I was offered $200M at 24 and I turned it down
en
January 31, 2025
TLDR: Episode 672 features Sam Parr and Shaan Puri interviewing Matt Mullenweg, the founder of WordPress and Automattic. Topics covered include turning down a $200M offer at age 24, WordPress's period of irrelevance, battling Shopify with WooCommerce, Matt's 'Villain Arc', auditions instead of interviews, employee front-line engagement, and Matt on Deepseek.

In the latest episode of My First Million, hosts Sam Parr and Shaan Puri engage in a deep discussion with Matt Mullenweg, the founder of WordPress and Automattic. At just 24 years old, Matt faced a pivotal moment when he turned down a $200 million acquisition offer. The conversation dives into his journey, insights on entrepreneurship, and the lessons learned over nearly two decades in tech.
Key Topics Covered
1. Turning Down a Fortune
- Significant Offer: At 24, after only raising $1 million, Matt received an offer to sell WordPress for $200 million.
- Motivation to Stay: His team believed in the company’s potential for growth, deciding to focus on making it bigger rather than accepting a hefty payday.
- Personal Impact: Although Matt initially struggled financially, his decision ultimately allowed him to invest in WordPress’s future, which has now grown to power 45% of the internet.
2. The Early Years and Challenges
- Days of Irrelevance: Matt reflects on the early days of WordPress, dubbing it the "1000 days of irrelevance" where the product wasn’t well known.
- Bootstrapping Success: He organized upgrade parties to engage the community, revealing that significant early successes often come after extensive groundwork, challenging the notion of overnight success.
3. Strategic Acquisitions
- Transformative Acquisition: The discussion leads to the acquisition of WooCommerce, emphasizing its value. WooCommerce has allowed Automattic to tap into the e-commerce space, generating over $30 billion in goods sold.
- Competing with Giants: Matt contrasts WooCommerce with Shopify, acknowledging Shopify's success while outlining the unique advantages of open-source models.
4. Open Source Philosophy
- Long-Term Vision: Mullenweg discusses the moral implications of open-source software and its benefits over proprietary solutions, arguing that the freedom it provides nurtures innovation and community.
- Community Reliance: He asserts that the open-source model fosters a larger ecosystem, benefiting various stakeholders long-term.
5. Unique Hiring Practices
- Auditions Over Interviews: Automattic employs a distinctive hiring strategy, favoring auditions where prospective employees complete trial projects instead of traditional interviews.
- Culture of Participation: Every new hire engages in customer support during their onboarding process, fostering a culture of customer-centric development.
6. Confronting Industry Drama
- Recent Controversies: The episode touches on a recent conflict with WP Engine, revealing tensions over brand identity and trademark issues. Matt maintains that protecting the open-source community is vital, even when it leads to disputes.
Practical Insights for Entrepreneurs
- Stay Visionary: Turning down short-term gains can lead to far greater long-term success if aligned with a strong vision.
- Cultivate Community: Building a supportive ecosystem can enhance product growth and sustainability.
- Innovative Hiring: Implementing creative hiring practices can attract diverse talent and improve company culture.
- Prioritize Customer Engagement: Directly interacting with customers is essential for product refinement and maintaining focus on user needs.
- Value of Open Source: Embrace open-source practices for long-term innovation and community building, which can create significant competitive advantages.
Conclusion
Matt Mullenweg’s story is one of resilience, vision, and belief in the power of community-driven technology. His insights into open-source philosophy, strategic growth, and the importance of staying grounded in customer needs offer valuable lessons for current and aspiring entrepreneurs. This episode is a must-listen for those interested in tech and startup culture, providing a blueprint for building something that lasts.
Was this summary helpful?
All right, today's episode is special. We've got Matt Mulliwig. Matt founded a company called the WordPress, which is used by something like 45% of all websites on the internet. So it's just a huge thing. And we talked to Matt about a bunch of interesting things. Sean, what are we talking about? He had an offer to sell his company for $200 million when he was 24 years old. He turned it down. We asked him what that was like. We talked to him about some of the recent drama that they've had. We talked about how they've been acquiring companies. They bought the small company in South Africa and how it turned out to be
a huge thing for their business, like a billion dollar plus win. And he's just a student of the game. He's been doing it for like 20 years. This guy started this company when he was 19 years old and is still doing it and it's become this absolute juggernaut. So enjoy this episode with Matt Mulloway.
It's travel never looking back. Tell me if this is right because this sounded like almost too good to be true, but I'd read that in 2008, you had an acquisition offer. I think you're only 24 years old for $200 million at that point. I think you'd only raised a million dollars and I think you raised a million dollars at three million in valuation, something like relatively you're 24. You're going to be worth nine figures, something crazy like that. You turn it down, but then you talk about how you didn't have control of the company because you were young and maybe just like made some mistakes with funding, something like that.
What's the conversation like with yourself when you're like, I'm turning down something that might make me worth over $100 million at the age of 24? You talked about and you named the first million. It's kind of funny. Like, I guess technically on paper, my first million was that first funding round, right? In theory, I own like half the company that was now worth $4 million.
But as you know, like, that's paper money. I was still eating ramen and mouth-and-do-it pizza, like living, you know, a very broke San Francisco college kid life. But it was in 2008 that we had this acquisition offer. And you're right, it was about two and a half years in this company. Someone tried to buy us for $200 million. And the investors at the time did something, which now is a quick comment, but at the time was pretty forward-looking, which is a secondary.
They said, wow, we're 20 people. We've been doing this for two and a half years, a $200 million exit would be pretty amazing. Like I said, I would walk away personally with a lot of money, but we think this could be actually way bigger. So let's build that. And so we took that acquisition, made an evaluation.
Turn that into a funding round where we put a lot more capital into the company. So we could really build things out. And I sold some stock myself. So that was my first million liquid was kind of in 2008. I think it was 24.
