011-v2.jpg" alt="How (and Why It s OK) to Make Money with WordPress, with Matt Mullenweg">

This week, we have the very distinct pleasure of talking to a gentleman who is not only a talented member of the WordPress community … but the one responsible for it.

Rainmaker.FM is Brought to You Bylogo.png" alt="StudioPress Sites">

			
www.studiopress.com/fm">
			
Discover why 201,344 website owners trust StudioPress, the industry standard for premium WordPress themes and plugins. 
			www.studiopress.com/fm">Launch your new site today!

Matt Mullenweg is the founding developer of WordPress, which currently powers over 26% of sites on the web. The WordPress website says it s “a state-of-the-art semantic personal publishing platform.”

More importantly, WordPress is a part of who Matt is.

In this episode Brian Gardner, Lauren Mancke, and Matt Mullenweg discuss:

• Matt s start with WordPress
• Founding Automattic in 2005
• The difference between WordPress.com and WordPress.org
• Analysis of the premium theme market
• Generating revenue in the WordPress Ecosystem
• The spirit of GPL in Open Source
• Adding paid themes to WordPress.com
• Making a profit with premium plugins
• The future of WordPress

Listen to StudioPress FM below ...

0112.mp3">Download MP3Subscribe by RSSSubscribe in iTunes

The Show Notes

• Follow Matt on Twitter
• Visit Matt’s Website
• Read Matt’s Blog
• WordPress.com
• WordPress.org
• Automattic

The Transcript

How (and Why It’s Ok) to Make Money with WordPress, with Matt Mullenweg

Voiceover: Rainmaker FM.

StudioPress FM is designed to help creative entrepreneurs build the foundation of a powerful digital business. Tune in weekly as StudioPress founder Brian Gardner and VP of StudioPress Lauren Mancke share their expertise on web design, strategy, and building an online platform.

Lauren Mancke: On this week’s episode, Brian and I are joined by Matt Mullenweg, the founder of Automattic, to discuss how (and why it’s okay) to make money with WordPress.

Brian Gardner: Hey, everyone. Welcome to StudioPress FM. I am your host, Brian Gardner, and I’m joined as usual by my co-host, the vice president of StudioPress, Lauren Mancke.

Lauren Mancke: Hello, everyone. Thanks for joining us this week. We are continuing our series on talking to members of the WordPress community.

Brian Gardner: Now, today we have the very distinct pleasure of talking not just to a member of the WordPress community, but one of the people responsible for it. Matt Mullenweg is the founding developer of WordPress, which, as it stands to date, powers over 26 percent of the web. Probably more even at that point. The WordPress website says it’s a “state of the art semantic personal publishing platform,” but more importantly to Matt, WordPress is a part of who he is. Matt, it’s a huge pleasure to have you on the show StudioPress FM, welcome.

Matt Mullenweg: Awesome. I’m very excited to be here.

Brian Gardner: There is a huge back story to all of this. For those of you who have been following StudioPress and me over the years, you know that I got started in WordPress in 2006, 2007. I can’t believe it’s been that long. We were just talking about that. I wanted to start at the beginning of your journey. I know in 2005 you founded Automattic and that is the secret force behind WordPress, Akismet, Gravatar, VaultPress, IntenseDebate, and a number of other smaller entities.

This story for you goes further back though. Before Automattic formed, you and Mike Little forked this little blogging platform called b2. Run through us the early years of WordPress and what it was back then you were hoping to achieve.

Matt’s Start with WordPress

Matt Mullenweg: Oh, our goals were very modest. I would say that back then we were just looking to have some good software for ourselves. To have something that we could use and continue. B2 had a pretty good community around it. There were some forums we would participate in. It had a pretty cool active little thing going on, and it just seemed a shame that it was slowing down. Mike and I had already interacted on the forums a lot. We followed each other’s blogs. He was releasing code and I was releasing code. He’s also a super nice guy, so it just seemed very natural to work together. It’s funny though, that we didn’t actually get to meet in person until many years later.

Brian Gardner: Yeah. I find that to be — Lauren and I are good examples of that. We met probably three or four years ago in person, but had known each other five or six years even before that. It’s funny how we can, in our Internet lives, finally get to that point where you get to do that ‘in real life’ thing with people who you’ve met, or known, or entrusted with a business, or even just become really good friends. To not really get to meet them in person for years down the road … Quick question though with Mike. You met on the forums. At what point did you think to yourselves, “We need to fork the software,” and then just take it and do your own thing with it?

Matt Mullenweg: At the point when it was no longer being developed and it didn’t appear like there was a way forward. In some ways, for a period of time there, b2 was abandoned. When proprietary software gets abandoned you’re just out of luck. If open source gets abandoned, you can pick it up and run with it. So there was a fumble, we picked the ball, and we tried to take it to the end zone. And that is the extent of my sports metaphors I have the knowledge to make.

Brian Gardner: Especially in San Francisco, right? We won’t talk about the 49ers right now.

Matt Mullenweg: It’s funny you talked about meeting people though. We actually have a tool inside Automattic that tracks who you’ve met in person. So you have a percentage and everything. Right now, because we just had our grand meet up, I’m at 81%, which is pretty high. That means I’ve met 404 of the 501 total Automatticians.

Brian Gardner: I just saw the picture of you guys. You guys were on Whistler, right?

Matt Mullenweg: We were, Whistler, British Columbia.

Brian Gardner: I just saw the picture and I was thinking to myself, “That is a lot of people.”

Matt Mullenweg: Yeah, I agree.

