Feb 12, 2018 · 37m · top-founders
933 Why Wordpress CEO Raised $300m, Replaced Himself, and New Gutenberg
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this interview with Nathan Latka, WordPress co-founder and Automattic CEO Matt Mullenweg discusses scaling Automattic past $100 million in annual recurring revenue, rejecting acquisition offers to remain private, and modernizing web publishing through Project Gutenberg.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 32.1% of the talking time here. How this is scored →
Nathan as informed peer 4.4 Guest teaching 3.7 Guest disagreement 2.0 Nathan pushing back 2.7
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 13:09 Blunt refusal to disclose acquisition suitor
When Nathan directly pushes Matt to name the corporation that made the $200 million acquisition offer, Matt shuts down the line of questioning with an uncompromising single-word rejection.
Hardest push from Nathan ▶ 6:43 Defending usage metrics against vanity metric labelWhen Matt dismisses post counts as mere vanity metrics, Nathan pushes back forcefully, arguing that revenue can be deceptive whereas user engagement and post counts indicate genuine product adoption.
Biggest teaching moment ▶ 22:20 Educating on ecosystem architecture and hosting strategyMatt explains why acquiring WP Engine did not fit Automattic's core identity, framing Automattic as a technology provider that supports all ecosystem hosts just as Android supports diverse device manufacturers.
Nathan holds their own ▶ 6:43 Nathan articulates interview philosophy on product addictionNathan demonstrates SaaS analytical expertise by defending why engagement metrics are more reliable indicators of platform health than top-line revenue.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Distinguishing Between WordPress and Automattic's Business Structure | 4 | 2 | 1 | 1 | Nathan introduces Matt Mullenweg, highlighting his background and referencing his Proctor & Gamble analogy for Automattic's brand portfolio. Matt elaborates on his early days playing jazz in Houston and dropping out to join CNET. | |
| The Genesis of WordPress and Launching Automattic in 2005 | 5 | 5 | 3 | 5 | Nathan brings up annual post statistics from 2016, which Matt brushes off as a vanity metric. Nathan immediately pushes back to defend usage metrics over revenue metrics, prompting Matt to explain how data imports distort posting volume compared to active users. | |
| Automattic's Core Revenue Streams and SaaS Subscription Models | 5 | 4 | 3 | 4 | Nathan probes Automattic's monetization model and delves into Matt's decision to reject a $200M acquisition offer in 2008 to stay independent. When Nathan asks who made the acquisition offer, Matt shuts it down with a blunt rejection, and later corrects Nathan on the timing of Automattic's fundraising rounds. | |
| Nathan Latka Promotion for The Top Inbox | 4 | 2 | 2 | 2 | Following an ad read for The Top Inbox, Nathan probes ARR milestones and inquires why Matt replaced himself with Toni Schneider as CEO before later reclaiming the role. Matt explains the transition strategy and playfully calls out Nathan for trying to get him to badmouth competitors. | |
| Strategic Acquisitions and Automattic's Role in Web Hosting | 5 | 6 | 2 | 4 | Nathan challenges Matt on why Automattic did not acquire WP Engine before its valuation skyrocketed. Matt schools Nathan on Automattic's strategic positioning as a core technology platform rather than a hosting provider, drawing a parallel to Google's relationship with Android OEMs. | |
| Early Cryptocurrency Investments and Philosophy on Bitcoin | 4 | 3 | 1 | 1 | Nathan asks about Matt's early crypto bets, leading Matt to correct Nathan's confusion between Coinbase and CoinDesk. The discussion transitions into the Famous Five segment covering Dalio's Principles, remote work tools, and company culture. | |
| Contemplating Public Markets, Crypto Tokens, and Final Thoughts | 4 | 4 | 2 | 2 | Nathan presses Matt on potential liquidity events and suggests token issuance as a community ownership mechanism. Matt methodically explains why shoehorning an ICO into Automattic's business model lacks intrinsic utility and does not serve long-term value. |
Statements from this episode (19)
Commercial spin-outs usually damage their underlying open-source projects
“The history of most companies coming out of open source projects is that the open source project really suffers.”
Gutenberg lets anyone build New York Times-style rich layouts for free
“What New York Times spent probably tens of thousands of dollars to do a few years ago will be able to enable anyone with WordPress and Gutenberg to do just kind of out of the box.”
Subscription revenue accounts for 98% to 99% of Automattic's business
“So we are, you know, vast, vast majority, 98, 99% subscription business.”
Automattic received a $200M buyout offer in 2008 with just 25 employees
“It was 2008, so it was about two years into automatic, two and a half years.
Nathan Latka: And it was a two hundred million dollar offer?
Matt Mullenweg: It was of that magnitude, yeah.
Matt Mullenweg: And the company at the time was also
Matt Mullenweg: Reall…”
Automattic raised at a $200M valuation to provide secondary liquidity
“So we were able to do a round at like a two hundred million valuation.
Matt Mullenweg: and that was New York Times actually joined that and it was largely our existing investors.
Matt Mullenweg: So all of our existing investors kind of re-upped and we did do a…”
Automattic has raised $200M in primary and $150M in secondary capital
“I think total at this point, I've raised around,
Matt Mullenweg: Let's say around 200 in primary and about another 150 in secondary.
Nathan Latka: Okay.
Matt Mullenweg: So somewhere around three 50 total.”
Public market quarterly reporting prevents companies from making 10-year strategic bets
“And while they have access to, you know, the public capital markets, which is great.
Matt Mullenweg: there, I think lost, you lose a little bit of your ability except for very few companies to make really long-term strategic bets.
Matt Mullenweg: And we believ…”
Automattic has surpassed $100M in annual recurring revenue
“I think the thing that we're saying publicly is that we're into the nine figures.”
Co-CEO arrangements create conflict; companies require a clear hierarchy
“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. Whic…”
WP Engine needs 450 employees for a vastly smaller customer base
“WP Engine at this point is 450 people. You know, that's, Automatic's only six 50. So just serving their customer base, which is much smaller than ours takes almost the same number of people.”
Mullenweg models Automattic's WordPress strategy on Google's Android and Pixel ecosystem
“Think of it kind of like Google with Android. Like, they'll make their Pixel phones, so we'll make 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 ever…”
Changing the editor is the most controversial task in WordPress history
“Changing the editor, since that's really in many ways the heart of WordPress, Is by far the most controversial thing you can do, and the hardest, because lots of people are very used to how WordPress has worked for the past 14 years, and there's lots of opinio…”
WordPress was an early major platform to accept Bitcoin at $12
“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 dollars”
Cryptocurrency is disconnected from fundamentals, acting primarily as a commodity
“I think that right now we're in some ways a little bit disconnected from the fundamentals because it's become essentially like a new commodity, been a flight to safety, a hedge against, you know, inflation and central banks printing money.”
Mullenweg has sold the vast majority of his crypto holdings
“I sold the vast majority of what I have and over the years, and I'll just keep a bit just for fun to keep an eye on it.”
Automattic coordinates 650 remote employees across 62 countries
“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, you know, coordinate across time zones, across, you know, 650 people in, like, 62 countries.”
Mullenweg joined GitLab's board of directors
“You know, I'll go super underground and talk about a company I just joined the board of. Which is GitLab.”
Automattic operates with zero internal email using a custom blogging tool
“So we use this thing we built called P two. You can look it up P two theme.com and it's basically 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 auto…”