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I believe all proprietary software to be an evolutionary dead end. Maybe they'll take 50 or 100 years, but what happens, just like what happened fairly quickly with like Encyclopedia Britannica and other encyclopedias and Wikipedia, is that the thing which is open to all and gets everyone working together? If it truly gets that sort of like humanity working together on the same shared resource, you get the opposite of the tragedy of the Commons versus like the field being overrun. Each person operating in their own self-interest sort of kills the environment or kills the share thing.

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Each person operating in their own self-interest makes to share things better and better. And in a digital world, we can do that because we have economists, economics of abundance versus economics of scarcity. That's why open source will eventually win every market it's in.

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

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That's the co-founder of WordPress, the open platform that runs most of the sites you visit, as well as the CEO of Automatic. More than that, though, Matt is one of the most kind and thoughtful people I've ever met. We talk a lot about distributed work, including the five levels of autonomous organizations. And of course, we dive into decision making, running an organization with more than 1500 people, integrating acquisitions and so much more. You'll walk away from this episode with better ideas on how to lead a distributed team or effort.

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Integrating new teams and cultures don't match and how to avoid problems before they happen. It's time to listen and learn.

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The Knowledge Project is sponsored by Medlab for a decade, Medlab has helped some of the world's top companies and entrepreneurs build products that millions of people use every day. You probably didn't realize that at the time, but odds are you've used an app that they've helped design or build apps like Slack, Coinbase, Facebook Messenger, Oculus, Lonely Planet and many more.

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Medlab wants to bring their unique design philosophy to your project. Let them take your brainstorm and turn it into the next billion dollar app from ideas sketched on the back of a napkin to a final ship product. Check them out at Medlab Dutko. That's Medlab Dutko. And when you get in touch, tell them Shane sent you.

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The Knowledge Project is sponsored by Hawk. Successful families know that wealth can create a curious dilemma. It creates benefits. It secures the future and creates opportunities. But it also presents challenges. How do you stay true to your values and ensure that future generations use their wealth wisely? Grey Hawk is about helping you solve that dilemma by working with your family on both the financial and human elements that build long term well-being. If you value independence, transparency and authenticity and want to learn more, connect with them at great wealth dotcom.

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This episode has also brought to you by 80, 20, 80, 20 is a new agency focused on helping great companies move faster without code. The team at 80 20 can build your next app or website in a matter of days, not months.

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Better yet, they can do it at a fraction of the cost. You walk away with a well-designed, custom tailored solution that you could tweak and maintain all by yourself without the need to hire expensive developers.

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So if you've got an app or website idea or you're just ready for a change of pace from your current agency, let the team at 80 20 show you have no code can accelerate your business. Check them out at 80 20 DOT Inc, that's eight zero two zero dot eye. And see that. I was so excited to talk to you, man.

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I'm so excited to be here. One of my favorite well, my favorite WordPress sites in the world.

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Oh yeah, definitely. What percentage of the Internet are you now like. Fifty. Sixty. No, not yet. Not yet.

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I think we're thirty eight percent at the top ten million websites which is more than ten times the number two. Yeah. Yeah.

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From three point zero zero zero zero two percent of that. But yeah. But it's like twelve percent of the awesomeness so. And you have one, a very rare two letter at that blog.

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Donate.

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We do one of the things in the world thanks to you, that was possible. So really appreciate that. How did WordPress get started. Like what's the origin story behind WordPress?

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Gosh, WordPress came out of sort of a passion.

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I was blogging and found the software called to to essentially I found it as like the most customizable blogging software out there. But it's very small. The dominant one was called movable type, which is kind of like a static site publisher. Probably had ninety five percent of market by like B too.

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And I started like volunteering on the forums and writing little code patches for it and like helping other people. And so got involved in that community, which I've always found. The most exciting part of building things or being online is being part of community. And when the software kind of got abandoned, I blogged about that and said I'd love to see something that combine the best. I think it was the simplicity of blogger customizer ability or the power of movable type, the elegance of text pattern and hack ability to search for different blogging platforms at the time.

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So kind of try to combine all those things in this fellow I had never met and the UK named Mike Little as I can't be serious about this. Let's work on this together. He was another volunteer on the forums and things and also a real developer. I was like a nineteen year old kid in Houston. He was a professional and so we just started hacking together, coding together and that turned into WordPress.

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And how did that like overtake the world? Was it just like it was such a better mousetrap or was that a timing thing? Or like what was what would you describe the reasons of that sort of one set at a time?

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And still to this day, you know, I believe and sort of incentives and environments and markets always trump, you know, anything one individual or company can do. And I think WordPress is a great example that the competitors, others in the market were far better entrenched for better funded, had hundreds of employees or are launching on stage. It had had kind of every advantage at this open source thing, eventually overtook it. And I believe the reason for that was that we had we created a community.

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So it wasn't just people being paid to work on something with people working on something because they love doing it. It was incredibly sort of adaptable. So WordPress could be used for and customize for any purpose. And it had a philosophy, both sort of an aesthetic philosophy, which was largely centered around jazz, both then and now, this idea that Coke could be poetry, but the open source philosophy, which I believe is the most powerful idea I've been exposed to in my lifetime, and probably one that all of your listeners should incorporate into their lives.

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I don't think, Charlie. Mongers talk about it yet, so we might have to introduce it here. Can you expand on that a little bit? Yeah. So open source is kind of like software with a bill of rights attached, like in the United States. I know you're Canadian, so I apologize.

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But, you know, the Bill of Rights essentially ensures certain freedoms. Most famous, like freedom of speech, mean the First Amendment for open source. There is what's called the four freedoms attached and particularly the license we build on, which is the GPL, because they're geeks, they start counting from zero. So freedom zero as the freedom to use the software for any purpose. This means no one can tell you what you can or cannot do with the software.

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If you want to make WordPress site or Shein is awesome or fst a blog or literally anything, no one can tell you what you can or can't do with freedom.

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

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We are losing our agency and sovereignty over ourselves. To be able to see how it works is really important. But doesn't matter if you can see how it works. If you can't modify it, that's freedom to the ability to modify the software. And this is where you get into why open source almost always wins. So I believe that open source comes to dominate any market that enters over time, and the keyword is over time, because sometimes it takes many decades and it finally is the freedom to distribute those changes.

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So actually, our main competitor had a couple of those freedoms and movable type. You could see the software, how it worked. You could open up the hood, you could change it, but you weren't allowed to redistribute those changes so you could just use them for yourself.

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The ability to make those changes means that the software takes on like almost like an evolutionary dynamic where there's sort of survival functions. And like that WordPress itself is actually a fork. So kind of like an evolutionary branch of existing cougher software company to when B two died, there were like five or six of these different branches and WordPress ended up being the one that was the most fit and survived.

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That's amazing. I love the concept of being able to sort of look under the hood and see what's going on. How do you commercialize that, though? Like what causes people to work on open source projects?

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Yeah, part of the freedom is the freedom to charge for it or the freedom to commercialize it or the freedom to sell it. Anyone listening to this could take WordPress and sell it to others, as that's many, many do. You can get WordPress from Blue Host or GoDaddy or Amazon or million different places. And it isn't a game for Morpheus tachometer Iran.

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So that's part of what's built in there. And there's different business models around open source.

