I have been a big fan of Matt Mullenweg’s work for more than a decade. In this fireside chat at CB Insights, at the end of 2017, he gives some great insight into WordPress (which he co-founded in 2003), Automattic (the company behind WordPress.com, which received a $300M investment from Salesforce in 2019, at a $3 billion post-money valuation) and his vision on the open web.
With the rise of social networks and closed platforms, Automattic’s mission statement has never sounded so important. It wants to build a strong foundation to empower content creators for decades to come.
Automattic is creating the operating system for the web, from websites to e-commerce to social networks.
Here’s a fully searchable transcript of the fireside chat, discussing:
- WordPress’ Marketshare and Ecosystem
- An Independent Platform, to Own Your Destination
- Open-source Eventually Dominates the Sectors it Enters
- Regulations and Monopolies
- Distributed Work
Q: I’m delighted to be here to speak with Matt Mullenweg who has had a huge impact on the development of the web over the last decade. WordPress was one of the seminal publishing tools that really drove a lot of innovation and it continues to drive a lot of innovation. You took what was essentially an open-source blogging tool, now you’ve got a company that’s worth over a billion dollars. You raised 160 million a couple of years ago. What is the business plan from here? Where do you take it that justifies that kind of valuation?
It’s a really excellent question, more people should ask that!
We’re a company that’s basically betting on the open web, and that’s why, at Automattic,
a lot of our resources go back into supporting the open-source WordPress project, because we believe that the web needs an open platform.
Just like Android has captured 88% of mobile devices and things like that, we think that there will be an explosion of creativity. Not unlike the early 2000s, when net neutrality roamed the world, and the web was open.
If we are able to create something that creates a great user experience, that gives people the power and flexibility they want and provides the freedom that I think people deserve, we can help build a web that I would love future generations, including maybe my own, to grow up in.
Q: So, you believe you can get kind of orders of magnitude more people on your platform to create whatever they’re creating with WordPress?
Yeah. I think we can take it from 28 or 29 percent to something more in sort of the 80 to 90 percent range, at the same time that the web is going to continue to grow, as another six and a half billion people come online.
Q: How much for that growth is outside of the US?
Most of it, so that’s another place where our open source can be really powerful. WordPress is translated and localized in languages that there would be no commercial reason to go to, including Klingon.
It shows that when you are able to create a platform in a movement, not just a product, it doesn’t just benefit one company, it benefits a whole ecosystem.
For every dollar that Automattic makes, twenty or twenty-one dollars are made by the other companies in the WordPress ecosystem. So, all those things that we just talked about, are deliberate.
If you look at the Windows 95 Launch (Windows was a dominant platform back in the ’90s for the younger crew). That’s one of the things they talked about. Windows 95 had this crazy launch where they talked about that; for every dollar that we make, twenty dollars are made in the Windows ecosystem. It turns out that for really successful platforms, that ratio happens.
Right now in certain platforms, like I’d say Facebook, for every dollar that’s made on Facebook, 99 cents goes to Facebook.
Not quite, I’m exaggerating, but Facebook and Google are taking disproportionate amounts of air out of the room, particularly in new advertising growth to detachment sometimes of journalism and other platforms.
An independent platform is what the web needs, sorry I keep coming back to that.
Q: ‘Need’ and ‘can exist’ are not necessarily the same thing. A lot of people would say ‘well, that independent web kind of over’, right? Big platforms like Facebook and Google just run everything. How do you negotiate that kind of ecosystem?
I’ll take that bet. We definitely go through cycles. There was a point not that long ago when instead of a URL on a billboard someone put an AOL keyword. Obviously, that hasn’t aged well, but we might look back at some of the current things that we do in the same fashion.
We’ve already had a few cycles of people investing millions and millions of dollars to buy followers on Facebook and then finding that they had to pay to reach those followers. Or that when the algorithm changes, that changes your entire distribution mechanism.
