Category Archives: Automattic

The company behind WordPress.com, Tumblr, WooCommerce, Pocket Casts, Day One, Beeper, and more.

Funding, Buyback, and Hiring

Automattic

In February of this year, Automattic closed a new primary funding round of $288M, bringing in some great new partners including BlackRock, Wellington, Schonfeld, and Alta Park. Existing investors ICONIQ and Aglaé (Bernard Arnault) also participated. This round was common stock, and like all funding since 2011, included a proxy assigning me the right to vote the shares.

Automattic was very busy during this time frame, as we were working on what would become the Parse.ly, Day One, and Pocket Casts acquisitions, our investments in Element and Titan, plus more acquisitions and partnerships we haven’t announced yet, so we haven’t mentioned the February funding round until now. And while we are a bit surprised the fundraise did not leak to the press, it’s now been an awkwardly long time since February and I’m pleased to formally announce it now.

And since then, Automattic has continued to grow at a rapid pace and we recently took the opportunity to do a $250M share buyback at a $7.5B valuation that just closed last week. The buyback was primarily targeted at current and former employees. 

We’ve grown and increased our valuation at a rate higher than most other alternate investments available to investors. However, some of Automattic’s employees and former employee shareholders have been part of our journey for a very long time. Selling a bit of their equity holdings could have a significant impact on their lives. 

Automattic was founded 16 years ago and is still private, so it’s important for us to try to provide liquidity to any shareholder who wants it. We do the same with our internal A12 stock plan where we let our employees buy our shares and also offer an opportunity for all holders to sell them back to Automattic, every quarter. (I need to do a longer post on that.)

One interesting thing we’ve been doing in these buybacks is holding the shares as treasury stock within the company instead of canceling the shares at purchase. This allows us to buy shares that come onto the market, and then when an investor comes and wants to put a larger quantum of capital into the company, we can re-sell the treasury shares that the company bought earlier. In effect, we are providing both a sell-side and buy-side for Automattic stock, serving previous and new investors and making money on these trades since we bought and took the risk earlier. We’ve established a logical valuation methodology, which is based on a simple multiple of the last twelve month’s revenue, so shareholders can track and anticipate performance.

All of this has been a lot of fun and we’ve seen a great amount of success, but it’s not all smooth sailing; we still have our share of challenges, probably the biggest being hiring. We have significantly scaled up our ability to find and hire great folks, with 371 accepted offers already in 2021 and it’s only August. However, with the growth of WooCommerce (hiring a Head of Payments) and our enterprise business, WPVIP, in particular, we need to move faster to keep up with the opportunity. For me and many other of the most-tenured Automatticians within the company hiring is the top priority. To that end, I’m also looking for someone to partner with me and our top executive group (which we call Bridge) in Creative Talent Development, an executive recruiter to help craft the highest performing teams of executives for each of our businesses. 

We have a multi-decade opportunity ahead of us to create the best solutions for the open web platform of WordPress, and WooCommerce is doing the same thing for commerce; growing together over the long-term with people passionate about the same mission is my favorite part of my job.

Day One at Automattic

Automattic, WordPress

I’m not sure when I first came across the critically acclaimed Day One product, which is the best private blogging and journaling app out there, but I began seriously using it daily in 2016 when my father was in the ICU and later passed. Having a private, safe place to write what I was going through kept me sane and helped me process everything.

Writing has always been a salve for me, and I’ve had local or private WordPress installations pretty much since 2003 to capture and archive writing that wasn’t fit for the public web.

Day One not only nails the experience of a local blog (or journal as they call it) in an app, but also has (built) a great technical infrastructure — it works fantastic (when) offline and has a fully encrypted sync mechanism, so the data that’s in the cloud is secured in a way that even someone with access to their database couldn’t decode your entries, it’s only decrypted on your local device. Combining encryption and sync in a truly secure way is tricky, but they’ve done it.

This is a long intro to say, as you can read from Day One’s founder and CEO Paul Mayne, from Eli at WordPress.com, and on Tumblr, that Paul and the team are joining the team at Automattic. For many years I’ve talked to anyone who will listen about my vision of making Automattic the Berkshire Hathaway of the internet, and Paul’s decision to continue to grow his amazing business as part of Automattic is a great validation of the way we’ve been building our culture and long-term orientation in our business. Day One is a beloved product, and bringing it into the fold is a responsibility I take very seriously and comes from a deep respect for what’s been built and a belief that working together we can create something for users better than we could working apart.