Brian Gardner: Did you think that back then when you and Mike forked this piece of software, that 10, 12 years later, however long it’s been, you would be in charge of a company with 400 or 500 people?

Matt Mullenweg: Never in a million years. If I had had a big ambition at that time it was maybe to be a really good webmaster or have a little hosting company with 500 clients or something. It was very modest. I think the big business plan idea was I could get 500 people paying me $20 a month. That was it. I was like, “Then I can just retire.”

Lauren Mancke: Some people get confused with WordPress initially because there’s WordPress.com and WordPress.org and they might not know the difference. For our listeners, can you give us a little explanation about which one is for who?

The Difference Between WordPress.com and WordPress.org

Matt Mullenweg: It’s all WordPress in that WordPress.com runs the WordPress software. I would say WordPress.com is a good place to go if you just want to dip your toes in. As you’re first getting started, it’s a great place to start. It’s got our great community features built in. It’s got built-in live chat support, so if you ever get stuck there’s someone there to help you. And it’s pretty difficult to break it, so there’s nothing you can do there that can’t be fixed pretty easily. It also showcases some of the latest interface work around what we call Calypso, which is essentially a next-generation interface for WordPress. So WordPress.com is a very good place to start.

An advantage is that if you ever outgrow it — which many people never do — that it’s very easy to move to a web host where, if you wanted to run specific plug-ins or modify the code on your theme, you could do so. That’s what in the community we call WordPress.org. This idea that you went to website WordPress.org, downloaded the software and installed it yourself. The terminology is a little confusing, and I hope someday we come up with something that makes a little more sense. But you can think of it as, if you want to modify code you’ll want to run the software someplace other than WordPress.com. If you’re not planning to modify the code, WordPress.com’s probably the best place.

Brian Gardner: Yeah. I’ve been on the outside looking in on WordPress.com stuff, primarily because when I first got started with blogging I was playing around with Blogger, which really was a competitor and still is — not so much anymore. Then I jumped right over WordPress.com and went right into the self-hosted version which is WordPress.org where you can download the software and install it. It’s been interesting to not really have that experience with WordPress.com but be able to watch you guys develop that over the years, knowing that it is the precursor to what’s coming into the .org side of things.

This is maybe a bad diagnosis, but in my eyes I’ve always seen WordPress.com as the place where Automattic makes money and WordPress.org is where the community makes its money. I realize there are opportunities on both for us all to make money, but is that a fairly safe generalization to make, that WordPress.com is the focal point from a revenue standpoint for Automattic, whereas the community side is left to WordPress.org?

Matt Mullenweg: Yeah. It’s not a perfect characterization, both because Automattic has a diversified business which makes money in several different places and several different ways — including WordPress.org — and that the community utilizing WordPress software and the freedoms of the GPL can make money from WordPress.com, and does quite a bit, but also can leverage it in many other ways, some of which don’t even look like WordPress on the surface.

Lauren Mancke: Let’s jump back to 2007. As you know, Brian launched a commercial theme called Revolution. What were your initial thoughts on this, the fact that someone chose to commoditize something you created? At this time WordPress was seen as less of a CMS and more for blogging. A lot of the themes were free. Was this something you expected to see?

The Spirit of GPL in Open Source

Matt Mullenweg: The first freedom of the GPL is the freedom to use the software for any purpose. You can modify it, you can see how it works, and you can distribute those modifications. There’s absolutely nothing, and has never been anything wrong with selling things on top of WordPress. Yeah, I think it was a very natural conclusion, especially because themes value in scarcity. Versus plug-ins or core, which has value in abundance.

Brian Gardner: For me though, I don’t know. It’s safe to say at the beginning with this whole Revolution thing it was unclear. To me it was unclear whether or not selling themes was legal, primarily because, if anything, that was an ignorance to what the GPL actually is and what it stands for. There was a lot of discussion going around back then. In my eyes all that confusion was rooted in that licensing issue. I know that it got to a point where I flew to San Francisco to talk to you and Tony about that. What it really means, what we’re allowed to do, and all of that. I take full blame for a lot of that initial confusion and some of the business models that may or may not have been in line with “the spirit of the GPL.”

The question I have for you is this — it’s more a comment than anything, but I’m glad that we’re through that period, because that’s was kind of a roller coaster thing. I think that, more than anything, it’s just a community trying to figure out what it is and isn’t allowed to do. Would you agree that it’s nice to be out of that period and into a different period where things are on the table and everybody knows what’s good, what’s not good, that type of thing?

Matt Mullenweg: Yeah, and I know there was some confusion around licensing at the time and what license was Revolution under versus the GPL. Was the GPL compatible? Did it violate WordPress’s license? Those sorts of things are pretty natural for this idea that WordPress had grown beyond just the early open source adopters, and folks coming in wanting to build businesses — including yourself — who might not have been as deeply rooted in the philosophy of open source naturally had a fear. I’m not saying this to you in particular, but we still see this today where people say, “Wait, if it’s free and open and users have these rights associated with it, how will I ever build a business? How will I ever make money?” That’s scary for folks, initially.

Especially then because there were no examples. Now we have the better part of eight or nine years of not just some money being made, but tens or hundreds of millions of dollars being made on 100 percent GPL, completely free code. You can no longer say, “Can I build a business on open source?” That question’s been resolved for even the biggest skeptics.

Brian Gardner: I would agree with that.

