How Automattic Reached Nine-Figure ARR with 650 People Across 62 Countries (Interview with Founder & CEO Matt Mullenweg)

Introduction to Matt Mullenweg and Automattic

Nathan Latka

00:01Hello, everyone. My guest today is Matt Mullenweg. He is the co founder of the open source blogging platform WordPress, the most popular publishing platform on the web and the founder and CEO of Automattic, the company behind wordpress.com, WooCommerce, and Jetpack. Additionally, Matt runs Audrey Capital Investment and Research Company. He's been recognized for his leadership and success by Forbes, Bloomberg Businessweek, and many, many other magazines. He's originally from Houston, Texas, where he attended the high school for

00:27the performing and visual arts and studied jazz saxophone. In his spare time, he's an avid photographer. He splits his time between Houston, New York and San Francisco. Matt, are you ready to take us to the top?

Matt Mullenweg

00:37>> I'm ready.

Nathan Latka

00:38All right, very good. So I'm excited to chat with you. Now, want to put this out there right away. When people think about Automattic and they think about how should they think about the relationship between the two?

WordPress vs. Automattic: How They Relate

Matt Mullenweg

00:49>> So think of WordPress as an open source project and software that people can run anywhere in the world. And Automattic both provides some WordPress services and contributes a lot to the project. So they're separate but closely related. I think where people get confused is a lot of the same people are behind each, including myself.

Nathan Latka

01:09Yeah. You gave a good analogy on stage, which... To... Was to kind of think of yourself as the as the Procter & Gamble between... Behind brands that we know and love like WordPress, WooCommerce, Jetpack, and others. Right?

Matt Mullenweg

01:21>> Yep.

Nathan Latka

01:22Alright. So give us the backstory here. You you know, you were early on at CNET, I think, doing open source stuff. Was that right out of college?

Dropping Out and Joining CNET

Matt Mullenweg

01:29>> Yeah. I actually ended up dropping out to take the CNET opportunity. I had visited San Francisco in between my sophomore and junior year and ended up connecting with a lot of great companies, including Google, Yahoo, CNET. And then when I returned, started to get some job opportunities. And I decided that, you know, it was such an incredible opportunity. I could stay in college two more years and hope to get that kind of job, or I could

01:54>> just go for it. And it didn't seem... I wasn't too into college at the time. But I also wasn't going to, like, an amazing school. Was going to University of Houston, which is fine, but wasn't, like, as great on the tech side.

Nathan Latka

02:04Going to miss the jazz club or anything?

Matt Mullenweg

02:06>> That's actually the thing that probably got the worst after I moved because in Houston, I've been playing jazz since elementary school. So I've been saxophone since elementary school. So I had very deep connections to all the groups here, and I would actually gig. I would generate a good chunk of my income from playing around town. And then when I moved to San Francisco, that totally stopped.

Nathan Latka

02:28What corner was your favorite in Houston? Where do where do you get the best tippers?

Matt Mullenweg

02:32>> I think I only bust maybe once or twice. Normally, would play, like, big band gigs or played in, you know, coffee shops a few times, like, mostly just stuff with friends around town. But the big band ones were the best because they were often union gigs. So you'd get kind of like an actual paycheck in the mail.

Nathan Latka

02:50That's pretty cool. Guys listening, if you don't know, obviously WordPress, we'll learn more about it today. But also with Matt, we're gonna touch a bit on his new project Gutenberg, which was released earlier this year as part of WordPress. He also did some early investments in BitPay and Coinbase back in 2013 before it was, you know, hot and cool and doing what it's doing today. He then left and returned as CEO of Automattic, which I want

03:13to talk about kind of how he did that. And an offer also in 2007, he made a... Well, I don't know how to describe it, but he made an important decision to turn down an acquisition offer, which I think there's probably some lessons there that I'd love to chat about. So Matt, take us back to year one. When did you launch WordPress?

Matt Mullenweg

03:28>> WordPress started in 2003.

Nathan Latka

03:30And that was... Kind of turned... Did you have you had other opportunities on the table. Why decide to go do your own thing?

Matt Mullenweg

03:38>> Oh, well, WordPress was really just like a a hobby, and it was something I was doing kinda nights and weekends or instead of my schoolwork, which was frequently. And it wasn't until... About a year after that is when I took the job at CNET, and a year after that is when I started Automattic. So starting of Automattic in 2005 was more where there were different opportunities, including continuing at my CNET gig, and decided to really dive

04:03>> in on a startup.