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There's some which try to say like here's this open source thing that will give you the same thing under a different license or we'll put the best features into a paid version. I personally don't like that because it seems to take what makes open source successful and essentially create the incentives against it, because if you played it out ten, twenty years from now, your very best features are going to go into the paid version and the open source thing will probably wither on the vine with it.

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And we've seen some of this happen. So the approach that we take is essentially making all the best stuff and what we call core, which is the software you can download from WordPress and WordPress, Digg and use for any purpose, and then we create services around it. So the first one we launched was actually antispam service, called it Kismet, which just celebrated its five hundred billionth Spamalot.

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I remember I remember the from back in the back in the day. How amazing was that. Like, that's an arms race, the like blocking spam. Well talk to me through the through the comments and trying to figure out if it's like a legitimate person or that it's actually all the things I'm most proud of today.

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We call it like a machine learning system that at the time we did.

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And it's now ten years later, it still has over five nines of accuracy for blocking spam and keeping and allowing good stuff through.

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So it's essentially like basically, again, it's all about markets. Markets always trump anything at individual company could do. And there were all these solutions to blocking spam on sites. They would only work for that one site. And of course, what happened is the spammers between their code and and it would start working. So we created a system that essentially allowed all the kids being bullied on the playground to work together and the gang up. And of course, that's what makes humanity great, is our ability to collaborate.

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So we started collaborating against the spammers and so they would have that very quickly, but the network would adapt in real time. They're changing tactics and in particularly with Web spam, typically web spam is trying to direct either a search engine or person to a place. So that provided a really great avenue of, well, you know, a ton about security, of being able to target these, because ultimately they didn't just want to they didn't want to rank first in Google for V1, G.R. for.

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They want the right first for Viag or mesothelioma or whatever, the random term that trying to is, and so that ultimately ended up being one of the weaknesses and still the weaknesses. And today, they still are trying to spin me to a particular website.

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It was a kismet, the start of automatic or was it was there a different origin because you're running automatic now?

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Yeah. So I was in college. I ended up dropping out to take a job at PSINet, which was a digital media company, which was an early adopter, WordPress. And after a year there was like, I really want to work on this full time. I sort of pitched them WordPress, dotcom and all the things automatic would like to do. They said, well, we don't we don't want to do that, but we'll we'll support it.

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We'll invest in you. And so that was kind of the genesis of kismet, funnily enough, used to be called automatic spam stopper until we realized that was an unfortunate acronym.

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Naming is usually not my my forte. And actually, my sister, I believe, came up with that name. And that was our very first product. And it was a plug in for WordPress. It's also a plug in for many other systems. So some large social networks use it. Commenting systems like discuss other platforms like mobile type Drupal can all use equipment. And that was also one of the ideas.

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Tell me a little bit more about automatic, like what are you guys do?

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And so automatic started actually 15 years ago. I just celebrated my 15th anniversary with the company and the idea was to essentially create a company which tried to build and flourish from the open web and open source. So we wanted I wanted to create a place where I could work on open source full time and all the other developers of WordPress could benefit from it. We also wanted to create a company, a for profit, that was paired with a nonprofit where each one would be stronger than either would be on its own.

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So I think non-profits can do all some things, I think for some things. But when WordPress, we have essentially WordPress, Digg, which is open source software, which is not owned by Ahmedi, we have automatic, which creates services for WordPress dog. And then there's a huge ecosystem outside of that. You know, WordPress, as you mentioned earlier, has some of the most incredible market share and that's been very rewarding. But automatically the company actually has smaller revenues.

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And then other companies that you probably heard of, because we only make a few percentage of the dollars in the workforce ecosystem. So we've always targeted and I got this there seem to be sort of a lot of platforms going all the way back to like dos and windows. If you look at like the launch of Windows ninety five, one of the things Microsoft would talk about, though, I do remember that launch there was a we would line up at Best Buy was like a new iPhone or something.

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I feel like there was like a Rolling Stones song and people can't really answer.

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OK, so one of the things Microsoft talk about the time is for every dollar we make from Windows 19 or 20 dollars are made by the Windows ecosystem. And so that's kind of like a you know, they were about five percent. And I kept finding this ratio that's like 20 to one everywhere. And successful platforms, not on vague platforms like not on the Facebook platform. Facebook made like 90 percent of the dollars in that ecosystem, but in others.

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And so in building automatic, I want to quote a company which then take all the oxygen out of the room so we would try to make about five percent of the revenue in the WordPress ecosystem and then grow the pie as much as possible.

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That's a that's a really good concept, because I guess the theory behind that is if you're you're capturing more value than you create, you'll inevitably die. And if you're not capturing enough value, you'll inevitably die. You have to capture a little bit, but not too much, always less than the value you create for others. That's the idea.

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And so the products we've evolved into doing our WordPress dotcom, which is kind of like our easy, hassle free version of WordPress WIU Commerce, which is the fastest growing e-commerce platforms in the world. It's essentially e-commerce built on top of WordPress. So you get the best of both, and that's doing well over 20 billion of GMV now and growing really quickly.

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And then Tumblr, which actually was an acquisition we did last year, which is a one of our blogging competitors, we were able to acquire it and we're redoing it, switching it actually powered by WordPress on the backend and trying to create a sort of like nice social space on the Web.

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How do you feel about the Tumblr acquisition? Its about a year later now isn't it like more over a year or two year.

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Yeah, I think it was 13 months ago now. Definitely by far the biggest one we've done in terms of one hundred and eighty people, different culture at the time they were based mostly in an office in Manhattan. So a lot of things to bridge. I suppose I should mention that automatic from the beginning has been distributed. So we always hear people working from all around the world today. It's about thirteen hundred people in seventy seven countries and almost every other state, I think fourth of the provinces in Canada.

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But when we got Tumblr, they were based in this one office. So a lot to bridge about the culture. And it's definitely turnaround's in a Tumblr, I believe was bought for a billion dollars by Yahoo in twenty twelve, twenty thirteen.

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Persevered at the time I think was a really smart acquisition by the way. But they got sort of that they had other. Yahoo! Kind of famously, and Yahoo! Merged with AOL, became oath, and that oath was acquired by Verizon, which comprises media, and you have this amazing community and like set of things called Tumblr, which is just like the smallest fly on the back of a rhino, on the back of like, you know, a mountain, which is Verizon.

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And so we were able to work out a really good deal with Verizon, where we were able to acquire a Tumblr for a de minimus amount. I think they were going for the maximum write down and then sort of take everything and try to turn it around. I love turnaround's, so I don't know if we can only do one every couple of years, but to me it's incredible.

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Probably fun to take something which the market has sort of undervalued, sort of an unset gem and really polish it up. And that was honestly most of our most successful products, including ecommerce, where I don't think really appreciated or valued by the market at the time when we brought them in and made them part of the automatic family.

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Talk to me a little bit more about how you think about turnarounds. Is the CEO you purchase a company, what are the next steps in your mind? How are you thinking about integrating that? Are you leaving the culture alone? Are you changing it? Like, walk me through everything that's going on in your head at that point in time?

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Yeah. So automatic is structured a bit like a holding company. So I like to think of us as like Berkshire Hathaway with a common digital platform is definitely what we aspire to. And so we can have these products like Tumblr, which run largely autonomously within. However, different from now Warren Buffett and Charlie Munger approach, we do try to take essentially economies of scale and from our culture, like our hiring, our technical platform, our infrastructure, that 30, 40 data centers we built around the world, things like that.

