#100 Matt Mullenweg: Collaboration Is Key
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I believe all proprietary software to be an evolutionary dead end. Maybe it'll take 50 or 100 years. But what happens, just like what happened fairly quickly with like Encyclopedia Britannica and other encyclopedias and Wikipedia, is that the thing which is open to all and gets everyone working together, if it truly gets that sort of like humanity working together on the same shared resource, you get the opposite of the tragedy of the commons versus like the field being overrun, each person operating in their own self-interest, sort of

kills the environment or kills the shared thing. Each person operating their own self-interest makes the shared thing better and better. And in digital world, we can do that because we have economics of abundancy versus economics of scarcity. That's why open source will eventually win every market it's in.

Welcome to The Knowledge Project. I'm your host, Shane Parrish. This podcast and our website, fs.blog, help sharpen your mind by mastering the best of what other people have already figured out. If you're hearing this, you're not currently a supporting member. If you'd like early access to the podcast, ad-free episodes, transcripts, and other subscriber-only content, you can join at fs.blog slash podcast. Check out the show notes for a link. There's no better guest for our 100th episode than Matt Mullenweg.

Matt's the co-founder of WordPress, the open platform that runs most of the sites you visit, as well as the CEO of Automatic. More than that, though, Matt is one of the most kind and thoughtful people I've ever met.

We talk a lot about distributed work, including the five levels of autonomous organizations. And of course, we dive into decision making, running an organization with more than 1300 people, integrating acquisitions and so much more. You'll walk away from this episode with better ideas on how to lead a distributed team or effort, integrating new teams when cultures don't match and how to avoid problems before they happen. It's time to listen and learn.

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Matt, I'm so excited to talk to you, man. I'm so excited to be here. One of my favorite WordPress sites in the world. Oh, yeah, definitely. What percentage of the internet are you now? Like 50? 60? No, not yet. Not yet. I think we're 38% of the top 10 million websites, which is more than 10 times the number two. Yeah, yeah. Farm Street's like 0.00002% of that, but... Yeah, but it's like 12% of the awesomeness. So...

And you have a very rare two-letter.blog domain. We do. One of the onlys in the world. Thanks to you, that was possible. So really appreciate that.

How did WordPress get started? Like, what's the origin story behind WordPress? Gosh, WordPress came out of sort of a passion. I was blogging and found the software called B2 to essentially I found it as like the most customizable blogging software out there. But it's very small. The dominant one was called Movable Type, which is kind of like a static site publisher, probably had 95 percent of the market. But I like B2. And I started like following

volunteering on the forums and writing little code patches for it and like helping other people. And so got involved in that community, which I've always found the most exciting part of building things or being online. It's being part of community. And when the software kind of got abandoned, I blogged about that and said, I'd love to see something that combined the best. I think it was the simplicity of blogger,

the customizability or the power of MovableType, the elegance of text pattern and the hackability of B2. There was four different blogging platforms at the time. So kind of tried to combine all those things. And this fellow I'd never met in the UK named Mike Little was like, "Hey, if you're serious about this, let's work on this together." He was another volunteer on the forums and things.

and also a real developer. I was like a 19-year-old kid in Houston. He was a professional. And so we just started hacking together, coding together. And that turned into WordPress. MARK MANDEL: And how did that overtake the world? Was it just like it was such a butter mousetrap? Or was it a timing thing? Or what would you describe the reasons of that sort of-- DAVID BASZUCKI: One set at a time, and still to this day.

I believe in sort of incentives and environments and markets always trump anything one individual or company can do. And I think WordPress is a great example of that. The competitors, the others in the market were far better entrenched, far better funded, had hundreds of employees who are launching on stage at TED, had kind of every advantage. Yet this open source thing eventually overtook it.

And I believe the reason for that was that we had we created a community. So it wasn't just people being paid to work on something, people working on something because they love doing it. It was incredibly sort of adaptable. So WordPress could be used for and customized for any purpose. And it had a philosophy, both sort of an aesthetic philosophy, which was largely centered around jazz, both then and now, this idea that code could be poetry.

But the open source philosophy, which I believe is the most powerful idea I've been exposed to in my lifetime, and probably one that all of your listeners should incorporate into their lives. I don't think Charlie Munger's talked about it yet, so we might have to introduce it here. Can you expand on that a little bit? Yeah.

So open source is kind of like software with a Bill of Rights attached, right? Like in the United States. I know you're Canadian, so I apologize. But the Bill of Rights essentially ensures certain freedoms, most famously like freedom of speech being the First Amendment. For open source, there's what's called the four freedoms attached, and particularly the license we build on, which is the GPL. Because they're geeks, they start counting from zero. So freedom zero is the freedom to use the software for any purpose.

This means no one can tell you what you can or cannot do with the software. If you want to make a WordPress suck site or Shane is awesome or FS.blog or literally anything, no one can tell you what you can or can't do with

Freedom one is the ability to see how the software works. So to be able to open up the hood, see how it operates, which, you know, if you're going to operate from first principles or you want to understand how something works, you need to see what's under the hood. And so much of our lives now are essentially digital black boxes. Like we have no idea what's going on. And more and more as more and more of our lives are influenced, you know, who we date, when we meditate, what we pay attention to, what news we read are essentially these black box algorithms. We are losing our

agency and sovereignty over ourselves. So being able to see how it works is really important. But it doesn't matter if you can see how it works if you can't modify it. That's freedom too. The ability to modify the software. And this is where you get into why open source almost always wins. So I believe that open source comes to dominate any market that enters.

Over time and the keyboard is over time because sometimes it takes many decades and then finally is the freedom to distribute those changes So, you know actually our main competitor had a couple of those freedoms so movable type You could see the software how it worked. You could open up the hood You could change it, but you weren't allowed to redistribute those changes. So you could just use them for yourself. So

The ability to distribute those changes means that the software takes on almost like an evolutionary dynamic where there's sort of survival functions. And WordPress itself was actually a fork, so kind of like an evolutionary branch of existing software called B2.

When B2 died, there were like five or six of these different branches and WordPress ended up being the one that was the most fit and survived. That's amazing. I love the concept of being able to sort of look under the hood and see what's going on. How do you commercialize that though? Like what causes people to work on open source projects?

Yeah, part of the freedom is the freedom to charge for it or the freedom to commercialize it or the freedom to sell it. Anyone listening to this could take WordPress and sell it to others. In fact, many, many do. You can get WordPress from Bluehost or GoDaddy or Amazon or a million different places in addition to getting it from WordPress.com, which we run. So that's part of what's built in there. And there's different business models around open source. There's some which...

Try to say like, here's this open source thing, but we'll give you the same thing under a different license or we'll put the best features into a paid version. I personally don't like that because it seems to take what makes open source successful and essentially create the incentives against it. Right. Because if you play that out 10, 20 years from now, your very best features are going to go into the paid version and the open source thing will probably wither on the vine a bit. And we've seen some of this happen.

So the approach that we take is essentially making all the best stuff in what we call core, which is a software you can download from WordPress and WordPress.org and use for any purpose. And then we create services around it. So the first one we launched was actually an anti-spam service called Akismet, which just celebrated its 500 billionth spam blocked campaign.

I remember. I remember that from back in the day. How amazing was that? Like, that's an arms race, though, like blocking spam. Well, like, talk to me through the comments and trying to figure out if it's like a legitimate person or... Yeah, it's actually one of the things I'm most proud of. Today, we'd call it like a machine learning AI system, but at the time we didn't. And...

It's now 10 years later, it still has over five nines of accuracy for blocking spam and keeping and allowing good stuff through. So it's essentially like basically, again, it's all about markets. Markets always chump anything an individual company could do. And there were all these solutions to blocking spam on sites, but they would only work for that one site. And of course, what happened is the spammers would tweak their code and it would start working.

So we created a system that essentially allowed all the kids being bullied on the playground to work together and to gang up. And of course, that's what makes humanity great is our ability to collaborate. So we started collaborating against the spammers. And so they would adapt very quickly, but the network would adapt in real time to their changing tactics. And particularly with web spam, typically web spam is trying to direct either a search engine or person to a place.

So that provided a really great avenue of, well, you know a ton about security, of being able to target these. Because ultimately, they didn't just want to, you know, they didn't want to rank first in Google for V1GR4, right? They wanted to rank first for FIRAGRA or mesothelioma or whatever the random term they're trying to rank is.