So, we do have this kind of idea. Musicians learned that you have to own your masters. We have a kind of generation which is growing up and learning sometimes from the mistakes of the past, and sometimes the hard way, that if you don’t control your digital destiny, your digital online home, that you’re really at the whim of these other parties, whose business model is going to change, whose priorities are going to change, and it’s likely not aligned with yours.
Q: Would you apply that criticism to Medium for example, which I think is one of your competitors?
Well, Medium is a good product, but I don’t think it’s going to be a platform.
Even with their subscription service, too much of the value is going to Medium. If you break out because you’re a great publisher, you’re not going to want to be on Medium’s platform, because Medium is sort of a useless middleman there.
So I think that’s part of the struggles that they hit. With the Forbes or Huffington Posts model, where you have lots of publishers; there is professional paid-for stuff and amateur stuff. You can get to a pretty good user base but I don’t know if you can create a huge business on top of that.
Particularly if you’re trying not to be a platisher (platform publisher).
Q: If I heard you right a second ago, were you suggesting that we are now at the peak of the dominance of the big platforms and that that’s going to kind of ebb over time?
Well, I think that the industry is already having an actual reaction to closed ecosystems. Open-source eventually dominates every sector it enters. The ‘eventually’ is the key, because sometimes it can happen fairly quickly:
- If you look at open-source applied to finance: Bitcoin;
- Open-source applied to information: Wikipedia;
- Open source applied to content management: WordPress;
In less than a decade they often become the dominant platform in its space.
Open-source ‘eventually’ dominates every sector it enters. In less than a decade they often become the dominant platform in its space.Matt Mullenweg, co-founder of WordPress #DecadeofOpenSource
And then others, like Linux on the desktop, might not happen before the sun burns out. But Android on mobile, which is a Linux-based system has an 88% market share of devices.
Q: Yeah, a lot of market share of devices, but not much market share of business profit. That example is a good one because I remember having this conversation six or eight years ago with a prominent person who was telling me “Android is gonna win because open systems always win. Apple is screwed”. That was a massively incorrect analysis.
It depends on how you look at it. Open doesn’t win just because it’s open. Open-source doesn’t win just because it has a morally superior license. You have to have a better user experience. You have to create real value.
Open doesn’t win just because it’s open. You have to have a better user experience.Matt Mullenweg
I think where it can win over the long term, is that ultimately it can be more aligned with where users are, then a company whose whims might change.
These petty fights that the internet giants are having:
- Amazon doesn’t sell Nest devices;
- YouTube won’t stream to specific devices.
It’s petty and it’s not user-aligned. So, that’s a big advantage that Automattic has as a company, by being Swiss. If you publish, you probably want as many readers as possible. So, you probably want to cross-post it to Facebook, to Twitter, to LinkedIn, to wherever it is. If you post to just Facebook, it’s not going to cross-post to Twitter because they’re having a fight right now. Or Instagram and Twitter; like all these sorts of things.
Having an independent place can be most user-aligned over time. The WordPress project started 14 years ago and is now growing even faster than it ever has in the past. Since then we’ve been successful. I attributed a hundred percent to having the same incentives and being completely aligned with our user base.
Q: Do you think there should be government action to help the big platforms to lose a little bit of their dominance?
I think that it would be interesting. I’m probably falling a little bit on the side of governments not intervening as much, but there could be something very interesting from the point of view of user-centric regulations:
- So, allowing the setting of defaults, which is a big thing lacking in iOS.
- Allowing and forcing the export of data, so if you put data in, you should be able to get the data out. Wix, one of our competitors, doesn’t allow you to export. Even Facebook allows you to explain, and Wix doesn’t.
So, there are these different things that could be very user-centric and help privacy, help portability, and everything. Much in the same way that net neutrality could allow future YouTubes and Facebook’s to arise, I think that we need to recognize that the network effects of these super-locked-in data systems, create the same sort of monopolies as we tried to fight with monopoly law, which was designed to deal with rising prices.
