The Exchanges

Q is, as I said, thrilled to make it happen, but I want to start today. And, you know, we see the incredible journey that you've been on with WordPress and Automatic, but I want to go back just for the beginning and set some context. How did you come up with the idea for WordPress and Automatic? And take me back to that starting aha moment in the early days.

A Yeah. So WordPress was very much born out of open source. So, um, I didn't come up with any idea. Blogging was already happening. There was lots of tools, including like LiveJournal, Blogger, et cetera. Um, but I wanted something that was open source, so I started using some software called B-II Cafe Log, actually from a developer out of Corsica, France, and, um, you know, started volunteering on the farms, forums, helping other people out, contributing code, and then what happened was that software actually was abandoned. The, uh, the developer kind of disappeared, and myself and a gentleman in the UK named Mike Little said, hey, we really like this. Um, we were both kind of contributors and part of the community, so we're like, Hey, why don't we, you know, pick up this torch and keep it going? Cause it seemed like really valuable software and open source. That's called forking a fork like you would eat with. And, uh, now that the main thing with forking is, I mean, one of the beauties of open source is you could take all the code, but you need to come up with a new name. So that's, uh, a friend in Houston suggested the name WordPress and we were off to the races.

AI assessment note: “I didn't come up with any idea. Blogging was already happening.”

Q ask a question from Tony Schneider, actually, and he asked, when he first met you, he said, uh, how long do you want to work on WordPress and Automatic for? And you very clearly said, within seconds, decades. And he was taken aback by your long-term mindset, and he asked the question, when did you know this was a project that you wanted to commit decades of your life to?

A I'd say pretty early on. So, you know, first year of WordPress was very small, probably dozens of users, um, but it was fun in that the developers, myself and the others, were really having a good time working on it and collaborating, and we were all over the world. We never met each other, but that's, that's how open source works. Uh, it was probably the second year that, um, one, I got a job offer, so I got basically hired by a company called CNET, And moved to San Francisco because of my work on WordPress. So that was pretty cool. That felt like winning the lottery. And then, uh, as WordPress started to get translated into other languages, you know, I am unfortunately quite monolingual. I barely speak English that well, but I've always been fascinated with other languages and, um, particularly, uh, WordPress was translated into Japanese. Now, what was this nowadays doesn't sound like a big deal, but what happened was a gentleman in Japan, we had no translation framework. So what he did was he actually went through every single line of the software, which must have been 60 to 80,000 lines at that point, and manually changed all the English text to Japanese, which was like, I can't even imagine how many dozens or hundreds of hours that took. And, um, and then I, you know, I downloaded the software. I loaded it. And it was just one of the most beautiful things I've ever seen in…

AI assessment note: “I'd say pretty early on.”

Q isn't too personal, but you know, we mentioned kind of the risk in being much more long-term minded. Do you think that comes with increasing wealth? And I don't mean that rudely, but like, as you make more money, you can afford the luxury of having a longer term mindset than worrying about rent or worrying about heating bills. How do you think about that in your relationship to money?

A Yeah, a hundred percent. It helps. This was actually something, you know, in 2008, um, secondaries were relatively rare. Uh, they, they just weren't very common, but you know, a lot of credit to our investors at the time, you know, in 2008, the company was only about 20 people, just about two years old, and we got an offer to sell for a two hundred million, uh, which, you know, I owned a majority of the company. That would have been obviously life-changing, and of course we considered it from a variety of angles, but it felt like that was a small fraction of the impact that WordPress and Automata could have, um, in the coming years. And so what the investors did is they said, okay, let's take that two hundred million, make it a new valuation. We'll invest money in that and we'll put, you know, ten million to the company and then we'll allow you and Tony and other employees to like take a little bit off the table, especially since my salary at that point was pretty low. Um, I remember like 80 or a hundred K or something like that. So living in San Francisco, so they're like, Hey, so, you know, take a little bit off the table, de-risk and, uh, focus on the long-term on what you can build swing for the fences. And I think that was really, really helpful for, for me. And I try to think about that now more in our sort of base compensation is for people who work at automatic. How can…

AI assessment note: “Yeah, a hundred percent. It helps.”

Q he said, um, Mad is always there when it matters, always. Birthdays, special events, if it's special, he's there. We met at Shaq's wedding, um, uh, and, you know, seeing obviously at Brilliant Minds and other events. To do this though, you have to manage your time very well, and so my question to you, and same from Hugo, uh, in particular, was first, how do you manage your time?

