How losing $33,000 was the best thing to happen to me

March 16, 2015| Mike Stott

I’ve been toying with whether to write this post for a long time now. Will it affect what people think of me, of Epic Plugins, if I share the background on how I managed to lose $33,000.

I have recently been doing more reading of some blogs you may have heard about (Nathan Barry’s being one of my favourites) and one thing I have learned from Nathan is that sharing can lead to good things. So I wanted to share with you the details behind the very real PayPal chart at the top of this post.

That PayPal chart is my PayPal revenue chart. It was July 2013 that I lost $33,000. Then in the months following my total revenue increased by 2x.

What caused this? Well you can read the blog post here. July 2013 was when I purchased the Social Gallery plugin rights.

Social Gallery was a concept which I dreamed up in 2012 to use on one of my very first websites (which is now closed down). The idea was I wanted a way for people to be able to comment on book covers, and “like” which one they thought was the best. This evolved through discussions into the Social Gallery WordPress Plugin.

So, why am I telling you this? How did that involve losing $33k. Well I could have just had the plugin built back in 2012 for $1,000. But I ended up (with no budget at the time) declining the build of the Plugin (by Woody, a freelancer on peopleperhour). Instead we agreed to “venture up” on the plugin and split the revenue 15% to me and 85% to Woody.

Woody also highlighted me to the existance of CodeCanyon and premium plugins, which was where we planned to sell Social Gallery.

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This was great. I was getting the plugin I wanted for free (saving me $1,000) and then any possible sales of the plugin would come my way. Joining forces turned out really well in the end. Social Gallery went on to sell over 3,000 copies (and counting) and I made a good friend for life.

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Reaching out and venturing up was a great decision.

But, the cookie started to crumble when supporting the plugin got too much for Woody (the 85% deal was that Woody did everything) and support requests were going unanswered, often for weeks on end and sales were starting to drop off.

So, that’s when I took the decision to purchase the plugin’s rights. The deal was expensive, but it was the right thing to do. It freed Woody up to work on other projects and enabled Epic Plugins to grow. It ended up costing me a lot and how I lost $33k compared to if I would have just paid $1k for the plugin back in 2012. This process taught me a number of valuable lessons.

  1. That the price of something is based on its value. Social Gallery was insanely valuable and it’s proved this over time. $1k was a lot of money for me at the time.
  2. That partnering up can lead to great things (the Social Gallery project got me well on my way to working with WordPress)
  3. That you can learn and grow at the same time.

Handling support was (and still is) one of the biggest parts of Epic Plugins and being able to handle this is something that I cover in detail in my upcoming eBook. You can read more about the book here. Or sign up to be notified when the book is ready to be released using the form below.

The spike in the PayPal revenue chart was caused by me taking over ownership of a performing plugin, but what happened next (in 2014) is something which I’ll write about in a future post. ┬áThe take away lesson for anyone reading this post is not to be put off by high prices of development costs, and explore the options out there for any new projects you may be working on.

Categories: Uncategorized

3 thoughts on “How losing $33,000 was the best thing to happen to me”

  1. Sidian

    I just wanted to say thank you for taking the time to write this and show this kind of transparency. I see no one else has commented, but I bet you many have been a little inspired by it.

    I recently purchased one of your products, and am very much looking forward to seeing what I can do with it. Would love to chat with you sometime.

  2. Rich

    I love the honesty. There are so many hard decisions to make when funds and time are scarce. Thanks for sharing!

  3. Jack Summers

    Sometimes in life investing in the right thing is going to cost big time, I am glad that there are people like you, that will roll the dice and risk a loss, your book sounds interesting I might come back and buy one.

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