And so that ultimately ended up being one of the weaknesses and still is a weakness of spam today. They still are trying to spam me to a particular website. And was Akismet the start of automatic or was it was there a different origin? Because you're running automatic now. Yeah. So I was in college. I ended up dropping out to take a job at CNET, which was a digital media company, which was an early adopter of WordPress.

And after a year there, I was like, I really want to work on this full time. I sort of pitched them WordPress.com and all the things automatic related to. They said, well, we don't we don't want to do that, but we'll we'll support you. We'll invest in you. And so that was kind of the genesis, a kismet.

Funnily enough, it used to be called Automatic Spam Stopper. So we realized that was an unfortunate acronym. Naming is usually not my forte. And actually, my sister, I believe, came up with that name. And that was our very first product. And it was a plugin for WordPress. It's also a plugin for many other systems. So some large social networks use it. Accommodating systems like Disqus, other platforms like MovableType, Drupal can all use Akismet. And that was also one of the ideas. Tell me a little bit more about Automatic. What do you guys do and...

So Automatic started actually 15 years ago. I just celebrated my 15th anniversary with the company. And the idea was to essentially create a company which tried to build and flourish from the open web and open source. So we wanted, I wanted to create a place where I could work on open source full time and all the other developers of WordPress and others could benefit from it.

We also wanted to create a company, a for-profit that was paired with a nonprofit where each one would be stronger than either would be on its own. So I think nonprofits can do awesome things. I think for-profits can do awesome things. But when WordPress, we have essentially WordPress.org, which is open source software, which is not done by automatic.

We have Automatic, which creates services for WordPress.org. And then there's a huge ecosystem outside of that. You know, WordPress, as you mentioned earlier, has some of the most incredible market share, and that's been very rewarding. But Automatic, the company, actually has smaller revenue than other companies that you've probably heard of because we only make a few percentage of the dollars in the WordPress ecosystem. So...

And we've always targeted and I got this. There seemed to be sort of a law of platforms going all the way back to like DOS and Windows. If you look at like the launch of Windows 95, one of the things Microsoft would talk about. Do you remember that launch? There was like people would line up at Best Buy. It was like a new iPhone or something. I feel like there was like a Rolling Stones song and, you know, people got really into it. Yeah. OK. So one of the things Microsoft would talk about that time is for every dollar we make.

from Windows, $19 or $20 are made by the Windows ecosystem. And so that's kind of like a, you know, call it, they were about 5%. And I kept finding this ratio that's like 20 to 1 everywhere in successful platforms, not in fake platforms, like it's not on the Facebook platform. Facebook made like 90% of the dollars in that ecosystem, but in others. And so in building Automatic, I wanted to create a company which didn't take all the oxygen out of the room. So we would try to make about 5% of the revenue in the

then grow the pie as much as possible. That's a really good concept because I guess the theory behind that is if you're capturing more value than you create, you'll inevitably die. And if you're not capturing enough value, you'll inevitably die. You have to capture a little bit, but not too much, always less than the value you create for others. That's the idea. And so the products we've evolved into doing are WordPress.com, which is kind of like our easy hassle-free version of WordPress.

WooCommerce, which is I think one of the fastest growing e-commerce platforms in the world is essentially e-commerce built on top of WordPress. So you get the best of both.

And that's doing well over 20 billion of GMV now and growing really quickly. Oh, wow. And then Tumblr, which actually was an acquisition we did last year, which is one of our blogging competitors. We were able to acquire it. And we're redoing it, switching it to actually be powered by WordPress on the back end and trying to create a sort of like nice social space on the web.

How do you feel about the Tumblr acquisition? It's about a year later now, isn't it? Like more over a year or about a year? Yeah, I think it was 13 months ago now. Definitely by far the biggest one we've done in terms of 180 people, different culture. You know, at the time they were based mostly in an office in Manhattan. So a lot of things to bridge. I suppose I should mention that Automatic from the beginning has been distributed. So we always were people working from all around the world.

Today, it's about 1300 people in 77 countries and almost every U.S. state. I think four of the provinces in Canada. But when we bought Tumblr, they were based in this one office. So a lot to bridge about the culture. And it's definitely a turnaround. You know, Tumblr, I believe, was bought for a billion dollars by Yahoo in 2012, 2013. Yeah. Marissa Mayer did that. I think it was a really smart acquisition, by the way.

But, you know, they got sort of the head of other problems. You know, Yahoo kind of famously. Then Yahoo merged with AOL. It became Oath. And then Oath was acquired by Verizon, which became Verizon Media. And you have this amazing...

community and like set of things called Tumblr, which is just like the smallest fly on the back of a rhino on the back of like, you know, a mountain, which is Verizon. And so we were able to work out a really good deal with Verizon where we were able to acquire a Tumblr for a de minimis amount. I think they were going for the maximum rate down and then sort of take everything on and try to turn it around.

I love turnarounds. So I don't know if we can only do one every couple of years, but to me, it's incredibly, incredibly fun to take something which the market has sort of undervalued, sort of an unset gem and really polish it up. And that was honestly most of our most successful products, including like WooCommerce, were I don't think really appreciated or valued by the market at the time when we brought them in and made them part of the Automatic family.

Talk to me a little bit more about how you think about turnarounds as the CEO. You purchase a company. What are the next steps in your mind? How are you thinking about integrating that? Are you leaving the culture alone? Are you changing it? Like walk me through everything that's going on in your head at that point in time. Yeah. So Automatic is structured a bit like a holding company. So I like to think of us as like Berkshire Hathaway with a common digital platform is definitely what we aspire to.

And so we can have these products like Tumblr, which run largely autonomously within. However, different from, you know, Warren Buffett and Charlie Munker's approach, we do try to take essentially economies of scale and from our culture, like our hiring, our technical platform, our infrastructure, you know, the 30, 40 data centers we built around the world, things like that.

So we were able to take 25, 30 million a year of cost out of Tumblr just by kind of bringing it over to our systems, which brought them a lot closer to being breakeven. In terms of culture,

I wouldn't purchase a company that I didn't want to be influenced by and also hope to influence. So I think if you do it right, the automatic culture and the Tumblr culture become something new together. And that's what we've been doing. And we do that as well through lots of rotations. So lots of people who were at Automatic before have rotated on to work on the Tumblr team. And vice versa, we've had people from Tumblr either merging with other teams in Automatic or sort of collaborating across things.

And this is a fine balance, right? Like all organizational structures are a series of trade-offs. But it allows us to get the benefits of having something that can kind of run on its own while still sharing knowledge and expertise and sort of unfair benefits that Automatic might have that other companies don't have access to. And Tumblr wouldn't have access to if it were its own independent company.

So the cross-pollination, is that how you influence the culture? Like it's not a top-down, we're going to slowly nudge this a little bit differently. It's more like we're going to place people at different levels in the organization? Or is it the same level? Is it the top? Is it the bottom? I mean, people is by far the most important thing because the people, everything else flows from the people. So you definitely want cross-pollination of people. In terms of technology, yeah.

I don't feel like you can force engineers to do things that they don't want to do. So that's much more like showing the benefits. The only places where we'll do something really top-down is if there is a

a really large capital impact. I think it probably would have been a little bit easier just to completely recreate, you know, by the 6,000 servers that they had before and by the exact number with exact configuration in our data centers. We ended up reducing that to about 800. So we went from 6,000 servers to 800. And part of that was, you know, doing a lot of engineering work to bring things on to sort of what we've learned with best practices and being super duper frugal with everything we build.

And so it took a little bit of work, but it just saved so much that it made sense to make that kind of like, no, we're absolutely going to do this decision.

I want to keep going a little bit more on this. Is it run by the same person it was run by before or is it run by somebody new? Yeah. So the CEO, Jeff, is still in place. So he was the CEO before and he's the CEO now. So that's really interesting, right? Because that sort of leads me to speculate that environment matters a lot to how people perform. Is that something you think about? I think it's the most important thing by far. Yeah.

So like in running a company and running a community with WordPress, we're obsessing over the environment we're creating. And I think there's a microcosm of that. Like think about the environment around you and your office or where you're working. The smells, the temperature, the lights, the inputs, the music, everything contributes to how you're operating. And companies have equivalents of that.

And communities have equivalents of that. In WordPress, we have 5,000, 10,000 people contributing to WordPress on a regular basis. Now, what sort of environment is happening there?

