Automattic CEO Matt Mullenweg: WordPress vs WP Engine

Hello, fellow data nerds. My guest today is Matt Mullenweg. Matt is the CEO of Automattic, the company behind WordPress. WordPress powers roughly about 40% of all websites. Uh, Matt, welcome to World of Das.

Thank you so much for having me on.

Now I'm really excited. Um, this is kind of different than our normal episodes where we're actually diving into something that's like super topical that's going on right now.

Real time. It's all live.

Real, real, like super real time. And often we'll like kind of like tape one of these and then we'll go live like 2 months later. But we're like doing this like in the middle of the maelstrom. And you like, and for maybe not everyone who's listening is familiar with what's going on, but right now WordPress and Automattic where you are is in some sort of like lawsuit with another company called WP Engine.

I'm engaged in the biggest corporate battle of my life. With a private equity firm, Silver Lake, which has $102 billion under management. And their company, they own WP Engine, and they've been attacking me from every corner. They're not doing podcasts like this, by the way, but I am. And yeah, so that's why I'm coming on.

Well, I really appreciate it. So yeah, kind of walk us through, just like, just give it, let people just understand the kind of context of like how this got to this point. What the backstory was, and then we can kind of talk about how it gets resolved.

Sure. So there is a business called WP Engine, which many people, including my own mother, thought was WordPress Engine or officially associated with WordPress.

Yep.

And so we tried to get them—

And they were like built on like a skin of WordPress originally. Is that kind of the idea? Yep.

Yeah. And so we tried to get them to get a trademark license and they kept delaying, delaying, delaying, delaying. And, um, uh, now they built this business to be pretty big— $400 million plus.

$400 million revenue. Okay, that's a pretty big business.

1,100 employees, owned by Silver Lake. Yeah, it was a private equity firm, bought it in 2018. So they, they've, they've run this play for a while, uh, while abusing our trademarks.

And I assume, like, you guys have— I, I don't know the backstory, but like, I assume you guys have talked to them over many years about this, right? It's not just like just come up today, right?

Trying to get them to have a trademark license for many years, and I assume it's in their best interest to not do it, right?

They would just prefer not to do it, right?

They would— they kept leading us on. I think they were trying to maybe flip the asset this year or something. They couldn't sell it, so, um I don't know. I can't speak for them, but yeah, we were really trying to get a license in place because it's very confusing to people. Yeah. You know, examples of like in CNBC Art Girl, where a close friend of mine, Bart Berkowitz, who I've known for 15 years, was hosted on WP Engine and thought it was me. And so when he heard all the news, he was like, oh, switching all my sites. I thought that was you. So.

Interesting. And so the, so the main dispute is just kind of simple that like, like there's confusion in the market. If I called myself like Nike Engine or something like that and had like a shoe thing, then I probably owe a little bit of money at least to Nike corporate shoe. Like that's where it started.

You need a trademark license. Yeah.

Yeah.

There's a lot of confusion in the marketplace. And I think they've been able to build their business to be this large. On that confusion. So many people have told me, Aron, that they thought WP Engine was us. So they thought they were signing up with us.

So now there's another kind of like, that's, that's part of the dispute. And then there's another one, which is like, hey, like open, like, like WordPress is an open source project and Automattic contributes massively to making the, the, the the project better. You contribute tons of hours and tons of time, whereas WP Engine was not contributing to the open source project. Is that right?

Well, that's a whole other thing, is that so Automattic in its history has a very open source, open web company. So we devote, um, over 100 full-time people, uh, uh, to dedicate just to open source. So we publish I think we maintain 6 or 7 million lines of code of public.

Because WordPress, you could just use open source, right? You could use it for free if you choose to.

They use the WordPress open source just fine. So they don't publish any, they don't maintain open source code like we do. So we publish a large amount of open source code. They just sort of take our code and sell it to their customers. With the WP Engine branding, which people think is WordPress Engine.

Now, if they were called instead of WP Engine, if they were called like Website Engine or something like that, would that solve the problem? Or do you think there's still a problem that like—

I think if they were called Website Engine, that would be— or if they forked WordPress and called it something different, you know, they could do that under the GPL. Yeah, that would be totally fine under trademark law. I'm not a lawyer, so I won't speak for my lawyers, but yeah, I think that feels fair.

Got it. So the main, really the main dispute is like, is, is that WP kind of piece of it?