And that was a step change. You know, I was able to like pay off my credit cards and buy my mom and my house. I'm like, you know, all that sort of stuff that you want to do that you dream of. And it sort of removed some of those sort of early economic things. And I was really able to focus on just the business and swinging for the fences, which is what they wanted me to do.
All right. So when I ran my company, the hustle, I think we had something like 2 million subscribers and we made money through advertising. We didn't actually make that much money per person reading the newsletter because advertising in general is kind of a crappy business model. And so I remember sitting down and I'm like, what are all the different ways that I can make money off the hustle that aren't advertising?
And so to make sure that you don't make this mistake, Sean, me and the husband team, we went and looked at a bunch of different ways to monetize your business. And we put it all together in a really cool document where we lay it all out along with our research and we call it very appropriately. We call it the business monetization playbook. Go to the description of this episode and you're gonna see a link to that business monetization playbook. It's completely free. You just click the link and you can see it back to the episode.
you know, I hear these stories like suck turns down a billion dollars from Yahoo or whatever. This story about you at such a young age turning down the opportunity to exit and have this huge payday. I think you're a better man than me. I don't think I would have been able to resist that. Was that an easy decision for you? Was that a hard decision? Like what? And like, you're like, I think this could be bigger, bigger. Let's go for it. Is that just like not blind faith, but just like an extreme amount of self confidence and faith? Like how do you even
Or did you even want to do it? And the investors were like, no, too bad. No, it wasn't an easy decision at all. Of course. If you're really seriously considering these things also as a fiduciary, you know, like you have a responsibility to shareholders, consider every acquisition. And we've had other acquisition offers and people trying to buy automatic. Yeah. As recently as this year, I think you have to ask yourself, when any acquisition, like will the mission that we're doing be accelerated?
by this transaction or will it be hampered? It's like we acquire a lot of companies, like WooCommerce I think did a lot better because we acquired it than they would have on their own. But there's probably other things that we tried to buy that we didn't buy that did really well on their own. Reddit was one actually. We looked at Reddit at one point.
Did you look at them in their content nest, $10 million valuation days? I actually really wanted to buy red. I couldn't convince my board. They thought it was like two outside of our early stuff. So we never got that far on the discussions or anything. But yeah, there was a point when they were like four employees and for sale and kind of in the wired offices on third street in San Francisco. I just thought it was really cool. So obviously they, they're so very well.
But when you created WordPress, it seems like it took off like within a year. I forget which year you started it, but like I said earlier, I think I was using it starting in like 10 or 11, 2010, 2000, like pretty early on. And I at the time was like a Tennessee college kid. So if I had heard about it, then a lot of people had heard about it. What was the first version of WordPress like?
2003. Oh, wow. Okay. I've read a blog post on this called like meaningful overnight success or because basically like what people see as overnight success is often a thousand days of relevance or people haven't heard of you. You know, one point, there was a joke that WordPress had more developers than users. The first few blogs, which was ones I set up for my friends in high school, you know, because no one was using software. So I just kind of like would manually set it up for people and, you know, early
We used to do these upgrade parties where just I'd say like, you know, a new version of WordPress would come out. I'd just open up my apartment, you know, go to Costco, bought some booze or it's a pizza and said, Hey, just come to my apartment and I'll upgrade your site for you. So really, you know, the early days were very much bootstrapped, you know, just doing everything. It looks like overnight success later. We had some breakout points, you know, when Google type change our license and other things. I think fortune favors to prepare. It was because we'd put in a lot of grind and a lot of work.
a lot of community building, a lot of contributions, a lot of code, a lot of everything in the many, many days before that. But what's crazy to me is I remember like four, six years ago, it said that WordPress was used by something like 30 or 20% of all the websites on the internet. Then recently I went and looked at it. Now it's like 40%.
And like the thing that struck me, I was like, are you the most under monetized business on earth? How are you not like the biggest company on earth? Because I used WordPress and I used WooCommerce, which you also own at my old company. My WooCommerce license, Sean, I think it was a $300 lifetime or $300 a year. And the product that I was using it was making many millions of dollars. And I've got a friend, Sean, you and I both have a friend.
who made $100 million off of the $300 a year license or whatever it was. It was like nothing. You guys have to be like the least monetized company there is. I think the way I put it is WordPress is almost like kind of the dark matter of the web.
you know, when you build like a list of like, what's the top website, you know, we're not going to show up. I said, I mean WordPress.com will be in the top 100 or whatever. The beauty of it is that, you know, the ecosystem of WordPress is probably like $10 billion a year, at least of revenue. Now my company, automatic is, you know, 5% of that. But if you add up all the companies and all the people, I'm not even counting like all the stuff that you talked about, like people selling things on WooCommerce, which we know is like,
I think last year was over 30 billion of goods and services sold through WooCommerce. But actually more than half of automatic revenue comes from things that aren't just WordPress. So we have a variety of different businesses, some really cool mobile apps like Day One or PocketCast, a new one called Beeper. Well, we're like the top two acquisitions, right? Like even Buffett, for example, if you study Buffett's portfolio,
It's like a huge amount of the gains came from like a couple of like really key acquisitions at key time, right? C's candy at a specific time has given them over a billion dollars, I think, of free cash flow over the years. What's the revenue number that you could say the whole company does? We've publicly stated we're over half a billion in revenue now. Okay, got it. All right. So yeah, to answer a challenge question, what's been the surprising thing? What are like the crown jewel, like best acquisitions that you feel proud of? Our most successful is probably WooCommerce.
And so this came a lot from WordPress as a platform. And so I did a lot of study of platforms. And so that led me to do a lot of deep reading on Microsoft, actually. And it was funny, like if you look at some of the press around Windows 95 coming out, they talked about how for every dollar that Microsoft made from Windows, there was $20 made by the Windows ecosystem.
