Matt Mullenweg built Automattic into a $7.5B company
How the WordPress founder used remote work and open source to build a connected, distributed business
Matt Mullengweg was a high school student looking for a better way to customize his blog when he discovered the open source software community and created the WordPress platform. A few years later, after dropping out of the University of Houston for a brief stint at CNET Networks, he founded Automattic, which he describes as a holding company for products such as WordPress.com, Jetpack, WooCommerce, Simplenote, Longreads and The Atavist. And just like over 40% of the web today, they all run on WordPress. Unlike many of its contemporaries, Automattic, which became a unicorn in 2014, hasn’t gone the IPO route or been acquired. In February of 2021, the company closed a new primary funding round of $288M, and it continues to grow at a rapid pace. The company recently did a $250M share buyback, primarily targeted at current and former employees, at a $7.5B valuation.
Matt continues to be energized by the open source community, which keeps him connected to users all over the globe. In fact, even before the pandemic made remote work the norm, Automattic was at the forefront of changing the way we work. A distributed company since day one, Automattic now employs 2000 people across 91 countries. Matt has influenced many leaders (including me) with his experiences of running an entirely remote business and keeping people connected, both technically and culturally. He shares more in this episode about what they’ve learned about remote work, and what they’re still figuring out. Listen now on Apple Podcasts, Overcast and Spotify. If you love it, please help more people find it by leaving a review!
“If you’re using software, if it’s open source, it increases your freedom...I was trying to increase my freedom as much as possible.”
When Matt Mullenweg started the open-source blogging platform WordPress, he didn’t set out with the intention of creating the most popular publishing platform on the web. He didn’t even view it as a business. “It was much more just wanting the software to exist,” he told me. He also thought it might look good on his resumé. In fact, it did lead to a job opportunity while he was still in college. He decided to go for it and dropped out of the University of Houston and moved to San Francisco to work for CNET Networks.
In those days, no one really saw commercial possibilities in an open source platform, and Matt’s aspirations for WordPress were pretty modest anyway. He just wanted to be able to make enough so that he could pay people to work on it full time. Through a combination of bootstrapping, maxing out his credit cards and paying people out of his CNET salary, he was able to hire a small team of 3 or 4 people and ultimately quit CNET to start Automattic. He says the responsibility he felt towards those early hires, who’d left “real companies” to come work for him, is a big part of what drove him to raising the first round of funding, even though the company was at break even at the time.
“The ones that were seeing what we were accomplishing were the ones that ended up investing.”
Matt’s first hires were people he’d met on the volunteer open source project, so from the very beginning, the company was completely remote and spread across time zones. Matt has spoken quite a bit about his experiences as a founder of a remote-first company, and in fact, his example inspired me with my own company Muck Rack, which is now entirely remote and is part of the Work Remotely Forever movement.
Of course, in the wake of the pandemic, remote work isn’t unusual, but back then, it was definitely not the norm, and Matt says it turned a lot of investors off. The ones that ended up investing in Automattic were the ones that cared more about what the company was accomplishing than what its offices looked like.
But Matt admits that he was uneasy about taking on outside investors. He describes what the typical model was like at the time, where investors would bring in “adult supervision” to oversee the founder. As he told me, “That didn’t sound like fun to me.”
“If I could choose the adult, adult supervision isn’t that bad.”
Matt changed his mind when he met Tony Persichilli. He says they were like “two sides of the same brain.” Tony was both an experienced executive and someone who understood open source and what they were trying to accomplish. Tony ended up being CEO for the first eight years of the company and, as you’ll hear, left an indelible mark on its culture.
Matt also shares how Tony gradually gave him more responsibilities over time, grooming and teaching him so that by the time Tony handed over the CEO role to Matt, it was well accepted in the company. That was an important process, because as a user of the products, Matt had no problem making products that resonated with customers. “But everything else in management I had to learn,” he says, through reading books and from the examples of people like Tony.
Matt shares that one of the biggest learnings for the company during that time was nailing down hiring. You’ll hear about some of the mistakes they made, how they figured out what the right profile was and also what the company looks for now in potential new hires.
“We gave ourselves a lot of room to really put the gas pedal on and accelerate growth, do acquisitions, accelerate hiring.”
During Automattic’s first 8 or 9 years, the company was largely bootstrapped, operating on $11 million of outside capital. But once Matt took over as CEO, he realized something Tony had been saying all along was right: They were capital constrained. Now 30 years old and the CEO of the company he founded, Matt became passionate about how to scale it.
In 2014, the company became a unicorn, raising $160 million in Series C funding. While that may not seem like a huge deal now, they were one of the first to do a round that large. Matt thinks part of the reason is that many startups at the time were chasing IPOs. He says for them, this was like doing an IPO, but they maintained control of the company. “That was very much a turning point for the company,” Matt says, “because it hadn’t been as clear to me that we were capital constrained, and the opportunity was much bigger than our revenue growth was able to support at that time.”
Automattic now has around 2,000 employees, but Matt admits that there’s enough work for 10,000 people. While he believes you can’t necessarily expand the depth of what you do, you can expand the breadth. So they’ve structured the company in what he describes as “a forest of small teams” that can move fast, iterate quickly, have lots of autonomy and do more things.
“If you’re on a rocket ship, don’t jump off.”
I was curious about how and why Automattic had gone so long without going public or becoming acquired. Matt explains how the hedge fund Tiger Global Management reached out and told them they wanted to become long-term investors in the company. Matt says they’re “fairly lucky” about that, but clearly the firm saw a lot of value in what he and the company are doing.
One of the big pluses of their relationship with Tiger is that when investors decide they want to exit, Tiger is willing to buy their shares. Matt adds, “I always say to every shareholder, whether they’re new or existing, if for whatever reason, you need liquidity, I’ll find it for you.” Just knowing they can sell at any time gives investors a lot of confidence to hold.
Matt also talks about why they haven’t felt the need to take the company public and some of the advantages and flexibility they’re able to maintain by staying private.
“If you’re staying relevant, you are also changing, both yourself and the product you work on.”
While it’s hard to get bored in a company that keeps growing and in an industry where everything is constantly changing, burnout is always a factor. Matt says he gets a lot of energy and reward from the WordPress community, but Covid did take a toll. For the first time in his career, he says, he felt his energy start to flag. On his blog, he wrote about his adventures with van life during the pandemic and how restorative it was to be out in nature. He says he also felt like he was able to give back in some way by helping people learn from Automattic’s 16 years of experience navigating the world of remote work.
In this episode, Matt offers up a lot of practical advice as well as app suggestions and tech tips for staying connected when you’re working really remotely—for example, by a lake or in the mountains or just in an Airbnb with terrible wifi. For more from Matt, check out his blog (including his streaming kit) and social media accounts, and tweet him to keep the conversation going!
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