#647 This Week In WordPress & SaaS: With Special Guest Vito Peleg Founder of Atarim

With Special Guest Vito Peleg Founder of Atarim

Vito built his first website on “Geocities” almost 20 years ago – Featuring his friends’ skateboarding crew when he was 14 y/o. As a former touring (and broke) musician, he looked for ways to allow him to work while he was touring the world playing my RNR to thousands of people and the web was, once again, there for him.

He started to build websites for clients from the back of the van (and sometimes the odd broom closet) and his passion for the field grew with each project. When the band finally broke up he moved from the van to a tiny room at home, then to a larger room with one employee sitting right next to him all the way to having his own agency with 12 guys on my team. Between then, through my WordPress agency years later, we created 600+ websites using WordPress.

Intro: Welcome to the WP tonic, WordPress, and SaaS podcast, Jonathan Denwood and his co-host Steven Sauder interview the leading experts in WordPress e-learning and online marketing to help WordPress professionals launch their own SaaS, take it away, guys.

Jonathan Denwood: Welcome back folks to the WP-Tonic this week in WordPress and SaaS. We’ve got a great guest, it shows 647 like I said we’ve got a great guest returning Vito Peleg of Atarim.  A friend of the show. I probably butchered his name, butcher the product, butchered everything. But I’m going to let Vito quickly introduce himself. And then we’re getting to this great interview. Would you like to introduce yourself Vito to the tribe?

Vito Peleg: So I’m Vito, I’m the founder of Atarim, which is a platform that helps web agencies and freelancers to better collaborate with their clients, get to deadlines on time and systemize the project to delivery.

Jonathan Denwood: That’s great. And I’ve got my great co-host, Steven. Steven, would you like to introduce yourself to new listeners and viewers of the tribe?

Steven Sauder: Yeah Steven Sauder from hustlefish.com.

Jonathan Denwood: That’s great. And before we go into the main point of this video, which is all going to be about Vito’s experience of being an agency owner, then doing his own SaaS products, what he has learned on this amazing journey, we have to go for our quick break for our major sponsor to tell them about their amazing product. We will be back in a few moments folks. 

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 Jonathan Denwood: We’re coming back. Been looking forward to this interview. Vito’s one of my favorite WordPress friends. so, Vito, what do you see as, your product helps digital agencies with handling their clients and you’ve got a very large, online community through your Facebook groups and your other activities. So you interreact with a lot of digital local agencies, WordPress agency owners. Are they any kind of consistent problems that you see them dealing with on a daily, weekly basis that you would like to share with the tribe?

Vito Peleg: Right? Yes, we all share the same exact problems. And this is what was kind of mystifying to me when I got into this game. Because as an agency owner, I was living in this, kind of a bubble with my own team and my own clients. And I didn’t realize that every experience that I was going through hundreds of thousands of other, people all over the world are going through the exact same challenges. If you want to pinpoint this to three stuff. There are only three big problems when it comes to running an agency.  the first thing is gathering content from clients, getting designs approved, and getting the clients to really give you the information that you need, on the support or on all of those communications.

Building websites, no one has a problem doing. That’s what I learned. Every everyone can build a website that is never a challenge. The challenge is always on the service delivery, getting to the deadlines, working with other people to meet those deadlines, and getting them to act on the stuff that we do. More of this what I found is that the main reason behind this and I think you guys would agree. For most of the overwhelming majority of our industry, our people are creative people. We came into this game from just wanting to build a nice website, a beautiful website, maybe came from the graphic side, maybe came from the code side, which is also as developers, which is also very creative, process. 

We’re not project managers, at heart we’re not, business owners at heart. We learn how to do this on the go. And we learn from our own experiences and whatever, listening to podcasts. And this, and that piece of training, we kind of, patch things together to build our own business out of this. But our background rarely comes from this world. That’s why these are the challenges that we have. We never have a challenge of the creative side. It’s always on the project management, the service delivery, the business side.