By the way, that ratio is similar to the way I talked about earlier, where automatic makes about 5% of the money that worked for his ecosystem. I sort of found that platforms often do this. They create a lot more value, a true platform. Have you heard that story of Bill Gates talking about when he meets Mark Zuckerberg, he talks about the Facebook platform? Have you heard this? There's like a quote I remember reading, which was like,
Gates was like, this is not a platform. He goes, a platform is when the company is built on top of it, generate far more value than the host platform. Whereas the Facebook platform at the time was like, Facebook was this gargantuan thing, all the small things on top. And Facebook was just sucking a lot of the value back in. And he kind of famously was like, that's not what a platform is. I would agree with that assessment. And also, that's not a platform which now a lot of businesses are built on. And there were some that sort of came up in the early days, like Zeng or whatever, or Spotify, even
But it's now not something that like every business is built on because you can get work built. Like a not true platform, they might give you some distribution early on when you align with their interests, but then they can easily pull the rug on you, which I think Facebook ended up doing to a number of companies. So yeah, I want to build a true platform. But of course, Microsoft famously had Microsoft Office.
So they had an application built on top of Windows, which ended up being very lucrative. So it was like, what's going to be, you know, I have this platform WordPress, which is now becoming like an operating system for the web. We were obsessed about backwards compatibility and auto updates and things like that, learning a lot from successful operating systems in the past. What's our Microsoft Office? And that ended up being WooCommerce, which was a
It's a small company, like I think 40 people based out of South Africa, a plugin for WordPress. It actually started as a theme company. It's called Wu Themes. They developed this actually a fork of another open source e-commerce thing. They started doing it just to sell more themes because themes were kind of the big business for WordPress at the time. And this e-commerce plugin
took off a bit. And actually, we looked at buying it years prior. You know, candidly, the code was really crappy. And so we were like, oh, this is like really crappy code. We're, you know, automatics very much like engineering led like technology R&D companies are like, oh, this is, but it just kept taking off because they did such a good job, like building something people want. So even though the code wasn't scalable, we're all organized, you know, they built something that they were really great at that product market fit. So WooCommerce was taking off. So we, that was an early acquisition that we did.
Finally enough, the competitor there was there were there's a private equity that was trying to buy this plugin. So we kind of won over the private equity because they wanted to join like our culture and everything like that. And woo, you know, like I said, at the time, it was 40 people pretty small. They only had like four engineers, by the way. So a lot of those people were like customer support or other things.
we were able to take what we were really great at, which is like engineering, scalability, all that sort of stuff, and apply it to what they had done really brilliantly, which is like great this thing that people love to use. And that's, like I said, I think last year it did over 30 billion of goods and services sold. So that's definitely one of our best acquisitions that we've done. But I also that e-commerce is an incredibly competitive space. And we're blessed to have an incredible competitor Shopify, which is a company I have a ton of respect for.
founders and entrepreneurs and the whole thing, they're actually a really, really great company. You know, Toby and I think have a lot of mutual respect for each other. You know, drivers that would be better.
So do you look at that? This is again, like we're kind of giving you a compliment and an insult at the same time. So the backhand of compliment is in full effect here. So on one hand, we're saying, Oh my God, there's 43% of the internet uses WordPress or you know, y'all's products. There's 500 million websites using WordPress. Like that is just such a mind boggling number. And so on one hand, that's absolutely incredible. And on the other hand, Sam was saying,
Are you the most like under monotone given that are you the most under monotone because you look at like a Shopify.
Shopify alone right now, market cap is 150 billion. The ruthless capitalists could say, Matt, you're doing all this work. Your whole company, including WooCommerce and all this stuff is going to be worth several billion dollars. But the closed source Shopify variant of the e-commerce side is worth 150 billion. What should I take away from that? And what do you take away from that? What meaning do you put on that?
There's definitely some things that are easier in a proprietary sort of closed ecosystem software model. You know, it's easier to, you know, Shopify is really great at forcing people to use their payments, for example. And in WooCommerce, you know, you can use ours, but you can also use a lot of other stuff. I think there are sort of average revenue per subscribers is like 10x. What WooCommerce is this? How I think about it is very much sort of short-term versus long-term.
So one, we have this philosophy of open source. I want all of the work I do, all of my creative output, to increase the amount of freedom and liberty in the world. I just something I believe very morally. So that's why I've dedicated my life to open source. Because open source software, you sort of have a bill of rights attached to it, right? The freedom to use the software for any purpose, to see how it works, to modify it, to reach your views, modifications, the four reasons of the GPL. To me, that's a moral decision.
The software I create, I want not to have a proprietary license. Shopify is amazing. If Shopify changed your policies tomorrow, their customers are stuck with it. They have their recourse and their proprietary license.
We're with open source. We could change our policies tomorrow. I could become evil or whatever, and automatic could be, you know, sell or be a terrible company. You would still own all the code, you know, WordPress and WooCommerce, etc. belong just as much to you as they do to me. And that sort of freedom of liberty is, I think, better in the long term. So I'd say open source has a slow burn. So it often is kind of slower to start up, but then over time it builds sort of this compounding momentum that is a bit unstoppable.
And there's two things. One, it could be very successful in a zone, right? As WordPress has, you know, it's 10x the number two in the market. But two, one great thing it does is it forces the proprietary folks to be a bit more open. So I use proprietary stuff myself. And a lot of Apple things are proprietary and I, you know, I really love their products. I think Apple is probably a bit more open than they would be otherwise because Android exists. There's there's an open competitor and it was just, by the way, open source and that it kind of influences the market.
So even if we don't have make as much money as Shopify or don't have the market share Shopify in the e-commerce space yet, although, you know, check in in 10, 20 years, let's see where we are. We forced the proprietary folks to be a bit more open without they do things. The short answer there is basically, I do it because that's what I believe. I believe in open source. I just believe that the moral decision comes first. And secondly, in the long run, let's see, in the long run, we'll see. Is that a good summary?
