- $1M ARR within the first 18 months
- $1M ARR to 5M ARR in less than 1 Year
- $100M ARR in less than 7 years
- $400M in Revenue
- 1,100 Employees
How WP Achieved $400 Million in Revenue as of March 2024
In a remarkably short period, WP Engine has ascended to the forefront of the SaaS industry, achieving a milestone revenue of $400 million as of March 2024.
This journey to success is deeply rooted in strategic decision-making, keen product-market fit, and effective team dynamics. Here’s an inside look at the tactics and philosophies that propelled this impressive growth.
1. Identify Product/Market Fit (PMF)
The quest for the ideal product/market fit (PMF) was pivotal in shaping WP Engine’s trajectory. This process involved a rigorous analysis to understand the core needs and preferences of their target market.
The company focused on identifying:
- Who their perfect customer was
- Determining the best niche
- Pinpointing the essential features that would drive purchases
“Everything changed after Product/Market Fit,” says WP Engine founder Jason Cohen. He explained the dramatic shift in strategy once these elements were aligned.
“The goal was to move from exploring to executing.”
The team dedicated time to refine their understanding of what delighted their customers, which distribution channels were most effective, and how their offerings stood out from competitors.
To create their PMF, they considered:
- Who is the perfect customer?
- What is the best niche?
- Which few features make them buy?
- What is delightful?
- What distribution channel will work?
- What makes us different?
- What is the right price?
After finding their PMF, Cohen’s focus shifted from exploring to executing. This includes hiring and managing (not building), de-risking (not just new innovation), fixing the shortcuts (not just new features), solving for the rare things that became common, and creating predictable processes.
WP Engine’s alignment on PMF enabled it to transition from exploring various possibilities to executing a focused strategy that maximized customer satisfaction and revenue.
2. Decide What To Focus On
With a clear understanding of their market, WP Engine honed in on what they could do best. The leadership advocated for concentrating efforts on a few impactful areas rather than diluting their focus across too many initiatives.
To start, they used the following process:
- Choose 1-3 Objectives that move the mark
- Highlight 1-3 Obstacles (churn, slow processes, slow delivery, etc.)
- Start 1-3 Actions to make progress on the Objectives while Attacking or Side-Stepping the Obstacles
Cohen also used this information and put together a 1-pager every quarter to realign the company. He mentioned this was instrumental in getting the team onboard and all moving in the same direction.
While a company could use a project management tool such as JIRA to do this, Cohen said they still use a simple Google Doc.
He said the first 1-pager took 3 weeks to create.
Today, it only takes 2 days a quarter to update, thanks to the team’s alignment and not much changing in priorities.
At the same time, Cohen stressed the importance of having your org chart reflect your company’s focus and culture. For example, is the company focused on product, or career growth?
Overall, the rationale was clear: “Focus everybody on just a few things of scale, rather than expanding to new tasks and projects.”
This focus on key objectives allowed the company to leverage its resources more efficiently and achieve greater impact.
“More people does not mean more projects”
A practical example of this strategy in action involved their approach to team dynamics.
Instead of dispersing efforts across many small teams, WP Engine optimized their structure to fewer, larger teams, enabling them to exert considerable influence in their chosen domains.
“If you have a YouTube channel and you have 2 people working on it, and some little startup is good at YouTube and also has 2 people on it, you’re not better than them at YouTube.
Whereas if you put 10 people on that and lots of investment, maybe you could dominate YouTube in your area.”
Cohen explained this organizational strategy through a comparison: “6 teams of 5 loses to small competitors, but 2 teams of 15 leverages scale to win.” Such strategic consolidation helped WP Engine maintain agility while scaling operations effectively.
Moving from constantly experimenting to doubling down on the few objectives that drive business allowed WP Engine to blaze past its competition.
3. Hiring Executives vs Hiring Employees
As WP Engine scaled, the importance of hiring the right people became increasingly apparent.
Differentiating between hiring executives, managers, and employees, the company placed a high emphasis on attracting individuals who could bring more than just skill—they needed vision.
“Business is ‘all people problems really,'” reflected Cohen, highlighting the technical aspects weren’t nearly as important as getting the right people in place.
While everyone loves a star employee who takes ownership of everything, the challenge was to build a robust team where no single individual’s absence could derail progress.
Whether it was an employee leaving or if they took time off, Cohen stressed the importance of working as a team.
He also provided some advice for hiring executives:
“Everyone you hire has to be better than you, otherwise the company won’t grow.”
This approach ensured that new hires were not just filling a gap but were poised to elevate the entire organization.
The importance of team dynamics was also emphasized, with the company focusing on building teams for key projects to ensure continuity and resilience.
Here’s what Cohen looks for when hiring executives. He asks himself and his team:
- Are we excited to implement their ideas (even without them)?
- Will they push everyone to the next level?
- How did they do under conditions for thriving or frustration? (asked background/reference check)
- Have they done this before?
Cohen said, “The second best decision that I’ve made was hiring a CEO”(the first was marrying his wife). Heather Brunner has been the CEO for over 11 years at WP Engine.
Final Thoughts: Everything Changes at Scale
WP Engine’s approach to strategic growth, focusing on product/market fit, strategic execution, and thoughtful hiring, has set a strong foundation for sustained success.
The main takeaways?
- Don’t split up your people too much.
- Be intentional of the org chart
- Hire people better than you
As the company continues to evolve, these principles remain central to its strategy, ensuring that WP Engine remains a dominant player in the SaaS landscape.
For those interested in a deeper dive into WP Engine’s strategic framework, the resources and the slide deck are available for free. These offer insights into WP Engine’s successful methodologies and decision-making processes—a valuable tool for any business leader or entrepreneur aiming to replicate such success.
Q&A With Jason Cohen
How do you measure yourself personally as you scale?
“I just know well like ‘that’s a weakness’ and so I should just not be in these positions for long…a 360 is another big business answer, but man is it good…Some of that is ‘Oh, I’m doing this wrong’, but I didn’t realize what I was really good at.”
What’s in your Quarterly 1-Pager?
“Literally a Google Doc with bullets… It’s messy for the first time, but but subsequent times it becomes really fast… We just did one and it took 2 days. I think the first time it took 3 weeks… It took almost no time, and yet we’re 100% aligned and so is the rest of the company”
How did you know you needed a CEO, and what did you look for?
“When you do stuff that you love, and stuff that you’re good at, and that the company needs done, then you’re at a good place… What I was able to see was, ‘The company needs various things, let’s say 70-80 people and growing fast, we need to hire an executive team to manage this stuff’. A global sales team for example… What got me over the line emotionally I was sitting in a wine bar with one of our early investors…and he goes ‘Jason, I know what you’re thinking. You’re thinking one day you’re going to ring the bell at the NASDAQ and you want the credit’…’You’re the founder, you’ll always get the credit’…That’s what I needed to hear.”
If you’d like to see Jason’s full presentation at SaaSOpen, check out the video below. You can also learn more about Jason and his work on his website: A Smart Bear.