I think there are some tweaks we can make to the frameworks, that would make it a more fair, more open and more innovative marketplace.
Q: You mentioned the user-centric approach. The European GDPR, the privacy rules, would be one example where you give a lot of rights to the individual to control their data?
Europe’s definitely leading the world in this regard. It’s making some mistakes along the way. You’ve all probably seen that annoying cookie thing; if you got a website, you have to accept the cookie. The intention was right. I think they were trying to get rid of retargeting, but how it got implemented made no difference, it just annoys everyone.
Q: To shift ground a little bit. You talk about being Switzerland as a publisher and aligning with your users and you don’t really impose any kind of restrictions on what happens on the platform. There’s the WordPress software itself, which anyone obviously does what they want with, but on your platform, you do have the ability and arguably the responsibility to have some rules around what kinds of things you can publish. So, how are you responding to the kind of current circumstances where people are posting racism, fake news and all kinds of horrible stuff?
TODO: LINK QUOTE ACTIVIST VS. CLINIC.
Well, to understand, at the open-source side of the software, the GPL license allows people to use it for any purpose. Just like you could print any document with Microsoft Word, people can use the open-source version.
At the end of the day Automattic – for the things that we host, run and supports – I have 650 colleagues and we have values and principles and want to be excited as well about the things that we’re supporting.
Q: So, your rules prohibit hate speech. How do you define that?
There’s a whole Terms-of-Service team that has a way to do it. It’s not me arbitrarily deciding things. It’s a team applying rules fairly, across languages, across borders consistently with our Terms of Service. They’ve been doing it now for 12 years, and pretty well.
Q: That is a little bit similar to what Facebook and Google have behind the scenes, there’s a bunch of people applying a rulebook to decide what’s okay and what’s not.
And some do it better than others. I’d say Twitter has definitely been in the news for being seemingly capricious in some ways, where the rules seem not fairly applied to one side or another.
I think any rule is fine, as long as it’s fairly applied and transparent.
Q: I think some people would argue that that sort of purist First Amendment approach that a lot of tech companies have taken is a somewhat self-serving stance because it absolves you of responsibility for policing things. Twitter is backtracked gigantically from where they used to be on these issues. When you do say that that we take a very strong First Amendment stance, have recent events caused you to rethink that in some fashion?
If you are providing a ton of distribution (there’s hosting: allowing people to publish, and there is distribution: putting something on the front-page), in today’s world, everyone has their own personal frontpage.
So, we don’t think of it, but the algorithms and the companies and the technologists writing these things have a responsibility not dissimilar to whoever is choosing what goes on A1 at the New York Times or something.
You’re doing that equivalent for hundreds of millions and billions of people. I do think that they should weigh into not just what generates the most engagement or clicks, but the truthiness of it and things like that.
That is more for distribution platforms than necessarily pure publishing platforms, although there is an element that falls to us as well.
But if a false blog is published and no one reads it, that doesn’t make a big deal. If there’s something false that reaches 150 million people before it’s taken down, that becomes an issue.
Q: You mentioned net neutrality earlier. [Assuming that net neutrality decreases], does that have any real-world actual impact on your business?
The rules are very wonky and I don’t know if I’m probably the best person to comment on it.
Q: So I could take that to say you’re not too worried about it because if you’re worried about it as the CEO, you’d presumably be up to speed on it, right?
I mean we’re lobbying against it. We try to fight on behalf of the independent web. WordPress represents in a lot of ways the dark matter of the web. It doesn’t show up on the top 10 on comScore, but in fact, it has traffic equal to some of the largest social networks. It’s just distributed among hundreds of millions of domains.
So, it is important and we do try but at the end of the day it gets aggregated those domains, aggregated into web hosts, which aggregate in the network providers; there are lots of layers there and at various layers, the new regulations will change different things.
Probably the best long-term thing that we can and that I personally try to do is to influence the people who will be making these decisions. Who is actually in the office making the decision and can they think long-term?