It's just a season to have a failure of a proprietary company as it is an open source. I think be proprietary open source is a little bit of a diagonal or not causal to whether you're a successful product or not. People get really attached to it. But I would say in the short term, it's definitely usually a bit easier to monetize a purely proprietary stack.
But over long term, you can create a much, much bigger thing if you have this kind of like flywheel of an open source, a community adoption, et cetera, innovation, you know, ton of innovation happens with open source.
All right, let's take a quick break because I got to tell you about a friend of the pod who's got their own podcast. If you know Steph Smith, she is a legend. She's been on MFM many times and she's got her own podcast called the A16C podcast. And it's all about technology. If you think about it, technology has evolved like crazy. I mean, I grew up in the 90s.
I had CDs, phones had cords. You couldn't use the internet if your mom was on the phone. And now there's like 3D printers and there's rockets that could go up into space, AI. There's so much crazy stuff going on. And you got to have a place that helps you stay ahead of the curve. And that's what the A6 and Z podcast is trying to do.
It's a podcast from the VC firm, Andries and Horowitz, and it's trying to give you an inside look at the trends that are shaping our future. They've had guests like Mark Cuban and Neil Stevenson on, and they talk about topics like deep fakes or the science behind GLP ones or autonomous drones. No small boy stuff at all. Steph is the host. She's awesome. I think you'll enjoy the podcast. So check it out. It is the A6Z podcast, and I like this tagline to say, it's like eavesdropping on the future. That's pretty cool. That's a good tagline. So check it out. The A16Z podcast, wherever you get your podcast.
By the way, Sam, isn't it nuts that Matt is clearly like this thoughtful, almost like soulful entrepreneur who has been building this thing since he was literally like a kid, 19 years old. Like a guy you'd call wise when he was 21.
Yeah, exactly. Oh, he's an old soul type of thing. Works on open source software. Like you said, it's widely used. It's almost free. It's only good. All I hear is only good. And then you had this random villain arc that people tried to paint on you in the last year with this drama that's going on. I couldn't believe it. I was like, if I was going to put money on who's the least
drama attracting founder. It might have been you. So I thought that was not Sam. It was quick. Your reaction to that real quick. And then I want to hear Matt's thoughts on it. So I didn't follow it too much. I'm a WordPress user, but I just and I'm friends with Jason Cohen of WP Engine.
You guys had a fight, but I was actually shocked Matt. I thought that some of the stuff that you said I was shot you like people were insulting you and you felt like Insulted them back. I was like I've read a lot about Matt's work I don't know Matt and I've listened to him He doesn't seem like someone who would ever like insult someone and I was actually surprised that you were going as hard as you were
And I guess your perspective is like they're coming after everything I made or they don't contribute, whatever. But I was actually surprised that you were pissed off. And I didn't think that you would be the type of guy that would come off pissed off. You know, a failure mode. And I think that can kill many open source projects is when they get taken advantage of. And so just like a schoolyard bully, you kind of have to stand up for yourself. It's kind of funny because you say you don't think of me doing this. But actually, if you look at the history of WordPress,
there has been maybe four or five times in the history where I had this kind of bill and arc. People are like, we had a fight to protect like our principles and like the sustainability and like the future of WordPress. Can you give the one minute summary of what happened? Cause I even half followed it and I'm sure there's a bunch of people listening that don't even know what we're talking about. Can you give like the one minute and try to be objective with this like, like not, not just the your side of the story, but what, what happened? Can you explain?
You know, it's an ongoing legal battle, so I can only say so much. Basically, there's a company called WPA engine. It started off, like, very positive in the community. Jason Cohen, I think, is awesome, by the way. But in 2019, they were bought by a private equity firm called Silverlake.
And sort of in the subsequent five years started becoming, I would say, more parasitic of WordPress. Also creating with how they were marketing themselves and branding themselves, a lot of confusion in the marketplace in a way that was threatening our trademark, the WordPress trademark. So people would sort of say, oh, it's WordPress Engine and they wouldn't correct them. And they think it was official. I even had very close friends who were WP Engine customers who thought that was my company.
And I would frequently get support requests for W. Benjamin, like my sites down and things like that, you know, for a long period of time and, you know, two years prior to this fight started, it was doing our best to partner with them and resolve all these things and resolve the trademark stuff. They just weren't responding.
And basically WP Engine is a web hosting service maybe only for WordPress sites. And the accusation I believe was that you felt they weren't contributing to the project as much as they should have been given that they make like a lot of money and also people confused the two companies.
On the contribution thing, is that like, I guess, like, what's your leg to stand on on that? Like, you know, for example, you know, like, it does somebody have to contribute? Is that like a rule or is that a suggestion, right? Is this like, you're at church, you should put something in the tray, but you don't have to technically, but it's frowned upon? Like, what is the take there?
So in WordPress, we do have this program. We call five for the future. By the way, this is all voluntary. The open source license, you don't have to do anything. You do whatever you want. But we say that if you're building a business on WordPress, you can allocate somewhere between zero, one and five percent. Profit or revenue? It doesn't matter. However you want to define it, it could be time, it could be hours, it could be whatever.
But and put that back into what we call core WordPress, which is something that belongs in the open source project. So it's accessible to everyone. It doesn't just benefit your company. That's part of what's made us sustainable and allowed us to be a open source project, which has really thrived more than some of other great CMSs that were open source that came up at the same time, like Joomlar or Drupal or something like that, which haven't has as much access as us.