Jerod Morris: Hey, Jerod Morris here. If you know anything about Rainmaker Digital and Copyblogger, you may know that we produce incredible live events. Well, some would say that we produce incredible live events as an excuse to throw great parties, but that’s another story. We’ve got another one coming up this October in Denver. It’s called Digital Commerce Summit, and it is entirely focused on giving you the smartest ways to create and sell digital products and services. To get all the details and the very best deal on tickets, head over to Rainmaker.FM/Summit. That’s Rainmaker.FM/Summit.

Lauren Mancke: I think one of the biggest stamp of approvals the community has gotten over the years was when you guys decided to list commercial themes on the WordPress.org website. Can you tell us a little bit about that decision to incorporate those and the impact it’s made on both WordPress and those developing themes for it?

Matt Mullenweg: Sure. Something I’ve always been a big proponent of through the years is sometimes, especially on the community side … You could look at the theme of your team or different areas around this today — we can be a little disciplinarian where we want to say, “This is wrong,” or punish people who do things wrong. I think it is even more powerful — this old southern idea that you catch more flies with honey than vinegar — to highlight good behavior versus trying to punish the bad behavior. The commercial themes list was just a way for us to highlight the good behavior, the people who were doing the right thing in the right way. It’s a carrot more than a stick that we could put out there for good people. Yet another reason to do the right thing besides it just being the right thing.

Brian Gardner: I think I bit pretty hard on that carrot. One example of rewarding that good behavior — and to this day I wonder where my life would be if I actually never saw this comment from you. On a blog post from Ian Stewart on ThemeShaper way back in the day, this was after we had released some themes that were against the spirit of GPL and proprietary and all that, I saw a comment that said something to the effect of, “I will gladly promote any theme shop that goes completely GPL.”

It was at that point when I saw that comment I almost immediately emailed you and that’s what instigated the trip to San Francisco, the idea that you would reward and put in front of the hundreds and thousands back then — not to know that in the future it would have turned into millions of people — using WordPress. That was an opportunity to — I wouldn’t say come to the light side, because I wasn’t necessarily on the dark side — I just realized that that was an opportunity to come alongside the bigger fish rather than swim against it. An example from you was exactly that, your willingness to promote and help people who were doing things that were in line with the licensing of WordPress. That is a decision I absolutely will never regret.

Matt Mullenweg: Yeah, and that’s very much in line with … There’s WordPress the software that you download and run. There’s WordPress.org which is a website, a community hub for everyone working on WordPress and interested in WordPress. It’s an editorial product. The things that we choose to highlight and promote there are showing a point of view. Something I’ve always been big on since the site first started was being thoughtful and deliberate about what we choose to link to from there, highlight from there, promote from there. Because it is an endorsement, and you’re defined by what you endorse in many ways.

Adding Paid Themes to WordPress.com

Brian Gardner: As well as those who you do endorse are defined by who’s endorsing you. Aside from listing themes on WordPress.org that we had just talked about, you also opened up that same capability to a smaller degree on WordPress.com. You invited some premium theme developers back then and gave them a way to make money with a very big distribution pool, the user base of WordPress.com.

That was a sign that I realized, as I alluded to earlier, that WordPress.com is what I would always in my head call “Matt’s baby.” I always felt that that was something that you govern and protected more than the .org site. Not that at any point did you — I don’t think it was favoritism. But I always knew that was the focal point, at least, for Automattic. So opening that door to allowing people to sell themes on WordPress.com was a huge declaration of that willingness to expose and open up the possibilities of making money with WordPress more on the .com side here.

It’s also something I know you guys at Automattic have joined as well, because I know you have some themes there and are participating in that. I’m curious, how is that going? It’s been probably what, four, five years maybe, since WordPress.com has opened up the ability for folks to purchase premium themes and all that. Is that going well and continuing to go well for both the users and the developers?

Matt Mullenweg: There’s a couple of things there. It’d be good to dive into history and then also talk about the present. On the history, my memory’s kind of fuzzy here, but part of what caused some of the premium theme stuff was we had actually announced that program and then didn’t follow through on it. And hadn’t you developed a theme and you’re like, “Okay, I’m just going to release this because it’s not going to be for sale on WordPress.com.” Or was that later?

Brian Gardner: It may have been later. I do know we were one of the three initial groups, but that does sound vaguely familiar, that there was a little bit of that happening back then.

Matt Mullenweg: Yeah, I think it was probably early 2007, or maybe even 2006. It seemed like a cool idea to have a marketplace. We reached out to folks, I don’t remember exactly what happened, but there was something where we didn’t launch it. But I had announced it in WordCamp Argentina, which was the first international WordCamp, and talked about it on stage. And then, I think because of the GPL issue, we put it off. We couldn’t decide how to make the code available while also preventing people from it being available. Then people just started to release them themselves — including the Revolution team — which we thought was really good. Yeah, of course. I think it was you, might have been Chris Pearson —

Brian Gardner: You want to open that box?

Matt Mullenweg: — that were the first ones that we reached out to because y’all had some of the best and coolest free themes. Today it’s been interesting. In the beginning, everyone was worried about GPL affecting their business. The reality is that business is just hard, full-stop. Even if you’re not open source, it’s really tough. Even if you’re not open source, people can copy your features. We have Wix and Squarespace. They don’t use any of WordPress’s code, but they’ve copied a lot of our features and are good competitors.