A That's a good question. Uh, like I do try to, I make a lot of lists. I use, um, simple note and day one quite a bit to make like extensive notes and list of things. Um, I manage my time by working with really great people who make me better. Um, including, you know, my super amazing assistants, Mo and Shiva and others that like really kind of helped me operate at a higher level. And, um, yeah, I do like the philosophy of, like, eat the frog, where if there's something really I don't want to do in the day or I'm procrastinating or putting off, I try to do that first with a joke that being that, like, if you have to eat a frog on a Tuesday, don't wait until the end of the day. I do it first thing and then just get it over with. So, uh, that is probably my best time management tip. Everything else, it's, you know, my days are so different, um, because I'm moving between our businesses quite a bit. Um, I'm often in different physical locations quite a bit. And so it's not really a typical day. Um, so I just try to really triage. I'm a very fast typist. I love being on the computer, so those things definitely help for kind of keeping on top of things.

AI assessment note: “I make a lot of lists. I use, um, simple note and day one”

Q ask a question from Tony Schneider, actually, and he asked, when he first met you, he said, uh, how long do you want to work on WordPress and Automatic for? And you very clearly said, within seconds, decades. And he was taken aback by your long-term mindset, and he asked the question, when did you know this was a project that you wanted to commit decades of your life to?

A I'd say pretty early on. So, you know, first year of WordPress was very small, probably dozens of users, um, but it was fun in that the developers, myself and the others, were really having a good time working on it and collaborating, and we were all over the world. We never met each other, but that's, that's how open source works. Uh, it was probably the second year that, um, one, I got a job offer, so I got basically hired by a company called CNET, And moved to San Francisco because of my work on WordPress. So that was pretty cool. That felt like winning the lottery. And then, uh, as WordPress started to get translated into other languages, you know, I am unfortunately quite monolingual. I barely speak English that well, but I've always been fascinated with other languages and, um, particularly, uh, WordPress was translated into Japanese. Now, what was this nowadays doesn't sound like a big deal, but what happened was a gentleman in Japan, we had no translation framework. So what he did was he actually went through every single line of the software, which must have been 60 to 80,000 lines at that point, and manually changed all the English text to Japanese, which was like, I can't even imagine how many dozens or hundreds of hours that took. And, um, and then I, you know, I downloaded the software. I loaded it. And it was just one of the most beautiful things I've ever seen in…

AI assessment note: “I'd say pretty early on. So, you know, first year of WordPress”

Q I have to ask, we spoke about the importance of communication, and then you mentioned not having email, and I, I kind of glossed over that, but I'm fascinated. How do you communicate by blog posts and not having email, Matt? Can you just walk me through this?

A Yeah, so first I'll say what I like about email is that it's written, uh, it's threaded, and, uh, it can be asynchronous, right? Like you can send something, I can reply on my own time. We don't have to be there at the same place. Now, what I really dislike about email is that, um, it's private, meaning that so much intelligence in a company is locked into people's inboxes. And that means when new people join, they don't have access to all of that conversation and decision making. And when someone leaves, like in their inbox, often leaves a ton of institutional wisdom and knowledge about the business. And so basically everything that most companies do on email, we just do on these internal blogs, including like, you know, you might post something and say, Hey, Matt, what do you think of these mockups? And then I would give your answer. And then maybe you post some more, and then maybe we do a user test and post that to the thread. Like we can have all that things there. And what's cool about this, the system's called P two, the letter P is in pool and then the number two. Um, what's cool about this is it becomes like a organizational blockchain, like a history of basically every decision, uh, we've made in the company for the past dozen years or so, including every partnership meeting, every investor meeting I've had, like pretty much everything's in there. And, um, and it's, y…

AI assessment note: “basically everything that most companies do on email, we just do on these internal blogs”

Q I always think our parents shape us in ways that we don't expect or anticipate. When you think about your father, are there one or two big takeaways or lessons that you learned from him in terms of how you think, how you act, how you operate?

A You know, one of my, my early memories of my dad were, um, him waking up super early in the morning before the sun was out. This was when I was so young. I would sleep in my parents' bed and, you know, he would shower. He put on a suit. He was a computer programmer, but at that time you had to wear like a suit and a tie and get his briefcase. And just like, without fail, be super early in the morning, like first person in the office. And then he would take me sometimes on weekends. So he would go into the office on like extra days, which was my favorite thing, because then I, he'd stick me at one of the other workstations and I get access to the, you know, T one internet or something. Um, but just like, he's just work ethic was really incredible. Uh, that was definitely one. And just, he was always incredibly straightforward. You know, the, uh, he would, you'd always know Yeah, he was just a very genuine person and that sort of high integrity you would see throughout every single aspect of his life. And just has always been really inspiring to me, you know, both as, as an example, but also just in how much simplicity it adds to life. If you're the same person in all context, you know, if you lie, you have to keep track of it, where if you could just tell the truth all the time. Um, you have one less thing to keep track of. All you have to keep track of is reality. So I feel lik…

AI assessment note: “he's just work ethic was really incredible... he was always incredibly straightforward.”

Q more risky assets with the cash flows of your profitable assets and really go for growth in a ton of more risky assets. Now I appreciate the time that we're in now, paying a challenging time to go for growth and not profitability and cashflow. But have you thought about this balance between growth and profitability a lot more in terms of leveraging cashflow here to really subsidize growth here?