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So we were able to take twenty five, thirty million a year of cost at a Tumblr just by kind of bringing it over to our systems, which brought them a lot closer to being break. Even in terms of culture. I wouldn't purchase a company that I didn't want to be influenced by and also hope to influence. So I think if you do it right, the automatic culture and the Tumblr culture becomes something new together. And that's what we've been doing.

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And we do that as well through lots of rotations. So lots of people from, you know, who are at automatic before have rotated on to work on the Tumblr team and vice versa. We've had people from Tumblr either merging with other teams and automatic or sort of collaborating across things. And this is a fine balance. Right. Like all organizational structures are a series of tradeoffs, but it allows us to get the benefits of having something that can kind of run on its own while still sharing knowledge and expertise and sort of unfair benefits that automatic might have that other companies don't have access to and Tumblr wouldn't have access to it for its own independent company.

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

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So you definitely want cross pollination of people in terms of technology.

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I just feel like you can force engineers to do things that they don't want to do. So that's much more like showing the benefits.

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The only places where we'll do something really top down, as if there is a a really large capital impact, I think it probably would have been a little bit easier just to completely recreate by the six thousand servers that they had before and by the exact number with exact configuration in our data centers, we ended up reducing that to about eight hundred. So from six thousand servers, eight hundred. And part of that was, you know, doing a lot of engineering work to bring things on to of what we've learned with best practices and being super duper frugal with everything we built.

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

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I want to keep going a little bit more on this. Is it run by the same person it was run by before or is it run by somebody new?

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Yeah. So the CEO, Jeff, is still in place. So he was the CEO before and he's the CEO now. So that's really interesting.

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Right, because that sort of leads me to speculate that environment matters a lot to how people perform. Is that something you think about?

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I think it's the most important thing by far. Yeah. So like in running a company and running a community with WordPress, we're obsessing over the environment we're creating and I think is a microcosm of that. I think about the environment around you and your office or where you're working, the smells, the temperature, the lights, the inputs, the music, everything contributes to how you're operating. And companies have a sense of that and communities have equivalents of that.

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And WordPress, we have now five. Ten thousand people contributing to WordPress on a regular basis now, what sort of environments is happening there? We have something happening right now, which I think is fairly unique and exciting for open source, which is WordPress five point six, which is coming out fairly soon, is an all women release lead squad. Oh, wow, that's awesome. It's a result of the past decade of trying to make, like WordPress a really open, inclusive, friendly place to be.

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

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And so I think about that for every aspect, even language.

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I want people who don't even have the ability to speak or read English to be able to contribute to WordPress and have their code included like good tipper and some of the other differences or not differences.

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But things that you see is environmentally impacting people's ability to not only contribute but perform at work and work. What helps people, what unleashes them inside the organization environmentally that we might not see as constraints?

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As somebody who's thought about this a lot and the best framework I found, I believe I got from Dan Pink and his book Drive, which is Mastery, Autonomy and Purpose. Mastery, is essentially being challenged and getting good at what you do. And I think of it when you're on the edge of that curve for learning a skill. Autonomy is essentially the freedom to be able to do it. So you're not being micromanaged. You're not being you know, so many people and organizations know what the right thing is to do and they can't do it.

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If only purpose is working for something bigger than yourself. I think that it's very difficult to drive worldchanging performance if it's just for a paycheck or just for your own personal benefit. You need to be connected to something larger. That's probably the easiest for us because pretty much everything we create is open source. We do have this mission to democratize things that we've had almost since for 17 years now. And we take it very seriously and we see the results of that.

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And we've been able to get a good chunk of the web on open source. And I believe we have the ability to create a national mentality of eighty eighty five percent of the world's websites running on open source. And if we do that, that means, I believe, that will preserve the open web for another generation of human flourishing. I think it's actually important for the evolution of society and humanity for us to accomplish this goal. It's kind of our version of going to Mars.

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For Elon Musk, this is key because a proprietary closed web doesn't get well. We see what happens with that because it's been a lot of the past few years. That's our purpose. So if you get those three things there, I find the rest falls into place.

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You mentioned something earlier about how you guys are distributed and you didn't use remote, you use distributed. What's the distinction there?

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Words create reality. And we have a lot over what words we use to describe things. I think we used to use remote to describe what we were like. We're a remote company or a remote fast company. I realized like who wants to be remote from their colleagues? Remote implies that there's like something central and you're far away from it. And there's a remote mountain or in a remote town, you're isolated. What's a lot closer to what we were trying to create as essentially an antifragile, fully distributed organization, that each node on the network was at an equal weight with each other.

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And just like a great network designed with like BGP failover or something like that, like that, or in the system itself becomes quite resilient because windows are relatively independent, but each able to fully contribute. So for us, we shifted to being the calling it distributed and really talked about distributed because it's so important that every single person in the company has an equal ability to contribute.

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Sort of like when you were saying that I was thinking about how words matter and or calling the covid. We call it social distancing, but it's really physical distancing because we don't want to be distant socially. We just want to physically have a gap between us for spread purposes. And I thought that was a really interesting distinction.

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It's why it matters in the beginning to. Right, because I have tried to change that. I thought about physical distancing. I try to use it in conversation. But at some point there's so much momentum around the term, you're kind of stuck with it. So naming things, particularly in the beginning, is so important because, you know, whatever your code name is or whatever the the the the thing is, the internal names, you know, you're going to end up with that almost certainly for a long time.

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And changing names later is is especially if you're successful is almost impossible.

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Yeah, I can definitely see that terminology once it gets a hold of you is like so hard to to get rid of.

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What are the differences between.

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Been going distributed at this point in time, in these circumstances and being distributed by default from the start in a global pandemic, I think that there's just aspects of life which are very difficult and challenging that you wouldn't have in a pandemic scenario. So part of what's I think great about distributed is one question we often get is why aren't people only because they don't have their friendships at work and things. And they could be certainly like if you're only social networks at work, you might be lonely if you weren't working with people physically.

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But then what does that open up opens up the opportunity for you to choose people around you geographically, to spend time with who you can talk about things out of the work you talk about with them, work you talk about someone else. You can play ultimate Frisbee, you can do a humungous or settlers' eschaton. You can go to music.

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You can. And part of our model of distributed work also provides a fair amount of autonomy in how people get the work done. So, you know, if your customers support, you need to be on a few certain hours a week. But you have a lot of time in choosing those hours. If you're an engineer or a designer, you did accomplish certain things. But gosh, if you could do that at a one hour a week, good for you.

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It's really about getting from A to B. We're not tracking how you do it. So that allows people a lot of flexibility to design their day around what works best for them. And now there's folks who wake up every morning, start work at four thirty. And I would never ask anyone to do that. But that's that's where they feel more productive. They get a couple of hours and before the kids wake up and not spend time, a lot of magicians love dropping their kids off from school and picking them up.

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That's easy to do because you don't have to, like, leave an office, walk into a parking lot, see all your colleagues, see you going somewhere and wonder if you're goofing off. I think it's just part of your day. And I like that it creates a lot more objectivity and focus around what the actual work is, because I believe in offices, we're so distracted just as like human social animals by all the things around the work, how someone dresses, whether they're present or not, what time's their present?

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Do they appear to be working really hard and these things are not the territory, right?

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Yeah, definitely. I had a friend once who worked for an investment bank, and he he figured out very quickly this was like a face time culture thing, not necessarily a you're working all the time things.