Nathan Latka

04:05And how did the open source community judge you opening up a company that was clearly meant to to kind of build the ecosystem and also make money to enable you to build further? How did you manage those expectations with the open source community?

Matt Mullenweg

04:20>> Oh, I think people were highly skeptical, but rightly so, regardless of who I am or anything. Like, the history of most companies coming out of open source projects is that the open source project really suffers, especially kinda years four to six when the company, like, starts to maybe feel the grind of fundraising or growth or something like that. We now have, you know, over a decade of Automattic and and WordPress. So even though today there is

04:48>> still some skepticism on my motives or Automattic's motives or things like that or just people in the ecosystem who work against Automattic very directly. We now have a lot of history showing that I very much take a long term view to these things and that the Automattic and WordPress can grow very much together. And in fact, Automattic, I think, has helped WordPress grow far, far beyond what it would have without it.

Nathan Latka

05:16Today or at least in your eyes' 2016 report, you shared almost 595,000,000 posts were written in that year on the platform, and four fifty seven million comments had hit. What do you think that's going to look like here in 2017 as we close out the year?

Matt Mullenweg

05:33>> I'm sorry, you froze for a second.

Nathan Latka

05:34Oh, no. I'll repeat it, Matt. So it looks in 2016 your report, you articulated almost 600,000,000 posts were written on the platform. What do you think that number will grow to here as we wrap out 2017?

Matt Mullenweg

05:45>> Oh, I don't know. I don't follow the number of posts super closely, simply because it can be kind of a... It's a good vanity metric, so I'm glad that you picked it up.

Nathan Latka

05:55But it's not necessarily vanity, right? Mean, lot of people will lead interviews or questions like this with revenue numbers, but revenue can lie if people aren't addicted to your platform. So I like to lead with usage based questions, and really the post is a good one for you.

Matt Mullenweg

06:09>> Yeah. Maybe I should be thinking more about post.

Nathan Latka

06:12Why don't you? Wait. Why don't you? This is interesting.

Matt Mullenweg

06:16>> Well, I think because, you know, what we're trying to do is get more people blogging, not necessarily more post. The post numbers can get kinda thrown off a lot by, you know, kind of the outliers or major publications, which use WordPress quite a bit. Or I think we take this out of the number you just quoted, but some of the numbers I look at internally, like when people import. Like, let's say people are leaving Tumblr, which

06:44>> is actually a pretty popular one to leave these days.

Nathan Latka

06:46You like leading... You like that story, don't you?

Matt Mullenweg

06:49>> No. No. No. It's actually a little sad because Tumblr is a very vibrant platform. Yeah. We're getting a lot of imports, and so someone might import, like, ten years of Tumblr post into the WordPress. So those can throw off some of the posting numbers. So a lot of what I'm looking at right now is kind of the monthly active users.

07:07>> So weekly, and that ratio to weekly and daily. And then another thing I'm thinking about a lot is that ratio to our mobile active users, so people using WordPress on apps. And I guess I'm thinking about post from the point of view of Gutenberg, which I know you want to talk about a little bit later. But with Gutenberg, it's not so much we're trying to get people to create more posts, although, hopefully, that's a good side

07:31>> effect. It's that we're... We really want them to be able to realize in their post and pages, you know, really rich layouts in their imagination. But right now, people are still kind of in that kinda more text blogging mode. We wanna take that to the next level.

Nathan Latka

07:47This... I I don't know if I'm misquoting you on this, so correct me. But was the New York Times piece, the Snow Fall piece written on WordPress?

Matt Mullenweg

07:55>> Oh, I don't think it was. I think it came out of their... One of their custom dev teams.

Nathan Latka

08:00Got it. I wasn't sure. Now are they part of your v I...

Matt Mullenweg

08:02>> Yeah. They are a VIP. Yeah. And that's kind of the idea is that what New York Times spent probably tens of thousands of dollars to do a few years ago. We'll be able to enable anyone with WordPress and Gutenberg to do just kinda out of the box. Of course, the hard part is writing the story. It's not all I had, but but I'm fine with that being the hard part. Right now, both parts are hard.