No, it's not WP. It's WordPress.

Yeah. Yeah. Sorry.

Yeah. And the other thing, WordPress. And it's funny because You know, when private equity comes in, they often do not just one bad thing, but a lot of bad things.

Yeah.

So Silver Lake has been a bad steward of many other open source communities. And so they weren't just abusing the WordPress trademark, they were actually also abusing the WooCommerce trademark. I don't know if you know what WooCommerce is. Yeah. WooCommerce is an open source Shopify that is fully owned by Automattic. There's no confusion or anything.

Yeah.

And they were also misusing that trademark. So the deal we offered them was for a license for the Woo WordPress and the WordPress WooCommerce trademarks.

Okay. Got it. Okay. Interesting. And like, and it seems like there's like an easy path to resolve this. Like either they just pay a license fee or they change their name.

Right.

Like, and then it's like, then it's resolved like that. Like, why is this, why has this become so public?

I would have loved to have done a deal. Yeah. By the way, this has been really stressful for me. I've been running WordPress for 21 years with very little drama and you don't hear about, you know, any drama in the press.

Yeah, I've known you for a very long time. You're kind of a low drama guy. You're not— there are certain people in the tech community who are known for their like creating drama. You're not one of those.

Honestly, Oren, where I feel a little silly is that they're just struggling along for so long. I kept believing they were going to do a deal.

Ah, okay. So they kept kind of like engaging, engaging, but then it didn't happen.

That's why we had them at, they were even a sponsor of our big annual conference, WordCamp US.

Yeah.

And the reason they were a sponsor was because I thought like by the time the conference happens, we'll have a deal done.

Interesting. Well, I mean, and that, you know, in some ways like that's what a good business is supposed to do in some ways is do it. But then on the other side, like they, they, you know, maybe they're playing too much hardball or, or, or could have, could have kind of put this to bed.

You know, I think there's a fair business deal to be had. Maybe they don't like the 8%. They could have negotiated a different percentage or whatever.

But like you were asking for like a percentage of their revenues or something.

So the, uh, the term sheet we published was, um, 8% of, uh, the revenue and they could have a trademark license.

Yep.

Now that could have all been negotiated. We could have talked about it.

Yeah, maybe they would have come out at 4% and you guys would have, or they could have changed their name.

And we gave them an option. So that's the thing. We said, you don't just have to pay us for the trademark license. We, if you want to donate ours into the open source community, you can do that too.

We'll credit you.

Instead. Yeah. So you don't have to give me any money. You don't have to give me a dollar. If you want to spend $30 million a year on engineers making WordPress better, you can do that and I'll give you credit. So.

All right. Okay. And they're probably spending a lot on engineers anyway. It's just like donating some of those engineers back so that everyone benefits from it.

I can only speculate, but you know, this private equity is good at running companies. So like this is a company that had, you know, I would estimate this deal would have been less than their free cash flow. Yeah.

And what would— is this— and you, and you, you put the blame squarely on like Silver Lake. You think it's their kind of— they're the ones who kind of made this happen? Like, how do you kind of think of it?

You know, I've been in business a long time. I'm used to people being very direct and saying what they mean. I'm not sure whether it was Heather Brunner, the CEO, who was telling me something and Silver Lake something else. As a financial, as a fiduciary, like, they should have done this deal. They're probably going to lose more than 8% of their customers over all this bad press. So, like, they— it would have been an obvious deal to do. But there's something in there that was not well communicated.

And then, okay, so then kind of walk me through. So like about a month ago, you kind of went on WordCamp. You kind of made this public. Like, I, most people, including me, were not aware of this dispute before you made it public.

Of course not.

And kind of walk me through kind of what's happened since.

So I will say that, like, you know, been maintaining the WordPress trademark for 21 years now.

Yeah.

Have never had an issue with anyone else. And usually when there's trademark issues, you just pick up the phone, you call, you talk about it, talk about it. You're like, hey, yeah, don't do this, don't do that. Like, uh, no need to get lawyers involved. Um, by the way, we didn't even file the first lawsuits, they did. Yeah. So, um, and they filed it not just against, uh, Automattic, but against me personally, which I run WordPress.org. So yeah, it's affecting the whole WordPress community is being attacked by their legal lawfare, you know.

