Automattic Connection: How an East Coast VC Got Behind WordPress, the West Coast’s Hottest Blog Platform
The party was pretty geeky—people were actually sitting around writing code. Mike Hirshland, who’d played football at Harvard (earning him an Honorable Mention on Xconomy’s VC Varsity roster), was having a hard time finding a beer. That’s when he gazed around the small San Francisco apartment and saw the laptop sitting on a counter—and on its screen was a clicker tallying downloads of the latest version of WordPress’s blogging software. “This thing was whizzing around like a race car,” Hirshland relates. “It was amazing.”
A click went off in Hirshland’s brain, too. In a cartoon, $$$ signs might have slot-machined in his eyeballs. Inventors have their Eureka moments, and so do investors like Hirshland, who’s a partner at Polaris Venture Partners in Waltham, MA. “That’s when I knew I somehow needed to find a way to invest with Matt,” he says.
Matt was Matt Mullenweg, the then-20-year-old whiz kid behind WordPress, a nascent open-source blogging platform—and the party was being held to celebrate an early release of the software. This was the spring of 2005. And, as the saying goes, it was the beginning (well, near beginning) of a beautiful friendship.
If you’ve been following the blogosphere at all, you’ll know WordPress has been phenomenally successful. The WordPress.com service now hosts more than 2 million blogs and last year claimed some 100 million unique users per month. With 42 million of those “uniques” coming from the United States each month, WordPress.com also claims to be the 12th-ranked site in the nation, ahead of Wikipedia and Facebook—and that doesn’t count the teeming multitudes of other blogs (including Xconomy) that use the software but are hosted elsewhere.
In January, ramping up to monetize the business, WordPress’s parent company, San Francisco-based Automattic, took in an eye-popping $29.5 million in financing, led by Hirshland and Polaris, and including strategic investor The New York Times Company. In the world of blogging, it doesn’t get any hotter—or better financed—than WordPress and Automattic.
This, then, is a story of how the not-so-hip Boston venture community claimed a front row seat at a trend-setting West Coast startup. It’s the sort of thing that isn’t supposed to happen. After all, when it comes to recognizing revolutionary Internet plays, Beantown investors are either a) hopelessly myopic and clueless, b) still saddled by Yankee conservatism, c) too gray to understand the Web, or most likely, d) all of the above. It’s also the story of a very smart 20-year-old who ran a business very, very cautiously and almost cashed it in and sold everything—until at the eleventh hour he decided to take the plunge and go after creating something really huge. Thinking big is another thing East Coast VCs aren’t supposed to be good at helping entrepreneurs do. But guess who helped push things in that direction? (By the way, if Hirshland’s bet helps us stop talking about Facebook, I’ll enshrine him in the VC Varsity Hall of Fame.)
Matt and Mike met in San Francisco back around Christmas of 2004. Hirshland was hanging out with folks like early superstar blogger Om Malik and Tony Conrad, now the CEO of Sphere, trying to figure out what blogging was all about and whether guys like him should be interested in it. As Hirshland relates, Malik and Conrad introduced him to Mullenweg, noting that the young developer was this super-smart guy doing interesting things.
“It doesn’t take too long to figure out that there’s something special going on,” says Hirshland, who has written on his own WordPress blog about some of what I’m describing. Beyond his great musicianship … Next Page »