Great software takes time, and the Day One team has been at it for about a decade now, I can’t wait to see what they accomplish in the coming decade and beyond. If you haven’t tried out Day One yet, please check it out in the Apple or Google’s app store.

Squarespace Direct Listing

Automattic

Squarespace filed their S-1 last month, and went a direct listing route for their stock today under the ticker SQSP, so I’ve been getting lots of questions on my thoughts on their business. It’s easier to share here in a blog than individually.

Squarespace’s CEO Anthony Casalena is a thoughtful, creative leader. It’s amazing what he’s built since 2003, and he obviously has many decades ahead of him. From our conversations I know how seriously he takes the craft not just of designing great products, but designing great organizations that will stand the test of time.

Squarespace is a customer-centric company, that has reliable, well-designed services, great support, and puts their customers first by allowing things like standards-based export. I’ve always observed them to behave and compete with the highest of ethics.

Their products work well, and they’ve been strategic in their acquisitions, including recently Tock which I’m a big fan of.

Their metrics are great, and there’s huge opportunity still. If you add up all the companies (including Automattic) in the independent web space it’s still only tens of millions of subscribers. I truly believe the eventual audience is every business in the world, and a good chunk of the 7 billion individuals, so there is so much room for everyone to grow.

How about the stock? Some of my favorite investing advice comes from Charlie Munger:

“I could improve your ultimate financial welfare by giving you a ticket with only twenty slots in it so that you had twenty punches representing all the investments that you got to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all. Under those rules, you’d really think carefully about what you did and you’d be forced to load up on what you’d really thought about.”

If I had to pick between Squarespace or Wix, I’d pick Squarespace every time. They’re a company you could punch the card with. They’ve built a great brand through their marketing and rightly earned trust with their customers and within the community as a good business, and they have a founder-led path to success for many years to come. I’m wishing them the best in their next chapter as a public company.

CC Search to join WordPress.org

Automattic, WordPress,

The WordPress community has long advocated for a repository with GPL-compatible images, and it’s time to listen to that need. CC Search, a CC0 (Creative Commons Zero) image search engine, is joining the WordPress project with over 500 million openly licensed and public domain images discoverable from over 50 sources, audio and video soon to come.

I am a long-time supporter of Creative Commons and their influential work on open content licenses, and when we heard they were considering shutting down their CC Search engine we immediately started exploring ways we could keep it going. I am eager to give a new home to their open search product on WordPress.org in continued commitment to open source freedoms, and providing this community resource for decades to come. This is an important first step to provide a long-term, sustainable challenger to proprietary libraries like Unsplash.

Automattic has hired key members of the CC Search team and will sponsor their contributions as part of our Five for the Future commitment. I look forward to seeing the project grow and welcome them to the WordPress community! Will share in a few weeks when everything is live and running on the site.

Parse.ly & Automattic

Automattic, New York

Excited to welcome Parse.ly to the Automattic family, in an acquisition that’s closing today. They’ll be joining our enterprise group, WPVIP. The deal has been nicely covered in the Wall Street Journal and Axios. As a bonus, here’s Parse.ly co-founder Andrew Montalenti’s first comment on this blog, in 2012.

Great article, Matt. I wrote about this on my blog — Fully Distributed Teams: Are They Viable?

http://www.pixelmonkey.org/2012/05/14/distributed-teams

In it, I drew the distinction between “horizontally scaled” teams, in which physical offices are connected to remote workers via satellite (home or commercial) offices, and “fully distributed” teams where, as you said, “the creative center and soul of the organization on the internet, and not in an office.”

At Parse.ly, we’re only a couple years old but have been operating on the distributed team model, with ~13 fully distributed employees, and it’s working well. Always glad to hear stories about how Automattic has scaled it to 10X our size.

And, likewise, we blow some of our office space savings on camaraderie-building retreats; our most recent one was in New York, see [here] and [here.]