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So he did this sort of I would call it clever. He hired the janitor who used to come in at like three or four a.m. to switch his coat and turn on his computer every day. So it looked like he was the first person in the office and he would stroll in at ten and, you know, like he had just come from a meeting or something.

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And everybody had thought he'd been there because his computer monitor was on and his go ahead.

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She was like, yeah, it was hilarious how he had thought about that. I love that.

[00:29:56]

So I'm going to use that in the future. But it's so much easier. I think it's easier to slack off in office than it is in a distributed environment.

[00:30:02]

I think it's easier to hide it right. Because in distributed, you can just you can you can do dishes.

[00:30:07]

You can, you know, get caught up with all this stuff at home, especially if you've never worked from home before.

[00:30:14]

And then but your performance stands out in a way that it doesn't in the office because you can sort of like hide behind these signaling and all these meetings and walking around with a lot of folders and people.

[00:30:25]

You can go months before people like Cloo and that you actually haven't done anything that I like that because ultimately, like, we want to be as close to the reality of the work as possible. And all these other things are false proxies. So the more we can make it a bit more objective about accomplishing the goal of the business, I think the better that is. And also, by the way, I believe that's way more inclusive.

[00:30:48]

Talk to me about the levels of autonomous organizations. So I think actually one of the reasons I was avoiding coming on this podcast because I was like because you asked me like very early on, it's like I want to get my book out first because I was really convinced I was going to write this book about this derivative work. And in the past few years, the company has been growing too fast, have prioritized other things. So what I ended up doing was starting a podcast and then so in that for a little bit, I was going to make that like the step to the book.

[00:31:17]

This is going to do like the ten various things. But then the pandemic happened and I realized that there were so many companies really struggling with this switch to distribute it that I could help them be a very small way that contributed.

[00:31:31]

And as I started talking to dozens and dozens of them, CEOs of top five financial firms, you know, hundreds of thousands of employees that I had dinner with just months before that said we could never be distributed. And then months later than like 98 percent of our workforce is is working from home and we're doing great. And I so I got to see from the inside, lots of it going well, going poorly, everything. I came up with these five levels within the five levels of the Tommy Siza introduced on Sam Harris's podcast, which I recommend checking out that one, too, if you have it.

[00:32:01]

Essentially what they are are how companies evolve through working.

[00:32:07]

In a distributed fashion, because I'm an engineer, we start counting at zero, so there's a secret six level level zero, a job which absolutely cannot be done distributed. What's funny is we think a lot of jobs were level zero. It turns out they weren't of the pandemic. So I like to refer to a telemedicine. Is the things you needed to go into the doctor to have them look at that rash on your kid?

[00:32:28]

And I can do that all online. So level it with level zero. Things like construction maybe being one, level one is one. If you weren't in the office or with your other colleagues for a little bit of time, you could get by. But it's the environments aren't really suited for it. So typical. And level one is like if you had a family emergency, I could pick up your kids in school, maybe you could hop on a phone call, but maybe you wouldn't have access to like the VPN or internal company resources.

[00:32:55]

It wasn't really designed for that. So you could get by for a day, but you're pretty unhappy. Level two is where most companies went to and a pandemic, level two is where you basically try to take everything you did in the office and recreate it online. And this is like the cargo cult of distributed work. Like you, you say, oh, we used to be in six hours of meetings a day. Now let's be in six hours, resumes a day, and let's have these ways of reporting and let's you know, maybe you have access to more of the tools online.

[00:33:29]

A typical if you're in level two, you might feel totally exhausted at the end of every day in a way you never did in the office. Lots of little organizations have too many meetings. You know, they worry about money and selling monitoring software on their employees. Computers are like and they don't have a good way for people to to have a home office set up or things like that. Level three is where you start to embrace the benefits of being online.

[00:33:52]

So this is where I think of it.

[00:33:55]

Like we like to have a Google doc and we have meetings, we have a Google doc that's open on everyone's computer and we're taking notes in real time. And everyone is looking at that next to so the zoom. And this allows kind of a real time record of whatever is being recorded in the meeting. And also that becomes a sense making apparatus. So someone is taking the notes, which, by the way, we can share, and they see something written down which wasn't what they thought was said.

[00:34:19]

All of a sudden you're reconciling that difference. And that's super, super powerful because how many times have we been in meetings? We thought we all agree. And then a week later, you realize, like everyone had different definitions of the terminology used and ideas of what success was and everything. That's just one simple example, which is like off the shelf Google Docs and Zoome. That is actually like a major force multiplier for four successive meetings. Level three, you start to have fewer meetings to which I like that level three is still synchronous, though.

[00:34:46]

You're still expecting to be able to be kind of online working together at the same time to get work done. Level four is where you go from synchronous to asynchronous. And this one's kind of magical, by the way. It's also really, really hard. It's much easier to work together if you're there at the same time, you can kind of ping pong back and forth. But if you're able to design an organization that people popping in and out at whatever time zone or whatever times are able to fully contribute and move forward the goals in a meaningful way, then you unlock access to the world's talent.

[00:35:17]

You unlock ultimate flexibility in everyone's day. You give people a ton of autonomy. And I believe asynchronous interactions can be far richer than synchronous once you unlock the power of the introverts in your company, people for whom in a real time meeting they might hang back a little bit or be shy, or they might need to think about things to really contribute their best thoughts.

[00:35:41]

There's a French phrase I love. I'm not going to say the French, but essentially means Stairway Wit and it's like the come back you have or the joke you think of when you're when you you pass the one on the stairs, but you think of it when you're at the bottom of the stairs.

[00:35:54]

Unlocking that. A synchronicity, I think makes organizations far, far better. So for example, inside Artomatic, we have this internal blocking system called Pitou. You can actually check it out at WordPress, dotcom, such P2P like pool and the number two. And so if we're trying to make a decision for like this widget inside the product, we don't call a bunch of meetings about it. We create a threat. And so this internal blogging threat, someone will say, hey, we need a site on this widget.

[00:36:18]

Let's discuss it for thirty six hours. Then we're going to make a decision. And then everyone essentially has almost like an internal comment thread. That's kind of like a mix between what, just like a blog and comment thread or a forum where they can discuss and they can embed videos and gifs and mock ups and discussions and link to research and and everyone's kind of participating in their own time. And they're writing essentially a little mini essays. So just on the cuff responses and reactions to things we able to like, really think about it, take around, walk around the block, take a shower, play the dog, like think about the problem and really ruminate on it and bring your best answer to.

[00:36:55]

And then everyone's doing that back and forth. And then at the end of the time period, because it's synthesize the best wisdom and knowledge and information from this make the decision.

[00:37:04]

And so it took a little bit. Longer, maybe from start to finish. I feel like the decision could be ten or a hundred times better, and when the quality of your decisions determines your outcome, this sort of process can be amazing. Now, also, let's fast forward each thread that gets created is adding to the institutional knowledge of the organization in a permanent way. Now, it's 10 years later, like, why on earth does a widget work like that?

[00:37:31]

And what usually happens, particularly in software, is engineers come in and they say, oh, let's rewrite this. And they sort of reinvent it from scratch. And then they reinvent all the same problems again and all the same bugs because they didn't really understand why it worked the way it did before. But now there's this perfect thread which shows the entirety of the thought process of the decision and how that decision came from. And so now, I mean, we have now an automatic I feel like I'd say it's our biggest asset more than the money in our bank, more than our software, anything.

