Category Archives: Automattic

Act Two

Automattic, , , , , ,

You’ve probably seen the news on GigaOM, Automattic has raised a new “series B” round of funding. We’re entering what I consider Act II of the Automattic story. I’ll talk about where we’re going, but first some history.

In 2005 Automattic was small. Through some miracle I had convinced Donncha O Caoimh, Andy Skelton, and Ryan Boren to leave their safe jobs, join a company with almost no money in the bank run by someone with no experience, and whose core idea was to give away and open source all our core IP. There were more questions than answers. Would a hosted version of WordPress move beyond the geek appeal the OS project had? How would the virtual company with no office work? Could we develop a service alongside an OS project without screwing both of them up? Should I raise money? Most importantly, would it scale?

In 2006 we developed a series of answers (sometimes hard-learned) to those questions. WordPress was obviously limited by its installation requirements — when it was added as a one-click to web hosts and when WordPress.com (and other MU hosts) made it simple to get a blog the popularity grew beyond what I could have ever imagined. In the WordPress.org world it wasn’t perfect — I consider the long period between versions 2.0 and 2.1 a personal failure — but after that initial bump the development really picked up and the community and usage exploded. There have been 5,880,790 downloads of WordPress.org since Automattic started. (3,852,554 in the past year alone.)

We ended up raising a small amount of money (1.1 million) to allow the company to take some risks without worrying about payroll but we ended up using very little of that capital because revenues grew quickly, allowing us to remain break-even even as the team scaled to 18 full-time folks and a number of contractors. Toni Schneider left Yahoo to join as CEO, a partner I couldn’t imagine getting along better with, and we started to look like a real company despite having no office and some of us never meeting in person.

Fast forward to 2007: many of the seeds planted started to really bloom. On WordPress.com 1.8 million new users joined, they created 25 million posts, we served 3.2 billion dynamic pageviews, and grew to reach over 100 million unique users worldwide. Akismet blocked billions of spams from reaching blogs. Nearly every major media organization, from the NY Times, WSJ, CNN, Fox, Time, People, and more, have embraced WordPress. Finally the approach of serious acquisition or majority-stake investments brought up the biggest question we’d faced so far: should we sell, or build out Automattic to be an independent company for many years to come.

That decision actually wasn’t hard. I couldn’t stop thinking about the opportunities and it became clear that the road ahead was much longer than the road behind us.

That brings us to today. The New York Times, the flagship of media, is joining our existing investors Polaris, True, and Radar in expanding their minority stake in the company. Automattic is now positioned to execute on our vision of a better web not just in blogging, but expanding our investment in anti-spam, identity, wikis, forums, and more — small, open source pieces, loosely joined with the same approach and philosophy that has brought us this far.

See also: GigaOM, Toni Schneider, New York Times, Techcrunch, Wall Street Journal, Mark Jaquith, Jackie Danicki, Mark Evans, Mathew Ingram, Michael Bazeley, Venturebeat, Lloyd Budd, Raanan Bar-Cohen, bu.blicio.us, VC Mike.

P.S. I’ve moved to a new domain, ma.tt, but more on that later. You can subscribe to my feed here.

Paid Support

Automattic

We just launched the Automattic Support Network which is a place for companies to purchase paid support for WordPress and MU. Originally I didn't think we'd need to do this, simply because the WordPress.org support forums are so amazing and there is such a good community around it. That hasn't changed, but some big companies and enterprise folks are uncomfortable with volunteer support, and want (and insist) on paying someone before deploying a product. Based on that feedback and a lot of input from Podz, we put together this new product, which is basically VIP support with a guaranteed response time. Toni has some more thoughts here. We also rolled out new pricing for commercial Akismet use a few days ago, and the response has been great so far.

A Little Funding

Akismet, Automattic, WordPress.com

The best thing that can ever happen to a web service is to have passionate users. Users that notice and email you the second there’s a database problem, users that really push the limits of what you can provide, and users that are phenomally successful and bring thousands of others to your doors.