Now, and then, and then at some point there's been this press about like, like, okay, they're somehow you're, uh, uh, or at least there's been some press that, that the, that their product has been degraded in some sort of way over the last few weeks, or they're not getting access to certain things now, or Walk me through kind of like that response.

So they have been trying to muddy the story as much as possible. Yeah. To say like, this is about the GPL or forking or something like that. They're trying to, they're really trying to make a lot of confusion about this. But so, and it turns out, you know, we got a reference for a crisis PR firm. And, uh, there's someone's like, hey, you gotta work with these folks. And I was like, oh great, all this like kind of crazy PR stuff. Um, and when we called them, they said, oh, sorry, we can't work with you, we're conflicted. So, uh, they have a very sophisticated operation which is trying to make this saying that I'm a terrible person, that I'm capricious, that I'm extorting them, that I'm like You know, whatever it is, they're trying to make this— I'm hurting their customers.

It's interesting because like there's been a— there's been probably 100 now articles about this little— this dispute, and you can clearly see some of them are like clearly on one side and some of them are clearly on the other. Like they've got the flax going, and it's like, it's like a real behind the scenes. Like, you know, all this money is being spent on PR and everything.

Well, one of the funny things was I, again, maybe I was fooled, was I thought Heather was interviewing for a job at Automattic. And so the CEO of WP Engine. So Heather Brunner, CEO of WP Engine. And so they leaked—

By the way, who I know and I like. I've known her for a long time and she seems like a nice person.

I thought so too. So yeah, they leaked my private test. They doxxed my text to her. They didn't show all of them, obviously. They just showed the ones that make—

make you look bad.

Yeah, they're trying to make you look bad.

Yeah.

By the way, I have not leaked any of their private communications at all. Please note that. But the— yeah, if you look at the thread, it was basically saying So Heather had been interviewing. I thought she was interviewing for a job to run WordPress.org. And she told me like, hey, like, I can't do this because like, you know, I built this team at WP Engine. I would love to join and like run WordPress.org. And but I built this team. But Silver Lakes probably, you know, they only are going to hold the asset for 6 to 7 years. They're probably going to transition, when I retire, I would love to like run WordPress.org in the future. I was like, awesome. That's great. Again, I was on, I was so supportive of WP Engine a year ago. I went to their conference. I, I supported them. I was publicly doing everything.

But even then there was a, I assume there was still a trademark issue at that point already, right? Or no?

But I thought it was going to be resolved because they kept saying like, hey, we'll fix this. We'll fix this. We'll fix this. So, and so I said, okay, so the text they leaked was me saying to Heather, well, okay, you said, you want to, you said Silver Lake is not allowing you to do this deal. Do you want to like do an OpenAI Microsoft thing? Like where like you come over and all your employees who want to follow you come over? We'll hire them all. Yeah.

So interesting.

What? And they leaked that to try to make me look bad, but really I was just in good faith trying to say what she, I thought she had said that she, you know, didn't want to leave her team behind. I was like, okay, we'll bring your team with you. Uh-huh. If you feel like you actually want to be aligned with open source principles and do this deal, like come on over and we'll. We'll hire the whole team too. Like, it was going to be hard, like they have 1,100 employees, but like I was ready to like make it work.

Okay, interesting. What, um, and then, then there's this idea that like at least for some clients of WP Engine, there's been like some sort of degradation of the, the WP Engine product because it's not working as well with WordPress. Like, can you walk us through that?

Yeah, so this is a little geeky. And so all of WP Engine servers were using free resources on WordPress.org to update their sites. So they were charging their customers and then using free services from WordPress.org to update their sites. When they filed a lawsuit against us and me, our data center people were like, let's block the network. Like, right, servers can't talk to our servers, right?

Right. Makes sense.

Uh, right.

Well, so they were, they were using, they were using, so it was almost like they were using like these API calls to wordpress.org or wordpress.com, and then they weren't, they were never paying for those or something, or they never paid, they never had a contract, anything, just free open you know, network calls and to serve their hundreds of thousands of customers that they were making $400 million plus on, you know. Okay, interesting.

So we blocked their network. So basically their data center couldn't talk to our data center. Yeah. And they tried to make it like we were breaking their sites, but we're like, hey, you promised our customers that you could update your sites. You said you promised them security and WordPress and managed WordPress and everything. So you should be able to do that.

Yeah.

