blog posts and create a small community to support and bring a product to life.

Creating a sustainable business around WordPress has nothing to do with coding. You have to start networking, do marketing and create a solid team.Tweet

So yeah, select one plugin and focus on it. Create as many use cases as possible and make them public, so that people will find out about your solution/product. This is at least our approach.

Sven, thank you very much for sharing your entrepreneurial story and great advice with us. In case anyone wants to contact you online for business related inquiries or just to chat, what’s the best way to do that?

Thanks for inviting me to this interview. It is a pleasure to be a Freemius customer. The best way to get in contact with me is via Themekraft support: Support @ themekraft . com. It will be assigned to my queue.

Originally published at Freemius.