[00:37:59]

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

[00:38:24]

They might be pretty new. And so it's a classic fast scaling companies to escape the groundhog effect that often happens when you're growing really quickly.

[00:38:32]

And what was level five to level five is Nirvana is somewhat unattainable, but what you always want to aspire to. So I think that we have glimpses of level five. Level five is where I believe that organization in a distributed fashion is outperforming at every single level productivity, quality, employee happiness, everything, any in-person organization, because you've embraced all the power, all the special features of this asynchronous approach and everything's better. I think if you if you kind of add up all the things we just talked about, for example, the increased autonomy and synchronicity might allow people to design the interaction between the work and their life a lot better, by the way.

[00:39:18]

Then they're going to be happier because they have a lot more control over their day. They're able to spend their day in an environment which isn't like the lowest common denominator of fluorescent lights and a cold temperature and like terrible food and colleagues that talk on the phone to all that sort of terrible environment that they're in an environment which they designed, which is creatively charging for them, which is filled with things which recharge your day.

[00:39:41]

Like maybe they do a little mini exercises during the day or they they kiss their kids or they walk the dog or whatever it is, and they bring that creativity to work. Their work goes so much better. And because the work's going so much better, they're bringing that energy back to their life and family and the 18 hours outside of work.

[00:39:56]

As somebody who who's super thoughtful, you always think of the drawbacks to everything. What are the drawbacks to distributed and entirely distributed workforce?

[00:40:05]

I totally get jealous sometimes when I walk in my friends companies and they just have these amazing offices, not so much for the physicality of the office, although sometimes I do appreciate good design there.

[00:40:16]

But just I love my colleagues. I really enjoy spending time with them, particularly this year. I wish I could do more as secret sauce as a magic ingredient of our distributed approach is in normal times we get people together three or four times a year. So if you joined automatic, it's a shame. You know, as part of deciding whether to take the job off or not, expect that you will be traveling three to four weeks per year, so you'll be away from home.

[00:40:41]

So, you know, whether that means you need to find like a cat sitter or someone to watch your kids or whatever, like you're going to be on the road for weeks out of the year and one week historically, we've brought the whole company together and then the other two or three weeks you're going to be with your team, which is typically we have lots of cross-functional teams, typically five to ten people. We try to have every everything on the team that's easy to ship something to users and so they can operate in a fairly autonomous fashion.

[00:41:07]

And when you're able to as humans, I still think that's something that is. Impossible to recreate online, which is that breaking bread and have the bottle of wine you and I share, whatever the equivalent of that is, it just built trust in a way that you can get pretty close online, I think get eighty five, ninety percent of the way, but you can't get to hundred.

[00:41:27]

Is there a difference in your mind between people that are switching to remote right now? You already have a relationship with people, so you don't have to develop it versus developing a new relationship. Like as this goes on longer and you hire new people, what's the difference between an existing relationship that you're building upon? Or you can rely upon this established trust and then this new relationship where now you have to that you have to break bread, you have to like establish this level of trust with somebody that you've never met before.

[00:41:59]

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

[00:42:25]

But what we do and we play some games together, we like read a book and then discuss it together and we'd have like a little ten minutes. We talked every morning just to kind of like talk about our day. Maybe I'd say, call me if you're going through something tough. Maybe, you know, I'd say like, hey, why don't we I bring my friends and family to the zone and you bring your friends and family to the zoo like we all hang out.

[00:42:47]

And just on the virtual. I know. What would you add to that? I don't know.

[00:42:50]

It's just something I've sort of been thinking about a little bit between the difference between because I've had friends talk to me about this and they're oh, it's really easy when I know somebody in advance.

[00:42:59]

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

[00:43:26]

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

[00:43:39]

And that'll erode trust with people that you've already established it with, and it makes it really hard to establish trust with people if it's a very transactional relationship. So I just wonder about these investments that you should be making in your colleagues and the people that you're closest to, including wine and cheese or something, or sharing a show or doing something that just makes it feel more. You're a part to your point earlier. There's a human psychological desire to feel part of something larger than yourself.

[00:44:10]

You're contributing to something meaningful. You're doing something. And I think that establishing that on a one to one basis, like we're in this together, we're contributing to this thing together. We're fighting for each other. We're in the trenches together. I think that's a really important thing to establish, especially when you think of this as maybe a marathon, not a sprint, and maybe the world doesn't go back to the way that we thought it was before.

[00:44:32]

And maybe you're a lot more flexible with your work. And learning to adapt now is just going to be exponentially more valuable than learning to adapt later.

[00:44:40]

You know, if your friend were here and here are also my good friend, I would shake his shoulders and say, like, wake up, you know? Yeah, yeah.

[00:44:47]

If you think of trust as like a function of communication times, time, you know, maybe when you're in an office or someone, you've got some of those things just by default and you think about it. But if you were to actually think about it and invest in it, I bet you could create an incredibly close relationship, one much more intentional and deliberate. Then you would just maybe cohabiting with someone by default. It's kind of like in relationships.

[00:45:10]

Yeah, you can live with someone every day and not develop a relationship and you can see someone a few times a year and then develop an incredibly deep relationship. So it's the same with with your work colleagues. So I would say, like, you know, really talk and finally talk about that. So like saying like, I feel like I felt like a little more disconnected from you because we haven't we haven't seen each other in a while. What can we do and make it a conversation.

[00:45:34]

But that's also how we solve like most of our company problems.

[00:45:38]

I get lots of questions like, well, what do you do if the team isn't brainstorming the way they used to because they don't have a whiteboard? And so I don't know, why don't you get the team together and talk about it and say, like, we used to do this thing that was really magical around the whiteboard. What are some things we can try to recreate that and then just try different stuff and it's going to be different for different teams.

[00:45:56]

But if you don't talk about it with everyone, you're not ever going to develop that relationship. So that communication times time, I think is a really good formula to keep in mind.

[00:46:05]

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

[00:46:25]

I was like, try this with people like create your own version of it, but sort of like have this level of conversation with people and see where it goes. And I think that was really effective.

[00:46:35]

I want to go back to decision making a little bit with the the P to program and having this distributed sort of like record of decision making, which seems awesome because you'll be able to pick out people who are consistently right and might not be as heard or recognized as right, because you'll be able like eventually computers will be able to say, well, this person is more consistently accurate than perhaps that they're there waiting in the decision happens. But like, how do you frame that?

[00:47:03]

Is everything time box? Like you said at the start, we have thirty six hours to make this decision.

[00:47:08]

What are the parameters that you put along that so that it doesn't just spiral out of control? And how do you differentiate between decisions that need to be made as soon as possible and maybe larger strategic decisions that can be as late as possible?

[00:47:22]

I think sometimes we do this poorly, by the way, so there's definitely threads that get started which don't have a clear goal or outcome or time limit, and they can just meander on for days or weeks. And then you come to it later like, oh my goodness, what is this is like fifteen, twenty thousand words. How do I decipher this? As I have very much automatic is a written communication culture and I believe clear writing represents clear thinking.

[00:47:47]

And we filter for this in our hiring and we talk about writing a lot. So we like invite writers and we talk about books like on writing well or words that work.