Nathan Latka

08:24And, Matt, I have a lot of cold hearted capitalists that listen to this along with a lot of developers, but I don't wanna lose my capitalists. So I have to ask the question. You know, you're a you're a guy that just seems hyper focused and we'll talk about what happened in 2007 or 2005 here in a second, but talk money to me for a second. How do you guys make money?

Matt Mullenweg

08:42>> So we are, you know, vast, vast majority, 98, 99% subscription business. So the three main things people subscribe to are wordpress.com, which is hosting for WordPress, and Jetpack, which is services for WordPress if you host it somebody else. Like, could be Bluehost or GoDaddy or Rackspace or anywhere. And then finally, WooCommerce, which is our ecommerce platform. And so that's people who build stores, listings. They sell digital goods, physical goods, or just take bookings, like, for salons

09:13>> and stuff. People use it for all sorts of ecommerce. So between those three, we have kind of products you can subscribe to at each, and that's really the main driver of the business for Automattic.

Nathan Latka

09:23And are all the... I mean, these are all kind of their own SaaS business. You have kind of ARPUs or is the WooCommerce one also take a transaction fee? Are they are they all just pure SaaS plays?

Matt Mullenweg

09:33>> So wordpress.com is pure SaaS. Jetpack is also SaaS, but there's some software you run yourself. And WooCommerce is much more of like you're buying software and it's a long term support model. So there's a little bit of SaaS there, but it's mostly more of like selling software.

Nathan Latka

09:48Yep. And then, Tony, we'll get to kind of Tony, and I'm really interested in the story of how you kind of left and then came back and did some kind of investing in the middle. But Tony, was the CEO running, Automattic or WordPress for a while, shared an interview that you guys, I believe it was in '20, was 2012 or 2014, you guys passed, I think 45,000,000 in revenue. One of the reasons I'm intrigued to be

10:11talking to you right now is I recently, two days ago, talked with Ryan Smith, who was the Qualtrics CEO. And they just raised a big round of funding and very directly said, you know, we will be IPO ing. All the messaging around your announcement on the latest round of funding was we're doing this specifically to stay private. So And I want to dive more into that with the following question, we'll build up to it. But you

10:37had an offer in 2005, I believe for $200,000,000 or at least it was speculated, right? Get get me into your brain at that point. I mean, this is a guy where in college you were playing jazz on corner... Corners, enjoying yourself, making some money. Where was your headspace in that moment to turn down that offer and also try and rationalize it with yourself?

The 2008 Acquisition Offer and $200M Valuation Round

Matt Mullenweg

10:57>> I think we've talked a bit about that publicly. It was 2008, so it was about two years into Automattic, two and a half years.

Nathan Latka

11:03And it was a 200 million dollars?

Matt Mullenweg

11:05>> It was of that magnitude, yeah. And the company at the time was also really small, like 20 or 25 people.

Nathan Latka

11:11Can you share revenue that year?

Matt Mullenweg

11:14>> I would call it negligible. Okay. So it wasn't really a revenue multiple.

Nathan Latka

11:18Less than 5,000,000?

Matt Mullenweg

11:20>> I don't remember actually, but probably in that range.

11:26>> And so really, really cool offer. Would have been great partners. And sometimes I wonder, not that I should have taken the offer, but just where we would have gone if we had done that. But the the main thing for me was it was very early for Automattic, and it seemed like there was a lot lot more we could do that we could do that best if we were independent. And then from, like, my day to day,

11:54>> the things I was doing then and now, which is, like, leading the product for WordPress, working alongside great people at Automattic, creating services, just trying to create that dent in the web, if you will. It's like, well, if I had a $100,000,000, I'd wanna do exactly that. You know? I don't know if I'd wanna change my life at all. And so what we ended up doing is sort of turning that into a round of funding where

12:18>> we both put some new money into the company.

Nathan Latka

12:22Matt, can you share who that was? What company made that offer? No. Okay. But when you say you both, I don't understand what you mean when you say you turn that into an investment, the company then invested instead of acquired you?

Matt Mullenweg

12:33>> No. So it's very common when you get an acquisition offer, it sets a value for the company. And so you can use that to go back to your investors and say, hey, if I'm not going to sell, why don't you invest at this value? So we were able to do a round at like a 200,000,000 valuation.

12:53>> That was... New York Times actually joined that. Oh, great. And it was largely our existing investors. So all our existing investors kind of re upped. And we did do a secondary part of that round. So they bought some stock from existing folks, including myself, which I would say is good for founders by taking a little bit of money off the table. I was certainly in a place that I didn't really need to think about money again

13:18>> And that allowed me to focus on the company, not worry about any of that stuff.

