Webflow and Wix layoffs this week for a brutal turn of a cutthroat CMS market.
I’ve been in the CMS space for 21 years. Mostly open source, but we’ve also managed (and experimented with) all runner ups in hosted CMS, blogging platforms, WCM, plus some enterprise-grade leaders not accessible to the large public.
We’ve also been incorporating machine learning solutions for clients since 2014 and some NLP from 2019-2020 (the LLM boom was no surprise for us).
Hosted SaaS was a rapidly growing space in each category – including site building.
It looked lucrative on the surface too (because of data access).
But the big miscalculation here is hidden in CLV and average ARR per customer. The small segment of hobbyists and bloggers and freelancers has been (and will always be) a race to the bottom. The same goes for the brochure sites not tied to revenue gains.
The reason Adobe or Salesforce or IBM have billion dollar customers is the exact opposite of this.
Our WordPress portfolio drives north of 3 billion dollars a year through our systems (purchases, deals closed, ad revenue, bookings). It’s money engines that drive businesses. Not brochure websites to put on business cards when attending events.
M&A also understands that – acquisitions or investments in the space are SO RARE because the freemium segment will stay freemium and won’t convert well.
This is why Shopify keeps growing. 100% of their audience is tied to revenue through the system. And that data is valuable, too.
LLMs now build sites too, but that’s not the core business model – data training and moving up enterprise is.
Serving bloggers and students is noble and admirable, but better suited to open source software like WordPress and charities. Wix, Webflow, and other companies in the space are now squeezed between “freedoms” and “cheaper funded capital”, and I don’t envy them at all.