Analysis of the Premium Theme Market

Matt Mullenweg: The thing that’s happened with the success of premium themes more broadly is that a lot of people have gone into the market, so even though the pie has grown, it gets sliced thinner and thinner and thinner for each individual theme shop. I think overall, themes have grown. Sites like ThemeForest have really driven a commodification so that individual theme shops that maybe used to make six figures a month, they’re now making five figures a month or less. That has been a trend. But it’s also a natural thing that you can expect with a successful market. People, including yourself, Brian, who talked about how successful it was — that draws people in.

On WordPress.com we’ve seen a little less of that, partially because we don’t allow everyone in, so there’s less commodification of the general size of it. Also, a lot of our theme authors — we’ve been trying to switch everyone towards subscriptions and away from one-time purchases. As you might be familiar, with our WordPress.com business plan you can have access to any premium theme, all of them, and you can switch them 10 times. You don’t have to buy them individually.

What we do is we take a portion of that business subscription and we pay it back to the theme author. That recurs every year, versus being a one-time sale. You get that over and over and over as long as that person is a WordPress.com customer, which creates a much more stable and sustainable business. I think it’d be cool as well to have this in our premium plan, which has a lot more subscribers than our business plan, which is $300 a year. We can facilitate people to profit from a subscription model. I think that that helps create more stable businesses that are less boom and bust, particularly in the theme space. As you know, people can only run one theme at a time.

Brian Gardner: Yeah. I wish I would’ve had that advice years ago when StudioPress started and I made the decision to do that as a transactional thing. There was never a point where I personally, up until the merger at Copyblogger, did I ever want to make the switch over to a recurring plan — even though there were other folks who were starting to move in that direction. For whatever reason I just thought to myself, “I don’t know if I can make that move.” And, of course, StudioPress merged into Copyblogger. We are still transactional at StudioPress, but we have the benefit of having other products and software and services around WordPress that are on a recurring basis so that we’ve never really had to make that change. That’s interesting.

Matt Mullenweg: It’s the best. If you can do it, it works really well. Something that was really obvious to me early on is that you buy a theme and you get support forever. I was like, “Support costs money, so if I’m giving you money once and then I’m costing you money indefinitely, forever into the future, at some point that might actually cross over.”

Brian Gardner: Yeah, WooThemes was an example. I think they were transactional at one point and then they transparently talked about why they made that decision, because of the fact that they just couldn’t scale the support and that “unlimited support” for them in the way that they were handling their business just wasn’t doable anymore. So they made a switch at one point then to go recurring.

Matt Mullenweg: They did, and that I think was pretty controversial for them.

Brian Gardner: Yeah, they got a lot of backlash.

Matt Mullenweg: It was before the acquisition that we did, so I wasn’t 100 percent privy to it. But definitely saw some of that from afar and didn’t envy their position. They were essentially saying, “Hey, this thing that used to be included is now no longer included,” which is tough to do.

Lauren Mancke: I think the recurring payments is something I brought up when I first came on board at StudioPress because I saw some other companies doing it. But it is definitely tricky with the backlash. We’ve talked about themes, and that’s an obvious way for members of the WordPress community to make money, but there’s so many other ways for an individual or company to generate a profit using WordPress. Can you share with us a little bit of the other ways you’ve seen the community generate revenue?

Generating Revenue in the WordPress Ecosystem

Matt Mullenweg: Oh, I was actually coming on this podcast to say you’re not allowed to make money with WordPress under any circumstances. Sorry. Was there a miscommunication beforehand?

Brian Gardner: I guess we’ll scrap the episode.

Matt Mullenweg: Cool. Yeah, I mean y’all have seen it. Where to start? Anything that creates value for someone who is getting from point A to point B. No one wakes up in the morning — well some of us do, but most people don’t wake up in the morning and say, “I want to use WordPress today.” They’re probably saying, “I want more customers in my restaurant,” or “I want to sell more of my widget,” or “I want an audience for my blog that someday I want to turn into a book or leverage into speaking opportunities or something.” They have some goals.

WordPress is a means to an end. As WordPress reaches a larger and larger number of people — because it does a really good job doing most of what people want — even the very niche users like, “I want to use WordPress to sell houses,” become valuable niches. If you can help people do that and you generate a lot of value for them, they will be willing to pay you back some of that. Open their wallet in some regard, whether that’s buying something directly from you, whether that’s coming to your events, whether that’s reading your site and clicking on the ads — whatever it is. There are a lot of opportunities there.

As many different ways as there are to be in business in general, there’s ways to make money with WordPress, because making money with WordPress is no different from making money in the world. It’s just that you’re getting the benefit of this huge open source platform and community as a distribution mechanism. And you’re part of a community that is a bit more conscious and awake about, “How do we keep this sustainable going forward? How do we give back and make sure that 10 years from now WordPress is just as vibrant?” But other than that it’s pretty much the same as any other business you do.

Brian Gardner: Yeah, I would say over the 10 years I’ve been doing stuff with WordPress, I’ve covered a lot of the different ways to make money. Even before selling themes I was selling my services on customizing themes. So there would be money for hire on a freelance level. Then, of course, I started selling themes, so there was the commodity or transactional version of making money through WordPress. And then we took StudioPress and merged it into Copyblogger where we, like you say, sell some of the training or the assistance. Helping people who are either on it or trying to use it themselves. We obviously have a small hosting division. And then we have Rainmaker, so there’s a software as a service. I feel like I’ve had a really broad experience, and I’m sure there are even …

Matt Mullenweg: You’ve done them all.