 
Jonathan Denwood: Yeah, I think just a quick follow-through question. You just touch it because you didn’t income, you get a lot of people that work for an agency for a number of years as a junior and they build relationships and then they go off on their own or with a partnership with either another co-founder or a couple of other people they know. You are like me you were outside that, digital WordPress digital marketing agency industry. You were a musician, and then you gradually, I think the consequence of that, I think what a lot of people get burned out when they’re like us to some extent is they don’t realize the amount of effort and the financial strain, because you don’t have those relationships, you normally have to take on a lot of work, which isn’t that well paid and is quite stressful that you’re just looking to get work initially. Do you think I’m right about that? And do you think people have got to be realistic and maybe have some money in the bank and realize it’s going to be a real grind the first year, maybe 18 months?

Vito Peleg: I don’t like having a backup plan. So, I think that if you’re doing something, you got to go all in. but that being said, it is expected that you’re not going to make any money on your first few projects. I didn’t, I build websites for $200 that I was supposed to charge five grand for when I first started. And, it’s fine, I think that’s part of the journey and I didn’t feel really bad about this back then, because I didn’t know anything else, I didn’t know I was doing anything wrong. When I, needed to make more money that is when the pain became real. And that’s when I started realizing that I do need to charge more for the service that I’m providing. That’s when I realized that I needed to find the right clients. 

It’s all a matter of where you are in your personal journey that leads you to find those questions. But if you are, if you’re not feeling the pain, then cool build a portfolio, do whatever, even rely on your spouse for a couple of months as a business owner that happens sometimes. And make sure that you have some money saved up for a rainy day. Because the agency model is really is like a feast and famine type of model, unless you build it properly with care plans and recurring revenue from the beginning. But I’m bill charging. Initially, I think it’s a good lesson to go through. I wouldn’t trade it really

Steven Sauder: When you’re thinking through like building a SaaS I guess if you’re in the agency world, you’re like, how do I augment this? I feel like there’s a trend to like go SaaS or recurring revenue, which is kind of almost like a SaaS sort of model in itself. Do you need to find that unique pain point that only you can solve? I guess what I’m trying to ask is like, with you deciding to go from being an agency to building Atrium, you found this very unique pain point decided to solve it. A care plan is not necessarily a unique pain point,, it is a solution that a lot of other companies have. Do you think that in today’s business climate, is there a need to find this very specific niche that you can own, or do you think there’s plenty of space still in this kind of service model that other people can have just an unequal surface to? 

Vito Peleg: That’s a really good question. I think that depends on your goals. So what, what do you aspire to do? Where, do you see yourself in five years? In 10 years? for me we already had a nice flow of cash from recurring customers, to be honest, most of our clients towards the later part of the agency, or just the same clients I didn’t feel the need of going out there and doing cold outreach and doing the, like shaking elbows, post-COVID, to bring in new business, because we were doing pretty well with that, 50, recurring clients, 100 total clients, that just came back with more stuff. I was nurturing them more than I was, concerned about bringing new people in.

I did want it to go further. So, and this is a super valid model, some people, and to be honest, Steven, this is not something that I, realized when I got into the SaaS game. I was under the impression that everyone wants to build a billion-dollar company, how do I get to 100 million AR that’s the kind of question that was burning in my mind but a lot of people. And I would say that maybe even, well more than half of our community are cool with running a smaller operation with, two other folks, along with them and generating the 5, 10 K a month. And that is super valid. it’s actually,  not only that, it’s, that it’s easier to do that, it’s a lot less stressful as opposed to going after a market or building a product that is innovative, that doesn’t exist, that you need to train the market, you need to, bring people in and you need to iterate this and invest a whole bunch of money into this. 

We invested well more than $700,000 into the product so far to bring it to where it is today. And that is still nothing compared to when you’re looking at some of the big SaaS companies that are out there. When you’re doing care plans, what are you investing in managed WP and Atarim and you’re good, that’s it?

Steven Sauder: yeah. That bar’s a lot, a lot lower of entry.