By the way, I think this is great self-interest as well. WP engine is fairly unique in that. Pretty much every other company in the WordPress ecosystem does this quite a bit. And in fact, if you look at old versions of WP engines website, they were very supportive of this. And actually even say on their website, they would dedicate, you know, to a forward full-time people and everything like that. Fast forward to 20, 24, they had less than that on core. So I think that's a whole like,
Sustainability, health of the ecosystem, health of the product issue. That's not a legal issue at all. The trademark abuse of not just the WordPress, but also the WooCommerce trademark. So you could argue that WordPress, WP, whatever, but like they were also using the WooCommerce trademark, which is fully automatic.
You have to protect that. If you don't protect your trademarks, you lose them. And so we're having discussions around that. We have trademark licenses with other web posts, great relations with every other. And they're just a web host. They're not a tech company. They don't really create a lot of IP. And they're a web host, which people think is the largest, but they're actually probably the sixth or seventh largest WordPress web post. There's a lot of bigger ones. They're a single digit percentage of all the WordPresses in the world.
They probably have like 700,000, 800,000 or something. So people have made this into a bigger deal. It is some of these previous controversies that got mainstream media coverage of CNN. They had this hot nacho scandal in the first couple of years of WordPress, or a thesis fight, or the Easter massacre of themes. All these things I'm mentioning you probably haven't heard of. It used to be like half my Wikipedia page.
Now it's not. Today, if you go to my Wikipedia page, their PR firm has a whole paragraph about this. I think in five years, maybe it'll be a sentence or not even out there at all. So it's not my first video. Sometimes you have to fight to protect your open source ideals and the community and your trademark, by the way. I expect this to resolve in the next few months. Although it's easy to find, like, if you go on Reddit or Twitter, I get a lot of heat. A lot of people were pissed at you. I tweeted out that you were coming on.
to the pod yesterday. There was a lot of angry people. And I was, I was a little surprised by that, to be honest. Yeah. And, you know, some of the people are uncomfortable with, you know, us having to, to fight protect ourselves. You know, WP engine took some very aggressive legal action. So it turned out when we thought we were sort of good face negotiating, they were preparing a legal case to attack us because, you know, three days after I gave this presentation, they launched this huge lawsuit with Quinn Emmanuel. It's kind of like the one of the biggest nastiest law firms
You know, private equity is so famously like goes in, hollows out businesses, extracts all the value, kind of kills it. There's this crazy story I don't know if you saw it recently where like one of the reasons there was like shortages of fire trucks in LA was like the fire truck manufacturers have been like rolled up by private equity and they've been like jacking the prices and that was like huge waiting list for like new fire trucks and fire truck repairs and
There's lots of examples and not all private equity is bad. There's good investors and bad investors in every asset class. Look, I didn't follow the story in depth. I didn't need to. I'm not a lawyer. Don't need to be. It's common sense to me. Who's side about going to be on the private equity backed company that sounds almost like it's made by the, by you guys, but it's not or the founder who's been working on this for like 20 plus years of his life.
Open sourced it is you know use by everybody it's kind of like a staple of the internet and you know captures like a tiny bit of the value along the way. It's pretty obvious to me you know which side i was gonna gonna come down on so i think it was like it was actually a common sense test i think for most people i can't believe how many people are like.
you know, on the PE side. It actually reminds me a little bit of like the AI stuff right now. Wait, Sean, we did a whole podcast about the founder of this PE firm though, and how like fascinated we were with them. We do profiles on ruthless killers. And then we're at the end, we're like, isn't that awesome? And we're like, yeah, do you want to be that way? Hell no. Like, that's not me. But like, I'm glad that these people exist. Like you need all these people in an ecosystem. Like it's not, they're not all bad. And there's impressive things about how, I think it's named what Egan Durban or whatever they like. I think that's the guy that we talked about.
You know, it's impressive in the same way that David Goggins is impressive, but I'm not going to go out there and run until my toenails bleed. Like, I like that he exists. That doesn't mean I want to be like him or even that I think that's the right thing for most people to do.
I think it was on, uh, on your blog. It could have been on the Tim Ferriss podcast. You wrote about how I think WordPress or automatic has like roughly 2000 people. And I think you wrote about how you tried a bunch of different ways to hire people. You're like, did all these tasks like Google does, like these like brain teasers and you tried a bunch of other stuff. And you said two interesting things that stood out. You said, what I found is that, uh, the people who
are the best writers, oftentimes are the best people who we hire, not PhDs, not master degrees. It was a correlation between your ability to write and communicate be the written word. And then the second thing you said that was pretty wild. You used to hire people just by like emailing or texting, like it was like just through chat, not ever face to face, not phone calls, things like that. Do you still hire people strictly?
through text communication. You know, for some roles we might do a Zoom if it's a sales role or something like that, you know, obviously it's important to see how someone interacts. But basically, you know, for a lot of our roles, you know, written communication is going to be the primary thing. But also like people want to talk to someone like we're not going to be like, oh, you can't. Yeah, a lot of our hiring process can be completely asynchronous and completely text-based. And for the first thousand or so hires, I did a final chat for every single person.
Is your chat like slacking or G-chatting or something? Yeah, it ended up being on Slack when Slack was invented. You know, before that, I think it was only like Skype or A or something, you know, in the early days or IRC. I think the way you said it was, we do auditions, not interviews. So what does that mean? How do you do auditions? Well, we do a trial project.
So we actually hire people on a standard sort of 25-hour contract. And so we pay them to do, we have screens with resumes and a little interview and stuff, but then we say like, let's actually do some work together. And there's various versions of this for different roles. We've done sandbox versions. We've also done it where they were actually talking to real customers, like a support person was actually answering real tickets.
But we've always been smaller than a lot of the big tech, but we compete with them. And so we need to have like the same caliber or better of talent. So part of, I think, automatic advantage is we've created an environment and also sort of a way of hiring that finds people who might be overlooked by sort of a meta or Google or something like that.
And we give them an opportunity not just to be hired, but also to participate in a company in a way that they can still be just as influential and have as much impact.