A Uh, totally. And we have done that in the past with, um, you know, the money we've raised. It's been primarily through acquisitions though. Like we do like to have businesses which have Good unit economics as you, as you run them from the beginning. So between 2005 and I think 2014, all of automatic was done with about eleven million in outside capital. Uh, those are also the years where Tony Schneider, um, you know, came in as a CEO. In 2014, when we were passing the baton, um, you know, we did, we did about a year or two of work, uh, before that, where he was kind of like, uh, getting ready to pass over the CEO title to me. And one of the things that became clear as we were sort of planning for that and everything was one building up the executive team, which we did, but two, that we were forgoing a lot of opportunities because we were essentially running the business at breakeven and only had, you know, ten million dollars in the bank or something. Like we didn't have a lot of, uh, A lot of leeway and the business was, um, trying to remember the size, probably still sub one hundred million, but getting up there. Uh, so that was one in 2014. We ended up doing our series C, which we raised, you know, we went from eleven million dollars to raising one hundred and sixty million. It was all primary capital. And that really opened us up quite a bit. It's actually what allowed us t…

AI assessment note: “Uh, totally. And we have done that in the past with, um, you know,”

Q You mentioned risk management there. Uh, ironically for a venture investor, I don't love risk. Um, how do you think, how do you think about your relationship to risk?

A Again, I think I got a lot of that out of my system in my twenties. Um, so now how I think about it is very much in the longterm. You know, what's, what are the decisions now? And if you play out a decision that you're doing today, And you say, okay, this continues for five years or 10 years from now. What does it look like? Um, we think about that with benefits. Like, let's say that, for example, we have a benefit that's a coworking allowance. Um, although we don't have, um, outside this one in New York, we don't really have, like, offices in all the places we have employees. Um, but we do give them an allowance of two, of up to 250 dollars per person per month, um, to, uh, go to a coworking space or to go to a coffee shop And, you know, buy coffee so they don't get kicked out and things like that. And early on, one of the arguments was like, Hey, instead of making this a reimbursable thing, like you go and you reimburse it, let's just like give it to everyone, or maybe an example, like let's pay for everyone's internet. And so, but when we thought about that, we thought, well, right now there's benefits used only by a small percentage of folks. Um, the cost is relatively reasonable. Can scale up and down, like during the pandemic, obviously usage of that Coworking allowance went down a lot, but you know, if we're paying two 50 per month, 12 months a year with 2000 people, tha…

AI assessment note: “now how I think about it is very much in the longterm.”

Q isn't too personal, but you know, we mentioned kind of the risk in being much more long-term minded. Do you think that comes with increasing wealth? And I don't mean that rudely, but like, as you make more money, you can afford the luxury of having a longer term mindset than worrying about rent or worrying about heating bills. How do you think about that in your relationship to money?

A Yeah, a hundred percent. It helps. This was actually something, you know, in 2008, um, secondaries were relatively rare. Uh, they, they just weren't very common, but you know, a lot of credit to our investors at the time, you know, in 2008, the company was only about 20 people, just about two years old, and we got an offer to sell for a two hundred million, uh, which, you know, I owned a majority of the company. That would have been obviously life-changing, and of course we considered it from a variety of angles, but it felt like that was a small fraction of the impact that WordPress and Automata could have, um, in the coming years. And so what the investors did is they said, okay, let's take that two hundred million, make it a new valuation. We'll invest money in that and we'll put, you know, ten million to the company and then we'll allow you and Tony and other employees to like take a little bit off the table, especially since my salary at that point was pretty low. Um, I remember like 80 or a hundred K or something like that. So living in San Francisco, so they're like, Hey, so, you know, take a little bit off the table, de-risk and, uh, focus on the long-term on what you can build swing for the fences. And I think that was really, really helpful for, for me. And I try to think about that now more in our sort of base compensation is for people who work at automatic. How can…

AI assessment note: “Yeah, a hundred percent. It helps.”

Q he said, um, Mad is always there when it matters, always. Birthdays, special events, if it's special, he's there. We met at Shaq's wedding, um, uh, and, you know, seeing obviously at Brilliant Minds and other events. To do this though, you have to manage your time very well, and so my question to you, and same from Hugo, uh, in particular, was first, how do you manage your time?

A That's a good question. Uh, like I do try to, I make a lot of lists. I use, um, simple note and day one quite a bit to make like extensive notes and list of things. Um, I manage my time by working with really great people who make me better. Um, including, you know, my super amazing assistants, Mo and Shiva and others that like really kind of helped me operate at a higher level. And, um, yeah, I do like the philosophy of, like, eat the frog, where if there's something really I don't want to do in the day or I'm procrastinating or putting off, I try to do that first with a joke that being that, like, if you have to eat a frog on a Tuesday, don't wait until the end of the day. I do it first thing and then just get it over with. So, uh, that is probably my best time management tip. Everything else, it's, you know, my days are so different, um, because I'm moving between our businesses quite a bit. Um, I'm often in different physical locations quite a bit. And so it's not really a typical day. Um, so I just try to really triage. I'm a very fast typist. I love being on the computer, so those things definitely help for kind of keeping on top of things.