Q: So for the immediate term you know you’re not too worried about. A lot of the rhetoric around net neutrality says that independent websites are going to be unplugged, they’re going to be throttled, they’re not going to be able to afford to pay to get into your home, which I personally find a little bit mystifying. Do you fear that those kinds of things are going to happen? That sites on your network are not going to be accessible because of bad practices by ISPs?
I guess the question becomes: “Is bandwidth or traffic prioritization a gating factor for the next generation of services being created?”.
In terms of publishing, like blogs and things: no. Texts and images are not making a huge difference. For video, the next Netflix: maybe but. You really have to get really far on the edge of usage before that becomes a real issue.
There’s probably been more damage done to innovation from, say, you start to get popular on the Facebook Graph and they shut you off, (basically, the closing off of the social networks, which have huge network effects and create these national monopolies and closing off of data) then there has been or will be from the couple of years of bad net neutrality law we will have.
My hope is that the ISP’s do something really stupid, and then we react with something that kind of enshrines the openness that we want in a more legally long-term way. So, I’m hoping they do something bad.
Q: So we’ve only got just another minute and I wanted to ask you a very different kind of question. You live in Houston Texas, an unusual spot for a tech entrepreneur I guess, but you were telling me that Automattic is a totally distributed company. Everybody works remotely and essentially and I found that quite interesting and I’m wondering because it seems hard to run a big company entirely remotely so:
A) what are your lessons from doing that and
B) what are the big challenges of doing that?
I think it’s actually easier. First, you’ll get down to hiring and retention. So, I believe that talent is equally distributed among the world.
If you find someone great, to be able to hire them regardless of where they choose to live or want to work just immediately is huge. So, we can get an incredible talent pool including some folks who were previously at an internet giant like Google or Facebook, and say “I just don’t want to work and live in that city anymore. I don’t want to commute to Mountain View every day, or to San Francisco”. That is a huge huge help.
And then retention, because people can do a lifestyle arbitrage. They can make SF style salaries anywhere they want; Brazil, Alabama, Japan, anything.
Because of the way of how remote work works, where a lot of what we do is asynchronous, you can create a really good life for yourself.
I forget the name of the group, but there’s a huge pool in Automattic, mothers who have returned to the workforce, and they can design the day around dropping their kids off, and picking their kids up. If you were in an office, that might be awkward; to leave and come back at those times, even if it had a very progressive policy. Or meetings might get scheduled during that.
By having very few meetings and making most things asynchronous, people can function as full; you wouldn’t know how they’re designing the day or what they’re doing, so they can really design their life and work to integrate and bring the best selves to both.
I think that is a huge long-term competitive advantage.
When we started the tools were really light. Today with Slack, with Zoom for video conferencing … you can just FaceTime with someone, you could hear crystal-clear, be connected to any person anywhere in the world. Why are we still worried that “Oh, if I need to talk to someone, how do I get to them?”.
I will say that we balance this. We just flip it, right?
Most companies say: 48 weeks out of the year, be in this one co-located place and then 4 weeks of the year, go do whatever.
We turn it around. We say: 48 weeks of the year, be wherever you want and then we tell people to expect three to four weeks of travel for work. We bring two meetups, so individual teams of 10 to 20 people will get together 2 to 3 times a year and we let them go anywhere in the world. Then, once a year, we bring the entire company together.
These bondings are important; you and I have met in person. Now, if we send the email or text later, it’ll have a voice and a tone to it. It’s nice to be able to break bread with people, but you don’t need to do that every day. In fact, you might get along better with them, like a family reunion effect, if you don’t have to see them every day.
Q: Before you finish, I wanted to just do one thing here which CB insights asked for us to do. I’m gonna state a bunch of things so you tell me if they’re underrated or overrated
Underrated (learn more on WordPress and blockchain)
A great partner
They’re a good competitor
Underrated (learn more on Twitter on a blockchain)
This last one is too easy; blogging?
Oh, I’m very long on blogging.