And they actually have been able to like make a sort of update server since then. So they, they, it took them like 3 or 4 days, but they still, that like, basically it's really about like, they can take the open source license. It's all GPL.

So it's all open. They can take it, they can bring it into their own system and then they can update it and then they could like push it out to their customers if they choose to do that.

Exactly.

Okay, so interesting, because like in the end, so really this is really just a simple trademark dispute essentially, and it seems like there should be a very simple, um, uh, uh, a very, very simple way to resolve this dispute. There's some number or there's some kind of like, you know, this could have been a very easy deal. Yeah, yeah.

And we've done deals in the past with other hosts and we will do others in the future. But for some reason, they just wouldn't do anything.

So now you, you retain Neil Katyal, who's also, who's a good friend of mine, but, and also been a guest on this podcast, um, for legal defense. Like, is that something like where you think this— because he's like a kind of a high-powered Supreme Court, uh, uh, person— like, do you think this goes to like that kind of like that area, or what's the legal side that could end up happening?

Well, what does private equity Silver Lake try to do to bully open source people? They hire Quinn Emanuel, who's one of the scariest law firms ever. Yeah. Yep. So I had to find someone who was bigger and badder than Quinn Emanuel.

Yeah. Okay. Got it.

Okay. Neil told me, he was like, I've been adverse to Quinn 15 times. I've won every single time. I was like, all right, you're my guy.

Okay. All right.

Yeah. Yeah.

Yeah.

You don't want to go against Neil.

He's amazing. Like, he's, he's definitely one of the, he's probably one of the best lawyers of our generation.

But honestly, the legal stuff will take years to play out. This is really like about confusion in the marketplace. Customers, yeah, they could, they could end this tomorrow if they signed a deal.

So now in some ways, like, more people have heard about them now from this thing. Like, they've gotten all this press. Again, a lot of it not good, but a lot of it now, like, you know, in, in the kind of the adage, like, no press is bad WordPress, like a lot of people have heard about them and never heard about them before.

Well, and I want every single one of their customers to understand what WP Engine is and what WordPress is.

Yeah.

Because they have been confusing their customers and conflating them and making them think that they're WordPress. And so what we're trying to do, I know this is messy. I know it's been, I'm not the best at PR or whatever, but like It's— we're trying to really differentiate that there is WordPress and there is what WP Engine offers you.

Now, how do you— because there are obviously there are other like content management system alternatives, then kind of that run— then, then those run on WordPress. You can go to Webflow, you can go to other types of content management systems. Are you afraid that like it could embolden some of those, like some of those guys could go after it, or—

yeah, competitors have been like You know, they're so happy to be like, oh, look at WordPress, it's a mess now. Come to Webflow.

But you know what?

When you switch, they're all proprietary. So if you go to Webflow, you're on a proprietary system. You're not on open source anymore.

So, yeah, yeah, yeah.

Rug pulled from you in a day. So open source gives you the security, the trust, the continuity. It's the future. It's why WordPress runs 43% of all the websites in the world. World and why every other host in the world that runs WordPress— by the way, all of WP Engine's competitors are perfectly happy to take your website, yeah, of course, host it someplace else.

Uh, but I still don't understand why, why has WordPress been so dominant? Like, what is the— I, I don't get it. Like, I, I, I, I— it's a good product. I'm not— I, you know, I think it's a, it's a very good product. And, and, um, but there's a lot of good products out there that don't have the same level of market share that WordPress has. Like, what Why, why did it happen the way it happened? Like, you could see a lot of scenarios where it wouldn't have happened that way.

That's a good question. So how open source works is that it basically— it's like the Wikipedia— it allows all of humanity to get behind a common solution and make it better.

Yep.

So, um, you know, TikTok and Facebook and Snapchat All run on Linux, right? They don't all make their own operating systems.

Of course. Yep.

So, but I know that sounds kind of ridiculous. I just said it, but that's open source working.

Yeah.

If you don't think about it, that's when open source works. So it's the same thing. Like websites are sort of coalescing around WordPress as a standard, as the operating system for the web. You know, we run anything from a tiny blog to whitehouse.gov. Um, and that's kind of like the operating system of the web. And, uh, so yeah, it's open source. So you could, that's the standard.

I, I'm still, I just still, I know it's open source. I know it's sitting, but it's like, it's just shocking to me that like there's a CMS that has that high of a market share that's out there. Um, and, and, and you just don't see that in many other kind of scenarios.