Vito Peleg: Yeah, definitely. And, everyone needs it. So every person that you build the website for is a natural fit for going into those additional services. I looked at this like the dentist model. so, when you go to a dentist, they bring you in with this, free checkup but then they tell you, you got to come in every few months, you got to come in every few months, and every time that you come they hit you with another thing. So, I see that you’re drinking a lot of coffee. Maybe you want to do some whitening that’s like $300 and if you do that, then the next time, okay. I see that you had braces when you were a teenager, so it looks like the teeth are moving again. So maybe we’ll get you this, Invisalign. I don’t remember what it’s called the, so that’s another two grand.

 So they,  make their profits on the backend. That is something that an agency or even a freelancer should keep in mind that, the clients are an asset, every time that you acquire a customer, it’s an asset that you need to nurture and you need to build forever, and not necessarily go after, raise a bunch of money and build a huge team unless this is what you do. This is what I enjoy. This is my, my passion. I like the hunt. I like the game. So I like this path.

 
Jonathan Denwood: I was listening to Lee Jackson’s podcast, agent trial, blazer, and he was talking about closing down his agency, because he’s got a SaaS product as well, with a partner. It was a couple of weeks ago. He discussed that he was closing down his agency and he was saying he was finding it very stressful for the agency because he was finding that there was a lot of pressure on the price, but the actual projects were getting more and more complicated and the deadlines were getting more compressed. So more complicated projects, and more realistic timeframes. In your community is this something you’ve been observing people talking about

Vito Peleg: Commoditization of our space is definitely there, unless you find your edge, then you’re just going to get commoditized. You’re just going to become, the flour, not the cake, but you want to be the fancy cake. So if that is building a complex website, or maybe like you’re doing Jonathan building, LMS platforms and, or focusing on SEO optimized websites, or, just finding some niche is way better than just, going down and competing on price. I see that the people that do find their edge have no problem whatsoever charging whatever they believe is the right price for their model. Then most of the industry is playing for the scraps really. Like most of the industry is competing with Fiverr and Upwork and, Wix and stuff like this. I never considered these platforms as a competitor to us at the agency. To me, it was just a step, on the potential client’s journey. Let them go to Fiverr, get burned, and then I’ll pick them up after.

Jonathan Denwood: Yeah, just before we go for the break, I’ve been thinking about this quite a bit, and I see it very like, the car industry, the car maintenance industry. You have a certain clientele that has a certain car, and they’re just interested in getting the cheapest mechanics they can find. And then you have people that have slightly better cars, and then they’re looking more for the competence of the mechanic, plus a competitive price, but they’re not looking for the cheapest. And then you have people that bought a brand new BMW or Mercedes and they just send it to the dealership, because they just don’t want to handle any of it. They’ve got to be a brand new BMW and a brand new Mercedes.

Vito Peleg: They send to the specialist.

Jonathan Denwood: Well, it’s a different attitude. And you find a different attitude especially when people are making actual money from their website, I’ve found their attitude about the website, totally changes if they are clearly making money, a result in B and B is an increase in their bank account the attitude to their website completely changes.

Vito Peleg: I agree. But there is, there is this point that the lower-tier clients, the ones that just want a website for the sake of having a website, don’t think about making money from the website. So they never even get to this point that it’s a revenue generation machine as it is for a SaaS or for us, for people that know how to build those funnels, get up there on Google and all those stuff.

Jonathan Denwood: That’s right. We’re going to go for our break we’ll be back we’ll be discussing all things about somebody that’s moved from the digital agency area into SaaS and what some of these problems have been and what tips and insights he’s got. We will be back in a few moments folks.

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Jonathan Denwood:: we’re coming back, you’ve been listening to a couple of our other great sponsors, and I just want to say, we’re very appreciative of their support of the show and of the tribe. So let’s go on with this great interview. so you started Atarim what have been some of the real challenges that you’ve faced Cause I think you went to the SaaS model straight away because you are involved in WordPress and then it’s a plugin, but linked to a SaaS model, isn’t it?