AI assessment note: “I make a lot of lists. I use, um, simple note and day one”

Q Can I ask, how do you approach the element of accountability with independence? You want people to be accountable. You want them to go big, but you also don't want to let them not be feared of failure, not be Willing to engage. How do you think about that challenge of giving them enough accountability, but not too much?

A Yeah, I think that where we've done that best is probably having clear goals and giving people a lot of flexibility for how to accomplish them. And where we've done it poorly is probably when myself or others get like a little too involved in the how to do it, uh, particularly if a team is doing well. So, but I think just if you're communicating which mode you're in. So for example, um, in February, I took over as the CEO of Tumblr. I've been running that personally day to day, uh, since then. And I told the team like, Hey, we're, we're in a tough place right now. So I'm not going to be trying to build consistent consensus or other things. We're going to be in a bit of a command and control method for a little bit, where, um, let's just try to do, uh, what I'm saying to do as quickly as possible, so we can kind of pull out of this, uh, this dive. Um, and I think that's fine if you communicate it, but it also is not sustainable. Like, I think that at some point, hopefully when things start going better again, you can then step back and, uh, you know, have just a different kind of leadership style. But like Ben Horowitz talks about like wartime versus peacetime CEO. I think that it's important to vary your leadership style based on who you're working with, the state of the team and sort of what's going on. I think where we make, or where I've made mistakes before is not being exp…

AI assessment note: “having clear goals and giving people a lot of flexibility for how to accomplish them”

Q challenges when things go wrong. You know, I spoke to Tim Ferris before this show about you, and he said you had two skills, world-class skills, and he said one of them is your zen-like mindset and your ability to just stay calm when the shit is truly hitting the fan. Um, And he, and he asked, how do you retain this zen-like calm in the midst of challenging environments?

A I think it's just a form of coping. So when something is really overwhelming, um, a way for me to try to get a handle on it is to sort of step back mentally a little bit and Uh, just try to dispassionately, uh, look at it, uh, breathe, you know, remind myself to breathe and other things, which comes from probably my saxophone days. You're about to walk on stage, your heart's racing, you're nervous, you gotta breathe, otherwise you can't blow the horn. Um, and also something, I don't remember where I read it or who said it, but like, uh, is freaking out right now gonna help the situation or make it worse? And you know, 99% of the time it's going to make it worse. So if, you know, something's challenging and we want to get through it, ah, you know, the saying, if you're, if you're going through heck, keep going, like, don't stop and hang out there. Like keep going and then look at, you know, what would be most helpful. And, um, I find that actually very, it helps me get out of that part where my body, my heart's racing or I'm really stressed out. And so it probably looks on the outside, like it's very calm. Um, internally I'm probably freaking out a little bit, but then sort of coming back to that sort of centered place.

AI assessment note: “step back mentally a little bit and Uh, just try to dispassionately, uh, look at it”

Q Matt, I have to ask you, you mentioned taking over from Tony there in, I think, 2014 or 20 15, we mentioned you're becoming CEO of Tumblr. In terms of delegation, how do you determine what to delegate versus what only you can do? And this is directly advice for me, I'm shit at it.

A You know, part of going from 10,000 feet to one foot is I do like to really deeply understand an area. And that I feel like helps me hire or recruit someone who's way better at it than me. And so for me, where, uh, it's very, very easy to delegate is when I find someone who is so much better or maybe just enjoys it so much more than me that it's a joy to pass things off. So I'd say that's where it's gone well. And when I come into things, I do see it as a little bit of a failure in that it means that we haven't, you know, found the right formula, uh, without me there. So I usually think of it like a temporary thing.

AI assessment note: “it's very, very easy to delegate is when I find someone who is so much better”

Q I always think our parents shape us in ways that we don't expect or anticipate. When you think about your father, are there one or two big takeaways or lessons that you learned from him in terms of how you think, how you act, how you operate?

A You know, one of my, my early memories of my dad were, um, him waking up super early in the morning before the sun was out. This was when I was so young. I would sleep in my parents' bed and, you know, he would shower. He put on a suit. He was a computer programmer, but at that time you had to wear like a suit and a tie and get his briefcase. And just like, without fail, be super early in the morning, like first person in the office. And then he would take me sometimes on weekends. So he would go into the office on like extra days, which was my favorite thing, because then I, he'd stick me at one of the other workstations and I get access to the, you know, T one internet or something. Um, but just like, he's just work ethic was really incredible. Uh, that was definitely one. And just, he was always incredibly straightforward. You know, the, uh, he would, you'd always know Yeah, he was just a very genuine person and that sort of high integrity you would see throughout every single aspect of his life. And just has always been really inspiring to me, you know, both as, as an example, but also just in how much simplicity it adds to life. If you're the same person in all context, you know, if you lie, you have to keep track of it, where if you could just tell the truth all the time. Um, you have one less thing to keep track of. All you have to keep track of is reality. So I feel lik…

AI assessment note: “he's just work ethic was really incredible. Uh, that was definitely one.”

