It was time to give WordPress.com and Akismet a parent. WordPress, like many free software projects, started as a script built in a hacker’s spare time. As the community grew and more people adopted the software, the hacker realized it could be a business — a for-profit venture, with dedicated employees and a company to cover costs.
In 2005, there weren’t yet many businesses run alongside free software projects. Creating a company to house WordPress.com and Akismet would be a delicate balancing act to satisfy very different constituencies. The business is responsible to investors and employees, while the community of contributors has no stake in the business, but a huge stake in the project. Decisions come under scrutiny from both sides. As founder of the project and the company, Matt would be pulled in both directions.
What companies based on free software and their foundational projects share is belief in the power of free, open source software. A WordPress.com company would offer a service and generate income while keeping the core software free and accessible. Making money would be but one aim, alongside popularizing free software for the benefit of society. It seemed to make sense for a business to spring up alongside WordPress, one that shared its commitment to the open web and to democratizing publishing, and that would help sustain the WordPress project.
In December 2005, as the memory of WordPress Inc. faded, Automattic launched as a new home for WordPress.com and Akismet.
Automattic marked a new, but challenging, beginning for its employees, who had to balance the free project’s aims with the company’s commercial goals. It’s a balance that has affected both WordPress and Automattic throughout their close histories. The business generates income and provides contributors and support to the project, while the project creates the software that is the foundation of the business. The business needs to grow in a non-destructive, sustainable way, allowing the project to grow, mature, and attract a diverse group of contributors.
The company launched with four employees: Donncha Ó Caiomh, the original developer of WordPress MU, worked on WordPress.com’s infrastructure with Ryan Boren, Matt, and Andy Skelton. They left their jobs and put their faith in WordPress — that it could grow beyond its roots as a small project into a platform that could sustain a blogging business.
In January 2006, Toni Schneider joined as CEO (or “adult supervision” for the still only 19-year-old Matt). Toni was a developer and later CEO of OddPost, a startup that was acquired by Yahoo! and became the basis of Yahoo! mail. After setting up the Yahoo! Developer Network, Toni joined Automattic for a new challenge.
Toni had his first encounter with the power of open source while working on OddPost. OddPost didn’t have a spam filter and needed one, and an open source project provided the solution. Paul Graham had introduced his idea of Bayesian spam filtering; he open-sourced the idea, and Toni’s team implemented it at OddPost. “It just showed me that this is a really powerful model,” he says.
He was attracted to Automattic by the challenges of building a product around free software. WordPress already had brand recognition, but no one was yet making money from it. In a 2006 interview he said:
WordPress is an interesting new challenge because it’s not like most startups, where the world still hasn’t heard of you. WordPress is way past that stage. On the other hand, there is no business yet. Until Automattic came along, there was nobody working for it. It was all volunteers. So taking that product momentum and somehow turning that into a business will be really interesting.
Other aspects of the project attracted Toni: the product wasn’t a central, proprietary service, it wasn’t owned solely by anyone, but by all of the people involved, and it gave users a say and a stake in a way other hosted services didn’t — anyone can set up a WordPress blog. Unlike a service like Gmail or Facebook, WordPress is something you make your own. The idea of a new kind of company with a new kind of influence was too much to ignore.
Automattic brought together free software development experience with Toni’s business experience to build a company organized around three key principles: a distributed workforce, a rapid-release development model, and a user-centric focus. All ultimately trace their roots to principles of open source development that still underpin Automattic today.
A distributed workforce seemed like the natural model. Contributors to a free software project come from all over the world, and collaborate online to build tools that suit their needs. Automattic’s first four employees came from four different locations, and the company remains distributed, enabling it to hire people from all over the world based on their skills, not their location — a global talent pool.
