Podcast Summary
Matt Mullenweg's insights on the early days of the Internet and the importance of open standards: Matt Mullenweg shares his experiences starting WordPress during the Internet's reinvention era, emphasizing the importance of openness and symbiotic relationship between open source and proprietary projects.
The founders and CEOs we listen to on Founders Field Guide are builders, and they've faced the challenges of making their businesses successful in various ways. In this episode, Matt Mullenweg, co-founder and CEO of Automattic, shared his experiences starting WordPress during the early days of the Internet. He described the Internet in the early 2000s as a time of reinvention, where openness and integration were key. Matt felt like he had missed the initial wave but saw an opportunity to contribute to the web 2.0 movement. He emphasized the importance of open standards and the symbiotic relationship between open source and proprietary projects. Additionally, the episode introduced us to Tegus and Vanta, companies solving problems for investors and startups, respectively. Tegus makes primary research faster and more accessible, while Vanta simplifies the process of obtaining and maintaining SOC 2 reports. These companies, like Matt and the other builders we hear from on Founders Field Guide, are all working to make things easier, more efficient, and more connected.
The power of passion and belief in unexpected growth: Investing in seemingly overlooked areas can lead to significant returns, as shown by the history of WordPress and the rise of permissionless publishing and innovation.
The early days of blogging and tech were filled with competition, but it was the passion and belief of the true innovators that led to unexpected growth and success. When WordPress was starting out, it seemed saturated with established blogging systems from companies like AOL, Yahoo, and Google. However, WordPress's early development allowed for consistent growth and the eventual dominance of the platform. This lesson can be applied to various industries and situations where the seemingly written-off or neglected areas may hold great potential. Investing in such areas, whether through entrepreneurship or angel investing, can lead to significant returns. The history of WordPress is a prime example of permissionless publishing and innovation, shaping the modern internet as we know it. If the path had diverged, the internet might not have evolved in the same way, emphasizing the importance of open source and the power of passionate individuals.
The natural cycle of open and closed systems: Proprietary systems can lead to abuse and stifle ecosystems, but decentralized alternatives eventually emerge, creating a continuous cycle between centralization and decentralization
Open and closed systems exist in a natural cycle where the success of one creates the conditions for the other to thrive. This can be seen in various aspects of society, from technology to religion. For instance, the Catholic Church can be seen as a proprietary system in the context of access to religious knowledge, while Martin Luther's actions represented an open source approach. The success of proprietary systems often leads to abuse, such as spam, which can stifle the ecosystem. Eventually, the market responds by creating open alternatives. As an engineer, it seems we are witnessing a shift towards decentralization in response to the over-centralization of the past. This is evident in the rise of decentralized technologies like Bitcoin and Ethereum. However, it's important to remember that this cycle is not a straight line, and different parts of the ecosystem may be at different points in the cycle. The success of proprietary systems contains the seeds of their own demise, and the pendulum continues to swing between centralization and decentralization.
The value of direct relationships between creators and consumers: In the digital age, having a smaller, dedicated audience of true fans who value and engage with your content is more valuable than having a large following on intermediated platforms. Long-form content and direct relationships are on the rise, but centralization of digital platforms and internet nationalism present challenges for creators.
The value of direct relationships between creators and consumers has become increasingly important in the digital age. This was highlighted during Facebook's shift towards making businesses pay to reach their followers, leading many to seek alternative platforms where they could build more direct connections. The idea of having a smaller, dedicated audience of "true fans" who value and engage with your content is more valuable than having a large following on intermediated platforms. This shift towards direct relationships is also reflected in the rise of long-form content, which was once thought to be unsustainable on mobile devices but has proven to be in high demand. Additionally, the increasing centralization of digital platforms and the rise of internet nationalism present challenges for innovators, creators, and builders in the digital space. Apple's growing dominance and the closing of digital platforms also pose threats to the open internet and the ability for creators to reach their audiences directly.
Power struggle between countries and the open internet: Countries vs open web: tension presents challenges & opportunities, with cryptocurrencies and decentralized tech making internet more accessible, and potential for widespread adoption and disruptive use cases.