Q obviously had many hours of chatting to Shaq about you and, and many stories that you guys have shared. He said one baller OG move was, uh, the Tumblr, um, acquisition, and then obviously also you taking over as CEO. Can you just help me understand what was the decision-making process for you in terms of taking the helm and taking the reins as CEO, you know, earlier this year?

A Yeah, it's, um, it's a good question. So, I mean, we bought Tumblr because it's a, it's a generational property. Like, it's really amazing. Um, it had been mismanaged, I think under Yahoo and AWOL and Verizon, and, um, we felt like we could turn it around. Uh, the reason I ended up taking over as CEO is that the first two years of the acquisition, it has not turned, it had not turned around yet. Uh, so not an ideal circumstance, to be honest, but we ended up You know, a lot of the teams knew, 85 or 90%, that at some point, um, like I said earlier, I felt like I needed to go in and be a bit more hands-on with the business, uh, because while we, you know, it's been reported that we bought Tumblr for very little, um, It has so much usage. It's actually quite expensive to run. So getting Tumblr to where it can be break even, um, and sustainable is really critical. Uh, now, fortunately at our business, all the other businesses are doing very well and very profitable. So we kind of evens out at a full business level, but I think rightly so like, uh, board and others looks at this and says, Hey, why are we losing so much money on this thing? Especially when it wasn't growing. Uh, what I'm really happy to say is that The team has done some amazing work over the past few months. And, um, not only is Tumblr is like growing really in a really interesting way now, both usage and revenue. A…

AI assessment note: “The reason I ended up taking over as CEO is that the first two years”

Q you know, I think insecurity can often creep in and it stays long-term afterwards. Honestly, Matt, I listened to a lot of your shows beforehand, and you sound so calm and thoughtful that you're like, ah, this guy, he's got no insecurities. And I think it's quite humanizing to discuss, I think it's quite humanizing to discuss them. So, what would you say are your biggest insecurities in leadership today?

A Oh, um, Yeah, I will just say that I have all the normal human foibles and follies and issues. Um, gosh, insecurity is what comes to mind is I've always been pretty insecure about my body. You know, like embarrassed to like take off my shirt at the swimming pool or something like that. Um, on the leadership side, I would say a lot of my insecurity came from my inexperience and age. It's part of why I would read so many books, because I was like, gosh, I really have no idea what I'm doing. I've never done this before. I need to learn something before everyone figures it out, or I mess up this thing I really care about. Um, and I still, like, it still gets to me when You know, even at our scale and we've hired thousands of people and, you know, over the years, people, a lot of people have left as well. Hundreds of people have left. Um, that's still a stuff for me, even at this level where, you know, when you hire someone, you have all the hopes in the world. And, um, so when that doesn't work out, it's still, uh, yeah, it's still, still bothers me. It's something I really, I try to think about and also like think what could we have done differently. Because it's not really fair to someone else as well to leave their previous job and everything else to come and, uh, and not being in the environment where they feel like they can be successful.

AI assessment note: “on the leadership side, I would say a lot of my insecurity came from my inexperience”

Q What have you stopped or started recently that's made a big difference? So like for me, I stopped drinking in the week, and I noticed that made a big difference actually. I still drink on the weekends and, you know, have a great time then, but weekdays, no. Is there anything that you've stopped or started that has made a big difference?

A You know, the two best things in the past couple of years that were interesting for me was actually the COVID lockdown when I stopped traveling. In 2019, I think I did over 500,000 air miles. So I was really traveling quite a bit. And, um, you know, that went to zero for a while there. So that was interesting because I realized that once I was in a single place all the time, all my excuses kind of fell away. Cause that before I'd be like, oh, I'm not exercising because I'm on the road or like, or whatever it is. So like, when I stopped doing that, I really had to face a lot of things that I think I had been running away from a little bit.

AI assessment note: “was actually the COVID lockdown when I stopped traveling.”

Q Matt, I have to ask you, you mentioned taking over from Tony there in, I think, 2014 or 20 15, we mentioned you're becoming CEO of Tumblr. In terms of delegation, how do you determine what to delegate versus what only you can do? And this is directly advice for me, I'm shit at it.

A You know, part of going from 10,000 feet to one foot is I do like to really deeply understand an area. And that I feel like helps me hire or recruit someone who's way better at it than me. And so for me, where, uh, it's very, very easy to delegate is when I find someone who is so much better or maybe just enjoys it so much more than me that it's a joy to pass things off. So I'd say that's where it's gone well. And when I come into things, I do see it as a little bit of a failure in that it means that we haven't, you know, found the right formula, uh, without me there. So I usually think of it like a temporary thing.