Vito Peleg: And it wasn’t like this from the get-go. So we released a plugin initially it was just like a standalone plugin. And I have a few other plugins that most people don’t know about. They’re kind of like a passive income for me at this point, there’s one developer that does the support and I check up on them once a month, but they generate the revenue every, every month. So I had a pretty good experience with some plugins that we built through the agency, even for some clients, at the agency. And then we started selling them with their agreement and stuff like that. So I was like, yeah let’s do a plugin. I think we- because we built this as social for us.

We knew that it worked and it worked like magic Jonathan, it was like transformative, it wasn’t just like, a WooComerce add-on, it wasn’t a line of code. It was something that really made an impact on my own business. So I thought that it could make a huge difference to a lot of other people’s businesses as well. So we pushed it out as a plugin. About two months in, we saw the need to become a SaaS. So, that is from a few aspects. First of all, the first thing that led us was the user, the users needed a centralized area to manage all of those communications that were coming on because basically what I tell him that what WP feedback the plug-in used to do is just, you put it on a client’s website and it allows you to annotate or visually collaborate right on the website itself.

That was great. It removed that barrier of communication and collaboration between the client and the agency. But then the agency still needed to go to each one of their 50 websites, 100 websites to check what was going on in there to check the stickers and all of those kinds of things. So centralized area made sense from the user’s point of view. And that is what we built. So we released the plugin in, like May, and in October, there was already like, Lavelle react-based dashboard. That was feeding all of this information there. And you were asking about one of the challenges.

This was an interesting one, and I didn’t predict this.  By October we knew we were we’re SaaS but everyone saw us as a plugin. And, and that was a huge challenge because SAS, as a completely different, costs attached to it and not only the hosting stuff but developing a platform is like a completely different game than developing a plugin. You have to have everything, you build everything from scratch. and not only that, the salaries for the team are much higher than a WordPress developer, but the infrastructure needs to be created from scratch for every single thing that you do, you need even the basic stuff, like a login system, it doesn’t exist unless you build it. A restriction on a feature doesn’t exist unless you build it. 

With plugins, it’s a lot easier. You have hooks and the WordPress framework makes it super easy to build and maintain. So that’s why a lot of plugins are at a very small, I think the entire industry is underpriced anyway. But that’s what allows plugins to stay rather cheap if you know what I mean, compared to cloud-based applications. And so that’s why we rebranded. It took about, a year and a half, of trying to battle it out with users and say, but we’re not a plugin why are you saying we’re a plugin? Stop saying it’s a plugin. It’s not a plugin, it’s a SaaS with a plugin like Hotjar has a plugin, Facebook has a plugin to install the pixel.

Jonathan Denwood: I got a quick question about that because you, and it’s not a criticism, I’m just interested in your view about this, you emphasize the difference between a plugin and a SaaS, but our, major sponsor you’re sponsoring the show for a period of time. But our biggest sponsor Castos. They still offer a plugin, which is a pod one of the leading, WordPress plugins if you want to do podcasting. And then they offer this hosted service, which is superb, by the way, I’m not just saying it because they sponsor the show. It really is fantastic. So they’ve still got their plugin and they still got their SaaS business. Why did you not think you could combine both?

Vito Peleg: So we do have a plugin, but, the plugin was renamed as the client interface plugin because really that’s what it is. It’s a tool that you use on the front-end to interact with the software on the backend and to have all of the stuff that we have inside the agency dashboard built into WordPress that would be crazy just from the reliability point of view, you would need like 70 more plugins to create what we created, into this application. So it had to be like that, you can’t do it, in a WordPress website that is-

Jonathan Denwood: We have to discuss that some more in the bonus content over to you, Steven.

Steven Sauder: Yeah. Before we went on break, you were talking about how website development has become a-

Jonathan Denwood: Commodity 

Steven Sauder: Commodity, a commodity product. Do you think that everything eventually devolves to commodity-based like will someday user feedback on a website and managing that like devolve to a commodity, or are there some areas that will never?

Vito Peleg: Everything gets commoditized over time. That is the nature of technology and you just need to be at the forefront and you need to evolve, beyond that. So, you can look at this from a project management point of view. When I first started, we were paying a whole lot for project management, for a project management tool, now it’s rather cheap. There’s a lot of players out there. They raised a whole bunch of money it’s, cheap. With what we are doing there are very, very few people out there that are, trying to do the same type of concept. They go about it in a different way. 