State of the Word 2020

This tumultuous year, two things really helped me get through it: my colleagues at Automattic and the community of WordPress.

At the end of the year I usually deliver a speech to the WP community we call the State of the Word, that celebrates what we accomplished the previous year and shines a light on what we could focus on in the coming year. There’s always a great energy in the room and I love mixing with the audience before and after the talk. This year we did it online, which meant we could produce the talk a little more, and we made extra time for the Q&A afterward with answers not just from me but folks across the community.

One thing I’ll call out WordPress 5.6 had an all women and non-binary release squad of over 50 people, a first for WordPress and probably any large open source project. Also the market share of WordPress grew more in 2020 than it has in any year since it started being tracked!

If you’re curious about what’s next for WordPress, check it out:

Gradually, Then Suddenly

Automattic, Future of Work, WordPress

The two main theses of my professional career have been that distributed is the future of work, and that open source is the future of technology and innovation. I’ve built Automattic and WordPress around these, and it’s also informed my investments and hobbies. Just today, we announced an investment into a distributed, open source, and encrypted communication company called New Vector.

On the distributed front, the future of work has been arriving quickly. This week, a wave of companies representing over $800B in market capitalization announced they’re embracing distributed work beyond what’s required by the pandemic:

Change happens slowly, then all at once.

The forces that enable working in a distributed fashion have been in motion for decades, and if you talk to anyone who was working in technology in the ’60s and ’70s they expected this to happen much sooner. Stephan Wolfram has been a remote CEO for 28 years. Automattic has been distributed-first for 15 years.

What’s been holding us back is fear of the unknown, and attachment to the familiar. I can’t tell you how many of the investors I see espousing distributed work once told me that Automattic would never scale past a few dozen people unless we brought everyone into an office. Or the CEOs who said this would never work for them, now proclaiming their company hasn’t missed a beat as tens of thousands of people started working from home.

What’s going to be newsworthy by the end of the year is not technology companies saying they’re embracing distributed work, but those that aren’t. Those who thought this couldn’t work have been forced by the pandemic to do it anyway, and they’ve now seen that it’s possible.

It was probably terrible at first, but now two or three months in it’s gotten better. We’ve learned and adapted, and will continue to do so. Necessity breeds invention. I promise you if you stick with it, you’ll progress through the levels of distributed autonomy. Over time people will be able to move houses, tweak furniture, buy equipment, upgrade their internet, and otherwise adapt to being more productive in a distributed environment than they ever could be in an office. Products and services are being developed all around the world that will make it even better. I’m so excited about how a majority of the economy going distributed will improve people’s quality of life, and unlock incredible creativity and innovation at work. (They go hand in hand.)

At some point, we’ll break bread with our colleagues again, and that will be glorious. I can’t wait. But along the way we’ll discover that things we thought were impossible were just hard at first, and got easier the more we did it. Some will return to physically co-working with strangers, and some employers trapped in the past will force people to go to offices, but the illusion that the office was about work will be shattered forever, and companies that hold on to that legacy will be replaced by companies who embrace the antifragile nature of distributed organizations.

Business as Usual in The Information

Automattic, New York, WordPress

The Information wrote Business as Usual — Remotely, which includes “85% of its 900 employees working from their homes” Hashicorp, which just raised $175M at a $5.1B valuation today. (I have to get them on Distributed.) Here’s my part:

A survey of American workers by the polling firm Gallup found that in 2016 43% of employees worked remotely at least some of the time, up from 39% in 2012. Of those remote workers, almost a third spent 80% or more of their time working remotely in 2016, compared to 24% in 2012. In computer-related professions, 57% did some remote work in 2016, according to Gallup. 

That includes tech companies like Automattic, which makes WordPress and other software products and has been almost entirely remote since it was founded in 2005. At one point, it opened a large office in San Francisco for employees who preferred a more traditional work environment, but it got rid of that space in 2016 because of how little people used it.  

“We had this 15,000-square-foot place with only five people coming into it,” said Matt Mullenweg, CEO of Automattic, which acquired Tumblr last year. 

Now Automattic rents only one small co-working space in a WeWork suite in New York  and uses another small office in San Francisco exclusively for board meetings. It manages its remote workforce using Slack and Zoom and gives new employees $2,000 so they can purchase home office equipment. 

