Startup2Startup dinner with Automattic

Matt Mullenweg and Toni Schneider of Automattic spoke today at Startup2Startup dinner in Palo Alto. Automattic runs this interesting model, where WordPress as software is distributed for free under GPL, but WordPress as hosting service is a freemium product. They charge users of the hosted service for some optional extra features, but do not insist on it. They also display occasional ads on hosted free blogs, as Toni Schneider put it, to the users who are likely to click on them – IE readers arriving from search engines.

Some takeaways:

  1. Matt is a great supporter of GPL. Not only from philosophical standpoint, but from practical – it requires people to contribute back, and hence build community.
  2. Don’t hire all the contributors, once you have the company started. This will ruin the community effect, as evidenced by MySQL. You also gain outside perspecives by having contributors working for different companies.
  3. By open-sourcing the founders effectively lose the iron grip. Even people who have commit access now have to go through a discussion in bug system.
  4. WordPress benefits greatly fro having all the developers work from home. More time spent with families, more efficient developers, who can take an after-lunch nap. The company is run via IRC channel.
  5. Automattic will even help you with scaling, if you’re a large organization adopting WordPress. You’re unlikely to surpass their scale, and they’ve been where you’re now, so they know what works for scaling out.
  6. Personal relationships matter a lot. So Automattic still has twice-a-year meetings of the entire team. Early developers were all people Matt knew personally – personal connections help out a great bit in a virtual organization.
  7. WordPress really started taking off as open source project with introduction of plugins and themes. It’s easy to develop both, and most of the WordPress installations run roughly 5 plugins, and it’s long-tailish.
  8. WordPress as a project did not do a good job early on maintaining the directlory of plugins and themes. After opening up SVN for plugin developers, the plugin directory got traction. Designers did not quite catch on to SVN, so Automattic had to provide a way to drop a zip file onto the site.

Thanks to Dave for organizing all this, and I specifically liked the after-dinner table discussion. It’s very structured – 8-10 people at a dinner table, a few VCs, a few entrepreneurs, a few random people, and a moderator. Moderator comes to the dinner with discussion points prepared, and ensures each guest has a chance to speak. After all the structured discussion is out of the way, it’s time for anybody at the table to ask any question, which some entrepreneurs used to gauge interest in their startups and gain feedback on business models.

The dinner table discussions are off the record, so can’t blog about those, but there were some pretty interesting companies – mjam, Get Satisfaction, and others.