How I Used Influencers to Market My Offshoot Product

Hello! What's your background, and what are you working on?

Hi! My name is Jonathan Williamson. I am the co-founder of CG Cookie and Blender Market, and one of three founders of Mavenseed.

Blender Market is the independent marketplace for artists and developers to sell their add-ons and resources for Blender, the open source and most widely used 3D creation suite.

We started Blender Market in June of 2014 with just a few products. By the end of the year it was grossing about $8,000 a month, with most of that being paid out to the sellers. At the end of 2015 we grew a bit, getting up to $13,000 a month on average.

Now in 2020 we are grossing an average of $336,000 a month with an operating margin of 16% and are profitable.

What motivated you to get started with Blender Market?

I got my professional start as a 3D modeler with Blender. After working in Blender for years I still loved the fast pace of development, but had grown frustrated with the state of external add-ons. The vast majority of add-ons for Blender were released for free to the community by the developer, which was great, but invariably the developer would get busy or lose interest, and the add-on would break. Blender has a notoriously fast development cycle and so there's always new features and API changes.

At this point in time Wes Burke and I had already been running CG Cookie for a few years and decided to test the commercial waters by developing and releasing one of the first paid add-on products for Blender. This seems normal now but back then (2013-ish) there had only ever been one or two commercial add-ons.

We wanted to see if our hunch was right and there was an appetite for paid products such that the developers would have intrinsic motivation to maintain and improve their add-ons.

After a few months of self-funded development we released the Contours Retopology add-on for $31.50 on CG Cookie. It was a modeling tool that made some technical processes more artist-friendly. Within a week we had sold several hundred copies and knew we were onto something.

Over the next year we released a second product and began designing and building the first version of Blender Market, which we launched in June 2014.

What went into building the initial product?

Having run CG Cookie for a few years on a mostly custom Wordpress install, we thought we had a decent idea of the work needed (we didn't). Our first full-time developer had just joined the team and so we got to work piecing together a combination of custom code and Wordpress plugins, such as Easy Digital Downloads, which is built by my brother's company.

With CG Cookie being profitable and running fairly smoothly, we chose to bootstrap Blender Market, funding the whole project ourselves. Aside from building the platform we also brought in a designer, Kyle Unzicker, and hired Matthew Muldoon of BlendSwap as the administrator.

What's your tech stack?

For the first year and a half the site ran on Wordpress, which served us well, but ultimately we were trying to do too much with it. It got to the point that we were building everything custom and there was practically more custom code than Wordpress code.

Today we run on a custom-built Ruby-on-Rails app that's hosted on Heroku and AWS. We try to stick to default Rails as much as possible, avoiding separate front end for the sake of simplicity.

Payment processing is handled via Stripe and PayPal with payouts done through Stripe, PayPal, TransferWise, and a few manual methods.

How have you attracted users and grown Blender Market?

Being a marketplace our primary focus was, and still is, attracting creators to sell on Blender Market. Prior to launching I spent several months reaching out to friends and colleagues in the Blender community, trying to persuade them to create and sell their first products. Most of these early sellers were freelancers and prominent artists in the community. Our pitch was help them generate some passive side income and let us handle the infrastructure.

The advantage of attracting sellers that already had an audience was that they multiplied our initial customer reach dramatically by sharing their products.

We also had an existing user base on CG Cookie of tens of thousands of people. We were able to advertise Blender Market to this whole audience on day one.

Ultimately, the thing that snowballed into substantial growth was convincing Andrew Price of Blender Guru to move all of his products to Blender Market. Along with us, Andrew was one of the first people to successfully sell commercial products in the Blender community. The problem he had, though, was maintaining an e-commerce website; it took too much time away from his products and it was visibly frustrating, which is where we came in. We went out on a limb and just asked what it would take to make the move. It worked.

We personally helped migrate all the products, imported the customer records, and built a subscription system for higher commission rates.

Getting Andrew Price to move his products to Blender Market gave us credibility, as he was probably the highest profile Blender creator at the time. The deal took about three months and substantial development work to meet his needs, but doing that is what enabled us attract many other high profile sellers that otherwise likely would have gone with a different platform.

Prior to that point we were grossing about $16,000 a month. Within a few months we jumped to $50,000 a month. The combination of Blender Guru's audience, the CG Cookie audience, and organic growth created the traction we needed to attract new sellers and buyers.

You found a lot of success from bringing Blender influencers onto your marketplace. How did you approach them? How did those conversations go?

The Blender community is pretty small and tight-knit and it was dramatically smaller at that point compared to today. I knew most of these influencers on a personal basis, having either worked on projects with them or having meant at the annual Blender Conference. I simply sent them a personal email and asked outright, no beating around the bush.

These conversations were always very candid, intentionally so, as we already trusted one another and they were more akin to starting partnerships than selling a service.

What's your business model, and how have you grown your revenue?