The world is witnessing a power struggle between countries wanting to impose their rules internationally, either through legal or economic means, and the drive towards a more open and decentralized internet through technologies like encryption, cryptocurrencies, and blockchains. This tension presents both challenges and opportunities. On one hand, countries like China and Saudi Arabia are using their economic power to suppress content and apply their own rules. On the other hand, technologies like cryptocurrencies and decentralized protocols are making the internet more open and accessible, forcing competitors to open up and compete. The price volatility of cryptocurrencies can be a distraction, but it also draws more people into learning about and using them, ultimately leading to more widespread adoption and disruptive use cases. As companies like Coinbase create safe on-ramps for interacting with these technologies, the potential for daily use and real-world applications becomes increasingly exciting. Additionally, the future of the internet may lie in distributed work and remote collaboration, as the COVID-19 pandemic has shown us the benefits and challenges of working from home. Overall, this tension between nationalism and the open web presents both challenges and opportunities, and it will be interesting to see how it plays out in the coming years.
A utopian future of work with a distributed model: In the future, work could be more productive and balanced with a distributed model, allowing for collaboration with the best talent globally, asynchronous work, and increased efficiency.
The future of work could be a utopian distributed model where individuals work in environments perfectly tailored to their needs, leading to increased productivity and better work outcomes. This model eliminates the need for a traditional office setting and allows for a more balanced life. In this world, people work with the best talent from around the globe, regardless of location. Asynchronous work becomes the norm, allowing for 24/7 coverage and increased efficiency. Companies that limit their hiring to specific geographic locations are excluding potential valuable contributors, and opening up opportunities to a larger talent pool could lead to even greater innovation. The speaker's experience with employing people in 77 countries has shown that time zones can play a significant role in productivity and collaboration, allowing for work to be passed between teams in different locations. This model allows for a more inclusive and efficient way of working, ultimately leading to better results for both individuals and organizations.
Decoupling services for external consumption: Decoupling services and making them publicly accessible can lead to better documentation, cleaner offerings, and a real customer base, improving efficiency and driving iteration in distributed teams.
Creating externally consumable services within a company can lead to significant benefits, particularly in the digital world. This concept, inspired by Amazon's approach of decoupling services and making them publicly accessible, can help reduce coordination taxes, improve documentation, and foster a customer-centric culture. By making services accessible to external consumers, companies can clean up their offerings, document them better, and create a real customer base that drives usage and iteration. This approach also sets the stage for more formal async interaction between teams and services, making distributed work more effective. However, it's essential to be aware of the challenges that come with distributed teams, such as the need to build relationships and trust in a virtual environment. Despite these challenges, the potential benefits of this approach are vast, given the massive opportunities for digitization that still lie ahead.
Creating a movement or ecosystem for business success: Foster a community, encourage collaboration, and allow for ownership to build a successful business that lasts, inspiring and leaving a lasting impact, like a city.
Building a successful business, especially one that lasts for decades, requires creating a movement or ecosystem rather than just a product. This means fostering a community, encouraging collaboration, and allowing for ownership and contribution from others. Matt Mullenweg, the co-founder of WordPress, emphasizes this philosophy, which has led to the creation of a world around the platform that outlives individuals and companies. He believes that the longevity of such a business can be compared to that of cities, which survive even catastrophic events. By working together to create something bigger than the sum of its parts, we can build businesses that not only thrive but also inspire and leave a lasting impact.
Company building as world building: Successful companies build platforms, foster communities, and prioritize long-term growth over short-term gains to capture around 5% of the overall value.
Successful companies, like Microsoft and Salesforce, build their businesses by creating platforms and allowing communities to evolve them. This concept, which can be thought of as "company building as world building," has been effective in creating large ecosystems with a consistent ratio of the platform creator capturing around 5% of the overall value. This idea, as mentioned by the speaker, is particularly important for companies like Automattic and WordPress, which have a significant influence on the future of their respective business models and open-source communities. The long-term perspective of growing the overall pie, rather than solely focusing on increasing one's own share, is crucial for the success and sustainability of these platforms. An example of this mindset in action is the decision to put a lot back into the core of the ecosystem, ensuring that the commons are not depleted and that the long-term growth of the platform is prioritized over short-term gains.