We have something happening right now, which I think is fairly unique and exciting for open source, which is WordPress 5.6, which is coming out fairly soon, is an all women release lead squad. Oh, wow. That's awesome. It's a result of, you know, the past decade of trying to make like WordPress a really open, inclusive platform.

friendly place to be. And it wasn't that there was ever a specific gender target or anything like that. We're just like, Hey, like why do most open source projects only attract a certain type of person, not even like one gender, but like a certain type of person who like loves to fight and be on mailing lists and like, and then what sort of products does that create over time? If we're trying to create products for the world, our mission is to democratize publishing and commerce. So if we want to truly democratize it, which means everyone has access to it, regardless of language,

technical ability, anything. We need to get as many of the world involved in building this.

And so I think about that for every aspect, even language. I want people who don't even have the ability to speak or read English to be able to contribute to WordPress and have their code included. Like go deeper on some of the other differences or not differences, but things that you see as environmentally impacting people's ability to not only contribute, but perform at work, in work. What helps people? What unleashes them inside the organization environmentally that we might not see as constraints?

as somebody who's thought about this a lot? The best framework I found, I believe I got from Dan Pink in his book Drive, which is mastery, autonomy, and purpose. Mastery is essentially being challenged and getting good at what you do. Think of it when you're on the edge of that curve for learning a new skill. Autonomy is essentially the freedom to be able to do it. So

You're not being micromanaged. You're not being, you know, so many people in organizations know what the right thing is to do and they can't do it. And finally, purpose is working for something bigger than yourself.

I think that it's very difficult to drive world-changing performance if it's just for a paycheck or just for your own personal benefit. You need to be connected to something larger. That's probably the easiest for us because pretty much everything we create is open source. We do have this mission to democratize things that we've had almost for 17 years now. And we take it very seriously. And we see the results of that. We've been able to get...

a good chunk of the web on open source. And I believe we have the ability to create a national monopoly of 80, 85% of the world's websites running on open source. And if we do that, that means I believe that we'll preserve the open web for another generation of human flourishing. I think it's actually important for like the evolution of society and humanity for us to accomplish this goal. It's kind of our version of going to Mars for Elon Musk. Like this is key because of proprietary closed web

Well, we see what happens with that because it's been a lot of it the past few years. That's our purpose. So if you get those three things there, I find the rest falls into place. You mentioned something earlier about how you guys are distributed and you didn't use remote, you use distributed. What's the distinction there? Words create reality. And we obsess a lot over what words we use to describe things.

I think we used to use remote to describe what we were like, hey, we're a remote company or remote first company. And I realized, like, who wants to be remote from their colleagues? Remote implies that there's like something central and you're far away from it.

You know, there's a remote mountain or you're in a remote town. You're isolated. What's a lot closer to what we were trying to create was essentially an anti-fragile, fully distributed organization that each node on the network was at an equal weight with each other. And just like a great network design with like BGP failover or something like that, like the system itself becomes quite resilient because the nodes are relatively independent, but each able to fully contribute.

So, for us, we shifted to calling it distributed and really talking about distributed because it's so important that every single person in the company has an equal ability to contribute.

Sort of like when you were saying that, I was thinking about how words matter and we're calling, you know, during COVID, we call it social distancing, but it's really physical distancing because we don't want to be distant socially. We just want to physically have a gap between us for, you know, spread purposes. And I thought that was a really interesting distinction. It's why it matters in the beginning too, right? Because I've tried to change that. I've like talked about physical distancing. I've tried to use it in a conversation, but at some point there's so much momentum around the term, you're kind of stuck with it.

So naming things, particularly in the beginning, is so important because, you know, whatever your code name is or whatever the thing is, the internal name, you know, you're going to end up with that almost certainly for a long time. And changing names later is, especially if you're successful, is almost impossible. Yeah, I can definitely see that terminology. Once it gets a hold of you, it's like so hard to get rid of. What are the differences between going distributed and

at this point in time, in these circumstances and being distributed by default from the start? In a global pandemic, I think that there's just aspects of life, which are very difficult and challenging that you wouldn't have in a non-pandemic scenario. So part of what's, I think, great about distributed, you know, one question we often get is like, why aren't people lonely? Because they're, you know, they don't have a

their friendships at work and things. And they could be certainly like if you're only social networks at work, you might be lonely if you weren't working with people physically. But then what does that open up? It opens up the opportunity for you to choose people around you geographically to spend time with who you can talk about things other than work. You talk about within work, you talk about something else. You can play ultimate Frisbee. You can do Among Us or Settlers of Catan. You can go to music. You can

And part of our model of distributed work also provides a fair amount of autonomy in how people get the work done.

So, you know, if you're customer support, you need to be on a few certain hours a week, but you have a lot of autonomy in choosing those hours. If you're an engineer or designer, you need to accomplish certain things. But gosh, if you could do that in one hour a week, good for you. It's really about getting from A to B. We're not tracking, you know, how you do it. So that allows people a lot of flexibility to design their day around what works best for them.

You know, there's folks who wake up every morning, start work at 430 a.m. I would never ask someone to do that. But that's that's where they feel most productive. They get a couple of hours in before their kids wake up. In non-pandemic times, a lot of automaticians love dropping their kids off from school and picking them up. That's easy to do because you don't have to like leave an office, walk into a parking lot, see all your colleagues, see you going somewhere and wonder if you're goofing off.

It's just part of your day. And I like that it creates a lot more objectivity and focus around what the actual work is, because I believe in offices, we're so distracted, just as like human social animals, by all the things around the work.

how someone dresses, whether they're present or not, what times they're present. Do they appear to be working really hard? And these things are, you know, they're the map, not the territory, right? Yeah, definitely. I had a friend once who worked for an investment bank and he, he figured out very quickly, this was like a FaceTime culture thing, not necessarily a, you're working all the time thing. So he did this sort of, I would call it clever, uh,

He hired the janitor who used to come in at like 3 or 4 a.m. to switch his coat and turn on his computer every day. So it looked like he was the first person in the office and he would stroll in at 10. And, you know, like he had just come from a meeting or something and everybody had thought he'd been there because his computer monitor was on and his coat had changed. Like, yeah, it was hilarious.

How he had thought about that. I love that, sir. I'm going to use that in the future, but it's so much easier. I think it's easier to slack off in an office than it is in a distributed environment. I think it's easier to hide it, right? Because in distributed, you can just, you can, you can do dishes. You can, you know, get caught up with all this stuff at home, especially if you've never worked from home before. And then, but your performance stands out in a way that it doesn't in the office because you can sort of like hide behind these signaling and

all these meetings and walking around with a lot of folders and people, you can go months before people like clue in that you actually haven't done anything. Yeah. I like that because ultimately like we want to be as close to the reality of the work as possible.

And all these other things are false proxies. So the more we can make it a bit more objective about accomplishing the goal of the business, I think the better that is. And also, by the way, I believe that's way more inclusive. Talk to me about the levels of autonomous organizations. So I think actually one of the reasons I was avoiding coming on this podcast because I was like, because you asked me like very early on. I was like, I want to get my book out first because I was really convinced I was going to write this book about distributed work.

And in the past few years, the company has just been growing too fast, have prioritized other things. So what I ended up doing was starting a podcast and then doing that for a little bit. I was going to make that like the step to the book. I was going to do like the Tim Ferriss thing.

But then the pandemic happened and I realized that there were so many companies really struggling with the switch to distributed that I could help them. And it should be a very small way that I contributed. And I also started talking to dozens and dozens of them, CEOs of top five financial firms with, you know, hundreds of thousands of employees that I had dinner with just months before that said we could never be distributed.

And then months later, they're like 98% of our workforce is working from home and we're doing great. And so I got to see from the inside, lots of it going well, going poorly, everything. I came up with these five levels. I call them the five levels of distributed autonomy. Decided to introduce it on Sam Harris's podcast, which I recommend checking out that one too, if you haven't.

Essentially what they are, are how companies evolve through working in a distributed fashion. Because I'm an engineer, we start counting at zero. So there's a secret sixth level. So level zero is a job which absolutely cannot be done distributed. What's funny is we think a lot of jobs were level zero. It turns out they weren't in the pandemic. So I like to refer to like telemedicine. I used to think you needed to go into the doctor to have them look at that rash on your kid. And now you can do that all online. So-

Level zero, think of like construction, maybe being one. Level one is one, if you weren't in the office or with your other colleagues for a little bit of time, you could get by, but the environment's not really suited for it. So typical in level one is like, if you had a family emergency, you had to go pick up your kids from school. Maybe you could hop on a phone call, but maybe you wouldn't have access to like the VPN or internal company resources. It wasn't really designed for that. So you get by for a day, but you're pretty unhappy.