Nathan Latka

13:23Wait, Matt. Sorry.

Matt Mullenweg

13:24>> To be as large as possible.

Nathan Latka

13:25How did you get your brain to that point? So you launched in 2005. When was kind of that moment money wise for you where you didn't... That wasn't a motivating factor factor for you anymore? How did you make money from that quickly?

Matt Mullenweg

13:37>> You know, I think there was both some of the early revenue and Automattic that, for better or worse from a pretty young age, from when I was like 22 or 23, I had a lot of confidence in not having to pay the bills. And then I don't remember exactly when the... So 2008, would have been 24, I guess. That was more where I was like, okay. I could retire if I wanted to But you wouldn't. I

14:03>> I don't think I ever will.

Nathan Latka

14:05Got it. Okay. So you turned that into investment and then update us today. How much total have you have you raised?

Total Raised: About $350M Including Secondary

Matt Mullenweg

14:11>> I think total at this point raised around, say around 200 in primary and about another 150 in secondary. So somewhere around $350,000,000 total.

Nathan Latka

14:21Got it. And I think that last one was 05/05/2017. Right? Around there?

Matt Mullenweg

14:28>> 20... That would be this year. I think our last round was in 2014.

Nathan Latka

14:35'fourteen, got it.

Matt Mullenweg

14:35>> I'm glad I

14:36>> got clarification on that. Worries, was thinking, was like, did we raise money this year?

Nathan Latka

14:40Yeah, surprise, surprise. Yeah. Okay, that makes a lot of sense. And and again, I... I'm curious to understand in the press messaging wise, were very clear. You were not raising this capital to go public. You were raising it to stay private. Why be so clear with that message?

Why Automattic Chose to Stay Private

Matt Mullenweg

15:01>> That's a good question. I think... Well, it was three years ago. So if we were promising to go public, we would have been wrong. I think the main thing... It was $160,000,000 which is the size of many IPOs.

15:14>> And we really felt like being private would give us the most flexibility for the next several years, including against our public market competitors who are reporting thing quarter... Things quarter to quarter. And while they have access to, you know, the public capital markets, which is great, they're... I think lost... You lose a little bit of your ability, except for very few companies, to make really long term strategic bets. And we believe that this is still very

15:41>> much, you know, the first inning of this space and that we're making investments, some of which are gonna pay back over three, five, and even ten years. So having a set of investors on board that are thinking long term was really, really important. And we've been very lucky to really develop that investor base over time.

Nathan Latka

16:03In 2010 at the web, it was generally reported by TechCrunch that you guys had passed that magical kind of $10,000,000 per year mark. And then 2012, obviously, Tony put out the statement 45,000,000, 70,000,000 sites up from 35,000,000 in 2011 and over 500,000 paying customers in that year. Are you comfortable sharing kind of where you are today or maybe getting a range? Are you more or less than a 150,000,000 in ARR?

Revenue: Into the Nine Figures

Matt Mullenweg

16:26>> I think the thing that we are saying publicly is that we're into the 9 figures.

Nathan Latka

16:31Got it. Fair enough.

Matt Mullenweg

16:32>> So past 100,000,000 in ARR, but we'll say less than 1,000,000,000 in ARR.

Nathan Latka

16:35That's a good range.

Matt Mullenweg

16:37>> I can say less than 1,000,000,000.

16:38>> Less than 1,000,000,000.

Nathan Latka

16:39So Next year. Next year will be a billion.

Matt Mullenweg

16:41>> Alright. Alright. Good.

Nathan Latka

16:42So I wanna transition now to more some of the softer stuff in the business. We got some economics. You you were running the company. Mhmm. Walk me through the process. How... Why did you replace yourself with Tony? And strategically, how do you recommend other founders do that if they wanna go down the same path?

