Some companies seem driven by an obsessive need to maximize growth and profit whatever it takes. There are other companies, however, that are driven by a vision. Their leaders want to change for the better some aspect of the world by doing great work while making a profit. These companies inspire us by showing that there are better ways to do things than letting the CFO run the company.
One of these companies is Automattic, the privately-held company behind WordPress and other software products. WordPress is a website creation and management tool that is often used to create blogs and other types of websites. Created by Matt Mullenweg and Mike Little in 2003, today WordPress powers around 40% of the web pages in the World1.
WordPress software also happens to be open source. It is written, maintained, and supported by thousands of independent contributors worldwide. Automattic, which is a for-profit, is a major contributor and coordinator to the project.
Being open source means that the software source code is freely available. You have what is called 4 freedoms about the software: the freedom to run it, for any purpose; the freedom to study and change the code so it does what you wish; the freedom to redistribute copies; and the freedom to redistribute copies of your modified versions and charge for it if you want.
This can be a difficult business model to sustain. Alas, many companies that offer software products that are not open source have a difficult time securing a monthly recurring revenue. Automattic, on the other hand, has around 2,000 employees worldwide and is quite profitable. Their revenue comes from services they offer around WordPress. Unlike other companies, the free version of WordPress is the only version available. It’s not a crippled-down, hookish version to upsell the paid software. There is no paid version.
But it doesn’t stop there. There is a whole ecosystem around WordPress, what is usually referred to as the WordPress community. Plugin developers, people that contribute to the WordPress core, theme designers, companies offering hosting services, integrations, etc. A big part of the value generated around WordPress is captured by those third parties, and not by Automattic itself. Automattic mission seems to be a big enabler for others to use WordPress.
In his presentation at State of the Word 2022, Mullenweg reviews how WordPress did in 2022, and his vision for what’s coming. In the last few minutes, he explains how he sees himself and the WordPress community:
I like to think a lot about how can we make WordPress something that is a gift to the world and part of the web infrastructure for decades to come. I hope that maybe in 100 years (…) there’ll be someone else giving a State of the World. (…) I feel like the contributors to WordPress, myself included, all the volunteers… WordPress belongs to us. But really, we’re just taking care of it for the next generation.
So really thinking about how to build things long term, how to align incentives, how to create the community tools, that last for a long, long time. So thank you so much for being part of that. (min. 52)
I think this is a great company to follow to learn from its culture and business model. At least for me, it’s like a breath of fresh air and a source of inspiration.
In case you are wondering, 40% is a huge number. ↩︎