With IPO Under Its Belt, Wix Plans to Move Beyond the Website
Toward the end of last year, website builder Wix did something special: it went public. In the process, the company raised $122 million, making it the largest-ever public offering in a burgeoning Israeli technology scene that has already produced a handful of billion-dollar exits.
The early excitement continued into late winter, and then fizzled in early spring. After a two month-long selloff, the company’s stock price flattened out in May and now hovers around its opening price — around $16 a share.
But with public capital comes an more urgent expectation for growth. Today, the company is looking to move beyond websites development to provide a host of other services to its 50 million subscribers — many of which are small businesses. This spring, it snapped up a mobile app builder, then added a booking system for hotels, and in May launched Wix Hive, which allows users to store data from various applications on their site into a centralized cloud database.
The company is one of a handful well-capitalized firms that want to turn an existing install base of small business into a more profitable revenue stream. One of its largest competitors, the Arizona-based GoDaddy, is gearing up for its own public offering, and has spent the past year snapping up a host of scheduling, invoicing and small business point solutions.
Street Fight recently caught up with Joe Pollaro, Wix’s vice president of strategic partnerships, to talk about the company’s plans to move beyond website development, its bet on self-service, and what it looks for in a partner.
Now that Wix is public, there’s more pressure to expand. Talk a bit about how the company plans to build out its business.
We are in the process of moving beyond just being a website builder. We’re evolving our vision beyond just creating your business online, to managing and growing in as well. For us, that goes beyond just creating a mobile or desktop site. It evolves into being able to help business market themselves online or communicate with customers online, or even facilitating a transaction online. Shipping, fulfillment, accounting, and finance — all of these things a business needs to do and we want to help make it easier.
Some of this we will do through our app store. In other cases we’re launching building it internally, and launching vertical plays to allow business in certain verticals to have mission critical controls on their website. WixHotels, for instance, allows a hotel to book rooms online. We are providing a lot of these services that GoDaddy and others are doing — albeit in a slightly different way.
So what’s different?
I think there’s two big differences. First, we are a product-focused business. More than half of our employees are engineers. We put an incredible amount of time into the user experience, and functionality of our products. The second is that GoDaddy, and others like it, are sales organizations. Their employee base is largely comprised of salespeople or customer service agents, who often act as sales people. Their business model is more about upselling customers into other products. That’s just not our model.
You seem to believe that a sales force isn’t necessary. Others would disagree. Do you think the market is heading to self-service approach?
We believe self-service model is the way to go. We’re moving into a world where people are getting more comfortable with technology, and being able to control and manipulate your own web presence and the functionality that goes behind it is becoming easier for everyone. As people get more comfortable with technology as whole, we believe self-serve will win the day.
From a revenue standpoint, what does the company care more about today: expanding subscriptions as a whole or generating more revenue per user?
Up until recently we have really focused on growing subscriptions, with less attention paid to increasing the revenue per user. That’s starting to change as we start to build products that are going to become critical systems for business online. Were not going to be charging for every small feature and function we provide, but there’s obviously some features or products that it makes sense to monetize.
But, I still think there is a lot of room to grow the subscription base as well, so its a bit of both. Also, with the self-service model it’s just far easier for us to expand. We don’t have to hire sales people — only translate our template into another language and we’re ready to go.
Some have argued that the growth of Yelp, Facebook and other third-party properties could undermine the importance of a website. How does the emergence of these properties impact Wix’s strategy?
We certainly do not consider ourselves an alternative to page on Yelp, Facebook or any other marketplace where an small business owner might market themselves. We’re part of a broader digital strategy that any small business should have. But I would say that a website or mobile app provides a certain amount of control which Yelp , Facebook, or others lack.
Wix has a massive install base that would likely be attractive for a lot of startups building technology for small business. What types of partners are looking for today?
Above anything else, our goal is to help small business get customers to make transactions. If you think of all of the things that a small business needs to do to complete a transaction — from finding customers to making sure they can find them, to being able to transact, fulfill and start that loop again — there’s a lot that needs to happen. We are interested in any partner that can provide those services and products to small businesses.
Steven Jacobs is Street Fight’s deputy editor.