Because even like, there's other companies that might have remote workers. But if you're not at headquarters, you're not going to be close to the sign. You're not going to be able to grow or have an impact. But we've tried to create it where our center of gravity, our headquarters, is really on the internet. And I have colleagues in 90 countries, 90, even though we're only 750 people. And another sort of innovative thing we do, we didn't do this in the beginning, but we moved to it probably in 2012, 2013, is we pay people the same salaries regardless of location.
So it's kind of funny because we all like the equality, DEI stuff, whatever. So much of what I feel like is virtue signaling. Because if you ask these companies and say, hey, I'm not going to call anyone out by name. Let's say a big tech company. Do you pay someone in Pakistan the same that you pay them in California? Usually the answer is no. If they're doing the same job, the same like Code Wrangler engineer or whatever like that. And they usually say no. And they usually have some reason, like cost of living or local markets or whatever.
But we sort of move to where we say, same work, same pay. You know, it's kind of something that, you know, the past hundred years, that wasn't always true for men and women, even, you know, or racial things or something like that. So I think the same moral reasons why I say like same work for same pay.
people of different skin colors or something like that, within a country, I think you should do that globally. And I think that's the future of work, actually, because to the extent that you can be equally as valuable and generate as much value for a customer wherever you are, you should receive the equal pay for equal work
Hey Sean here, I want to tell you a little story about Winston Churchill. So Churchill once said, first we shape our buildings and thereafter they shape us. And I think this is true not just for the buildings we see in cities, but also for the building blocks you choose in your company. For any company that I start, I use Mercury for all of my banking needs. Why? Well, it was built by a YC founder and you could tell this is built by a founder who understands the needs of other founders.
Second thing is this modern. It's clean, easy to use. The design is really nice. You'd never have to drive somewhere, park, put coins in the meter, get out just to do one simple task. You could do everything in just a couple of clicks. They got bill pay, checking account, savings account, wire transfers, everything you need. They got it. I use it for not one, but actually six of my companies right now and actually even have a personal account with them. It's kind of amazing.
So if you're ready to operate in the future, head over to Mercury.com, apply in minutes. Disclaimer, Mercury is a financial technology company, out of bank banking services provided by Choice Financial Group and Evolve Bank and Trust members FDIC. Thank you to Winston Churchill for that little ad segment. All right, back to this episode.
Have you guys read American Kingpin, the story of Ross Albright, the Silk Road? Have you read that, Matt? I think I've read some of the long from wild articles, but I've never read the whole book. Yeah. Oh, you got to read this book, man. I'm rereading it now because you just got released and it's like the best book I've ever read. It's like a total page turner.
The story of it for listeners basically Russell Wright was accused and I think he did it where he started Silk Road, which was eBay for drugs in two years. It did 2 billion in sales, gross sales, something like that. But what's crazy is it kind of sucks because this whole business was documented because he chatted with everyone. Like he had 12 coworkers.
He did two things that were interesting that I actually think are going to be common. The first thing is that he obviously because it was an illegal enterprise, he never, they didn't know the identity of the workers. It was just their username. Like one guy's name was like chronic pain. That was his username. So we just, he didn't know this guy's real name. He just knew chronic pain as like the guy.
Ross knew everybody's name. They didn't know each other's names or his. He made them send a license so that he could basically have that like, you know, always have that in his back pocket, have leverage. But chronic pain didn't know Ross is sorry. I forgot that was actually important detail.
That's actually very similar to like early hacker culture. Everyone was sort of known by their username. There's like interesting merits to that. And then the other thing was that they only communicated via messaging. I was reading this book. I'm rereading it now. And I was like, those two attributes are kind of interesting for a company, which is like anonymous workers. But you're still oddly friends. Like he developed relationships with his coworkers. This is a great LinkedIn post for you, Sam. Like 13 management lessons I learned from the Silk Road. Here you go.
I believe that he did murder for hire a four times. He did a lot of bad shit, but he was actually an inspiring leader like when he read like some of his like like stuff.
Well, he was very idealistic, right? Like he had certain beliefs that drove him, right? He didn't like he didn't necessarily intend. Like, for example, he wasn't super interested in selling guns on the platform, but he believed that people should be able to sell what they want. And his team was like, no, no, you shouldn't do this. This is going to increase the target on our back. Like you're cool with the drug side, but you don't care about this. So let's just ban it. It's going to cause problems. And he was like, well, no, that's not the ethos of what we're doing. Like we wrote a creed of what we stand for and why we're doing this. And therefore we got to stand by it.
And they call them captain. You know, it was very much as like, we are revolutionizing thing. And that's like a really interesting thing. Matt has a, you don't get called captain, but what is your like benevolent dictator for life, right? BDFL. It's a term and open source that's applied to like line of selenics or we do a Python or something like that. David, I'm our Hanson at Rails. It's sort of a joking thing. And one that I think none of us like really attach ourselves to, just kind of like an internet lower thing.
Well, you do a couple of other interesting things, right? Cause you got this like multi-billion dollar company used by most of the internet, but you run your company in these interesting ways where remote work, I think is your famously were early and heavy into remote work. And you've talked a lot about that, but you do a couple other interesting things. So we talked about auditions instead of interviews, but you also do everybody in the company, including yourself, works, customer support, I think one or two weeks out of the year. Can you talk about that one?
Yeah, part of our hiring process is your first two weeks of doing customer support for every single hire, whether you're like our new CFO or Chief Legal Officer or whatever role it is. And then once a week a year, you rotate back into doing customer support. By the way, lots of companies have versions of this, so it's definitely not the one where the first to do this or anything like that. Why should a company do that? If you look at every successful business, the closer they are to customers, generally the more successful they are.
And so it's very easy, especially when you're running something on the internet and distributed for people to become numbers or stats or something on your look or dashboard or something like that.