[00:47:55]

So I get people to be clear, written communicators, some of the things I'd recommend other companies try that we've come to, you know, let's say there's there's a a post which is presenting an idea. A very common pattern is a TI elder at the top. If you're not familiar with that acronym, it's T.L. Semicolon, D-R, and it stands for too long, didn't read. And so essentially, oftentimes people put like a little tweet, late summary of whatever they post it at the very, very top actually.

[00:48:26]

So some way. Yes. About Tumblr culture influencing us, they introduce a new acronym to this. And so they'd have to tell the R then like a chunk of text and then they have like it's escaping me right now. I feel like it's like. S g m like good stuff, give me more and think of that like almost like an appendix where that it could be like another five thousand words. If you really want to dive deep into this, whatever that the post is about, you could but if you didn't, you could skip that section.

[00:48:56]

Don't feel like you're required to read it. Another really good practice our best internal threats have is at the time boxing. I think that's usually pretty good, but then also someone who summarizes it at the end. So again, it can be kind of intimidating come on this really long conversation thread and hard to sort it out. So one thing I see some of the best, particularly leaders doing the company is at the very end. They'll just make a comment that summarizes everything, including the outcome.

[00:49:23]

And so if I come across a really long thread, ultimately scroll to the very bottom and see if there's one of those summaries, because that can be like that synthesis. And the synthesising is an incredible contribution to the institutional knowledge. That's great there. And if I wanted to dive into a particular thread or mine a thread on how something was decided, I could I don't need to. So I think a lot about that efficiency of time. And I think one downside of synchronous communication is it's kind of one to one.

[00:49:52]

So the time that it's taking to communicate the information is also what it takes to consume it. And that's kind of inefficient. On the other end of the spectrum is maybe like a book that someone took a lifetime to write and they can take you a few hours to read like, wow, that's a multiple thousands to one ratio. So that's really dense and valuable. And then probably the worst is like things that take people a short amount of time to create and a long time to consume.

[00:50:19]

If that's Twitter. Yeah, definitely.

[00:50:21]

I mean, a lot of these hand grenades that people throw take a lot of time to refute. But in like eight seconds to Twitter and yeah, it's interesting. I wouldn't imagine you'd have that as much inside the company, especially when it's visible, because it'd be like a shaming element to it as well.

[00:50:38]

But well, that's is also one thing that the super power of asynchronous. So we do these monthly town halls every month and where anyone can ask any question and I just answer them in real time or someone else in the company answers them every time you can watch that real time. And it's about an hour long, but we post a recording.

[00:50:56]

So if you want to watch it sped up later that hour long meeting, you can get through in thirty minutes.

[00:51:01]

So, hey, you just you literally just create a time out of nothing. And so this is why we always want really good notes out of meetings. By the way, if every meeting is transparent and has really good notes or recording, people don't feel the need to be there.

[00:51:14]

And so the meeting can be smaller, which also means it's more effective, whereas like not everyone is like not in this meeting. I have no idea what happened and like, my voice won't be heard. So when you start to unlock all the pieces of the stuff we talked about on five levels, one thing then that leads to a cornucopia of like other benefits that you wouldn't have until you went to the earlier levels.

[00:51:39]

How do you prevent people from sort of or encourage them not to, I guess is probably a better way to word it, but like not getting caught up in slack all day or reading PITU all day or catching up on all these meetings that they weren't really a part of and just sort of like acquiring all this organizational knowledge that they never put to use.

[00:51:58]

It's clear expectations. I mean, ultimately, by the way, I've had this week with these weeks where I spent a lot of time very busy, I worked maybe six or eight hours, but I didn't really get my most important things done.

[00:52:10]

So when you have clear expectations either for yourself or for others, that is the best filter, because at some point there's going to be that conversation like either with yourself or with someone else. Like I didn't there's accountability. I didn't meet the thing that was expected of this role or this job or that other people were depending on the on. And then you start to say, well, what happens that I, I play Nintendo all week. OK, well, that's an issue that I work really hard.

[00:52:35]

But on the wrong things, that's far more common. Actually, the problem we have actually in distributing work. So to get to another downside is not under work, it's over work. So we have developed a lot of internal systems to be used to not track any vacation or we thought afk away from keyboard time because we have a completely open policy there. Take what you want. But the problem was people aren't taking. So we started tracking it to encourage people to take it, which is kind of funny.

[00:53:02]

So we do that is a report that our team leaders will look at. It's like our chain hasn't taken a single day off in six months. First, I'm gonna have a conversation with you about why at that. By the way, this has happened a lot in pandemic. People are like, I can't go anywhere. I'm locked down. Why would I take any days off? And then I go and try it anyway, do a staycation and just don't go in your office at all that day and do everything else.

[00:53:25]

Or you'll talk about how that recharge time, because I do believe it is important for high performance, how to build that.

[00:53:32]

And how do you think about your day and organizing it to make sure that you're working on the most important things? I roughly think of my time in three buckets, I try to spend about a third of my time on people, so that's either hiring or internal H.R. I think this is the environment work, creating the environment for people to thrive and do the best work of their lives and their career. It's been about a third of my time right now on product.

[00:54:00]

So I'm sort of temporarily running our largest product, which is WordPress, Dotcom. And so I'm a lot more in the in the weeds there in terms of working with the leaders and the engineers and everything to make sure that's an excellent experience. But more normally, I might float a little bit more between the different products across the company. And then finally, that final third, I just try to reserve for whatever is the emergency of the week.

[00:54:26]

Do you think about sort of like your day, the night before? Do you have blocks of time where you're guaranteed to be free? Like how how do you do that and how much email do you get? You don't get a lot right. Who takes care?

[00:54:37]

Most of it. Internally, I get almost zero email. So inside the company we basically don't use email, maybe like some H.R. stuff or something. You might get the email if it's truly private, but everything else happens on the blocks. I also have a point right now where I have almost no meetings in my schedule, so kind of no regular recurring ones. Everything is a bit more opportunistic. Ah, on the fly. I would say that a lesser version of this is throughout the company.

[00:55:09]

Most of our teams do have regular recurring meetings, but automatic probably has 80 percent fewer meetings than most other companies. I'm familiar with their internal workings. This is also really powerful. What happens when you have your meetings and if you need to have a meeting, you can do it immediately.

[00:55:24]

It's not like I'll meet with friends at Google and like there's this like Tetris of their calendar. And you're like, all right. Next Friday at 2:00 p.m., I've got 15 minutes or something like that or like, hey, let's meet at 7:00 p.m., because then I'll be done with things and then work and you end up like a crazy off time.

[00:55:42]

But when everyone's calendar is open, it's kind of like. All right, let's hop on. Let's do that right now sort of increases the velocity, which you can solve the problems, what you were doing the meeting. Great. So that's that's where I am right now. I'm not always like this. And I'm not advocating this for everyone all the time. There are times when I was in a lot more like weekly one on ones with 15, 20 people a week or something like that.

[00:56:08]

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

[00:56:32]

I want to come back to the reading here in a second, but what are some of the subtle changes that you're talking about that you're you're thinking of? You know, this has been a year of incredible acceleration for our business because as the world economy and everything shifts online, our ecommerce business, global commerce, the blogging side, the situation with WordPress, dotcom even uses our Tumblr guru. And so everything was up at a time when I would say our my colleagues were are impacted.