Brian Gardner: Yeah, exactly. Well, I’m sure there are even other ways. Plug-ins became a big thing after the premium theme market. Folks like Gravity Forms and WooCommerce are two huge examples — Pippin with Easy Digital Downloads. So plug-ins — there’s a huge market for that. Where do you see holes though in the WordPress community in terms of that opportunity to make money? Is there anything or are there any areas that you think yourself, “Man, I wish somebody would go out and go do X?”

Matt Mullenweg: You know, having a company in the space, when I think that, we usually do it.

Brian Gardner: Yeah, I walked right into that one. But there’s got to be smaller stuff. Things that aren’t important enough for you guys to cover. You would think, “Hey, it’d be great if a little company just came alongside and did this.”

Matt Mullenweg: I would say to follow my blog and follow my Twitter. Because I put out — it is true that I probably have 10 or 100 times more ideas than we’ll ever be able to get to. My philosophy is to always just put them out there, and if they happen that’s great.

Brian Gardner: Yeah, I’ve been asked, probably on a number of different occasions on different podcasts, “Why doesn’t Genesis do X,” or “Why aren’t you guys going after this particular market?” Like you, I say, “You know what? We’ve only got so many developers and designers and people in-house. We’re just not going to spend our time going there.” But I always throw it up as a layup. I say, “Hey, this is a great opportunity for someone to come alongside, wink wink, and take over and take that opportunity.” I think I’ve seen it a few times where someone’s taken that bait and then gone and done it. We, like you, try to reward people and our community who do good work and try to expose them and help promote their stuff too.

That’s a good idea though, to leave a breadcrumb trail of ideas and things that might be of interest or have value or potential for monetization that we can’t get to. At least you’re leaving that open for others to see.

Matt Mullenweg: Totally, and also it’s just good to share.

Making a Profit with Premium Plug-ins

Lauren Mancke: Let’s jump back. You mentioned some premium plug-ins. Let’s jump back to those. Matt, can you give us an example of plug-ins that are being sold right now that you think are a great and solid solution for WordPress users?

Matt Mullenweg: The obvious ones I don’t want to unfairly advantage, because there’s a lot of really good ones. I don’t want to mention one and not another, so I’m just going to mention ours.

Brian Gardner: Safely.

Matt Mullenweg: The things that Automattic sells — we have some service plug-ins available generally through Jetpack, but you can get VaultPress or Akismet, which are backup and security services and anti-spam services. These are essentially lightweight plug-ins. What they do is they connect you to an external service that, in the case of a Akismet, uses the intelligence of seeing hundreds of millions of things a day to help keep spam off your sites. VaultPress takes a copy of your blog and stores it literally in 12 places. So even if a meteor hits 11 of them, we would still have a copy of your blog that would be safe and available to restore. Those are the lightweight things.

We also have plug-ins largely that came in through the WooThemes acquisition, including WooCommerce — there’s over 300 extensions for WooCommerce — and smaller things like WordPress Job Manager or Sensei that are essentially like little miniature applications that you can put on top of WordPress that transform it. In the case of Sensei, it turns it into a learning management system, something if you wanted to run classes online and help people it’s all there.

Brian Gardner: Let’s talk about the acquisition of Woo for a little bit. I think in the big picture of the WordPress community that was the big, “Oh my gosh. Did you hear?” type of thing. I know when I read it there was … Adii and I, back in the day, started things out side-by-side and were really big competitors back when WooThemes got started and all of that. You run this race with people and when you see something like this, “Automattic acquires WooThemes and WooCommerce,” and you start hearing figures of seven and eight figures, my instinct was to instantly get jealous and think, “Oh, that sucks. Why can’t that happen to me?” But then you realize that …

Matt Mullenweg: Well, you got to reach out.

Brian Gardner: Is that how it works?

Lauren Mancke: Yeah. We’ll talk after the podcast.

Brian Gardner: We’ll have a follow-up phone call. No, in all honesty though, it made sense for WordPress as a platform to try to go after the e-commerce thing. So yes, you have to realize that there was a lot of wisdom in that acquisition. Is that the type of thing that you guys look for specifically? I know there’s a lot of people making money all over the place, but I’m sure there’s lots of things like that on your radar where you say, “We want to go after a certain type of market or a certain type of user. These folks or that business already has built a solid piece of that and it’s a good idea for us to then go pursue.” Is that what happened, just the movement towards e-commerce through WordPress and the acquisition of Woo and WooCommerce?

Matt Mullenweg: Yeah. It was really driven, first and foremost, by e-commerce as a category. From Automattic’s point of view, we were hearing for a really long time the demand from our users on WordPress.com that they wanted e-commerce. The demand from our partners, places like Web hosts, that sometimes as many as half their customers signing up were saying they wanted to sell things online and the solutions there were not good.

We really did look holistically at all the WordPress add-ons, including Woo, Easy Digital Downloads, WP commerce — there’s probably even more. All the services: Shopify, Ecwid, BigCommerce, PresstaShop — everything out there. And the big guys: eBay, Amazon, Etsy, the more centralized approaches. And began to really map it out and explore different options, including talking to folks like Shopify a lot. I think Shopify has a really great user experience and has built a pretty interesting business there.

What they built at Woo was super impressive — the team that was putting it together and the breadth of its adoption and the ecosystem around it. I had been trying to signal for several years that Automattic was going to move into e-commerce. We’re a big elephant in the room, so I don’t like for there to be surprises for people. In fact, prior to the acquisition I reached out to the other folks and said, “Hey, just so you know, this is going to happen and be announced next week or next month,” or whenever it was. Just because I feel like that’s the polite thing to do. But probably what drove the decision there was that e-commerce for WordPress needs to be a platform, meaning that the core software that drives the commerce engine needs to be available as widely as possible, really robust.