Employees can also get up to $250 per month for access to a co-working space or for daily coffees at a local coffee shop. But Mullenweg says only about 300 of the company’s 1,200 employees chose to work somewhere other than a home office.

“I hope there can be a silver lining to this crisis, which we all hope is over as soon as possible, that enables people to reexamine how they work and how they interact with things and improve it,” said Mullenweg. “I’m happy to spread the gospel wherever possible for distributed work. I think it’s better for companies, employees, the environment and the world. There are very few downsides.” 

The Information is a worthwhile subscription if you’re in the tech business.

Coronavirus and the Remote Work Experiment No One Asked For

Automattic, Future of Work

“We’ll never probably be the same. People who were reticent to work remotely will find that they really thrive that way. Managers who didn’t think they could manage teams that were remote will have a different perspective. I do think we won’t go back.”

Jennifer Christie, Twitter’s head of human resources, in BuzzFeed News

This is not how I envisioned the distributed work revolution taking hold.

It has been a challenging time around the world—from how we live our daily lives to how we keep our kids safe in schools and our family members healthy in assisted living communities and hospitals. 

And then there’s how we work. Seattle (and all of King County in Washington State) is encouraging companies to have their employees work from home. Given that Automattic is already distributed, we’re receiving requests from the press and other companies about how to navigate what is turning into a massive global work-from-home experiment. 

It’s not ideal on any level. Even at a remote-friendly company like Automattic, we rely on in-person team meetups and conferences to strengthen our connections and get work done. For now, we’ve canceled all work-related travel.

But as the BuzzFeed story notes, this might also offer an opportunity for many companies to finally build a culture that allows long-overdue work flexibility. Millions of people will get the chance to experience days without long commutes, or the harsh inflexibility of not being able to stay close to home when a family member is sick. 

Or even when you’re sick yourself. How many people in America go into an office even when they’re feeling under the weather, because of pressure from the company or managers, or because their sick days come out of their vacation days? This might be a chance for a great reset in terms of how we work. 

For those asking for tips, my Distributed Podcast has a wealth of advice and stories about how we operate. But here are four good ones to start with: 

  1. Operate as if everyone works from different time zones, because one day they might. This means more communication, likely written, that is accessible to people even if they can’t attend a specific meeting or be in a specific place. If you can minimize the number of real-time meetings, do so. Embrace asynchronous communication.
  2. If you are hosting a real-time meeting, improve the audio (and video) quality. Don’t use conference call lines with grainy phone audio. Sign up for Zoom, which allows for crystal clear audio calls or videoconference chats. Make video participation optional unless it’s planned well in advance. Record these calls so folks who can’t attend can catch up on what they missed. Everyone must use good headphones with mics (I love Sennheiser) to minimize external noise. Krisp.ai is also cool. Need a quiet place without distractions? Try a parked car or a closet.
  3. We use our own WordPress blogs, called P2, instead of email as our central hub of communication so people throughout the company can access every team’s long-form notes, documents, and priorities. We’re bloggers by heart, so we blog a lot. There are other similar tools, like Basecamp. Make it your new office.  
  4. We also use Slack for real-time chat, social connection, and urgent conversations. Check out Matrix for an open-source, distributed version. Use it to chat and connect with your colleagues, but don’t let it replace your long-form planning notes in No. 3. Also create an etiquette that doesn’t force people to become chained to it all day and all night. When you ask a question in DM, do not expect that person to respond immediately, and ask your question upfront. Never write “got a sec?” and let it hang there. 😁

The truth is, there are a thousand ways to do remote work, but it starts with committing to it at all levels of the company. If you assume positive intent and place trust in your coworkers and employees—knowing that if they do great work in an office they can do great work anywhere—then you will all succeed. 

Thirty Six

Automattic, Birthday, WordPress

I am now solidly entering my late thirties, and fortunately I am in good health, good cheer, and doing one of my favorite things — exploring a part of the world and culture I haven’t experienced before (Maldives and Sri Lanka).

The past year has included a number of professional milestones including a significant amount of fundraising and related activity, bringing in a major new product to the Automattic family, the maturation of Gutenberg in the WordPress ecosystem, launching the Distributed blog and podcast, and a growth in the breadth and depth of the Automattic team.