You actually see it in a lot of other scenarios.

If you look at sort of browser, I guess if you're like SEO, MTP or something like that, or Chromium usage.

So like, uh, other browser engines, there's Chrome, but there's also Brave and Arc and all the other browsers that use the Chromium engine, which have, I think, like 90% of market share. Uh, look at it with Linux, look at it with databases. When open source works, it becomes like 90 to 95% of the market. There's always going to be others.

Yeah.

Like, uh, everyone kind of says, oh, okay, there's this like main thing that we all work on and make it really secure. Safe, awesome, open, transparent.

Yeah.

And let's all just work on that thing and then let's do other stuff on top of it.

So this is like maybe Android would be an example or something like that as well.

And we'll see what happens if that gets spun out of Google or whatever. That's— yeah, actually kind of interesting right now.

Now, Automatic has been— it's a private company, um, and it's a super, um, you know, impressive company on itself. Like, how do you think about— like, should it be— would you prefer it at some point to be a public company? Like, how do you think about that?

We've had a lot of interest in, um, Automatic shares. Uh, we have an amazing program. So if you're an employee of Automatic, we actually have a very special program where you can buy shares. Uh, it's called the A12 stock program. You can buy shares and you can sell them every 6 months, uh, and they have a 1x liquidation preference. And even if you leave the company, you can still sell them for the rest of your life. So the company maintains an internal market for those shares.

Now, I would buy them from other— you buy them, you sell them to other employees and other ex-employees, or, or can I go buy them?

So it's, it's a little complicated to get into right now, but like, we, uh, yeah, we have this great stock program. And I would love for more people to be able to own Automattic in the future.

And by the way, is that like a phantom stock? Because I assume at some point you can't have like tens of thousands of owners and then you're kind of forced to go public.

It's real stock.

Oh, okay. Interesting.

I'll walk you through the legal stuff later because I think you actually find it pretty fascinating. Yeah, I think companies should do more of this, but it's, it's pretty cool in terms of more owners of Automattic. Yeah, maybe we'll spin up something. I thought about doing something like AngelList. Where we could do like one of those roll-up vehicles. Like people could like accredit investors, could like do something. Because it is true that like we've been very closely held. Yeah. Only a few investors, you know, it's me, Bernardo Arnault, you know, Tiger, Salesforce. You know, I'm now going to fail because I'm not going to list all of them. Yeah, yes.

Yeah, yeah. Well, we have amazing investors, but there's only few of them.

Um, you have them kind of on your hands and feet. So, um, I would love— do you agree?

Like, some— there are these people like Bill Gurley, like, oh, the company should definitely go public. And, you know, where do you kind of fall on that debate?

I think companies should do what's right for their customers. So whatever they need for capital. So our capital needs have been amply met by the private markets. And, uh, yeah. So because companies should do what's right for their customers.

Okay, so there's no like— it's not like, you know, if you want to stay private, stay private, whatever, whatever you think is like the best— isn't in the best interest of your customer, come, uh, of your, of your customer.

Yeah, of course investors want you to go public. Yeah, right, that's their, their interest. You always should focus on your customer first.

Okay, interesting. Now what, um, Uh, and now that you're kind of in the midst of this like PR craziness and stuff like that, um, you know, we always ask on this program if there are conspiracy theories that people believe. Are you more apt to believe in conspiracy theories now?

I have seen some really amazing, um, dark PR stuff. So I've never been in the center of like a misinformation campaign.

And, um, yeah, there's a lot of people who are good at this dark arts of PR.

And I've seen like Twitter accounts with 20,000 followers with no posts suddenly become active and start posting memes about me and stuff like that.

Oh, interesting. So they're— they have these like dormant things that they've been waiting for a while to— oh, that's smart. Sleeper, sleeper cell, uh, Twitter, uh, Twitter accounts, probably $100,000 to $150,000 a month.

On crisis PR.

I mean, that would probably be the minimum that they're— they got to be spending more than that, I would presume. Yeah.

Yeah. Well, thank you so much for talking. I, I gotta run some other meetings.

This has been great. Thank you. Um, thank you, Matt Mullenweg, for— by the way, I follow you on X. I'm a huge fan of yours. Um, I know this has been kind of a quick thing, but I really appreciate you coming on World of Das.

Thank you.

Yeah, thanks, Matt.