It needs to be something that scales from a small store selling just a handful of T-shirts to really huge stores with 60, 70,000 skews doing tens of millions or hundreds of millions of dollars in revenue. We wanted that to be something that lots of other businesses could be built on, and Woo was the best fit that we identified at the time.

That was just about a year ago, and a lot has happened over the past year. We joined these two different companies into one. Woo had a lot of similarities to Automattic, so that made it a bit easier both in how they were distributed and how they ran the company, everything. But we then started to look at, How can we grow this?” We’ve increased the size of the Woo team by over 40 percent and that’s still growing. The developers on the core software and the core areas have gone up by 5x, so a lot more people working on the software. We’re looking at it from a very long-term view. Automattic has a very strong business already. What can we subsidize or invest in or support to make Woo a platform that, just like WordPress, is one that’s a commerce engine for the next decade?

Brian Gardner: Well, just like you, we’ve been asked by our users all the time also, “When are you going to have e-commerce themes?” and things like that. Back before the acquisition it was always like, “We can’t design for WooCommerce because they’re technically a competitor.” I got all weirded out about all of that. But when the acquisition took place I started thinking to myself, “Okay, there’s a bigger vision here for all of us here, and it goes beyond just trying to compete or not compete against other people.” I wouldn’t call this an announcement, because I have alluded to it a little bit here on social media in the same way you sometimes do, but we’re very excited that we are focusing our themes — I’m literally designing one as we speak that will be WooCommerce compatible.

Matt Mullenweg: Oh, cool. That is news to me, so thank you.

Brian Gardner: The writing, for sure, is on the wall, and we’re now at a point where we can focus and dedicate some of our time. This may take a little bit of time, but my hope is to take all of our existing themes on StudioPress and work in the WooCommerce component. At the very least to make WooCommerce out of the box look good.

Our emphasis, then, will be on continuing to design and develop themes for the Genesis framework and all of that, but as a side note to that, all of them will be styled at a basic level for anyone who wants to use a theme and start selling stuff. So WooCommerce and e-commerce for us is definitely on the radar and the roadmap. That’s very fun for me to — I wouldn’t call it announce, because it’s not a big announcement yet. But it’s been on my mind for six months to a year for sure, as Lauren knows. We’ve had conversations.

Matt Mullenweg: Cool.

Lauren Mancke: Yes. It’s been on my mind for a couple years now.

Brian Gardner: I’m like, “I’m going to do it. This makes sense to me.” That will be coming — the first theme — probably in the next couple weeks, so I’m excited about that.

Matt Mullenweg: I think that’s something I’ve always tried to do with Automattic as well, is that we can compete and cooperate at the same time, especially if you think long-term. If we said there were 10 WordPress sites in the world and you and I were going to duke it out for getting them to use your theme or one of the themes that Automattic sells, sure, that’s zero sum. The reality is there are 10 sites today and I’m working on taking that to being 100 sites so we can both get a ton and work together. Automattic works with all the web hosts. We also compete with them with WordPress.com.

I just try to think of it from the point of view of what is the best long-term thing for WordPress as a whole. Never let what our particular business might be there …. For example, I love working with other e-commerce platforms besides WooCommerce. There are reasons for people to use something instead of Woo. We could pretend they don’t exist, like Google or Facebook do, or we could just say “Hey, how can we help everyone here with what we’re learning and maybe services we can provide — whether that’s hosting or something else — to make this pretty awesome for whatever people want to choose?”

Brian Gardner: That’s a good way to look at it.

Lauren Mancke: Matt, you said earlier that you don’t like to have surprises from Automattic. Is there anything you want to hint at for the future?

Matt Mullenweg: That’s a good question. Nothing I’m ready to say today. I appreciate the swing at the bat there.

Lauren Mancke: It was a try.

Brian Gardner: Nice try, Lauren.

Lauren Mancke: Yeah.

Brian Gardner: Back in the day, I know you weren’t a fan of how the whole licensing and theme things went down and we’ve moved well beyond that. Are there any areas right now within WordPress — within the community, that is — where you see things that you wish would be going a little bit differently? Not that you can control it or anything like that. But is there anything out there that we should just be aware of that maybe there’s room for improvement, or a better way to do a business model, or something like that?

Matt Mullenweg: I think the area that — there’s a ton of stuff in core and some really great things that Helen’s working on for Four Seven. Thinking beyond that even, I’d say broader, the thing that I feel like we have the most room for improvement is probably in our directories, both the plug-in and theme directory. When you think of the directories as essentially an interface for users, I think they could be pretty frustrating in terms of how search works. How you discover things. How you get support for it after you’ve used it. And how you know whether things are compatible or not, including having a different approach. With plug-ins, we accept everything and then worry about quality through reviews and reports. With themes, we try to look at everything beforehand.

For, honestly a few years, we’ve been pretty behind. You might submit a theme to WordPress and it could take — the WordPress Theme Directory, and it could take months before it goes up. And then we’re still not requiring things like it to be responsive, which is kind of wild in a day when cell phones are a big deal. Maybe even smart phones in the future.

There’s good reasons for this, but I think sometimes you can get pretty far down a path by just putting one foot in front of another and not think, “Am I heading in the right direction?” One of the things I’m looking forward to — there’s some good conversations going on in the weekly meetings on Slack. I’ve been talking to a lot of folks and seeing how can we iterate there — both in the design and presentation of the directories, which we’ve done some work for, especially on the plug-in directory. But also in our processes and how we approach them.