And so, you know, getting back to like every individual, every number of your signups, you might have 5,000 signups in a day. But each one of those people is like, has a story. You've just learned a lot about your product and it's I think the best way to sort of do iterative customer developments. I think Eric Ries talked about this or Steve Blank, you know, they're kind of like, get out of the office and go meet the customers. And I'm very inspired by like leaders at Salesforce, talk to Mark Binioff or something like that. They'll typically spend a quarter to a third of their time with customers.
even at that scale. Is there a story or any epiphany you had from doing this? You've probably done this now for decades. So is there like an insight that came from this? Just the other day, a few days ago, I spent like 30, 45 minutes with the gentleman who kind of checks expenses at the company.
You know, because anyway, I have like these ramp cars and people who have spent things and stuff like that. You know, sometimes we like, say, you need to recede for this or you question it, it's been... I just want to understand more about this and also make sure that the way we were doing this was... The most hated man at the company, by the way, like... Well, I had gotten some feedback from folks. They felt, you know, some of the questions they were getting felt a little aggressive.
And so we want to talk about, one, I just kind of want to see the tools they used and how the work did and stuff like that. So some of that was just shadowing. So I was like, OK, because I want to understand the interfaces. This was also really helpful. Going through support, I realized that some of our internal tools don't represent best practices in design or usability. So the internal stuff doesn't get beloved that your external stuff does. But then also, we just sort of talked about
culture of automatic, bedside manner, if you will. How can we hold these principles? We need to really enforce our policies and make sure we do, we get audited and everything. So we need to have these things from a good accounting principles point of view, but also doing it a way that when we have these conversations, we're talking about the principles of it and the reason why. So it's not just like I'm giving you Sean a hard time because you didn't have a receipt, but like, hey, if we don't have this receipt,
you know, it's sort of an art firm, my question of this. And then, you know, that might create an issue for XYZ or something like that.
When I first moved to Silicon Valley, I came to work with this guy, Michael Birch, and he represented everything I wanted. He had already built like successful tech companies, and he had made it. And I was a 23-year-old kid who wanted to make it. And so I'm super excited to go into the work the first day, and I'm like, I'm gonna learn so much from this guy, because he'd not just done it one time, he's built like four successful companies. I'm ready for him to teach me the kind of like the dark arts. I'm like, what's the strategies, the growth hacks, what, this like super like high-level strategic thinking,
And the very first week he puts me on, not the new shit, like the oldest company that he had started. Something had started back in 2001. It's like birthday calendar or something.
Yeah, birthday alarm. Is that still going? Birthday alarm? Still going. And so I as like 25 year old company now. So I, at the time, I was like, oh man, like I got to do this like whatever. And he tells me the story. So I actually learned this really valuable lesson in it. I go, so what's the, I got curious because instead of just like being bored at doing like birthday alarm, which, you know, seemed like this old outdated product at the time, I got a little curious. So I started asking him like,
Where did this come from? Like, how did you even come up with this idea? Why did you build this product? And what he told me was he goes, my very first startup, I had quit my job, I wanted to like build a successful tech company, like do an internet company. Internet was like the new thing back in 99 2000. And he quit a high paying insurance job while his wife was pregnant and was like, I'm going to make it. So he tried to create something really fancy. So he's like, Oh, with the internet, he created something that many people have tried, like Sean Parker tried to create this, a self updating address book, which is like,
You know, I have your information, I have your name, your address, but you move, Matt, now I don't know that you moved. So wouldn't it be cool if you could just update your info in one place and it updated in all your friends address books so we now have your latest and greatest address. So that's what he wanted to build.
And he's spending like nine months heads down, like doesn't leave the bedroom coding this thing. And it's not really going anywhere. But because he was a one man show, he was also doing, you know, he was the designer. He was the developer. He was the ops guy. He was the customer service guy. Like he did all of it. And he was like, it's the customer service that was actually the key because he was answering support tickets. And he's like over and over again.
He's like, I spent like, you know, seven hours a day banging my head against the wall trying to figure out why nobody wants to use our product. I think it's so cool, but nobody wants it. And then the hour I was doing customer support, he's like, I noticed that a bunch of people kept thanking me for the birthday reminder feature I had built in, like just the one feature, which was like a throwaway idea, which was just say, if you know, forget the address, if it was someone's birthday, I would just tell you, you know, hey, it's our birthday today. Remember that this before Facebook existed, right? So you didn't have Facebook or a bunch of other ways that people could do this.
So he just threw away the whole product and renamed the company birthday alarm.com. And he's like, I expected to go nowhere. And that was the thing that took off. And at that time, birthday alarm had generated for him and his wife personally, like probably $20 million of pure profit by that time. Cause it was just every year was just generating a few million dollars of profit.
And it's still to this day generating a few million dollars a year of profit. Like it's this incredible business. There's just the gift that keeps on giving that only came because he was answering the support tickets and he got curious like, huh, like, why are they keep talking about this birther minor thing? Like is that actually maybe I should do that. And he did it on a, on a whim. And then in two days had built the product that actually people wanted, you know, that's awesome.
I have one last question for you. It's on AI. So there's a lot of stuff you could talk about with AI, but I just, I'm curious on your quick take about deep-seek because it's also, you know, they came out with this open source thing. There's a lot of people on either side of, of, you know, how much they believe about the story, but like, what's your quick reaction to what you saw with deep-seek?
deep seeks a really cool model. So, you know, every model has like kind of a vibe with the way it's tuned and everything like that. And so it's a really fun one to play with. And I would say, you know, the thing I tell people with all this AI stuff, just like use it, play with it, you know, because it's such early days. And there's kind of a
You know, the way to prompt it, the way to interact with it, there's a skill there that you'll learn. And the vibes of the deep-seak model are very cool. I think what's I'm most excited about as an open source guy is that they actually open source the model. We're really amazing papers about how they built it and the open weights.