Level two is where most companies went to in the pandemic. So level two is where you basically try to take everything you did in the office and recreate it online. And this is like the cargo cult of distributed work, right? Like you...

You say, oh, you know, we used to be in six hours of meetings a day. Now let's be in six hours of Zooms a day and let's have these ways of reporting and let's, you know, maybe you have access to more of the tools online. A typical, if you're in level two, you might feel totally exhausted at the end of every day in a way you never did in the office. Lots of level two organizations have too many meetings. You know, they worry about installing monitoring software on their employees' computers or like,

you know, they don't have a good way for people to have a home office set up or things like that. Level three is where you start to embrace the benefits of being online. So this is where, think of it like we like to have a Google Doc when we have meetings, you know, we have a Google Doc that's open on everyone's computer and we're taking notes in real time and everyone is looking at that next to sort of the Zoom. And this allows kind of a real-time record of whatever is being recorded in the meeting.

And also that becomes a sense-making apparatus. So if someone is taking the notes, which by the way, we can share, and they see something written down, which wasn't what they thought was said, all of a sudden you're reconciling that difference. And that's super, super powerful because how many times have we been in meetings? We thought we all agreed. And then a week later you realize like everyone had different definitions of the terminology you used and ideas of what success was and everything. That's just one simple example, which is like off the shelf Google Docs and Zoom.

that is actually like a major force multiplier for success of meetings. Level three, you start to have fewer meetings too, which I like. Level three is still synchronous though. You're still expecting people to be kind of online, working together at the same time to get work done. Level four is where you go from synchronous to asynchronous. And this one's kind of magical. By the way, it's also really, really hard. It's much easier.

to work together if you're there at the same time and you can kind of ping pong back and forth. But if you're able to design an organization that

People popping in and out at whatever time zone or whatever times are able to fully contribute and move forward their goals in a meaningful way. Then you unlock access to the world's talent. You unlock ultimate flexibility in everyone's day. You give people a ton of autonomy. And I believe asynchronous interactions can be far richer than synchronous ones. You unlock the power of the introverts in your company, people for whom in a real-time meeting,

They might hang back a little bit or be shy, or they might need to think about things to really contribute their best thoughts. There's a French phrase I love. I'm not going to say the French, but essentially it means stairway wit. And it's like the comeback you have or the joke you think of when you're when you you pass one of the stairs, but you think of it when you're at the bottom of the stairs.

I'm unlocking that asynchronicity, I think makes organizations far, far better. So for example, inside automatic, we have this internal blogging system called P2. You can actually check it out at wordpress.com slash P2, P like pool and the number two. And so if we're trying to make a decision for like, you know, this widget inside of the product, we don't call a bunch of meetings about it. We create a thread. And so this internal blogging thread, someone will say, hey, we need to decide on this widget. Let's discuss it for...

36 hours, and then we're going to make a decision. And then everyone essentially has almost like an internal comment thread that's kind of like a mix between, it's just like a blogging comment thread or a forum where they can discuss and they can embed videos and GIFs and mock-ups and discussions and link to research. And everyone's kind of participating in their own time. And they're writing essentially like little mini essays. So instead of just on-the-cuff responses and reactions to things, they're able to like really think about it.

Take a walk around the block. Take a shower. Play with your dog. Think about the problem and really ruminate on it and bring your best answer to. And then everyone's doing that back and forth. And then at the end of the time period, we can say, okay, let's synthesize the best wisdom and knowledge and information from this and make a decision. And so it took a little bit longer, maybe from start to finish. But I feel like the decision could be 10 or 100 times better. And when...

the quality of your decisions determines your outcome. This sort of process can be amazing. Now also, let's fast forward. Each thread that gets created is adding to the institutional knowledge of the organization in a permanent way. So now it's 10 years later. We're like, why on earth does a widget work like that? And what usually happens, particularly in software, is engineers come in and they say, oh, let's rewrite this. And they sort of reinvent it from scratch. And then they reinvent all the same problems again and all the same bugs.

Because they didn't really understand why it worked the way it did before. But now there's this perfect thread, which shows the entirety of the thought process of the decision and how that decision came from. And so now, I mean, we have now at Automatic, I feel like it's our biggest asset.

more than the money in our bank, more than our software, anything is this sort of now kind of like 15 year record of every decision, every design process, everything is in these internal blogs. And it's kind of amazing what you can find there. Of course, we built a good search engine for it and everything. And you can really mine. And I think it allows us to now not recreate the same mistakes, particularly when, you know, in a tech company, fast growing 20, 30% of your people

might be there less than a year. They might be pretty new. And so it allows fast scaling companies to escape the groundhog effect that often happens when you're growing really quickly. And what was level five? Yeah, level five is nirvana. It's somewhat unattainable, but what you always want to aspire to. So I think that we have glimpses of level five. Level five is where I believe that the organization in a distributed fashion

is outperforming at every single level, productivity, quality, employee happiness, everything, any in-person organization, because you've embraced all the power, all the special features of this asynchronous approach and everything's better. I think if you kind of add up all the things we just talked about, for example, the increased autonomy and asynchronicity might allow people to design the interaction between their work and their life a lot better.

By the way, then they're going to be happier, right? Because they have a lot more control over their day. They're able to spend their day in an environment which isn't like the lowest common denominator of fluorescent lights and a cold temperature and like terrible food and colleagues that talk on the phone too loud, all that sort of terrible environment. Now they're in an environment which they designed, which is creatively charging for them.

which is filled with things which recharge their day. Like maybe they do little mini exercises during the day or they kiss their kids or they walk their dog, whatever it is. And they bring that creativity to work. Their work goes so much better. And because their work's going so much better, they're bringing that energy back to their life and family and the 18 hours outside of work. As somebody who's super thoughtful, you always think of the drawbacks to everything. What are the drawbacks to distributed and entirely distributed workforce?

I totally get jealous sometimes when I walk in my friends' companies and they just have these amazing offices. Not so much for the physicality of the office, although sometimes I do appreciate good design there. But just I love my colleagues. I really enjoy spending time with them. Particularly this year, I wish I could do more. A secret sauce, a magic ingredient of our distributed approach is in normal times, we get people together three or four times a year.

So if you joined Automatic and say, Shane, you know, as part of, you know, deciding whether to take this job off or not, expect that you will be traveling three to four weeks per year. So you'll be away from home. So, you know, whether that means you need to find like, you know, a cat sitter or someone to watch your kids or whatever, like you're going to be on the road four weeks out of the year. And one week, historically, we've brought the whole company together. And then the other two or three weeks, you're going to be with your team.

which is typically we have lots of cross-functional teams, typically five to 10 people. We try to have everything on the team that's needed to ship something to users. And so they can operate in a fairly autonomous fashion. And when you're able to, as humans, I still think there's something that is

impossible to recreate online, which is that breaking bread, you know, the bottle of wine you and I shared, whatever the equivalent of that is. It just builds trust in a way that you can get pretty close online. I think you get 85, 90% of the way, but you can't get to 100. Is there a difference in your mind between people that are switching to remote right now? You already have a relationship with people, so you don't have to develop it versus developing a new relationship. Like as, as this goes on longer and you hire new people, um,

What's the difference between an existing relationship that you're building upon or you can rely upon this established trust and then this new relationship where now you have to break bread, you have to establish this level of trust with somebody that you've never met before?

You just have to work at it. Know that that's an issue and say, how am I going to invest the time to build a relationship with this person? By the way, people did it hundreds of years ago when you had to send letters that would take weeks to arrive. They could build very strong relationships with folks on the other side of the ocean. We are blessed with instantaneous audiovisual, every type of technology. Let's say, Shane, you and I were like, we want to develop our relationship, but we know we're not going to be able to physically see each other for a while. What would we do? Maybe

Maybe we'd play some games together. Maybe we'd like read a book and then discuss it together. Maybe we'd have like a little 10 minutes we talked every morning just to kind of like talk about our day.