Leaders think long-term and create a unique worldview: Effective leaders draw inspiration from various sources, have a compelling mission, capture most value, prioritize capital allocation, and focus on long-term goals to create a unique worldview for their organizations.
Effective and successful leaders think long-term and focus on creating a unique worldview for their organizations. They draw inspiration from various sources, including the study of cults, religions, and politics, to understand both positive and negative behaviors. A compelling and differentiating mission or vision is crucial, as is capturing the majority of value in the ecosystem. Companies like Wix and Shopify, which capture a large percentage of the value in their respective ecosystems, do so through aggressive business practices, but this approach may lead to long-term challenges. Successful leaders also prioritize capital allocation and make decisions based on long-term goals, rather than short-term gains. The concept of world building, which involves creating a cohesive and effective environment, requires a clear and distinct vision, a focus on value capture, and a long-term perspective.
From small team to industry leader: Automattic's growth strategy: Automattic grew by staying frugal, focusing on open systems, and operating as a decentralized, resource-focused org. CEO Matt Mullenweg aims for monopolistic market position for WordPress.
Automattic, the company behind WordPress, has grown from a small team to a significant player in the tech industry by staying frugal, focusing on building an open system as the de facto standard for the web, and operating as a decentralized, resource-focused organization. The CEO, Matt Mullenweg, aims for a monopolistic market position for WordPress, drawing inspiration from the success of open systems like the Linux kernel. Automattic's internal structure is modeled after companies like Berkshire, IAC, and Alphabet, allowing for autonomy and resource allocation based on growth potential. The company prioritizes long-term health and growth over short-term costs, fostering a culture of collaboration and flexibility. However, investing in new initiatives that haven't yet gained traction poses a challenge, as it requires balancing the potential for future growth against the resources currently available. Ultimately, Mullenweg's leadership style emphasizes perseverance, learning from mistakes, and paying it forward by helping new entrepreneurs.
Engage and collaborate with external stakeholders: Collaborating with external stakeholders leads to a more diverse and innovative ecosystem, attracts and retains talent, and creates a welcoming environment for new contributors. Connecting with others and aligning near-term business goals with long-term societal benefits can lead to a sustainable and impactful digital revolution.
When building a platform or ecosystem, it's essential to engage and collaborate with external stakeholders, rather than trying to control everything yourself. This approach not only leads to a more diverse and innovative ecosystem but also has long-term benefits for the project and society as a whole. Matt Mullenweg, the co-founder of WordPress, emphasizes this point by sharing his experience with the open-source project. Instead of hiring every contributor, he suggests hiring a few key people and encouraging other companies to contribute. Over time, this approach leads to a more sustainable ecosystem with a larger pool of contributors and new code. Furthermore, creating a welcoming and inspiring environment for new contributors is crucial. Providing incentives, making it fun, and connecting the near-term business goals with the long-term goals of humanity can help attract and retain talent. Mullenweg also highlights the importance of connection in the future of the internet. Every communication revolution has faced resistance, but each one has led to increased interaction and intelligence among humans. The current digital revolution, with the potential to connect every single human, is an exciting opportunity to tackle global challenges and make the world a better place.
The Power of Human Connection and Cooperation: Technology fosters connectivity and collaboration, bringing humanity closer together, but also creates new threats. Despite challenges, Matt remains optimistic about our ability to adapt and work together.
Technology, particularly the kind that fosters connectivity and collaboration like the systems Matt's involved with, has the potential to bring the entire human population closer together, enabling us to work together, share information, and potentially accelerate progress. However, it's important to acknowledge that as we create new technologies, we also create new threats. But overall, Matt expresses optimism about humanity's ability to adapt and work together to overcome these challenges. A powerful illustration of this came from Matt's personal story about a stranger's kindness during a car trouble incident. This act of kindness, though seemingly small, demonstrated the power of individuals coming together to help each other, even in the most unexpected situations. Matt's perspective on technology and humanity's potential is both thought-provoking and inspiring. The kindest thing anyone's ever done for him was a stranger's act of kindness during a car emergency, which showed him the power of human connection and cooperation.