Lauren Mancke: Matt, is there anything you regret with WordPress? Have there been any decisions made, whether by you or others, that you wish hadn’t happened?

Matt Mullenweg: I don’t live with a lot of regrets, so I don’t know if I’d resonate with that particular word. But there are certainly things that in hindsight, if I were doing them today, I would do differently. The theme licensing stuff, especially in 2007 through 2010, has come up a few times. I think part of why that was such trouble was I was less mature as a leader and I thought the best way to hash these issues out was to talk about it and correct everyone in blog comments and do blog posts.

Lauren Mancke: And go on Mixergy.

Matt Mullenweg: Go on Mixergy. Just prove everyone wrong. We got from point A to point B, but maybe I should’ve done more of what you did, Brian, which is get on a plane and talk to people. Perhaps we could’ve avoided a lot of the back-and-forth and drama that we had. Because we were on the same side of things. You wanted to build a business with WordPress and sell themes, and I wanted more people using WordPress. Those are highly complementary goals.

I think now, as a leader — and this has also been something I’ve learned through many of the great people I have the good fortune to work with every day at Automattic — you can approach that differently and really look at talking things through. If one medium of communication — be it email, or Slack, or text, or twitter, or blog post comments hurled across the interwebs — isn’t working, switch to another one.

Brian Gardner: I have a question that I’ve been wanting to ask you for a long time now. I hope that you don’t take this in a narcissistic way, because I’m not at all looking for the answer that some people might think. Do you think that the whole premium theme movement has had some degree of impact on the growth and the use of WordPress as we talk about it now, 25% of the Internet and all that kind of stuff?

Do you think that without that — I guess that in a natural evolution would’ve always happened at some point, but do you think … ? I was thinking to myself like, “Wow, I was part of the big area of growth within WordPress.” Because I think premium themes proved that. Of course, there’s lots of people involved. This is not at all me trying to take credit for anything. But I always think in the back of my mind that at least I was a part of a movement that helped open WordPress up to a significant amount of users who may not have ever thought of it as anything more than just a little blog platform.

Matt Mullenweg: That’s a interesting question. It’s actually one I’ve thought about a lot. Because, if the answer is yes, then what we should be doing is trying to have everything be premium, right? If the answer is no, then we should try to eliminate premium themes. Or maybe it’s someplace in the middle. Based on the data, it’s someplace in the middle. Here’s what I mean by that. In absolute terms, it’s undeniable. You can look at your numbers and say, “I have sold X tens of thousands,” or, for some folks, into the hundreds of thousands of copies of this theme. I’m sure everyone has heard from customers — especially because many premium theme sellers are really good at marketing. I would say better than WordPress.org and better than Automattic in some cases.

They say, “I wasn’t going to use WordPress, but I found this theme and I decided to use it.” Have you heard that before? Yeah, so that’s undeniable on an absolute sense. The relative sense, meaning, “Does it change the growth curve of WordPress?” The numbers — because we’re able to track through the update system how many of every theme is run. If you added up all the premium themes, or let’s say all themes not in the directory, which is a good proxy for premium themes — although, as you know, there are some that have up-sells or pro versions of things — it comes to be cumulatively 10 percent, 12 percent. It’s had an impact, but still the vast majority of the overall growth is driven by some of the default themes and the many free ones out there.

I think that if you think about this, it makes sense a little bit. Although some people start with WordPress from our premium theme, it might be more likely that when they’re comparing things they’re probably comparing WordPress … They’re either getting it from their web host, and I would say that web hosts have been a big driver of WordPress adoption and growth because it’s one click and they get started there — or they’re comparing it to other solutions like Squarespace, Weebly, etc.

They start with WordPress. They’re probably going to start with a free theme because they’re not sure whether it’s going to work for them or not. Then, once they figure it out and they say “Hey, okay this is something I can use to solve my problems,” then they go to premium themes. That’s for everyday users.

The other thing that drives this market a lot is developers. It’s folks who know WordPress and they’re being hired to build WordPress sites for people. They have a theme that they love because it enables them to make great-looking client sites really quickly. It’s got the functionality and they know it as a platform on top of WordPress. It’s their go-to. So they’ll buy a copy for every single one of their customers as they build it out. Do they have to? No. But do they want to support you so you’ll make more themes? Of course.

Brian Gardner: Yeah, I think the definition of premium, back in the day — I think we at one point even had conversations of calling them paid themes versus premium, because premium’s kind of a subjective term. I’ve seen themes that are free that are probably better coded and better designed than some of the ones I’ve seen being sold.

Matt Mullenweg: I think that’s what we call them on WordPress.org too. I think we call them paid themes.

Brian Gardner: Paid themes, yeah. Okay, let’s talk about the future of WordPress.

Matt Mullenweg: Wait, does that answer makes sense to you?

Brian Gardner: It totally does. I realized that when I take myself out of the equation that WordPress is huge. There’s just — like you alluded to, even the hosting. That seems like within the last few years, especially with movements like Go Daddy doing one-click installs, and Bluehost and so on, that the hosting companies could say the very same thing. Saying, “Well, from 2010 on we really had a big role in the growth of WordPress,” and all of that. I’ve just always thought about that one back in the day. It was like, “What would’ve happened if … ?” type of thing. If it wasn’t me, it would’ve been someone else, so it certainly wasn’t my intuition.

Matt Mullenweg: It’s also something to keep an eye on. Maybe that percentage of what’s driving changes over time. And also looking at new users, not just total users. I’ll keep an eye on it. I love data.