AI assessment note: “very easy to delegate is when I find someone who is so much better”

Q you know, I think insecurity can often creep in and it stays long-term afterwards. Honestly, Matt, I listened to a lot of your shows beforehand, and you sound so calm and thoughtful that you're like, ah, this guy, he's got no insecurities. And I think it's quite humanizing to discuss, I think it's quite humanizing to discuss them. So, what would you say are your biggest insecurities in leadership today?

A Oh, um, Yeah, I will just say that I have all the normal human foibles and follies and issues. Um, gosh, insecurity is what comes to mind is I've always been pretty insecure about my body. You know, like embarrassed to like take off my shirt at the swimming pool or something like that. Um, on the leadership side, I would say a lot of my insecurity came from my inexperience and age. It's part of why I would read so many books, because I was like, gosh, I really have no idea what I'm doing. I've never done this before. I need to learn something before everyone figures it out, or I mess up this thing I really care about. Um, and I still, like, it still gets to me when You know, even at our scale and we've hired thousands of people and, you know, over the years, people, a lot of people have left as well. Hundreds of people have left. Um, that's still a stuff for me, even at this level where, you know, when you hire someone, you have all the hopes in the world. And, um, so when that doesn't work out, it's still, uh, yeah, it's still, still bothers me. It's something I really, I try to think about and also like think what could we have done differently. Because it's not really fair to someone else as well to leave their previous job and everything else to come and, uh, and not being in the environment where they feel like they can be successful.

AI assessment note: “on the leadership side, I would say a lot of my insecurity came from”

Q Can I ask, how do you approach the element of accountability with independence? You want people to be accountable. You want them to go big, but you also don't want to let them not be feared of failure, not be Willing to engage. How do you think about that challenge of giving them enough accountability, but not too much?

A Yeah, I think that where we've done that best is probably having clear goals and giving people a lot of flexibility for how to accomplish them. And where we've done it poorly is probably when myself or others get like a little too involved in the how to do it, uh, particularly if a team is doing well. So, but I think just if you're communicating which mode you're in. So for example, um, in February, I took over as the CEO of Tumblr. I've been running that personally day to day, uh, since then. And I told the team like, Hey, we're, we're in a tough place right now. So I'm not going to be trying to build consistent consensus or other things. We're going to be in a bit of a command and control method for a little bit, where, um, let's just try to do, uh, what I'm saying to do as quickly as possible, so we can kind of pull out of this, uh, this dive. Um, and I think that's fine if you communicate it, but it also is not sustainable. Like, I think that at some point, hopefully when things start going better again, you can then step back and, uh, you know, have just a different kind of leadership style. But like Ben Horowitz talks about like wartime versus peacetime CEO. I think that it's important to vary your leadership style based on who you're working with, the state of the team and sort of what's going on. I think where we make, or where I've made mistakes before is not being exp…

AI assessment note: “having clear goals and giving people a lot of flexibility for how to accomplish them”

Q obviously had many hours of chatting to Shaq about you and, and many stories that you guys have shared. He said one baller OG move was, uh, the Tumblr, um, acquisition, and then obviously also you taking over as CEO. Can you just help me understand what was the decision-making process for you in terms of taking the helm and taking the reins as CEO, you know, earlier this year?

A Yeah, it's, um, it's a good question. So, I mean, we bought Tumblr because it's a, it's a generational property. Like, it's really amazing. Um, it had been mismanaged, I think under Yahoo and AWOL and Verizon, and, um, we felt like we could turn it around. Uh, the reason I ended up taking over as CEO is that the first two years of the acquisition, it has not turned, it had not turned around yet. Uh, so not an ideal circumstance, to be honest, but we ended up You know, a lot of the teams knew, 85 or 90%, that at some point, um, like I said earlier, I felt like I needed to go in and be a bit more hands-on with the business, uh, because while we, you know, it's been reported that we bought Tumblr for very little, um, It has so much usage. It's actually quite expensive to run. So getting Tumblr to where it can be break even, um, and sustainable is really critical. Uh, now, fortunately at our business, all the other businesses are doing very well and very profitable. So we kind of evens out at a full business level, but I think rightly so like, uh, board and others looks at this and says, Hey, why are we losing so much money on this thing? Especially when it wasn't growing. Uh, what I'm really happy to say is that The team has done some amazing work over the past few months. And, um, not only is Tumblr is like growing really in a really interesting way now, both usage and revenue. A…

AI assessment note: “The reason I ended up taking over as CEO is that the first two years”

Q challenges when things go wrong. You know, I spoke to Tim Ferris before this show about you, and he said you had two skills, world-class skills, and he said one of them is your zen-like mindset and your ability to just stay calm when the shit is truly hitting the fan. Um, And he, and he asked, how do you retain this zen-like calm in the midst of challenging environments?