So my edge was saying, all right, instead of being a feature, which is what you would find in some of the other solutions out there, just the feature itself. I wanted to be the one that consumes the entire problem.  That gives the user a solution that gives them the cake, that gives them a cake with candles on top already lit. And so they don’t have to worry about anything. You just come in, you plug it in and you play instead of patching things together, Microsoft world is commoditized, you can use it for free on Google they kill it.

Steven Sauder: I think it’s important. As like an agency, if you’re starting to look at building a site like it’s becoming that commoditized product, cause you’re talking about, is it important to find non-commoditized things? Or do you think it’s a viable strategy to say like, no, we’re just going to win the commoditized game? I mean, Sharman ultra does, the toilet paper brand, Sharman, like does like billions of dollars, of toilet paper sales. I don’t know what their profit margin is on that at all. but is that a viable strategy for an agency to just say like, Nope, we’re going to embrace this commodity thing, or do you think it’s important for a cost for a company to always figure out how to get ahead of that and innovate with technology and stuff?

Vito Peleg: So if you’re a SaaS or if you’re a technology-based tool. You gotta innovate and you gotta be, you gotta have an edge always. That’s why you can never stop building. But as an agency, you can have a different game as an agency, you can be niched down or you can be the specialist. And when you’re the specialist, you’re creating a natural edge already. But more than that, you don’t need many people. You don’t need billions of people to become your clients. You don’t need millions of people. You don’t even need thousands. You just need like a few hundred over the course of 10 years to make a good living for yourself and for your family. So there’s plenty of that out there.

As long as you place yourself at a place that is not looking at, someone, if someone was talking to us and say, what I can build this myself on Wix cool please go do it, go ahead, I’ll send you a guide on how to do it. So that they see how hard it is and come back. And some didn’t, which is fine. Most of them are not in business anymore. They were never, going to become a long-term client, the ones that want to run a business, they want to rely on professionals to work with them. 

You can become the big agency that does, the, like, like that’s what the yellow pages did, you know? They became one of the biggest agencies in the world. They build websites for 100, 200 bucks. And, it’s a template website. You get 10 of them to choose this thing. What is your color? You’re good to go. And yeah, next let’s do thousands of them, 10 thousand, millions of them. So this is a model, but I think this is not real, it’s more of a productized service than an agency at this point, you know?

Jonathan Denwood: Yeah. I think it’s fantastic. We can continue this great conversation in the bonus content section, which you can watch on the WP tonic, YouTube channel, and on the WP tonic Facebook group, page, the mastermind group page. So Vito how can people find out more about your thoughts and know your company and what you’re up to?

Vito Peleg: So, you can join our Facebook group at the Atarim web agencies, community, and you can find me on Twitter, Vito Peleg, and of course, check out Atarim.io. If you’re building websites for clients, we can help you a lot.

Jonathan Denwood: Yes. And you can get a really special offer if you go to the WP tonic, website, strike newsletter, go there, and you’ll be able to sign up for the newsletter, but you also will be offered a special deal on Vito’s, great service as well. Steven, how can people find out more about you and what you are up to?

Steven Sauder: Head over to hustlefish.com 

Jonathan Denwood: That’s great. I just want to tell you our next week’s guest is Malton Henderson senior trainer at LinkedIn learning. A great friend a personal friend and a great friend of the show like Vito, and we’re going to be delving in about the future of E-learning in the medium, to the short and medium-term. How technology will affect E-learning it’s going to be from one of the great experts on it and a great trainer. It’s going to be a great conversation. So please join us live for that conversation on the WP-Tonic YouTube channel at 9:00 AM Pacific standard time next Thursday. Vito, thanks for the conversation. As I say, we’ll be continuing this, which you’ll be able to see in the bonus content. We’ll see you next week folks Bye.

Outro: Thanks for listening to the WP-Tonic podcast, the podcast that gives you a dose of WordPress medicine twice a week.