Replacing Himself as CEO with Tony

Matt Mullenweg

16:57>> Yeah. It's it's definitely factually true to say I was running the company in the very beginning, but it was also just, five people. So it's not like... It wasn't like a... Although a CEO, it wasn't like CEO like you might think of a CEO. And I had already met Tony and knew that I want Tony to join the company. So it was more a matter of him kinda wrapping everything up at Yahoo where he had sold

17:19>> his previous company to. And... But I knew I wanted Tony to be CEO. So he joined, and and we always worked super, super closely together. So it was very much like

17:34>> we were paired, essentially, and I learned a ton working alongside him. But we were always really clear with everyone because I had seen co CEO and other kind of arrangements, and that seemed to create a lot of conflict. So I wanted everyone in the company to be clear. There was, like... There was a clear hierarchy, and Tony was at the very top. So he had the final say on everything, which I just think is healthy for

17:55>> an organization to have kind of a clear lines of responsibility. But then as it sort of started to scale and we started talking about this probably... Oh, certainly a few years before we made the switch was Tony's passionate about smaller teams. And I was really excited about taking Automattic from, like, 200 people to 2,000 people. So we talked about it for a while, and that was actually a good exercise because we started to think, well, what's

18:22>> the thing that Tony... Things that Tony's doing that I'm not gonna enjoy or be good at? You know, and really started to build up the executive team. Got a great CFO, general counsel, you know, head of HR, like, sort of building out the team, which is something we should have done anyway. And then the day after my thirtieth birthday, which Tony came to celebrate me with, we kind of passed the baton, and he moved to take

18:44>> over a small team on Automattic, and I became CEO.

Nathan Latka

18:47And that's that.

Matt Mullenweg

18:48>> And we still work together today. So

Nathan Latka

18:50That's so fun. So it's almost like you use the CEO title as a carrot to pull him into the company, right, from Yahoo. It worked really well, and now it's working well just in a different form.

Matt Mullenweg

19:00>> Yeah, I think Tony and I, I like to say that we're business soulmates. He's someone I definitely see, I hope that we're in each other's lives the rest of our lives. And the past, I guess, how many years? Twelve, thirteen years, that's been at Automattic, and hope that can continue as long as possible. And if not, we'll figure out other ways to work together.

Nathan Latka

19:22Well, we learn from history, there's somebody else right now that's winding down an acquisition and potential earn out with Yahoo, who is also kind of in this space. Are we going to see a David Karp at Automattic anytime soon?

Matt Mullenweg

19:32>> Oh. Oh, you know, it's like when you try to get me to bad mouth Tumblr earlier. I love David and Tumblr.

Nathan Latka

19:40Wasn't trying to get you to bad mouth him. I was curious. I I mean, I was just looking at patterns. Right?

Matt Mullenweg

19:44>> No. Yeah. If you want to work with... Yeah, they would be great to work with. He's a like a really brilliant product person and just a generally nice guy.

Nathan Latka

19:53Switching modes here, building things internally to acquiring them. We'll talk quickly about acquisitions and then wrap up with Gutenberg. You made an acquisition obviously of WooCommerce back in 2015. I believe it was for $30,000,000. Why didn't you buy WP Engine before they did their 2015 round and got way more expensive? Because you got in early in 2011 there.

Matt Mullenweg

20:16>> That's a good question. So I would say that Automattic isn't really so much in the hosting space,

20:25>> except for wordpress.com, is like our entry level product. So

Nathan Latka

20:29But, Matt, that's a big deal. Right?

Matt Mullenweg

20:32>> Well, our strategy with with the many, many web hosts out there, including WP Engine, is to really create a great set of services with Jetpack that complement what they do. I see. I mean, WP Engine at this point is 450 people. You know, that's... Automattic's only six fifty. So Yep. Just serving their customer base, which is much smaller than ours, takes almost the same number of people. And if you add that up with the other people

20:56>> working on WordPress like GoDaddy and Bluehost, I mean, you get into the many, many thousands. So it's just kind of a different business, and and there's people who will build that type of business and be really passionate about it. Automattic's really like a technology and product company. So that's why WooCommerce made a lot of sense because it's both a technology and a product, and we'll create SaaS services for it. And, yeah, you can run it on

21:17>> wordpress.com, so there's definitely a hosting piece as well. But we believe... Think of it kinda like Google or the Android. Like, they'll make their Pixel phones, so we'll make some some versions of WordPress that we think are the best in the world. But very key to our strategy is also working with every other manufacturer out there and every other host out there. So maybe there'll be Samsung. You know? Maybe there'll be HTC. Like, who knows? But

21:41>> there's there's lots of space for for many companies in the in the WordPress ecosystem.

Nathan Latka

21:45Gutenberg. Why make it your first project when you get back? What is it, and how can my listeners go use it?