A I think it's just a form of coping. So when something is really overwhelming, um, a way for me to try to get a handle on it is to sort of step back mentally a little bit and Uh, just try to dispassionately, uh, look at it, uh, breathe, you know, remind myself to breathe and other things, which comes from probably my saxophone days. You're about to walk on stage, your heart's racing, you're nervous, you gotta breathe, otherwise you can't blow the horn. Um, and also something, I don't remember where I read it or who said it, but like, uh, is freaking out right now gonna help the situation or make it worse? And you know, 99% of the time it's going to make it worse. So if, you know, something's challenging and we want to get through it, ah, you know, the saying, if you're, if you're going through heck, keep going, like, don't stop and hang out there. Like keep going and then look at, you know, what would be most helpful. And, um, I find that actually very, it helps me get out of that part where my body, my heart's racing or I'm really stressed out. And so it probably looks on the outside, like it's very calm. Um, internally I'm probably freaking out a little bit, but then sort of coming back to that sort of centered place.

AI assessment note: “a way for me to try to get a handle on it is to sort of step back”

Q like, spend more time with friends, um, and correlating that to happiness, and I spoke to Hugo Bauer, I spoke to Daniel, I spoke to Shaq, I spoke to Tony Schneider, Tim Ferriss, and the depth of their friendship with you was so wonderful to hear, and it, it just made me think on a couple of things, but first is like, what does truly great friendship mean to you?

A You know, a friend is someone who calls you out. You know, I always joke that, like, if you have something in your teeth, like a stranger might not tell you, but a true friend will always tell you if you have something in your teeth, because it's kind of saving you from walking around all day with your poppy seed in there or something. Um, I do appreciate, um, vulnerability. I think, you know, Being vulnerable with your friends, um, and making space for them to be vulnerable with you. It's really powerful. Like we all want to be heard and understood. Um, what I'm bad at and trying to get better at is actually asking for help when I need it. Uh, if I'm going through a really challenging situation or tough time, I, I tend to kind of go in a cave. And like, withdraw. And all my friends are like, hey, like, that's when we want to be there for you. Like, that's, but we can't if you don't tell us. So that's something that's been on my mind recently.

AI assessment note: “a friend is someone who calls you out. You know, I always joke”

Q What have you stopped or started recently that's made a big difference? So like for me, I stopped drinking in the week, and I noticed that made a big difference actually. I still drink on the weekends and, you know, have a great time then, but weekdays, no. Is there anything that you've stopped or started that has made a big difference?

A You know, the two best things in the past couple of years that were interesting for me was actually the COVID lockdown when I stopped traveling. In 2019, I think I did over 500,000 air miles. So I was really traveling quite a bit. And, um, you know, that went to zero for a while there. So that was interesting because I realized that once I was in a single place all the time, all my excuses kind of fell away. Cause that before I'd be like, oh, I'm not exercising because I'm on the road or like, or whatever it is. So like, when I stopped doing that, I really had to face a lot of things that I think I had been running away from a little bit.

AI assessment note: “was actually the COVID lockdown when I stopped traveling.”

Q more risky assets with the cash flows of your profitable assets and really go for growth in a ton of more risky assets. Now I appreciate the time that we're in now, paying a challenging time to go for growth and not profitability and cashflow. But have you thought about this balance between growth and profitability a lot more in terms of leveraging cashflow here to really subsidize growth here?

A Uh, totally. And we have done that in the past with, um, you know, the money we've raised. It's been primarily through acquisitions though. Like we do like to have businesses which have Good unit economics as you, as you run them from the beginning. So between 2005 and I think 2014, all of automatic was done with about eleven million in outside capital. Uh, those are also the years where Tony Schneider, um, you know, came in as a CEO. In 2014, when we were passing the baton, um, you know, we did, we did about a year or two of work, uh, before that, where he was kind of like, uh, getting ready to pass over the CEO title to me. And one of the things that became clear as we were sort of planning for that and everything was one building up the executive team, which we did, but two, that we were forgoing a lot of opportunities because we were essentially running the business at breakeven and only had, you know, ten million dollars in the bank or something. Like we didn't have a lot of, uh, A lot of leeway and the business was, um, trying to remember the size, probably still sub one hundred million, but getting up there. Uh, so that was one in 2014. We ended up doing our series C, which we raised, you know, we went from eleven million dollars to raising one hundred and sixty million. It was all primary capital. And that really opened us up quite a bit. It's actually what allowed us t…

AI assessment note: “Uh, totally. And we have done that in the past”

Q What's the secret to successful integration? M&A is fucking hard. Everyone struggles on integration. How have you guys done it so well, so consistently?