As a service provider, you have a strong responsibility to these folks. They’re putting their life online with you, they deserve nothing less than 100% uptime. They tell all their friends to try you out, they deserve for the experience of the hundred thousandth user to be as great as the tenth. WordPress.com is serving 4.2 million hits a day on a handful of boxes. Akismet has gotten to the point where it’s blocking so many spams every second that any fraction of downtime is very noticable to users. (Like we had this morning.)

At Automattic we’ve always taken this very seriously, and from the bootstrap beginning I planned for it to be sustainable and frugal in the long term. Of course since I moved to San Francisco I’ve talked to dozens of really high-quality investors who were interested in what we were doing, but the bubble model of giant valuations and ultra-rapid growth never really appealed to me.

The growth of WordPress.com and Akismet has outpaced anyone’s expectations. Recently, I made the decision to sell a minority stake in the company to a few select partners who I think are going to bring a lot of value to the business far beyond mere dollars. This isn’t going to change how the business is run, or the people involved with it, but it will allow us to take better advantage of the opportunities before us and also for us to keep our promise to every one of you to maintain a fast, stable, and innovative platform in the long term.

Automattic isn’t going to get fancy SoMA offices, throw huge parties at SxSW, or “get big fast.” We took a small amount of capital to put things that were already growing fast in a stable position, so from month to month you’re not robbing Peter to pay Paul. We’re going to use the money to pre-emptively address scaling issues before they happen, and continue to share everything we can back to the community, like all of the code behind WP.com in WordPress MU, the spellchecking feature we sponsored, free Akismet for 99.9% of users, and a few other goodies we still have up our sleeve. In terms of hiring, we’re still going to grow very deliberately in line with our revenues and focus on the very best and brightest (and BBQ-loving), like Podz.

We’re going to publish more technical details about everything later, and this is already longer than I hoped — I’m sure you folks have some questions. I’m going to do something a little different and turn the comment section here into a FAQ. If you have a question, please post it below. If you want to say “congrats!” or “that sucks!” do it on this entry instead to keep the question and answer flow clean. If a question warrants a long enough answer I might turn it into a separate blog post.

Hours and Work

Asides, Automattic

There’s no correlation between hours worked and work done. I think this is why traditional corporate structures are starting to crack at the seams, and the distributed model companies like Automattic, MySQL, SocialText, and many others use will start to gain real legs and acceptance. The best example of this was at a place I used to work: after lunch everything seemed to shut down. Several people obviously got very sleepy after lunch and would spend 2-4 hours of the afternoon on auto-pilot. (This was me sometimes too.) It would have been infinitely better for them to take a one hour nap and get back to productive work than spend 3 hours in an obviously hampered state. Happy, healthy, well-rested people work orders of magnitude better.

Automattic Toni

Automattic, Yahoo

Another nice birthday present! I have no idea (really) how he got this, but Om has the scoop on Yahoo VP Toni Schneider leaving to join Automattic. We were originally going to announce this at the end of the month when Toni actually left but I guess now is as good a time as any. 🙂 Toni was the CEO of Oddpost and after joining Yahoo led, amoung other things, their really cool developer network.

I first met Toni shortly after I moved to San Francisco and I’ve wanted him to be a part of Automattic pretty much since the idea first entered my mind. We’ve spent many long meals over the past year discussing the Automattic idea before it even had a name. I’ve been on cloud nine since (somehow) I convinced him to leave the incredibly cushy corporate job and rough it out in startup world again. I’m very very excited about some of the things coming down the line.

Update: Toni has blogged about it here. He also has a WordPress.com blog that used to have a bunch of cool cars on it, hopefully that’ll come back somewhere. 🙂

Update 2: It’s on Digg, and I’m curious what linking to the Digg story will do. Digg it if you think it’s interesting.