Gutenberg: The New WordPress Editor

Matt Mullenweg

21:51>> Sure. So first, I'll say that Gutenberg is still in beta. So it's an open beta. But if you search for it on your plug in directory, search for Gutenberg, you'll see it, and you'll be able to install it. The big idea is that we can basically move editing posts and pages from being kind of a document model where you type a bunch of text in a box to where you're really taking these building blocks, be it,

22:16>> you know, text list, but also things like maps, videos, contact forms, products, and you can rearrange them in blocks, like building things with Legos. So this is how the best websites and the best layouts and everything work, and we just wanted to make something core WordPress that really made it easy for everyone to do this. Changing the editor, since that's really, in many ways, the heart of WordPress, is by far the most controversial thing you can

22:45>> do and the hardest because lots of people are very used to how WordPress has worked for the past fourteen years. And there's lots of opinions on it. And it's also just technically difficult, like what we're building. To build it in a way that works for the, you know, many, many, many, many, many tens of millions of WordPress sites out there It's just tough. It's much harder than doing it in a plug in. So that's part of

23:10>> why we decided to tackle it was the... You know, WordPress has a great set of developers, has had a great set of leaders. There's different releases over the many years, particularly Helen Husandy, who's been, like, super incredible. But for this, I was like, well, let's tackle the very, very hardest thing.

Nathan Latka

23:28Go for it all.

Matt Mullenweg

23:29>> Know, it's definitely a stretch, both leading core and running Automattic, the company, because both are basically full time jobs. But by working with great folks on both sides, I'm able to have a foot in both. And, you know, my hope is once we get some of these really, really big hard things out of the way, that will set up WordPress for the next decade of what's going to happen with it.

Crypto: Audrey Capital, CoinDesk and Bitcoin

Nathan Latka

23:50Makes good sense. Last questions on crypto, Matt, before we wrap up with the famous five. You made bets via your do you a call VC from Audrey Capital? That's how it's structured?

Matt Mullenweg

24:01>> It's structured. Well, it's a VC, but the... I'm the only LP. Got it. So it was a a vehicle for me to make these investments.

Nathan Latka

24:07Yes. You you made early bets in Coinbase and BitPay. Why? This is 2013.

Matt Mullenweg

24:12>> Oh, it's CoinDesk, not Coinbase. Sorry. CoinDesk. Coinbase would have been awesome.

Nathan Latka

24:16Yeah. Yep.

Matt Mullenweg

24:19>> You know, I... As a believer in open source, as believer in distributing nature of the web, Bitcoin from very early days was very interesting me. And WordPress, I think, was one of the first large Internet services to add support for accepting Bitcoin for our services. At the time, Bitcoin was about $12. And the Bitcoin magazine was edited by the guy who later would found Ethereum. So he wrote the cover... There's a big cover article with the

Nathan Latka

24:47>> word

24:47Anthony Delirio?

Matt Mullenweg

24:51>> Vitalik. Accept his name. Vitalik. Yeah. Yeah. Yeah.

Nathan Latka

24:54That's too funny.

Matt Mullenweg

24:56>> So, yeah, he was the editor of that magazine, which is, again, really funny. Wow. You know, it's it's been an interesting space. I think that right now, we're some ways a little bit disconnected from the fundamentals because it's become essentially like a new commodity Speculation. To safety hedge against inflation and central banks printing money. There's capital flight from restrictive regimes like China. Like, there's just a lot of stuff being glommed onto Bitcoin, which is interesting and

25:25>> fun, and that's kind of the cool part about open distributed systems is they get used in ways you would have never anticipated. But I'm not... You know, my full time job is not speculating or investing in these things. So I mostly... I sold the vast majority of what I have over the years. And I'll just keep a bit just for fun to keep an eye on it.

Nathan Latka

25:47Some skin in the game. Keep yourself up to date with what's going on.

Matt Mullenweg

25:50>> Right? Yeah.

The Famous Five: Books, Remote Work, GitLab and P2

Nathan Latka

25:51All right, Matt, let's wrap up here with the famous five. Number one, what's your favorite business book if you have one?

Matt Mullenweg

25:57>> So actually I see one behind you. Which one? So Principles by Ray Dalia.

Nathan Latka

26:03Yeah, know. Funny story about this. I don't know if you can see, I don't know how clear it is, but there's actually like two copies up here because I just did it. I'm blessed. Portfolio just did a big deal with me and they also published... My agent also did this book with So I loved it so much I bought it and then I get a hand signed copy from Ray two days after, right? So what do

26:27think? Do you like it?