[00:57:03]

So I feel like we were operating probably even still like a 70 percent efficiency of what we were pre pandemic. And that is largely the it's everything that you can think of. People are literally getting sick sometimes or they have loved ones that are that they need to care for the impact on folks who care for either elderly or children. For us, it has been really disproportionate, I think, of this this year. And so I've seen a big impact for folks like for kids at home trying to homeschool them like this has been really challenging.

[00:57:37]

So we're not operating at our peak. What's funny is other organizations have been switching that distributed haven't talking about how they've gained 15 or 20 percent. So my theory is that we are at one hundred percent and we came down to 70. They were like 50 percent and they went up to 70.

[00:57:51]

Yeah, especially if you had kids. Right. And you had elementary school children like myself sent home. And it's like working with, you know, a 10 and 11 year old at home. It's good luck.

[00:58:05]

It's it's different.

[00:58:06]

So that has has been a challenge. We're also, though, at the precipice of it of even far more growth. So if you look at the percentage of ecommerce we have as a percentage of websites or anything like that, there's several doublings in our future. And so we need to make sure that we have the organizational structures in place to support that. And we've we've shifted to the kind of like digital Berkshire Hathaway. We've prioritized some longer infrastructure, product investments, sort of using the opportunity of this year to say, OK, let's let's do this five year investment and really start it now and really make lots of progress on it.

[00:58:46]

And then just in hiring, scaling our hiring and training, it's kind of my other obsession, which I know you and I have talked about before.

[00:58:56]

Like, if we can make our people 10 percent more effective, that's the equivalent of hiring one hundred and thirty new folks. And so how can we invest, by the way, one side effect of being distributed and how the next time we focus, we have incredible retention. So our regretted churn is something like four percent per year, three percent, three and a half percent. And so if people stay more than a year or two, they'll probably be here a very, very long time.

[00:59:21]

So you have to train them like they're going to be around forever. It's that old joke, like, what if I train my people and leave and like, what if you don't? And they say, like, we've got some examples of this, but to be completely candid, like we were a little bit relying on in person as a crutch. So a lot of our previous learning and training would happen. We were together in person. So we are much like many children in the world trying to learn how to do this in a distributed fashion, really, really effectively and just invest as much as possible.

[00:59:49]

And in coaching one on one and programs and concepts we like like radical candor. And how do we get that distributed throughout the whole organization. So all of this is probably the most important thing we're doing as an organization right now.

[01:00:02]

I want to talk a little bit about the differences between public and private. You just mentioned doing this five year big infrastructure investment. Is that something that you get an advantage of being a private company where you might have more scrutiny if you're a public company? How do you think of it that?

[01:00:17]

I think it's about clear communication and expectations. So we run things internally like we're a public company. And, you know, I could see a future at some point when maybe all of automatic or maybe one of these like subsidiaries, one of these like subs could go public on its own.

[01:00:34]

But I actually don't buy the thing that that public markets don't reward long term investment. And I think there's some amazing counter examples of that. Amazon perhaps the best one where if you clearly communicate and.

[01:00:46]

And do what you're going to say over the long term, these long term investments can really, really pay off. And you know, what's the thing in the short term voting machine, long term weighing machine?

[01:00:57]

In the short term, the markets are a voting machine, but long term they're weighing machine.

[01:01:00]

Yeah, yeah. We have as a private company had incredible swings in valuation. So I feel like we've experienced the capriciousness of Mr. Market already internally and to the point where I literally like you know, we turned down an investor who wants to invest at the company at a maximum of five hundred million enterprise value. And like a week or two later, someone invested a three billion dollar valuation like this. Wild, wild swings that happen. That's that's fine.

[01:01:26]

You just got to get used to it. And you say like, well, what actually matters to our business and is growing. And sometimes the market will understand that. Sometimes it won't. Sometimes, by the way, even better or worse at explaining what we do, sometimes we had the wrong people around the table talking to investors like all those things.

[01:01:43]

But when you get them right over the long term, I think you you have better access to all the capital you need and the ability to make very long term investments.

[01:01:52]

You guys really twelve hundred people now, right? I think given thirteen hundred, what was the hardest phase of growth. From zero to thirteen hundred and one 20 to 50.

[01:02:02]

Why. And by the way, this is always happening, so I try to design automatic to be a fractal organization. So as you zoom in or else it is so similar and so a cross-functional 10 person team at automatic looks a lot like what all of automatic like when the whole company was ten people. And then as they grow, there's like a is it mitosis? When a cell splits like a team will get too big, then a split the two and then they'll be start to be some coordination.

[01:02:29]

So when a division and we have several of these going through, this is kind of in that. Like 20, 30 million dollars of revenue and going from 20 to 50 people, you lose that ability to brute force the collaboration and getting everyone on the same page. And you really need to start communicating in a way which is well understood across the existing people. But also at that point, you're probably scaling pretty quickly. And so you need to be able to onboard people.

[01:02:59]

So this institutional knowledge that was built up by a lot of people working closely together over many years and bringing that new person and really effectively and get them to understanding a lot of what happens at that phase is you bring in new people and you get that Groundhog Day thing where, like new people come in and they they start that discussion or debate that has happened five times already. Because, you know, when you first look at WordPress dot com, they say, well, what if we just I made it ultra simple and only have like five buttons like Tumblr, one that be way bigger.

[01:03:29]

And you're like, OK, well, here's what happens when you do that right here three times we've done that and why on Earth and what we learned from it and like how we're using that to inform our next version. So there's that that onboarding. When you're scaling sort of the the boot loading of institutional knowledge, know if you could imagine your aspiration being like when Neo gets plugged into the Matrix and he's like, I know.

[01:03:52]

Come for, you know, you're not going to get quite there.

[01:03:55]

But if you can get that in someone's first couple of weeks, I think you're ahead of 99 percent of companies, and particularly when you're in that sort of point, when you're growing above 50 percent people wise, is there a costly mistake that you've made recently or while you were growing automatic that you think other people would benefit from knowing to avoid so many?

[01:04:17]

What comes to mind instantly when I say that what comes to mind instantly, we were having a lot of essentially like people issues with the very earliest team and we were probably twenty, twenty five people. Some really good fights happening with folks is very, very close to. And so it felt like a personal thing we had to offer at that time to sell the company for about 200 million. And it was absolutely the right answer not to do it. But I was very close to and it was partially because I was like, OK, that'll resolve these people issues.

[01:04:56]

I won't have to deal with them anymore. But I was like, what is going on here? Why would I make this life decision to sell this thing, which could be one hundred times bigger and I believe will be because of like interpersonal conflict. And so that conflict avoidance is definitely something that particular early on as a lead, I think led to a ton of dysfunction within the organization. Another one that came to mind was, you know, we've been very inspired by a lot of remote Disturbia stuff was pioneered by Basecamp at the time called thirty seven signals.

[01:05:27]

But they also were really into like keeping the company as small as possible. And so I really kept us sub 50, probably two or three years longer than we should have been. And so that meant that we had really spread thin and we under invest in things like customer service because it's trying to keep the company really small, because in my head I equated big with bad. I thought, you know, the larger organization gets, the worse it gets, the more bureaucratic.

[01:05:55]

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

[01:06:16]

Why can't those things make the organization far better as you get better? And so just by kind of asking the opposite and trying the opposite was able to get a company that we have today, which is get to work in the morning. The number one thing that motivates me is that the quality of the care and compassion, the kindness, the intelligence of my colleagues and I consider myself like one of the luckiest people in the world to work with the people I do.