Maybe I'd say call me if you're going through something tough. Maybe, you know, I'd say like, hey, why don't we, I bring my friends and family to the Zoom and you bring your friends and family to the Zoom. Like we all hang out and do something virtual. I don't know. What would you add to that? I don't know. It's just something I've sort of been thinking about a little bit between the difference between, because I've had friends talk to me about this and they're, oh, it's really easy when I know somebody in advance, but it's, it's, it's,

there's more friction when I don't know people, which I think is inevitable, right? There will be friction when you're developing that relationship a little bit and you have to, you know, communicate a little bit more precisely because you might not share the same vocabulary and there's all these byproducts to it, but it requires this investment. And that investment is really strange right now because people feel like they're working harder than ever. A lot of people, but they're not as productive as they are. So they're feeling more

strain, I guess, on their, their hours. And so what's happening or what I, what I hear anecdotally anyway, is like everything is becoming or not everything. A lot of things are becoming transactional.

And that'll erode trust with people that you've already established it with. And it makes it really hard to establish trust with people if it's a very transactional relationship. So I just wonder about these investments that you should be making and your colleagues and the people that you're closest to, including, you know, wine and cheese or something or sharing a show or, you know, doing something that just makes it feel more comfortable.

you're a part of like, cause to your point earlier, there's a human psychological desire to feel part of something larger than yourself. You're contributing to something meaningful. You're doing something. And I think that establishing that on a one-to-one basis, like we're in this together, we're contributing to this thing together. We're fighting for each other. We're in the trenches together. I think that's a really important thing to establish, especially when you think of this as maybe a marathon and not a sprint.

And maybe the world doesn't go back to the way that we thought it was before. And maybe you're a lot more flexible with your work and learning to adapt now is just going to be exponentially more valuable than learning to adapt later. You know, if your friend were here and he were also my good friend, I would shake his shoulders and say, like, wake up. Yeah. If you think of trust as like a function of communication times time. Yeah.

You know, maybe when you were in an office with someone, you got some of those things just by default and you didn't really think about it. But if you were to actually think about it and invest in it, I bet you could create an incredibly close relationship, one much more intentional and deliberate than you would just maybe cohabitating with someone by default. Totally. It's kind of like in relationships. Yeah. You can live with someone every day and not develop your relationship. And you can see someone a few times a year and then develop an incredibly deep relationship. So it's the same with your work colleagues. So I would say like, you know, really...

And by the way, talk about that. Say like, "Hey, Shane, I'm feeling a little more disconnected from you because we haven't seen each other in a while. What can we do?" And make it a conversation. By the way, that's also how we solve most of our company problems. I get lots of questions like, "Well, what do you do if the team isn't brainstorming the way they used to because they don't have a whiteboard?" And it's like, "I don't know. Well, why don't you get the team together and talk about it and say like, 'Hey,

We used to do this thing that was really magical around the whiteboard. What are some things we can try to recreate that? And then just try different stuff. And it's going to be different for different teams. But if you don't talk about it with everyone, you're not ever going to develop that relationship. So that communication times time, I think, is a really good formula to keep in mind.

And just to add to that a little bit, one of the things that I did end up going back and saying is like, oh my God, we do this at our events. I never even thought of this in the context of this. We take complete strangers and we sort of get to a base level of trust. And how do we do it? We had that game based on the

the 35 questions to fall in love where we have these increasing like intimacy level questions. I was like, try this with people, like create your own version of it, but sort of like have this level of conversation with people and see where it goes. And I think that was really effective. I want to go back to decision-making a little bit with,

the P2 program and having this distributed sort of like record of decision making, which seems awesome because you'll be able to pick out people who are consistently right and might not be as heard or recognized as right because you'll be able, like eventually computers will be able to say, well, this person is more consistently accurate than others.

perhaps that they're waiting and the decision happens. But like, how do you frame that? Is everything time box? Like you said at the start, we have 36 hours to make this decision. Like what are the parameters that you put along that so that it doesn't just spiral out of control? And how do you differentiate between decisions that need to be made as soon as possible and maybe larger strategic decisions that can be as late as possible? Yeah.

I think sometimes we do this poorly, by the way. So there's definitely threads that get started, which don't have a clear goal or outcome or time limit. And they can just meander on for days or weeks. And then you come to it later, like, oh my goodness, what is this? It's like 15, 20,000 words. How do I decipher this? I'd say that very much automatic is a written communication culture.

And I believe clear writing represents clear thinking. And we filter for this in our hiring. And we talk about writing a lot. So we like invite writers and we talk about books like On Writing Well or Words at Work to like get people to be clear written communicators. Some of the things I'd recommend other companies try that we've come to, you know, let's say there's a post which is presenting an idea. A very common pattern is a TLDR at the top.

If you're not familiar with that acronym, it's TL semicolon DR, and it stands for too long, didn't read. And so essentially oftentimes people put like a little tweet late summary of whatever they posted at the very, very top. Actually, so some way, you know, you asked about Tumblr culture influencing us, they introduced a new acronym to this. So they'd have the TLDR, then like a chunk of text. And then they had like, it's escaping me right now, but I feel like it's like

G, S, G, M, like good stuff, give me more. And think of that like almost like an appendix where that it could be like another 5,000 words. If you really want to dive deep into this, whatever the post is about, you could, but if you didn't, you know, you could just skip that section. Don't feel like you're required to read it. Another really good practice our best internal threads have

is the time boxing. I think that's usually pretty good, but then also someone who summarizes it at the end. So again, it can be kind of intimidating to come on this really long conversation thread and hard to sort it out. So one thing I see some of the best, particularly leaders do in the company is

is at the very end, they'll just make a comment that summarizes everything, including the outcome. And so if I come across a really long thread, often what I'll do is scroll to the very bottom and see if there's one of those summaries, because that can be like that synthesis and synthesizing is an incredible contribution to the institutional knowledge that's created there.

And if I wanted to dive into a particular thread or mine a thread on how something was decided, I could, but I don't need to. So I think a lot about that efficiency of time. And I think one downside of synchronous communication is it's kind of one-to-one. So the time that it's taking to communicate the information is also what it takes to consume it. And that's kind of inefficient.

On the other end of the spectrum is maybe like a book that someone took a lifetime to write and it can take you a few hours to read. Like, wow, that's a multiple thousands to one ratio. So that's really dense and valuable. And then probably the worst is like...

uh, things that take people a short amount of time to create and you a long time to consume. Maybe that's Twitter. Yeah, definitely. I mean, a lot of these hand grenades that people throw out take a lot of time to refute, but like eight seconds to like tweet out and

Yeah, it's interesting. I wouldn't imagine you'd have that as much inside the company, especially when it's visible because it'd be like a shaming element to it as well. Well, that's also one thing that the superpower of asynchronous. So, you know, we do these monthly town halls every month where anyone can ask any question and I just answer them in real time or someone else in the company answers them in real time. You can watch that real time and it's about an hour long.

But we posted recordings. So if you want to watch it sped up later, that hour long meeting, you can get through in 30 minutes. So, hey, you just you literally just created time out of nothing. And so this is why we always want really good notes out of meetings. By the way, if every meeting is transparent and has really good notes or a recording, people don't feel the need to be there. And so the meeting can be smaller, which also means it's more effective.

Where it's like, you know, not everyone is like, oh, I'm not in this meeting. I'll have no idea what happened. And like, my voice won't be heard. So when you start to unlock all the pieces of the stuff we talked about in five levels, one thing then like leads to a cornucopia of like other benefits that you wouldn't have until you went to the earlier levels.

How do you prevent people from sort of, or encourage them not to, I guess is probably a better way to word it, but like not getting caught up in Slack all day or reading P2 all day or catching up on all these meetings that they weren't really a part of and just sort of like acquiring all this organizational knowledge that they never put to use. The best way is clear expectations. I mean, ultimately, by the way, I've had these weeks where like I spent a lot of time

Very busy. I worked maybe 60 or 80 hours, but I didn't really get my most important things done. So when you have clear expectations, either for yourself or for others, that is the best filter. Because at some point, you know, there's going to be that conversation like, oh, either with yourself or with someone else, like I didn't.

there's an accountability. I didn't meet the thing that was expected of this role or this job or that other people were depending on me on. And then you start to say like, well, what happened? Did I play Nintendo all week? Okay, well, that's an issue. Did I work really hard, but on the wrong things? That's far more common, actually. The problem we have actually in distributed work, so to get to another downside, is not underwork, it's overwork. So we have developed a lot of internal systems to

We used to not track any vacation or what we call AFK away from keyboard time because we have a completely open policy there, take what you want. But the problem was people weren't taking it. So we started tracking it to encourage people to take it, which is kind of funny. So we do, you know, that is a report that HR team leads will look at. It's like, oh, you know, Shane hasn't taken a single day off in six months.

