WordPress maker, Automattic just announced a $50-million dollar investment that's structured to provide short-term...

WordPress maker, Automattic just announced a $50-million dollar investment that’s structured to provide short-term…

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WordPress maker, Automattic just announced a $50-million dollar investment that’s structured to provide short-term cash to employees and early investors while still enabling it to remain focused on the “long road ahead.” 

Automattic is a very interesting company, with a strong mission-focus. That focus has been critical to their success – today WordPress software powers 1-in-5 websites. 

In this article I look at why today’s deal is important to keeping Automattic focused on its mission and its stakeholders. In other words, how this deal keeps Automattic, a “regenerative business.”

#WordPress   #TigerGlobal   #Mission   #Regenerative  

http://www.the-vital-edge.com/automattic-regenerative-business/

6 comments

  1. See a lot of extra detail here as well (also vis-a-vis the Tumblr-Yahoo deal): https://plus.google.com/u/0/112964117318166648677/posts/DzvLQSsNFoC

  2. Here is something I just posted buried in a large link curation pack about Tumblr and WordPress (under the post linked above):

    “Could WordPress be the next Tumblr?”

    http://www.guardian.co.uk/commentisfree/2013/may/20/yahoo-buy-tumblr-who-next

    [IMO, one could argue that WordPress(.org) is being monetized by hosting providers at a rate of about $3-6/month per blog – one would have to know the exact number of self-hosted blogs people host on average on such an account, but the base price for hosting on Bluehost.com is ~ $7/month, and most people will only have 1 blog, with a fairly predictable 80/20 distribution from there: Likely 20% of people host 80% of the blogs, asf.]

    So if WordPress.org gets 1/2 of 66M (to keep the math simple; other half to WordPress.com), that would be around $100M/month (33M x $3) or more in hosting, or at least a $1.2B/year revenue business!

    Not bad at all, and WordPress has really left most of that long-tail hosting $ on the table…

    However, Tumblr gets nearly 20B PageViews from 88M claimed blogs, while WordPress.com gets only about 4B from those (assumed) 33M claimed blogs.

    Tumblr has double the velocity?

    Also just read: http://www.inc.com/allan-roth/did-yahoo-pay-too-much-for-Tumblr.html

  3. Great article Gideon Rosenblatt , what made me really sit up and take notice was the section about the regenerative business: losing only 12 people out of 118 over 7 years is a phenomenal sign that they really walk the talk of employees as capital of the business. Kudos to the enterprise!

  4. Alex Schleber, thanks for additional thinking here. This is something I’ve been thinking a lot about. It has to do with stakeholder networks and how much the company that organizes those networks actually monetizes out of that network. WordPress has a huge ecosystem of developers, themers, hosters and others who are deeply invested in the success of this platform. Automattic has been very conservative about how much of the overall value created by this network they take for themselves. They have what I would call a ton of “network capital.” Tumblr has pretty much kept the monetization in-house. That’s what made them a more valuable acquisition target. I think that Automattic is growing itself in a way so that it will not be acquired and that they’re doing that quite intentionally. But were Yahoo somehow able to actually buy them, could you imagine the fuss that would be created were they to muck around too much with the way value is distributed in the WordPress ecosystem? It would be a firestorm. 

    I will likely do a follow up piece on this story, and if I end up using the Tumblr contrast, I’ll definitely cite you. Tks. 

  5. Susanne Ramharter, I completely agree. It’s an amazing retention rate and says a lot to the kind of culture that Automattic must have. The other interesting thing about them is that they are spread out all over the place. 

  6. Thanks Karen Peck. You’re talking about the leadORS community right? Do you think it’s a fit? 

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