Partially because of the schedule those milestones required, this ended up being my year with the most travel ever since I started tracking: I flew over 515k miles, to 124 cities in 24 countries. I was able to incorporate a good amount of running in my routine, started picking up musical instruments again, and learning more about sound and its impact on our lives. I found small daily habits, like a little bit of exercise or stretching first thing in the morning, to be sustainable and high-impact.

What suffered in 2019 was my book reading time and making a dent on the top 50 list. I still check tech news every day, but I had to unplug from daily non-tech news because it was just too hectic — I’ve found a lot of value in weekly publications like the Economist to make sense of what’s going on in the world with the benefit of a little distance and time.

Personally my main goals this year are for the health and wellness of my family, incorporating more playing music and photography into my life, and strengthening my meditation practice. If you’re reading this, I hope to run into you online or in person and this year let’s do our best together to leave the world a little better than we found it.

All birthday posts: 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42.

Distributed Podcast: Clark Valberg, Lydia X. Z. Brown, Stephen Wolfram, and the Grand Meetup

Automattic, Future of Work,

If y’all haven’t caught up recently with my podcast Distributed, this is a perfect moment to do so—the past several weeks have been full of insights from folks like InVision CEO Clark Valberg, attorney and advocate Lydia X. Z. Brown, Stephen Wolfram, and some of my own Automattic colleagues in-person at our Grand Meetup.

You can subscribe at Apple Podcasts, Google, Overcast, Spotify, or wherever you like to listen. 

Continue reading Distributed Podcast: Clark Valberg, Lydia X. Z. Brown, Stephen Wolfram, and the Grand Meetup →
Great Mental Models book cover

Farnam Street’s Great Mental Models, Presented by Automattic

Automattic, Future of Work, Ideas, WordPress,

I’ve been a fan of Shane Parrish and his indispensable Farnam Street for many years now. Shane is a fascinating person — he’s a former cybersecurity expert for the Canadian intelligence agency and occasional blogger who turned his website into a full-time career. Oh and fs.blog is on WordPress, too. 😎

His book, The Great Mental Models: General Thinking Concepts, has been tremendously valuable to me in my work. So valuable, in fact, that Automattic is now sponsoring the next printing of the hardcover edition. You can pre-order it here, then learn more about the mental models outlined in it.

New Automattic CFO

Automattic

As Venturebeat has picked up, Mark Davies will be leaving Vivint and joining the merry band. Automattic is creating the operating system for the web, from websites to ecommerce to social networks. As we zoom past 1,100 employees in over 70 countries, we wanted a financial leader with experience taking businesses from hundreds of millions in revenue to billions (Vivint) and even tens of billions (Alcoa and Dell), as Mark has. I’m excited about working alongside such an experienced leader day-to-day to build what I hope will become one of the defining technology companies of the open web era.

Automattic’s Series D

Audrey, Automattic, WordPress

Today Automattic announced it has closed a new $300 million Series D, with Salesforce Ventures taking the entire round. This puts us at a post-round valuation of $3 billion, three times what it was after our last fundraising round in 2014. It’s a tremendous vote of confidence for Automattic and for the open web.

I met Marc Benioff earlier this year, and it became obvious to both of us that Salesforce and Automattic shared a lot of principles and philosophies. Marc is a mindful leader and his sensibilities and sense of purpose feel well aligned with our own mission to make the web a better place. He also helped open my eyes to the incredible traction WordPress and WP VIP has seen in the enterprise market, and how much potential there still is there. I’ve also loved re-connecting with Bret Taylor who is now Salesforce’s President and Chief Product Officer. Bret’s experience across Google Maps, Friendfeed, Facebook, Quip, and now transforming Salesforce makes him one of the singular product thinkers out there and our discussion of Automattic’s portfolio of services have been very helpful already.

For Automattic, the funding will allow us to accelerate our roadmap (perhaps by double) and scale up our existing products—including WordPress.com, WordPress VIP, WooCommerce, Jetpack, and (in a few days when it closes) Tumblr. It will also allow us to increase investing our time and energy into the future of the open source WordPress and Gutenberg.