First, I'm going to have a conversation with you about why that, by the way, this has happened a lot in the pandemic. People are like, I can't go anywhere. I'm locked down. Why would I take any days off? And then like, well, maybe try it anyway. Do a staycation. You know, just don't go in your office at all that day and do everything else. You know, talk about how that recharge time, because I do believe it is important for high performance, how to build that in. How do you think about your day and organizing it to make sure that you're working on the most important things?

I roughly think of my time in three buckets. I try to spend about a third of my time on people. So that's either hiring or internal HR. I think this is the environment work, creating the environment for people to thrive and do the best work of their lives and their career. I spend about a third of my time, particularly right now, on product. So I'm sort of temporarily running our largest product, which is WordPress.com. And so I'm a lot more in the

in the weeds there in terms of you know working with the leaders and engineers and everything to make sure that's an excellent experience but more normally i might float a little bit more between the different products uh across the company and then finally that final third i just try to reserve for whatever is the emergency of the week do you think about sort of like your day the night before do you have blocks of time where you're guaranteed to be free like how how do you do

do that? And how much email do you get? You don't get a lot, right? P2 takes care of most of it. Internally, I get almost zero email. So inside the company, we basically don't use email. Maybe like some HR stuff or something you might get via email if it's truly private, but everything else happens on the blogs.

I also am at a point right now where I have almost no meetings in my schedule. So kind of no regular recurring ones. Everything is a bit more opportunistic or on the fly.

I would say that a lesser version of this is throughout the company. Most of our teams do have regular recurring meetings, but Automatic probably has 80% fewer meetings than most other companies I'm familiar with their internal workings. This is also really powerful. What happens when you have fewer meetings means if you need to have a meeting, you can do it immediately. It's not like sometimes I'll meet with friends at Google and there's this Tetris of their calendar and you're like, all right, next meeting.

Friday at 2:00 PM. I've got 15 minutes or something like that. Um, or like, Hey, let's meet at 7:00 PM because then I'll be done with things and they're working you in and like a crazy off time. But when everyone's counter is open, it's kind of like, all right, let's hop on. Let's do that right now. So it increases the velocity, which you can solve the problems, what you were doing the meeting to create.

So that's where I am right now. By the way, I'm not always like this and I'm not advocating this for everyone all the time. There are times when I was in a lot more like

weekly one-on-ones with 15, 20 people a week or something like that. But for where we are right now, my biggest value is in taking information, synthesizing it, writing, and making some very, very subtle but large changes to how the organization works that need to be planned and thought through. And so there's a lot of conversations around these and come to a conclusion. I also like to have as much reading in a day as possible.

I want to come back to the reading here in a second, but what are some of those subtle changes that you're talking about that you're thinking of? You know, this has been a year of incredible acceleration for our business because as the world economy and everything shifts online, our e-commerce business with WooCommerce, the blogging side, the site creation with WordPress.com, even users of Tumblr grew. And so everything was up at a time when I would say our business

my colleagues are impacted. So I feel like we were operating probably even still at like a 70% efficiency of what we were pre-pandemic. And that is largely, you know, the, oh, it's everything that you can think of. People are literally getting sick sometimes, or they have loved ones that are, that they need to care for them. The impact on folks who care for either elderly or children

Versus, you know, it's been really disproportionate, I think, in this year. And so I've seen a big, big impact for folks like for kids at home trying to homeschool them. Like, you know, this has been really challenging. So we're not operating at our peak yet.

What's funny is other organizations that have been switching to distributed have been talking about how they've gained 15 or 20%. So my theory is that we were at like 100% and we came down to 70. They were at like 50% and they went up to 70. Yeah. Especially if you had kids, right? And you had elementary school children like myself sent home and it's like, try working with, you know, a 10 and 11 year old at home. It's good luck.

It's different. So that has been a challenge. We're also, though, at the precipice of even far more growth. So if you look at the percentage of e-commerce we have or the percentage of websites or anything like that, there's several doublings in our future. And so we need to make sure that we have the organizational structures in place to support that.

And we've shifted to the kind of this like digital Berkshire Hathaway. We've prioritized some longer infrastructure product investments, sort of using the opportunity of this year to say like, hey, let's do this five-year investment.

and really start it now and really make lots of progress on it. And then just in hiring, scaling our hiring and training. It's kind of my other obsession, which I know you and I have talked about before. Like if we can make our people 10% more effective, that's the equivalent of hiring 130 new folks. And so how can we invest? By the way, one side effect of being distributed and having the mastery autonomy purpose, we have incredible retention.

So our regretted churn is something like 4% per year, 3%, 3.5%. And so if people stay more than a year or two, they'll probably be here a very, very long time. So you have to train them like they're going to be around forever. It's that old joke, like, whatever, I train my people and leave. And like, what if you don't and they stay? Like, we've got some examples of this, but to be completely candid, like we were a little bit

relying on in-person as a crutch. So a lot of our previous learning and training would happen when we were together in person. So we are much like many children in the world trying to learn how to do this in a distributed fashion really, really effectively and just invest as much as possible in coaching one-on-one and programs and concepts we like like radical candor and how do we get that distributed throughout the whole organization. So all of this is probably

Probably the most important thing we're doing as an organization right now. I want to talk a little bit about the differences between public and private. You just mentioned doing this five-year big infrastructure investment. Is that something that you get an advantage of being a private company where you might have more scrutiny if you're a public company? How do you think about that? I think it's about clear communication and expectations. So we run things internally like we're a public company. And I could see a future at some point when

Maybe all of automatic or maybe one of these like subsidiaries, one of these like subs could go public on its own.

But I actually don't buy the thing that public markets don't reward long-term investment. And I think there's some amazing counter examples of that. Amazon, perhaps, being the best one. Where if you clearly communicate and do what you're going to say over the long term, these long-term investments can really, really pay off. And what's the thing in a short-term voting machine, long-term weighing machine? MARK MANDEL: Yeah, in the short term, the markets are a voting machine. But in the long term, they're a weighing machine. Yeah.

We have, as a private company, had incredible swings in valuation. So I feel like we've experienced the capriciousness of Mr. Market already internally. And to the point where literally like,

You know, we turned down an investor who wants to invest in the company at a maximum of 500 million enterprise value. And like a week or two later, someone invested a $3 billion valuation. Like there's wild, wild swings that happen. That's fine. You just got to get used to it. And you say like, well, what actually matters to our business? And is that growing? And sometimes the market will understand that. Sometimes it won't. Sometimes, by the way, I've been better or worse at explaining what we do.

Sometimes we had the wrong people around the table talking to investors, like all those things. But when you get them right over the long term, I think you have both the access to all the capital you need and the ability to make very long term investments. You guys are like 1200 people now, right?

I think you mentioned 1300. What was the hardest phase of growth from zero to 1300 and why? 20 to 50. Why? And by the way, this is always happening. So I tried to design Automatic to be a fractal organization. So as you zoom in or out, it is self-similar. And so a cross-functional 10 person team at Automatic looks a lot like what all of Automatic looked like when the whole company was 10 people. And then as they grow, there's like a,

Is it mitosis when a cell splits? Like a team will get too big, then they'll split into two, and then there'll start to be some coordination. So when a division, and we have several of these going through this, it's kind of in that, you know, kind of like $20, $30 million of revenue and going from 20 to 50 people. You lose that ability to brute force the collaboration and getting everyone on the same page. And you really need to start communicating in a way which is...

well understood across the existing people. But also at that point, you're probably scaling pretty quickly. And so you need to be able to onboard people to this institutional knowledge that was built up by a lot of people working closely together for many years and bring that new person in really effectively and get them to understanding.

A lot of what happens at that phase is you bring in new people and you get that Groundhog Day thing where like new people come in and they start that discussion or debate that has happened five times already. Because, you know, when you first look at WordPress.com, you say, well, what if we just like made it ultra simple and only have like five buttons like Tumblr? Wouldn't that be way bigger? And you're like,

Okay, well, here's what happens when you do that. And here's three times we've done that and why it worked and what we learned from it and like how we're using that to inform our next version. So there's that onboarding when you're scaling. It's sort of the bootloading of institutional knowledge.

You know, if you could imagine your aspiration being like when Neo gets plugged into the matrix and he's like, I know Kung Fu, you know, you're not going to get quite there. But if you could get that in someone's first couple of weeks, I think you're ahead of 99% of companies. And particularly when you're in that sort of point when you're growing above 50% people wise. Is there a costly mistake that you've made recently or while you were growing Automatic that you think other people would benefit from knowing to avoid?