The Future of WordPress

Brian Gardner: All right. Let’s talk just about the future of WordPress. We alluded to it a little bit earlier with e-commerce and stuff like that. Not necessarily how folks can make money from it, but where do you see WordPress going and what are the things that maybe stand as the biggest hurdles in terms of growth for Automattic and WordPress and all of that?

Matt Mullenweg: I think that what’s cool about WordPress as a platform is that it can do a lot at once, meaning that I believe that WordPress is going to grow hugely as a blogging platform. Some people might think that blogging is dead, but I see the next six billion people coming online and blogging being an interesting thing for a lot of them. It’s growing as an e-commerce platform. It’s growing as a site creator. It’s growing as a platform that people build things — maybe even just using the API, whether that’s a REST API or a PHP APIs, to make applications. Whether they’re using WordPress as a development platform to do things that don’t look like a blog at all.

The challenges and threats is that, in every single one of those areas that we’re in, there are some purpose-built tools. And, in fact, an entire company is dedicated to that small area, which are in some cases doing a really good job. If I’m starting a store today, I’m going to compare how easy it is to get started with Woo to how easy it is to get started with Shopify. And today that comparison looks pretty good for Shopify because they’re quite good at providing the hosted service that really on-boards you in a slick way.

The same thing in the CMS space and small business space. We’re getting some very good competition from Weebly, Squarespace, and Wix. Wix in particular, has really used marketing to leverage some breakout growth there. We have to keep in mind that they are spending $40 million dollars a quarter, so $160 million dollars this year, which is a big number, in advertising to drive people signing up for Wix. In certain markets now — you can go and the barista at the coffee shop might ask you about Wix. They might see your WordPress shirt and ask you about Wix.

If they’re able to create a flywheel effect of that advertising driving brand awareness, driving people asking for Wix, that’s going to start to drive developers away as well, which could be very bad for WordPress. These are the things that we have to keep in mind and also do some coordination across the community. One thing that I’m sure about WordPress is that if we all run our own directions and just try to localize or maximize our own profit and everything, we’ll be outgunned by these other companies.

The truth is that Wix’s $300 million dollars in revenue is bigger than any company I am aware of in the WordPress space individually, but it’s much smaller than we are collectively. The question becomes, “How can we work together? How can we team up? And how do we get the right philosophies and the right ways of doing business and everything out there? The best practices so that as we do our own things in our own places, we’re heading in the same direction in a way that, honestly, no company could ever compete with?” Just like the Encyclopedia Britannica could never compete with Wikipedia.

Brian Gardner: Yeah, it’s that crowd-sourced approach, whether it be intentional or unintentional. I guess what you’re saying is that you guys at Automattic necessarily can’t, by yourselves, go out and compete against Squarespace or X. But through the enlistment of other, bigger, smaller companies that would themselves go after and cater to the types of people who would be using Squarespace — that is the bigger army. The WordPress as a whole army versus Automattic as the one company behind it.

The more companies that are out there trying to build their own things off of WordPress, but to a user that might be interested in using Weebly or Wix or Squarespace, that that’s also a bigger win for you guys or just all of us as a whole. To think we are the ones that are out in the field trying to do the things, so the more we can do for ourselves, ultimately, goes up to the top.

Matt Mullenweg: Yeah. It’s all about being long-term. If you think truly long-term about this, that’s how we can win. That’s how we’ve won in the past against competitors like Six Apart that had more people and were better funded, and it’s how we’re going to win against all the ones down the road. We kind of have to. You have a lot of business owners listening to this. Think about what makes this business relevant? What makes the WordPress ecosystem relevant in 10 years. Are you orienting your business to make that a reality? Are you going towards it or away from it?

Brian Gardner: Well, I think those are great words for us to close by. I really do want to be sensitive to your time, because I know that you have a lot of things to do, a lot of responsibilities. First of all, before we go though, I do want to personally thank you for WordPress. Without a question, I’m not sitting in the house that I’m in if WordPress wasn’t around.

I know that on behalf of all of our users and developers and designers — people who build off of Genesis, which was really built off of WordPress — you have created an ecosystem and an environment which, as you alluded to at the beginning of this call, you probably didn’t even forecast or even think of. It was just a matter of trying to build something for yourself that you could use to do something X. Little did you know, 10 years from now you will have companies making 8 figures a year in revenue and enabling — our company has 60 people.

We have 60 people whose families are fed by way of, ultimately, what WordPress has enabled us to do. The stuff like that. I want to thank you. I should text you every once in a while or just shoot you an email and remind you, and say “thank you” and all that. I was a byproduct of your vision. You have put me on WordPress.org before to showcase some good work and stuff like that, so I just didn’t want that going unsaid. As much as I appreciate you being on the show, I also more importantly appreciate for what you’ve allowed me in my life and my family to experience because of the stuff that you did back in the day.

Matt Mullenweg: Thank you. I wish I could take credit, but the reality is you’re part of that too. We all are. So let’s all give ourselves a round of applause there, because what we’ve created is pretty impressive and I hope that you can have 10 more houses in the future.

Brian Gardner: My wife would like that too. No.

Lauren Mancke: Matt, thank you for coming on the show. Everyone, if you like what you heard on today’s show you can find more episodes of StudioPress FM at StudioPress.FM. You can also help Brian and I hit the main stage by subscribing to the show in iTunes. It’s a great way to never ever miss an episode. Thanks for listening, and we’ll see you next week.