Move Over Slack? Automattic Mulls Commercializing Its Own Internal Messaging Product

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On Wednesday night, at an event in San Francisco, Automattic founder and CEO Matt Mullenweg answered a wide range of questions in conversation with one of the earliest investors in the company, Tony Conrad of True Ventures. (Conrad is also the cofounder and CEO of the self-expression platform About.me.)

One of the most interesting aspects of the talk touched on the future of an internal messaging system that Automattic’s far-flung workforce of 400-plus employees relies on, and that Automattic is considering commercializing, according to Mullenweg.

Given Automattic’s funding (it raised $160 million last year alone), and its reach (Automattic is the parent company of WordPress, which claims to power 24 percent of all sites), that’s news. Indeed, it’s easy to imagine an Automattic product becoming a strong competitor to both Slack and even to Facebook, which is planning to release its own workplace communications app by year end.

More from the evening’s conversation, edited for length, follows.

Mullenweg, on “keeping things fresh” for himself, given that he founded Automattic 10 years ago:

“I change my hairstyle every six months,” he said, laughing.

On the future of open, distributed, accessible systems:

“Hopefully, we’re at the nadir of openness right now. You’re not going to build the next Facebook on top of Facebook.”

On how Automattic finds the right balance between what it’s going to go after without stepping on the toes of its community:

Here, Mullenweg noted that people using WordPress are making far more than Automattic itself. “There are now many billions of dollars being made on top of it, and we don’t disclose our revenue, but I’ll say they are smaller than that.”

Mullenweg went on to say that the company tries to avoid conflicts with its users by communicating with them extensively. Though Automattic just made its biggest acquisition ever earlier this year, buying the commerce platform WooCommerce (which claims to power 30 percent of all online stores), he said that he’d “probably been saying for several years before that happened” that Automattic would move into e-commerce, and that users “understood it was an area that we considered strategic.”

As for what the WooCommerce acquisition means (i.e, whether Automattic will now compete more directly with the likes of Shopify):

Here, Mullenweg suggested that WooCommerce will remain an independently run unit, even drawing a comparison between Automattic and newly established Alphabet, the holding company that now counts Google among its moneymaking subsidiaries. “WordPress was one of the products [we imagined for Automattic]. We’ve also tried a lots of other bets; some have done well, lots have been insignificant, but we’ve tried. And we’re excited to see where we can take WooCommerce.”

It does seem like WooCommerce is expected to become a major growth engine for the company going forward. Though Mullenweg characterized it as “still a prosumer product” for the savviest of users, he expects it to evolve in much the same way as content management systems have evolved on WordPress, where people used to have to hire third parties to build them but they can now publish very professional-looking sites on their own.

That said, Mullenweg begged patience. With payments come challenges, he noted, like “taxes, shipping, payments, refunds, fraud. It’s a whole new world that’s not usually addressed by open source.” He added, laughing, “There aren’t that many [open-source obsessed] engineers who go home [after working elsewhere for the day] and say, “I want to work on a new payment gateway . . . So we’re navigating that.”

On challenges to WordPress’s growth posed by platforms like Medium:

Mullenweg didn’t sound terribly concerned about a lot of things, from Medium to Facebook’s Instant Articles program. “There are always things that capture the tech reporting cycle and tech funding, and we’ve seen a lot of those things come and go,” he said. The macro trend, he continued, “is that people want their own domain, their own site, their own voice, and not just to be a page on someone else’s [platform] as a digital sharecropper.”

Not last, Mullenweg talked about Automattic’s famously distributed workforce:

“Less than 1 percent of our burn goes to rent,” said Mullenweg, agreeing with Chamath Palihapitiya that it makes no sense to spend a lot of capital on luxurious offices. “In a world where at offices, everyone has headphones on and stares at screens anyway, and you have software that enables meetings online — whether that’s Zoom or Google Hangouts or Slack connecting people — you can create not just a distributed workforce, but one that’s more global and diverse.”

Finally, Mullenweg was asked about Automattic’s internal messaging system (which Mullenweg has mentioned to reporters in the past) and whether there’s a commercial opportunity in it:

Said Mullenweg, “We’ve at various times flirted with commercializing it and making it a thing. The truth of the matter is that, even at 400 people, we are incredibly resource constrained for our primary mission and goal, so we ended up tabling it for focus reasons purely. But I absolutely hope that we loop back to it at some point, because I do believe that distributed work is the future of work.

“There’s an incredible lifestyle arbitrage to be had when you can make a San Francisco salary and live in Texas, like I do, or in Utah, or any one of the beautiful places around the world . . . So yeah, we’ll release those tools at some point and perhaps even try to make a business around it.

“In the meantime,” he added, “we’re just open-sourcing everything and giving it away.”

(Btw, here’s a very early version of that internal messaging system, P2.)