So many. What comes to mind instantly when I say that? What comes to mind instantly? We were having a lot of essentially like people issues with the very earliest team. And we were probably 20, 25 people. Some really good fights happening with folks I was very, very close to. And so it felt like a personal thing. We had an offer at that time to sell the company for about $200 million.

And it was absolutely the right answer not to do it. But I was very close to and it was partially because I was like, okay, that'll resolve these people issues. I won't have to deal with them anymore. But I was like, what is going on here? Why would I make this like life decision to sell this thing, which could be a hundred times bigger and I believe will be because of like an interpersonal conflict, right?

And so that conflict avoidance is definitely something that particularly early on as a lead, I think, led to a ton of dysfunction within the organization. Another one that came to mind was, you know, we've been very inspired by a lot of remote distributed stuff was pioneered by Basecamp at the time called 37 Signals. But they also were really into like keeping the company as small as possible. And so I really kept us sub 50.

probably two or three years longer than we should have been. And so that meant that we got really spread thin and we underinvested in things like customer service because I was trying to keep the company really small because in my head, I equated big with bad. I thought, you know, the larger organization gets the worse, it gets the more bureaucratic.

And that was just a limiting belief I held. And I had never really truly interrogated or questioned or challenged. Why can't when you get more amazing people in an organization, it can't actually get better? Why can't the specialization that comes or the ability to attract and retain talent or the ability to pay a lot more as your business scales? Why can't those things make the organization far better as you get better?

And so just by kind of asking the opposite and trying the opposite, I was able to get the company that we have today, which, you know, I skipped to work in the morning. The number one thing that motivates me is the quality, the care, compassion, the kindness, the intelligence of my colleagues. And I consider myself like one of the luckiest people in the world to work with the people I do.

I work with a coach that I just started doing that this year. He was like, okay, I want to talk to the direct report who is your least favorite or something like that. There's some version of that where you want to interview the person you have the most trouble with. And I kind of looked around the virtual room.

There was no one. I was like, wow. I was like so ecstatic. It was like a moment of pure joy because, you know, for a lot of the history of Automatic, there's often been someone in that room where I was like, ah, you know, this person. And by the way, it doesn't mean it was a bad person. It often meant I was not communicating clearly with that person or setting expectations or avoiding certain things. So I found a lot of ways as I have

sort of invested in self-work and just trying to get better at the work of interacting with other human beings and not just a computer all the time like I used to, the company has benefited. And then when other people do the same work, it's just like any relationship. When people invest into improving the relationship, that multiplies. And I like to think that

Maybe not all 1,300, but we've got maybe 1,200 or 1,250 folks investing and improving their relationships with the folks they work with. And that's going to lead to a much better product over time. Faster iteration. What are some of the blind spots you've uncovered working with a coach this year? How limiting my communication can be sometimes. Even sometimes how I'll ask a question from a place of perfectly good intention can put the other person in like a...

Not a victim mentality, but in like a mentality where I'm solving things for someone. Like I can play the savior role. So it can be very, very subtle. It's like, is there anything I can do to help you? Versus what do you need for this to be a success? One is like putting the power with me to help you. And the other is putting the power with you.

to define what you need. And then I can support that. But ultimately, you have the agency, which is far more empowering. I've been learning and working on... And by the way, Nonviolent Communication is an amazing book, NVC, which has a terrible name, but it's really valuable. That was not with this coach, but was a game changer for me a few years ago. The other is I feel like for most of my life, I kind of treated myself as a brain in a jar. So this disconnected intelligence that

You know, I'd invest a lot in exercising my brain, but not anything else, but also not really listening to my body. And so something I've been working on a lot is trying to listen to you, to whoever I'm speaking to, but also listen with awareness of what's going on throughout my whole body. And that's been kind of amazing. You know, just this idea that maybe you can name a feeling. By the way, naming feelings is also hard.

I'm feeling a little anxious about going on with Shane. And I can define that because, gosh, Front of the Street is like one of my favorite sites and the podcast is so good. And his other guests are so amazing. I don't know how I'm going to hold a candle to them. And like, man, I hope this gets lots of listens and it's not, you know, all these sorts of things going. I can define that. But what's really interesting is like saying like, well, where do I feel that? Like, is that the pit of my stomach?

Is it kind of in my throat? Is it in my chest? Is it like, where is it showing up? Are my shoulders tense? And identifying that for me has just been really, really powerful for allowing the feeling to pass through versus being kind of kinked up inside me and causing disharmony versus being

I apologize for these words too. They're so inexact, but like sort of somatically experiencing and working through difficult things where before I would try to intellectualize it and like think my way through problems. I'm now trying to physically feel my way through them as well. And also listen to what my body is telling me, which often contains like maybe some

I like that a lot. Did that make any sense at all? Totally. I think there's definitely something there. I mean, we're taught that everything should be rational, but there's a huge component of that that is like your body, right?

has this pattern recognition sometimes. Like you look at somebody at the door and you instantly recognize this person has malicious intent. But when you're talking to somebody, you feel all these other things like stress or anxiety, and you're not going to move that relationship forward or get to really good rational solutions if you don't sort of figure out what it is you're feeling and why you're feeling that way. And I think that we sort of, we're often taught to gloss over that and suppress it. And then when you suppress it, it keeps

coming up over and over again. And I think that there's a lot to be said for just being with that feeling, recognizing the feeling, labeling the feeling, exploring it, exploring what's going on in your body and staying with it instead of just like tossing it away. And I think that there's a ton of value, not only to your personal happiness and sleep and sort of like heart rate, but also to the quality of

thinking and decisions and relationship, right? Like if you're trying to grow the pie with somebody, it's really hard to do that when you're feeling anxious around them. And one of the better ways to get out of that and to come up with win-win is like, why am I feeling anxious? Let's chat about this for a second. There's a quote I love from Hafiz. Fear is the cheapest room in the house. I would like to see you living in better conditions.

Oh, I like that. This is really powerful. You can also, everyone listening to this can feel it. Like if we were to take 10 seconds and try to breathe through your belly, like where you take a breath in and really like stick your belly out almost comically and then let it go back in, that'll instantly have an effect on you. And it's like,

Okay, what just happened and why? I'm not just a brain in my jar. Your whole nervous system is connected to every part of you. And yeah, that's a fascinating thing I'm starting to explore. Some of this stuff I think I avoided before because it felt a little woo-woo. And I'm a very skeptical person. I like challenging things. I love the scientific method and process. But when I discover something like the Harmonix series, like as a musician, like

when I started learning the math of the harmonic series and where it show up and the history of like just versus even intonation and all these sorts of things, I was like, wow, there's an entire universe here that actually shows up in like physical laws. And so very scientific things that that's just a million different places I wouldn't think of how plants or how petals form on a flower.

These things are pretty cool. And so I love kind of like maybe starting with the woo-woo mystery side and then kind of like exploring it from a more scientific basis of, you know, first principles and things that are axioms, which are fully definable versus even if it started at a place that felt a little amorphous to me.

I look forward to learning more about this from your experiences and how you grow with this. So I think that is a really interesting place to be. I want to switch gears a little bit back to just decision making a little bit. What are the patterns of people that make really good decisions? Like what do you see in these people and how do they think about things in a way that is transferable to other people? You know, one of the best advice I got early, which was from early at Automatic, I actually hired a CEO. I consider him like a co-founder, Tony Schneider. It's like my business soulmate.

And one of the things he taught me early on was make reversible decisions quickly and irreversible ones deliberately. And I still return to that on like a weekly basis. If it's a reversible decision, you know, we'll probably learn a lot more by doing it. I find it so funny in software, especially like let's just build the first version and build it to throw away maybe.

But let's get that prototype out there. And we could debate it for weeks or months or do a million mock-ups. I have this old essay, 1.0 is the loneliest number. Like the oxygen of usage is required for any idea to survive. And so you want to get to that first version as fast as possible. And that learning is really, really valuable. So the speed of iteration.

So I like smaller, reversible decisions that happen frequently, quickly, and without being too attached to them a lot. Now, you all famously advocate, and I point people all the time to the Decision Journal. Our internal blogging system essentially becomes that for both small and large decisions. And particularly for large decisions, we try to really gather. I think Netflix calls it farming for dissent. I try to gather as much contrarian or challenging content

ideas as possible. One thing sometimes new executives struggle with when they come to Automatic is the fact that everyone, including me, might really challenge them on the things that they're doing.