Matt Mullenweg

26:28>> It's amazing. I'm not done with it, so I won't call it my favorite book, But I would say I would highly recommend it to everyone listening.

26:38>> It's not a blueprint, right? You shouldn't take it whole cloth and apply it. And in fact, he says that. But it's so fascinating to really get into the mind of this guy, Ray Dalio, who's created far and beyond the Bridgewater financial stuff. Just a really interesting organization. And I often... One of my fantasies is like, would love to just work at some of these really companies like Google or be inside Facebook for just, like, a year

27:08>> to, like, learn about their internal systems. I would just read the Internet the whole year. Yeah. Like Yep. Don't I don't actually wanna work at those companies as much as, like, really deeply understand how they work and how they manage things and everything like that. And and he really kinda opens the playbook for how they do it. And I'm also excited for the coming year when they're gonna release some of their tools around assessments. And I

27:28>> think he's gonna release the coaching app and a few things that he talks about, like internal tools they developed at Bridgewater. It's actually been something Automattic's always been good about in the past and trying to be better about in the future, that we work in a unique way. And we want to open source and release a lot of the tools that we use to be one of the larger, totally distributed companies in the world, coordinate across

27:52>> time zones, across six fifty people in like, 62 countries.

Nathan Latka

27:56You're fully... Was gonna say you're fully remote. We didn't touch on this, but fully remote team.

Matt Mullenweg

28:00>> And I really believe that's the future of work. And I also believe that the tools aren't that good yet. So that's why we've had to develop a lot of our own.

28:08>> Other than that, I'll say I'll say two more books. I only asked for one.

Nathan Latka

28:11That's okay.

Matt Mullenweg

28:12>> But we'll just make this the big question.

Nathan Latka

28:13It's gonna be good.

Matt Mullenweg

28:15>> I loved Black Swan by Nassim Taleb, and I'll do two more recommendations. Final penultimate business book is one called The Halo Effect, which basically talks about how to skeptically read other business books. So it's actually a good foundational one, particularly tech press and some of the industry books, some of which are really good like that recent Brad Stone one on Uber and Airbnb. You also have to remember that these are very much colored by how well

28:45>> or poorly the company is doing at the time. Know, some yeah. The best companies that I read a really good book on... I think it was called Losing the Signal on BlackBerry, the rise and fall of BlackBerry. So if that book had been written in 2005, it would have probably said how all their strategies were perfect. Now written in 2017, it sort of looks at the stuff they were doing in 2005 and saying, oh, this was

29:08>> a huge mistake. So you have to be careful about taking lessons whole cloth from things. And then finally, something that I've started doing the past year or two is just reading a lot more fiction. I got into a mode where I only read nonfiction and business books and science books and history and stuff for a really, really, really long time. And actually reading fiction has helped open me up in ways that have helped the business side

29:31>> of my work in a huge way. And, you know, because it's relatively new to me, I'm just going to all the classics, you know, All The Light We Cannot See or One Hundred Years of Solitude or just, like, books that aren't necessarily new but, like, that people have said are really, really amazing and digging in and really loving it.

Nathan Latka

29:49Number two, is there a CEO in particular that you're following or studying? And avoid the common ones. Anyone kind of underground you really like following.

29:59You know,

Matt Mullenweg

30:00>> I'll go super underground and talk about a company I just joined the board of, which is GitLab. And so the CEO there, Sid, is also... They're also a fully distributed company. But I would say they take some of the things Automattic does even to a further degree. They're smaller. They're kind of, you know, sub 200, but the... But that's also still pretty large already. And they're open source, but their business model is totally different because they're

30:25>> doing very much the enterprise side of things. So I've been learning a ton both from the company and just learning more about the enterprise side of the business.

Nathan Latka

30:32That's that's great. Now as a distributed team number three here, what's your favorite online tool that you guys use to run and grow the business?

Matt Mullenweg

30:40>> So we use this thing we built called P2. You can look it up p2theme.com, and it's basically like like an Internet blogging tool. So you can use it to share things with your colleagues. We use that instead of email. So there's basically no email inside of Automattic. Interesting. All of the email I get is external, which is also why I'm not very good at replying to it often. Everything internal either goes through P2 or Slack.