The Salesforce funding is also a vote of confidence for the future of work. Automattic has grown to more than 950 employees working from 71 countries, with no central office for several years now. Distributed work is going to reshape how we spread opportunity more equitably around the world. There continue to be new heights shown of what can be achieved in a distributed fashion, with Gitlab announcing a round at $2.75B earlier this week.

Next year Automattic celebrates 15 years as a company! The timing is fortuitous as we’ve all just returned from Automattic’s annual Grand Meetup, where more than 800 of us got together in person to share our experiences, explore new ideas, and have some fun. I am giddy to work alongside these wonderful people for another 15 years and beyond.

If you’re curious my previous posts on our fundraising, here’s our 2006 Series A, 2008 Series B, 2013 secondary, and 2014 Series C. As before, happy to answer questions in the comments here. I also did an exclusive interview with Romain Dillet on (WP-powered) Techcrunch.

Tumblr the Day After

Automattic

It is not surprising that the news about Automattic buying Tumblr has picked up a lot of coverage. I especially appreciated the notes of support from Tumblr founder David Karp, former CTO Marco Arment, and investor Bijan Sabet. I am beyond excited to see what the Tumblr team creates next, and I will definitely be connecting with alumni to hear their perspective.

There has also been a lot of speculation on the purchase price, which I think is missing the real story. I would like to take this opportunity to express my respect for Verizon and how they approached this entire process. They inherited Tumblr through an acquisition of a merger, a few steps removed from its initial sale; it’s probably not a company they would have bought on its own, but they nonetheless recognized that there is a very special community and team behind the product. It’s also worth noting at this point that Verizon is a company that will do over $130B in revenue this year and has over 139,000 employees.

First, they chose to find a new home for Tumblr instead of shutting it down. Second, they considered not just how much cash they would get on day one, but also — and especially — what would happen to the team afterward, and how the product and the team would be invested in going forward. Third, they thought about the sort of steward of the community the new owner would be. They didn’t have to do any of that, and I commend them for making all three points a priority.

Automattic is still a startup — I’m sure there are deep-pocketed private equity firms that could have outbid us, but the most likely outcome then would have been an “asset” getting chopped up and sold for parts. (This is a caricature and there are PE firms I like, but it’s not a terrible stretch of the imagination.) Instead, Tumblr has a new chance to redefine itself in 2019 and beyond. Its community is joining with WordPress’ 16-year commitment to open source and the open web.

Diversifying WordPress

Automattic, WordPress

WordPress is about democratizing publishing, removing barriers to getting your words on the web. There’s a cool effort underway right now to remove some barriers that people from groups underrepresented in tech might face when becoming a WordCamp speaker. Automattic is supporting this by sponsoring Jill Binder’s work on the WordPress Diverse Speakers Training Group.

I would love to see the WordPress contributor base become more diverse, and training people from marginalized communities to speak at WordCamps is a great way to help that along. Check out that effort if you’d like to get involved.

Prospress joining Automattic

Automattic, Marketing

As you may have read on the WooCommerce blog, Prospress blog, WP Tavern, Post Status, or Techcrunch, the team at Prospress is joining forces with WooCommerce at Automattic to help accelerate the adoption and democratization of ecommerce across the web. Whew that’s a lot of links! Prospress was best known for their extension that allowed many types of Subscriptions on top of WooCommerce, but also has some cool marketing automation and automated testing tools as well. I love that Prospress was already a Five for the Future company, which aligns really well with Automattic’s long-term goals and contributions to the wider community.

Introducing the Distributed Podcast

Automattic, Podcast
Distributed podcast

I’ve been meeting with some brilliant people for Distributed, my new podcast dedicated to exploring the future of work. The first episode is a conversation with Stephane Kasriel, CEO of Upwork, about how they built a distributed culture, and how flexible work will shape the future of the global economy.

Unlike Automattic, Upwork does have an office in Silicon Valley (albeit one with a remote receptionist!). It was interesting to hear how Stephane’s teams balance in-person culture with inclusiveness for all employees, no matter where they live. Read more about Stephane’s work at Distributed.blog, and subscribe at Apple Podcasts, or wherever you listen to podcasts.