Blender Market runs on a pretty simple commission model. We sell products on behalf of the creator and then pay them a commission on every sale. If a creator wishes to earn a higher commission rate they may pay us a monthly subscription fee for a larger cut and lower transaction fees.

Our portion of revenue is everything left over after commissions are paid out, plus the recurring revenue from creator subscriptions. We have experimented with some paid promotional spots, where a creator can pay for newsletter spots and promos, but so far it's not substantial.

As of this year, we're running at a 16% operating margin. Given that our revenue has practically doubled every year since launch, this margin is quickly becoming significant. This year to date, our 2020 revenue is at $2,797,000.

This revenue growth is largely from new creators entering the market and bringing new customers with them.

It's only been in this last year that we've become profitable, but at the current pace the distance between breaking even and a healthy profit isn't much.

You're clearly very passionate about Blender. What was it about Blender that really made you think it made such a good business foundation, as opposed to something else?

I started learning Blender when I was 13 years old and so the thought of building businesses around it never even occurred to me. My transition into Blender business(es) was completely organic, starting with my first training DVD that I produced when I was 16. I had become completely infatuated with Blender, frequently spending upwards of 10 hours per day on it.

After a few years I began creating small video tutorials that I would release for free on the community forums. The response to these tutorials made me realize I could create a more in-depth training series and sell it, which is what led to the first DVD at sixteen.

When you started Blender Market, you'd already had other startup projects, and you were taking a bit of a gamble by creating a product based off of another product. What did the stakes of this project look like?

The stakes actually weren’t that high because CG Cookie was already profitable and we were mostly re-investing what we could afford.

It’s not always as simple as this and there were several (read: many) difficult years with tight cashflow, but at no point were we beholden to any investors or banks. We had only ourselves to answer to. This gave us a lot of leeway to make decisions and choose when (or when not) to double down and keep going until it was finally profitable.

Had we failed it would have been a disappointment but no livelihoods were at stake as the whole team has always been able to work across projects and contribute in other ways.

What are your goals for the future?

Our main goal for Blender Market is to grow it to the point that we can afford to increase the commission rate we pay to creators, giving them a larger slice of the pie.

Beyond that, our emphasis is improving the tools that help creators grow their business more easily. I know that sounds a bit generic but it's true. If we can help creators make better products and reach a wider audience everyone wins.

What are the biggest challenges you've faced and obstacles you've overcome?

I think trust was one of the most difficult obstacles. Why should a customer buy from our platform? What reason does a creator have to trust us with their earnings and reputation? Trust is something we slowly gained with time, but it took a while. It helped that we had an existing (and good) reputation in the Blender community... but that only helped so much.

The other main obstacle that we continue to struggle with is: why should a creator sell with us when they earn less than other platforms?

Even though we're growing quickly, we simply don't have the scale of some other platforms and so we don't have the luxury of high commission rates for creators yet. Convincing someone that they should give us 5% to 30% of each sale when they can earn more elsewhere is tough. The commission rate has ultimately come back to trust. By building trust with creators and community we have been able to convince more creators that were otherwise on the fence.

One way we've worked to build this trust is by going out of our way to help onboard new creators and doing things that don't scale. Some examples include manually recreating product pages for creators, handling all customer support for a time, bug fixing and testing products, and frequently offering better rates for an intro period.

If you had to start over, what would you do differently?

Looking back, I would launch with affiliate tools on day one.

The main reason marketplaces work is because every seller puts in the time to help grow it; it's not strictly dependent on the time you personally put in. Had we had affiliates on day one we could have further incentivized creators to do outreach for their products, which in turn results in more traffic and sales for everyone.

We launched affiliates back in March 2020 and referred purchases have grown from $6,000 the first month to $83,000 in August.

Have you found anything particularly helpful or advantageous?

Reputation, reputation, reputation. This goes back to trust but our number one advantage was, and perhaps still is, that we were well known in the Blender community and generally trusted to be well-intentioned. This was all due to our work with CG Cookie. We have always tried to go out of our way to be fair and to take care of people first, ourselves second. Even if this meant refunding a customer's last year of subscription fees when customer lands on hard times or has an unrelated issue.

It takes years to build a good reputation and minutes to ruin one.

The other advantage we had was timing. The market for commercial Blender products didn't exist when we started and so in a way we were able to be the first to market. There were plenty of other 3D animation marketplaces but none of them were focused on Blender (many didn't even support Blender).

One thing that's been completely out of our control, but that's benefitted us enormously, is the growth of Blender itself. Relative to the other two primary animation software packages Blender has seen immense growth in the last few years. Just check out the Google Trends since 2014.

What's your advice for indie hackers who are just starting out?

My advice is to not get too wrapped up in the details. Get your product or service out there first, and then refine it based on what people actually need.

Don't lose out on an opportunity because you spent too long trying to make it perfect. Just make it work (mostly) and see what happens.

Where can we go to learn more?

You can find Blender Market at Blendermarket.com or contact me on twitter via @carter244.

I'm not very active but I try to always respond when mentioned.