A I think it helps that we're totally distributed. So there's less of like a us versus them in the office or things. It was actually a big challenge when we bought Tumblr because they did have, you know, pretty large office presence. About two thirds of the company was in an office in New York. And, uh, so we had to bridge that. Um, a lot of what we do is around like internal switchers. So often when you acquire a company, they you're doing it or they're doing it partially because they want more resources. So one of the best things we can do when we buy something is take some of the best people at automatic, the best engineers, the best designers, et cetera, and we rotate them in to the acquired business. And that, uh, builds a lot of bridges, you know, it's kind of the, again, some of our best folks. So it's painful to remove them from other businesses, but then they give a really good impression of the rest of automatic and, um, they can be embedded in essentially, uh, helping transform the culture. Uh, it's very much so the culture goes both ways. So, you know, like Tumblr is a good example, like influenced the rest of automatics culture quite a bit. And now we have them using P two and like all the things that we do. So there's, um, I think that's pretty important. I guess it's kind of geeky, but the other thing is just really backend integrations and making sure that you rea…

AI assessment note: “a lot of what we do is around like internal switchers”

Q Have you ever seen therapists when I went through, you know, very bulimic kind of schedules and episodes, I saw therapists for many years and probably still need therapists for many years. Uh, but, um, have you ever spoken to them and how did you find that if so?

A Um, not a formal therapist, but I've worked with a lot of teachers over the years who have done very therapy-like things with me, including a coach I work with now called Joe Hudson, who actually has a really great, he shares a lot of his stuff online now. So, uh, it's been, I think self-awareness is kind of, you know, know thyself before you can change anything else. And where I see leaders struggle the most, including companies I invest in, is typically where They're being driven by some forces which they're not fully aware of, and that might cause them to be snappy or tense or act of the fear rather than in abundance, and, um, You know, all these things, some sound really woo woo. And sometimes I do these things like a friend will bring me in. I'm like, this is total like woo woo crystal stuff, but I'll try anything at least once. And I try to look for the wisdom and even things that I think are a little ridiculous. Uh, particularly if it's like from an older modality or something that's been around for a long time, it's like, okay, why is this survive so long? Or why do people like it? Or even if I think it's totally, you know, made up. Why are people drawn to it? What about, what is it promising that people are drawn to? So, um, yeah, approaching these things with the open mind, I think is really, really helpful for all of this. Like you have to be open-minded for it to wo…

AI assessment note: “not a formal therapist, but I've worked with a lot of teachers over the years”

Q of the failure and you having to jump in, I think that we learn a lot from lessons or mistakes that kind of go wrong. When you think about kind of painful lessons that you've learned, I do want to ask this one, which is, what are the most difficult but valuable lessons you've learned in the automatic journey that although it sucks, you're pleased that you went through them?

A I don't know. You know, everything we've talked about so far, there's usually an opposite side. So we talked about good communication. Um, like remember I was. 19 when WordPress started. So I was a pretty terrible communicator for many of those years. Um, so everything that's going right, I've definitely done wrong at some point. And unfortunately, sometimes my head's kind of thick. I need to do it wrong before I figure it out. Um, Tony was always really, really great at also, you know, he's very wise. He was a much more experienced executive than me. And, uh, but it would also give me some, some space to make my own mistakes. So, you know, mistakes that come to mind, um, you know, making capital expenditures when we shouldn't have, or, you know, put us in a tight cash position, uh, signing a lease for an office for Tumblr in like, uh, December, 2019 to move in April, 20, 20. Um, you know, so there's just different things, but, uh, There's something I learned from Tony actually is, uh, to try to make reversible decisions quickly and irreversible decisions very deliberately or slowly. So, uh, and if there is a irreversible decision, like apparently our lease was in New York, um, you know, make sure that the cost, even if it goes wrong is not existential. So I think a tremendous amount about risk management and longevity and sustainability, because like I said, I do want to do th…

AI assessment note: “try to make reversible decisions quickly and irreversible decisions very deliberately or slowly”

Q What did you learn about yourself at the time? Because it does reveal a little bit about who you are and what you really want.

A I found I had a lot of resistance to these things. So, uh, yeah, I would say that the, I think I learned the importance of consistency. So typically what I've done in the past is like, you know, I won't work out for a while. And then I'll like work out every day and then I end up hurting myself and then I stop. Absolutely. That kind of feast or famine. Um, I think for things like exercise is not the most effective approach, by the way, I don't, um, the least world's least expert on this, but at least that's been my experience so far. Um, versus the consistency of doing even just a little bit every day, I found felt a lot better. It was easier to accomplish and got honestly better results. So. That, um, consistency, I think applies to a lot of things, whether it's meditation, you know, investing in your close relationships to make sure you're not just spending time around each other, but really like listening to each other, talking to each other. Uh, yeah, the consistency matters a lot. You know, we were talking about friendships. One of my favorite things is also seeing how friendships and people develop over the long term. I feel really lucky that the people I worked with when I first moved to San Francisco, like Phil Black or Tony Schneider, um, Tony Conrad, I still work with today. Uh, so, but seeing how people change over time is also really inspiring to me that I could cha…

AI assessment note: “I found I had a lot of resistance... I learned the importance of consistency.”