Like, for example, at my company, I would say, don't use deepseap.com for various reasons. That's hosted in China and stuff like that. But we can run the model ourselves locally. And that's pretty cool.
or you can get it through perplexity, which hosts it in the US. So there's lots of ways to access it. It's a really fun model. So all these models are good at different things. They have a coding version. They've just released a cool image thing. And so think of these as like little entities that you can interact with and run and spin up of boots. And you should just learn the nuances and kind of flavors of each one. Matt, do you guys actually believe that they've only taken the amount of funding that they've said? Didn't they say something like,
five or $10 million. They said that's what it cost to run the final training. That might be true for like some something, but obviously like, I'm sure they've spent invested a ton in another thing. So, and I know there's kind of this theory that maybe that's like a PR or scyop or whatever like that. When I started reading about them,
I got fearful. It was pretty insane, right? That the market reacted the way it did, that it wiped out a trillion dollars of value in 24 hours. It was pretty wild how big that announcement was. I didn't think that was going to happen. And I think you called it, Matt. Didn't you tweet about this during Christmas time? Well, I enjoyed capacity. So, folk credit tweeted about this the day after Christmas, and I saw his tweet and retweeted it. So, that's why I first learned about Deepseek, started playing with it.
Yeah, I think that with all these things, you can verify all the things. They made some amazing advancements in how they train things and how they run things and how they did memory interconnects and working with the constraints. That has some really cool engineering breakthroughs. And they shared it. And this is stuff that I think OpenAI had also figured out, but they hadn't shared it publicly.
And so what I love about the deep-seat guys is they're open sourcing at all. And it's all available under like a true open source license. It's not like the level license where it's free to have 700 million users or something, or I think Quinn Alibaba one, which is also a really great model that people are sleeping on. So check out Quinn and some of these other models coming out of China. They're really, really good. But it's a true open source license, so. That's awesome. Matt, thanks for coming on, Matt. It's good to see you again. And thanks for sharing everything you did about WordPress.
Yeah, we appreciate your man. Alright, that's the pod.
Everyone, a quick break. My favorite podcast guest on my first million is Darmesh. Darmesh founded HubSpot. He's a billionaire. He's one of my favorite entrepreneurs on Earth. And on one of our podcasts recently, he said the most valuable skill that anyone could have when it comes to making money in business is copywriting. And when I say copywriting, what I mean is writing words that get people to take action.
And I agree, by the way, I learned how to be a copywriter in my 20s. It completely changed my life. I ended up starting and selling a company for tens of millions of dollars and copywriting was the skill that made all of that happen. And the way that I learned how to copyright is by using a technique called copy work, which is basically taking the best sales letters and I would write it word for word. And I would make notes as to why each phrase was impactful and effective.
And a lot of people have been asking me about CopyWorks, so I decided to make a whole program for it. It's called CopyVat. CopyVat.com. It's only like $120, and it's a simple, fast, easy way to improve your copywriting. And so if you're interested, you need to check it out. It's called CopyVat. You can check it out at CopyVat.com.
Was this transcript helpful?
Recent Episodes
He made $100m betting on the NBA… here’s how

My First Million
Get our Business Monetization Playbook: https://clickhubspot.com/monetization Episode 674: Sam Parr ( https://x.com/theSamParr ) and Shaan Puri ( https://x.com/ShaanVP ) talk to the most successful sports better of all time, Haralabos Voulgaris ( https://x.com/haralabob ). — Show Notes: (0:00) Stumbling into gambling (6:19) Finding your edge (19:23) Alpha (27:28) Casinos are for losers (30:02) Betting 160% on Bitcoin (35:36) Getting paid (37:31) Buying a soccer team (46:11) Investing every dollar into Bitcoin (49:27) Analogue things and biohacking — Links: • https://www.cdcastellon.com/ — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth • Sam’s List - http://samslist.co/ My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano
February 07, 2025
The craziest rags to riches story I’ve ever heard ($1/day to billionaire)

My First Million
Episode 673: Shaan Puri ( https://x.com/ShaanVP ) talks to Nick Mowbray ( https://x.com/NMowbray23 ), the founder of the most profitable toy company in the world. — Show Notes: (0:00) Selling DIY hot air balloons door-to-door (5:57) First product (21:32) $30M David Beckham Tamagotchi fail (30:18) Nightball (36:18) Robofish (41:43) Diapers (48:44) Shampoo, pet food, confectionary, supplements, home products (1:00:07) Zurutech - a self-funded moonshot (1:03:28) Serial entrepreneur flywheel — Links: • Zuru - https://zurutoys.com/ • Zuru Tech - https://zuru.tech/ • Boom Supersonic - https://boomsupersonic.com/ — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth • Sam’s List - http://samslist.co/ My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano
February 05, 2025
We hosted a slumber party with 12 billionaires (our minds are blown)

My First Million
Sam Parr and Shaan Puri recount their weekend with billionaires in Greenville, NC discussing topics such as Confidence, identity, work ethic, wealth, health, and the Midwit meme.
January 29, 2025
I run a $180M+ company...here's how I'm using AI on a daily basis

My First Million
Episode 670 features Sam Parr, Shaan Puri, and Andrew Wilkinson discussing how AI tools are replacing new hires in administration tasks. They cover topics such as AI for 24/7 agents, software becoming a commodity, and AI hedge investments.
January 24, 2025

Ask this episodeAI Anything

Hi! You're chatting with My First Million AI.
I can answer your questions from this episode and play episode clips relevant to your question.
You can ask a direct question or get started with below questions -
What was the main topic of the podcast episode?
Summarise the key points discussed in the episode?
Were there any notable quotes or insights from the speakers?
Which popular books were mentioned in this episode?
Were there any points particularly controversial or thought-provoking discussed in the episode?
Were any current events or trending topics addressed in the episode?
Sign In to save message history