Automattic Connection: How an East Coast VC Got Behind WordPress, the West Coast’s Hottest Blog Platform

The party was pretty geeky—people were actually sitting around writing code. Mike Hirshland, who’d played football at Harvard (earning him an Honorable Mention on Xconomy’s VC Varsity roster), was having a hard time finding a beer. That’s when he gazed around the small San Francisco apartment and saw the laptop sitting on a counter—and on its screen was a clicker tallying downloads of the latest version of WordPress’s blogging software. “This thing was whizzing around like a race car,” Hirshland relates. “It was amazing.”

A click went off in Hirshland’s brain, too. In a cartoon, $$$ signs might have slot-machined in his eyeballs. Inventors have their Eureka moments, and so do investors like Hirshland, who’s a partner at Polaris Venture Partners in Waltham, MA. “That’s when I knew I somehow needed to find a way to invest with Matt,” he says.

Matt was Matt Mullenweg, the then-20-year-old whiz kid behind WordPress, a nascent open-source blogging platform—and the party was being held to celebrate an early release of the software. This was the spring of 2005. And, as the saying goes, it was the beginning (well, near beginning) of a beautiful friendship.

If you’ve been following the blogosphere at all, you’ll know WordPress has been phenomenally successful. The service now hosts more than 2 million blogs and last year claimed some 100 million unique users per month. With 42 million of those “uniques” coming from the United States each month, also claims to be the 12th-ranked site in the nation, ahead of Wikipedia and Facebook—and that doesn’t count the teeming multitudes of other blogs (including Xconomy) that use the software but are hosted elsewhere.

In January, ramping up to monetize the business, WordPress’s parent company, San Francisco-based Automattic, took in an eye-popping $29.5 million in financing, led by Hirshland and Polaris, and including strategic investor The New York Times Company. In the world of blogging, it doesn’t get any hotter—or better financed—than WordPress and Automattic.

This, then, is a story of how the not-so-hip Boston venture community claimed a front row seat at a trend-setting West Coast startup. It’s the sort of thing that isn’t supposed to happen. After all, when it comes to recognizing revolutionary Internet plays, Beantown investors are either a) hopelessly myopic and clueless, b) still saddled by Yankee conservatism, c) too gray to understand the Web, or most likely, d) all of the above. It’s also the story of a very smart 20-year-old who ran a business very, very cautiously and almost cashed it in and sold everything—until at the eleventh hour he decided to take the plunge and go after creating something really huge. Thinking big is another thing East Coast VCs aren’t supposed to be good at helping entrepreneurs do. But guess who helped push things in that direction? (By the way, if Hirshland’s bet helps us stop talking about Facebook, I’ll enshrine him in the VC Varsity Hall of Fame.)

Matt and Mike met in San Francisco back around Christmas of 2004. Hirshland was hanging out with folks like early superstar blogger Om Malik and Tony Conrad, now the CEO of Sphere, trying to figure out what blogging was all about and whether guys like him should be interested in it. As Hirshland relates, Malik and Conrad introduced him to Mullenweg, noting that the young developer was this super-smart guy doing interesting things.

“It doesn’t take too long to figure out that there’s something special going on,” says Hirshland, who has written on his own WordPress blog about some of what I’m describing. Beyond his great musicianship … Next Page »

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26 responses to “Automattic Connection: How an East Coast VC Got Behind WordPress, the West Coast’s Hottest Blog Platform”

  1. Jeffro2pt0 says:

    Just wanted to say that this was an interesting piece to read. A nice overview of how Matt and company got from point A to point B. I also learned some things I didn’t know such as the select pages advertising campaign.

    If Automattic can make more acquisitions that were as good as a much for the company as Gravatars was, the sky becomes the limit for Automattic.

  2. David says:

    This is a fabulous article, and an interesting story to boot, with some great sidebars on east vs west, etc… I think it’s going to make a fascinating Harvard B-School Case. Of course, funding isn’t everything, as a couple of well endowed local companies recently realized — one tanked and the other sold out leaving the investors “under water”. I didn’t notice stories in the Xconomy updates, but no need to rub salt on the wounds. Let’s hope Automattic executes well, and maybe they will also open an office in Kendall Square alongside Microsoft, Google, Yahoo!, et al:)

  3. Toni says:

    “As the deal was being put together, Tony Conrad introduced Matt and Mike to Toni Schneider”

    Not that it matters hugely, but for accuracy’s sake I was introduced to Matt by Om Malik in summer 2004, about a year before Automattic raised it’s first money.

  4. Toni

    Thanks for the clarification. I have corrected this.

  5. Mike says:

    Great story, great article. I am constantly amazed by Matt’s levelheaded approach to fleshing out Automattic and his interesting view on commonly problematic issues, such as advertising. I look forward to seeing what Automattic has up their sleeves in the future.

  6. Very enjoyable read. I have no doubt that there are great things in store from WP and Automattic. He has so many great qualities, refreshing to know Web Entrepeneurs like Matt exist.

  7. Thanks for the article, it was a good read indeed

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