Some founders struggle to scale their companies when growth takes off. Others, like Array Themes founder Mike McAlister, struggle to keep their companies small.
As the solo founder of Wisconsin-based Array Themes, McAlister had been turning out design-focused themes to help creatives and companies build simple but powerful WordPress websites since 2012, with the help of only one other “code wrangler” working as a contractor. The business was bootstrapped.
“Finding ways to scale the operation while also remaining a purposefully small-scale operation was challenging,” he told They Got Acquired. “I didn’t have ambitions of creating a full-blown company, so I found creative ways to scale to healthy 6-figure revenue with as much autonomy as possible.”
Array Themes: small but attention-grabbing
McAlister may have been determined to stay a one-man band, but his email list still grew to around 25,000 and his themes attracted about 2,000 clients, including big names like TED and DropBox.
“After years of creating bespoke websites for clients, I decided to try and turn my designs into pre-made templates that I could sell to a wider audience,” McAlister told They Got Acquired. “This was really early on in the days of WordPress, so templates weren’t nearly as commonplace as they are now. It was a burgeoning niche, and I happened to get in at a great time when my designs could have a widespread impact.”
McAlister’s themes, which clients paid for with a yearly fee, earned the company monthly recurring revenue in the $20,000-$40,000 range and attracted attention from potential acquirers. However, McAlister was never interested until WP Engine’s principal developer advocate Brian Gardner reached out in the summer of 2018.
“As I told him at the time, he certainly wasn’t the first to make that offer, but he was definitely the most interesting,” McAlister told WP Tavern. The companies shared a similar vision, and the timing and offer were right.
“This was also a unique opportunity for me to start fresh and focus on crafting products with a stellar team,” McAlister elaborated to WP Tavern. “I wanted a new challenge.”
For its part, WordPress hosting company WP Engine was impressed by McAlister’s design savvy, praising “the style and design look Array has employed so successfully to create themes that deliver a new level of value and agility for WordPress users and businesses of all sizes” in a statement announcing the acquisition.
After negotiating, the parties settled on a deal in the mid-6 figures and called in the lawyers.
The challenges of negotiating a sale as a solo founder
While McAlister had kept his business intentionally small, he needed a larger team to make the deal.
“Even though my business was smaller than many in SaaS/tech, there was still a lot of details to iron out: due diligence, contract negotiations, etc. I’m glad I had legal help,” McAlister told They Got Acquired.
The experience taught McAlister much about the acquisition process, which he described as “incredibly draining.”
Post-sale, McAlister and his contractor, John Parris, continued to work as software engineers at WP Engine, helping create sleek, functional websites for clients. McAlister has also developed learning products for the WP community as a side project.
McAlister says the Array Themes acquisition should remind other founders of smaller-scale businesses to know their worth.
“There really isn’t a one-size-fits-all approach to pricing your business in a sale. There are many factors (authority, momentum, etc.) that are specific to your business, your audience, and your expertise that can’t always be accounted for in multiples or revenue numbers. Keep those in mind and don’t settle for less than you think it’s worth just because it doesn’t fit a convenient formula for the interested party.”