And I've had people say to me before, like, hey, you hire. I'm an expert. I've been really successful. Why don't you just let me do my thing? And it's like, yes. And we should be able to defend our ideas, not just to me as the CEO, but to like the brand new the brand new person at the company. You know, you should. Oh, one of my favorite things. I refer to Fountain Street all the time. The work required to have an opinion. Yeah.

It's one of my favorite. You should really be able to defend your idea vigorously and even better. I want you to be able to argue the opposite even better than the person challenging you can. And unless you really understand that you haven't really and we probably are not making the decision in the most informed way. And especially if we're making a decision, it seems like everyone agrees.

Talk to me. What do you think of irreversible? Do you actually define that literally or is it just hard to get out of? Because a lot of people get stuck on this. There's almost nothing that is literally irreversible. It's all a matter of costs. If you're an NBA general manager, you could trade somebody away, but you could always trade back for them and you end up in this circular argument about thinking about decisions. How do you think about that?

It's true that probably almost everything is reversible, but some of them, the cost is so high that it's unattainable. I'll start naming things. Are things actually people think is reversible that are actually far harder to reverse, especially when you're successful. Taking an investor on. So who you choose to partner with. It might be reversible, but it might blow up on the way out. So it might actually be existential. So fundraising, acquisitions,

both on both sides of the table are very, very hard to unwind and sometimes existential. You know, not totally reversible, but, you know, something you want to deliberately is particularly executive hires because an executive needs six to 12 months to ramp up. So, and then, you know, kind of a year to do their thing. So if you make the wrong hire there, you kind of lost two years, the system.

So there's a lot of these that I think are worth approaching deliberately or just having a few turns on, like writing. There's almost no writing that didn't get better from some amount of editing. I'm sure there's a diminishing margin of return at some point, but you know this as a very crisp writer. Like, how often is that first draft like the best thing you've ever written? Oh, God, never. Never.

And the idea that it is or should be is keep so many people with amazing thoughts from writing more because they're like, oh, my first draft is terrible. I'm troubling it out. Well, congratulations. You are now like every great writer in history. And it's really about that process that happens after that first draft, which is where the magic is.

Talk to me a little bit about mental models and the mental models you use most commonly when you're making decisions for yourself or for Automatic. I think I'm struggling with this one because I'm such a fanboy. Well, I mean, this is worth pointing out, right? Like, so our physical books, the Great Mental Models series are a direct result of you and your support of what we're doing. I mean, they wouldn't be possible, the physical copies wouldn't be possible without you and Automatic.

So thank you. That's very kind. Although I believe someone would have sponsored it if we didn't. But yeah, I was falling over myself to do so. By the way, if you haven't gotten the physical book, I encourage people to do it because it's gorgeous. The mental models, I think that

You know, we all operate on pattern recognition and most of these patterns are subconscious. And there's been great books written on this, like Thinking Fast and Slow, all of Dan Ariely's work around behavioral economics, all the great conversations that have happened this year around bias, conscious and subconscious. Like these are just patterns that we have. And I think far too often do we truly invest in creating deliberate patterns, ones that have don't just happen by accident.

but that we truly challenge and choose to adopt in our life and actually practice much like an athlete would practice a certain move or a musician would practice a scale. These can become the sort of raw technique of, I think, operating, particularly under pressure, under duress or in high time sensitive situations. When you can fall back to this training, to these mental models, it is really, really powerful. And that, you know,

I actually love thinking about it in musical terms. You know, there's 12 notes in the Western scale. There's a million scales between them. I mean, not literally a million, but there's all these combinations. But I play jazz. And so it's all about improvisation. If you put someone who doesn't know all of the underlying technique and theory and just say improvise, it's not going to be great, right? Because you need to know the rules to break them.

And maybe that's a mental model. Well, there's a saying, the young man knows the rules, the old man knows the exceptions. I like that. I inherited a lot of these from music, actually. So before I started consciously thinking and discovered, probably through your blog, like Charlie Munger and all those things, that the rules of music and learning music and deliberate practice and performing and breathing and all these sorts of things I got from being a saxophone player.

I think were a huge, huge benefit for me. Just being like, I was fundamentally an engineer. I was like a coder, but I could get in front of a room and talk to people. And so it's like leading a band. I could off the cuff, you know, respond to things and like, sort of like improvisation. I knew that the best things are created in a team.

And so even though a lot of my early days were, it was more of that solo coding and, you know, crazy 12 hour days with pizza and Mountain Dew and like all those things. Like it, uh, it was always trying to get other people involved too. It was actually funny. Remember we talked about the multiple evolutionary branches that came off of B2? WordPress was one of them.

One of the things that happened was I actually reached out to the people who started all the other branches and said, "Hey, if we work together, I bet we could create something better than if we were each recreating the wheel on our own." And I think out of the five branches, four of them joined up with WordPress. Oh, that's awesome. And so the leaders of those other things merged because they had done really cool stuff. One of them was called B2++ and it created a multi-site version of WordPress. So where you could run multiple instances on the one code base.

That then got merged into WordPress, became WordPress multi-site. And then that became WordPress.com, which allows us to host hundreds of millions of sites on the same code base, same databases, in a super scalable way where each incremental site only costs us like a penny per year. So that was part of that beauty of like taking these multiple evolutionary branches and being able to adopt the best from different ones. So...

Idea meritocracy, probably, I think, probably got that from Ray Dalio and principles. Just if you dig into a lot of the most successful people, they often have their rulebook. And I love it as well when they say like, this rulebook doesn't need to be your rulebook or guidelines.

And so I'm always hesitant about that to be too prescriptive. It's actually one of my mental blockers around writing a book because everything I've just said, I hope that five years from now, I'm like, oh, we figured out a much, much better way to do it.

I hope you do follow up to some of these conversations like five or 10 years down the road where you can kind of revisit some of the ideas and see what changed. Because to me, that delta, it's actually pretty, pretty interesting. We're talking about a snapshot, a moment of time of what I believe is the best practices and the best things.

But if I'm still growing, hopefully I discover far better methods or better ways of approaching almost everything we've talked about. Let's book it now. We'll follow up on this for sure and come back to it. And one of the things I love about you is that you're not only one of the kindest and most thoughtful people I know, but you're always trying to grow the pie with other people. And you're always trying to make something larger through growth.

going with other people instead of just going really fast on your own. And I think that's a really unique attribute for you. Yeah, I think it's awesome. Thank you. I would also say that's why everyone should explore open source. Open source is a hack that gets competitors to work together.

And when you think of, you know, you read Sapiens, what made humans who were weaker, slower, et cetera, outcompete from an evolutionary point of view, all the other animals. And it was working together. It was story. It was collaboration. And I believe all proprietary software to be an evolutionary dead end.

Maybe it'll take 50 or 100 years. But what happens, just like what happened fairly quickly with like Encyclopedia Britannica and other encyclopedias and Wikipedia, is that the thing which is open to all and gets everyone working together, if it truly gets that sort of like humanity working together on the same shared resource, you get the opposite of the tragedy of the commons versus like the field being overrun, each person operating in their own self-interest, sort of

kills the environment or kills the shared thing. Each person operating their own self-interest makes the shared thing better and better. And in digital world, we can do that because we have economics of abundancy versus economics of scarcity. And that's why open source will eventually win every market it's in. It's, you know, there were lots of

competitors to WordPress in the blogging and CMS space, which essentially bet on, you know, if we make all the money and have all the revenue and everything, we'll be able to create something better than this unprofessional group of volunteers working in their spare time. And they really have lost that bet over the past 17 years. It's happening with e-commerce now. And I believe it's going to happen with every area that open source is

When there's a really great project, a project which is truly inclusive, responsive, evolves and has the economic incentives in line for collaboration versus vulcanization. I think that's a great place to end this conversation. Together, we go a lot farther than we go alone. Matt, thank you so much for such a wonderful conversation. Thank you, Shane. Thank you.

Hey, one more thing before we say goodbye. The Knowledge Project is produced by the team at Farnham Street. I want to make this the best podcast you listen to, and I'd love to get your feedback.

If you have comments, ideas for future shows or topics, or just feedback in general, you can email me at shane at fs.blog or follow me on Twitter at Shane A. Parrish. You can learn more about the show and find past episodes at fs.blog slash podcast. If you want a transcript of this episode, go to fs.blog slash podcast.