Nathan Latka

31:06Why did... By the way, I have to ask you something like that. Why did you why did you agree to come on? Because we we we tried some different... I mean, we were very tactical with you and a few other CEOs on purpose. What worked for you? Why'd you respond?

Matt Mullenweg

31:17>> I don't recall.

Nathan Latka

31:18No, did. I'm sorry. Can't. Honest, I'm glad you didn't make something up on the spot, but I'm glad you came on. This has been very valuable.

Matt Mullenweg

31:25>> But it's definitely, you know, email for me is... Since it's generally external and I prioritize WordPress and Automattic, it can take a while to get back to folks. I'm sorry if it did.

31:37>> Nope. It was good. I had to work for it. It's good.

Nathan Latka

31:39Number number four, how many hours of sleep do get every night?

Matt Mullenweg

31:43>> You know, the past few months, since the summer, it's actually been not enough, but I do target at least seven hours. And actually, last night, I got nine hours, So I'm feeling really great today. But, you know, I've been going for a few months on kind of a four to six hours.

Nathan Latka

31:59Yep. Alright. And what's your situation, Matt? Married, single, do you have kiddos?

Matt Mullenweg

32:04>> I'm not married and I have no kids.

Nathan Latka

32:06Single, no kids, and how old are you?

Matt Mullenweg

32:09>> I'm now 33.

32:10>> 33, very good.

Nathan Latka

32:11So three years back at front there after baton was passed off. Last question, I'm gonna change it for you.

32:18Because you're wanting to stay private, what's the one argument that you've made to yourself where it would make sense to go public?

The Case for Going Public Someday

Matt Mullenweg

32:26>> Oh, well, let's assume that at some point in the future, the business is at a point where there's no longer a strategic advantage to being private, access to the capital markets that are public would be fantastic and also provide liquidity to some of our early investors that have been around since very early days. What I also like about it would be that WordPress has a huge ecosystem, tens, maybe even hundreds of thousands of people that make

32:53>> their living from WordPress outside of Automattic. And it'd be great for them to be able to have a piece of the business. So that's actually something... If there were a way that didn't create tons of regulatory and disclosure hassles and everything like that, that I could give or let everyone who'd ever contributed to WordPress have some ownership in Automattic, I would do it.

Token Issuance and Staying True to Investors

Nathan Latka

33:11Now, Matt, come on. This is ironic, like token issuance.

Matt Mullenweg

33:17>> Sure, that is kind of a way to IPO without IPO ing.

Nathan Latka

33:21And do what you just said very well.

Matt Mullenweg

33:26>> I thought about that, but I think

Nathan Latka

33:27Did you really? You seriously considered it?

Matt Mullenweg

33:29>> Of course, but you know, one, I think there's a lot of... 99% of those are are gonna go to zero. Yeah. There's a... But there's also some in there that'll be category changing and change the world.

33:43>> But for us, I think that the token should have something intrinsic to it. It's sort of proof of work that is really important for the business or the issuers or the holders. And there's just nothing in our business that would really benefit from a token. Or a ledger or that sort of approach. You you could definitely shoehorn something or, like, make a stretch, but it's not something I would personally feel good about. And, you know, that's

34:11>> always been very, very important to me that every... Anytime I've taken someone else's money for something, whether that's as an investment or as a customer, you know, that they're buying something, one of our products. I wanna feel that I'm giving them something that I really believe in, that I believe in for the long term, so for decades to come, and that we're proud of. So I haven't had that idea So for a token

Nathan Latka

34:36it's fairly safe to say no token issuance for you and no IPO in the next twelve months. You're going to keep building, stay internal focused, and go from there.

Matt Mullenweg

34:44>> Yeah, either would be a big surprise to me.

Nathan Latka

34:46Yeah, there you go. Fair enough, guys. There you have it from Matt again, Founder of WordPress and then Automattic back in 2005. Then in 2008, turned down a big offer, 200,000,000, used that smartly to create competition. The value was set on the company, raised capital, they have since raised $317,000,000 total, obviously, some of that combined into some secondary rounds as well. Healthy valuation made smart acquisitions in the form of WooCommerce also built things themselves like Jetpack

35:13doing well, making money through subscriptions to their hosting provider, also their VIP plan. Again, well into the... Well past a $100,000,000 now in revenue. Matt, thank you so much for spending time with us. Thanks for taking us to the top.

Matt Mullenweg

35:24>> No problem.