Toni recalls how, in Automattic’s early days, people expected its commitment to a fully remote workforce to break down. It goes against traditional business wisdom, which keeps employees supervised, in one place, and focused on hours worked instead of output. The first few employees were experienced at working in a distributed environment; new employees who found it difficult didn’t last. Automattic responded by refining its hiring methods, developing a hiring process in which potential employees do a trial, working on real projects in the distributed environment, to see if the company is the right fit for them.
A rapid release model, in which developers constantly push small releases straight to the user, lets Automattic iterate quickly and improve constantly. The company eschews the traditional “waterfall model,” in which development follows a strict sequence involving specifications, design, construction, integration, testing, debugging, installation, and maintenance. At Automattic, developers break down features into small components, create patches for each component, and launch code incrementally — and directly to bloggers. There are few roadblocks, and developers and designers push enhancements and new products to millions of users within a few seconds. Continuous deployment means that by May 2010, Automattic had over 25,000 releases, an average of 16 a day. Rather than optimizing for perfection, the process optimizes for speed.
A distributed workforce and rapid releases work for Automattic because the people who build its products have a direct connection to their customers, doing away with as many levels of mediation as possible. Every person in the company starts their Automattic career with three weeks of direct customer support, with one more week every year, giving each employee the opportunity to see how users interact with the products — and where the weak spots are. Developers stay happy because they can constantly push new ideas right to customers. Customers stay happy because they’re constantly getting new toys to play with, and the chance to share feedback that refines the product.
Following Automattic’s launch, the bulk of new hires came from the free software project. Seven of the first ten employees were from the WordPress community, all with an intimate knowledge of developing and using the software. Automattic had a wealth of developers who were not just experienced, but passionate and committed, evidenced by the considerable volunteer time they’d put into it.
From the start, Automattic was both exciting and contentious. It wasn’t obvious where Automattic’s boundaries ended and the WordPress project’s began. Matt and Ryan, the two developers who led WordPress, were both employees of Automattic, which appeared to make it an Automattic project. It was unclear even on the original Automattic “About” page, which lists WordPress as an Automattic project.
The confusion was compounded by the name of Automattic’s blog network: WordPress.com. “We gave the company this advantage of being able to call its service WordPress.com,” says Toni. “It’s been a curse and a blessing.” The mainstream tech press frequently describes Automattic as the “maker of WordPress,” which does a disservice to the hundreds of contributors who aren’t employed by Automattic. The WordPress.org support forums are littered with questions about WordPress.com from bloggers who don’t understand the difference.
On the other hand, Automattic puts millions of dollars into growing the WordPress brand, and a 2013 survey by WordPress hosting company WP Engine found that 30% of people had heard of WordPress. The name recognition increases the number of people opting for self-hosted WordPress sites rather than using Blogger, Tumblr, or other CMSs. There are many more people whose first exposure to WordPress is via WordPress.com, and a number of those eventually move to the self-hosted software. It’s unlikely that the free software project would have had the money or the drive to do such extensive branding.
As for-profit entity, Automattic experimented with different ways to make money. Creating an enterprise version was considered, then scrapped — since WordPress itself can run a blogging network like WordPress.com, producing an enterprise version didn’t make sense. Instead, it offered support services to enterprise-level clients. Prominent sites such as CNET, About.com, and the New York Times were using WordPress, and other sites, such as Gigaom and TechCrunch, shifted to WordPress.com. Automattic initially courted these sites as a marketing strategy, thinking that nothing says “WordPress can scale” better than hosting big, high-traffic sites. Toni approached big websites to offer to host them on WordPress.com; early takers included Scobleizer and the Second Life blog.
Automattic tested different subscription levels. In 2006, they launched the Automattic Support Network at $5,000 per year, later adding enterprise-level hosting via WordPress.com VIP at $250 per month.
Just because software is free doesn’t mean that services around that software have to be inexpensive. Companies are prepared to pay enterprise prices to ensure that their websites scale and stay online. Automattic, and other companies in the WordPress ecosystem, had to develop confidence, build up their pricing structure, and charge what they were worth.