[01:06:40]

I work with a coach that I just started doing that this year. I was like, OK, I want to talk to that direct report. Who is your your least favorite or something like that? There's some version of that. We're going to interview the person who has the most trouble with. And I kind of looked around the virtual room. There was no one.

[01:06:58]

I was like, wow, I was like, so ecstatic. It was like a moment of pure joy because, you know, for a lot of the history of out of my head, there's often been someone in that room where I was like, oh, they have this person. And by the way, doesn't mean it was a bad person. It often meant I was not communicating clearly with that person or setting expectations are avoiding certain things. So I found a lot of ways as I have.

[01:07:25]

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

[01:07:46]

And I like to think that maybe not all thirteen hundred, but we've got maybe twelve hundred or twelve fifty folks investing in improving the relationships of the folks they work with, and that's going to lead to a much better product over time, faster iteration or some of the blind spots you've uncovered working with a coach this year.

[01:08:03]

How limiting my communication can be sometimes, even sometimes how I'll ask a question from a place of perfectly good intention can put the other person in like a not a victim mentality. But unlike our mentality where I'm solving things for someone, I can play the same role so they can be very, very subtle. It's like, is there anything I can do to help you? Versus what do you need for this to be a success? One is like putting the power with me to help you, and the other is putting the power with you to define what you need.

[01:08:36]

And then I can support that. But ultimately, you have the agency, which is far more empowering. I've been learning and working on.

[01:08:43]

And by the way, Nonviolent Communication is an amazing book. And DC, which has a terrible name but is really valuable. That was not with his coach, but was a game changer for me a few years ago.

[01:08:53]

The other is like I feel like for most of my life, I kind of treated myself as like a brain in a jar. So like this disconnected intelligence that I'd invest a lot in exercising my brain, but not anything else, but also not really listening to my body. And so something I've been working on a lot is trying to listen to you, to whoever I'm speaking to. Also listen with awareness of what's going on throughout my whole body. And that's been kind of amazing.

[01:09:19]

You know, just this idea that maybe you can name a feeling by naming feelings. So also hard, I'm feeling anxious about going on Machain. And I can define that because, gosh, streetside, like one of my favorite sites in the podcast, is so good and his other guests are so amazing. I don't know how I'm going to hold a candle to them. And like and I hope this this gets lots of listeners and it's not, you know, all these sorts of things going.

[01:09:42]

I can define that. But what's really interesting is like saying like, what if I feel that like is that the pit of my stomach? Is it kind of in my throat is in my chest? Is it like where is it showing up? My shoulders tense and identifying that for me is just been really, really powerful for allowing the feeling to pass through versus being kind of cleaned up inside me and. Causing disharmony versus I apologize for these words to this on his ads, but like sort of semantically experiencing and working through difficult things where before I would try to intellectualize it and think my way through problems, I'm now trying to physically feel my way through them as well.

[01:10:25]

And also listen to what my body is telling me, which often contains maybe some on verbalize wisdom.

[01:10:32]

I like that a lot of that make any sense at all. I think there's definitely something there. I mean, we're taught that everything should be rational, but there's a huge component of that that is like your body has this pattern recognition. Sometimes, like you look at somebody at the door and you instantly recognize this person has malicious intent. But when you're talking to somebody, you feel all these other things like stress or anxiety, and you're not going to move that relationship forward or get to really good, rational solutions if you don't sort of figure out what it is you're feeling and why you're feeling that way.

[01:11:05]

And I think that we sort of we're often taught to gloss over that and suppress it. And then when you suppress it, it keeps coming up over and over again. And I think that there's a lot to be said for just being with that feeling, recognizing the feeling, labeling the feeling, exploring it, exploring what's going on in our body, staying with it and staying with it instead of just like tossing it away. And I think that there's a ton of value not only to your personal happiness and sleep and sort of like heart rate, but also to the quality of thinking and decisions and relationship.

[01:11:38]

Right. Like if you're trying to grow the pie with somebody, it's really hard to do that when you're feeling anxious around them. And one of the better ways to to get out of that and to come up with Winwin is like, why am I feeling anxious? Let's let's chat about this for a second.

[01:11:51]

As a quote I love from his fear is the cheapest room in the house. I would like to see you living in better conditions. I like that is really powerful.

[01:12:02]

You can also everyone listening to this can feel it like if we were to take ten seconds and try to breathe their belly, like where you take a breath in. And really, like, stick your belly out almost comically and then let it go back in. That'll instantly have an effect on you, and it's like, OK, what just happened and why I'm not just a brain and Rajaa, your whole nervous system is connected to every part of you.

[01:12:26]

And yeah, that's a fascinating thing. I'm starting to explore some of this stuff I think I avoided before because I felt like Woo Woo and a very skeptical person. I like challenging things and I love the scientific method and process. But when I discover something like the harmonic series, like as a musician, like when I started learning the math of the harmonic series and where it show up and the history of like just vs. even intonation and all these sorts of things, I was like, wow, there's an entire universe here that actually made it that that shows up in like physical laws and so very scientific things that that's just a million different places.

[01:13:04]

I wouldn't think of how plants or how petals form on a flower like these. Things are pretty cool. And so I love kind of like maybe starting with the mystery side and then kind of like exploring it from a more scientific basis of, you know, first principles and things that are axioms which are fully definable versus even if it started at a place that felt a little amorphous to me.

[01:13:27]

I look forward to learning more about this from your experiences and how you grow with this. So I think that there's a really interesting place to be. I want to switch gears a little bit back to just decision making a little bit. What are the patterns of people that make really good decisions? Like what do you see in these people and how do they think about things in a way that is transferable to other people?

[01:13:48]

One of the best advice I got early, which was from earlier automatic, I actually had a CEO. I consider him like a co-founder. Tony Schneider. It's like my business. So me and one of the things he taught me early on was. Make reversible decisions quickly and irreversible ones deliberately, and I still return to that on a weekly basis, if it's a reversible decision, you know, we'll probably learn a lot more by doing it. I find it so funny in software, especially like let's just build the first version and build it to throw away maybe, but let's get that prototype out there.

[01:14:17]

And we could debate it for weeks or months or do a million mock ups. I have this all essay 1.0 is the loneliest number, like the oxygen of usage is is required for any idea to survive. And so you want to get to that first version as fast as possible and that learning is really, really viable. So the speed of iteration. So I like smaller, reversible decisions that happen frequently, quickly and without being too attached to a lot.

[01:14:45]

Now, you know, you all famously advocate and I point people all the time to the decision journal. Our internal blogging system essentially becomes that for both small and large decisions and particularly for large decisions, we try to really gather know I think Netflix calls it farming for dissent. I try to gather as much contrarian or challenging ideas as possible. One thing sometimes new executives struggle with when they come to automatic is the fact that everyone, including me, might really challenge them on the things that they're doing.

[01:15:20]

And I've had people say to me before, I like you, I'm an expert, I've been really successful. Why don't you just let me do my thing? And it's like, yes, and we should be able to defend our ideas, not just to me as the CEO, but to like the brand new the brand new person at the company.

[01:15:39]

And you should hope one of my favorite things I've heard of it all the time, the work required to have an opinion.

[01:15:45]

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

[01:16:08]

Talk to me.

[01:16:09]

Like, what do you think of the reversible? Like, do you actually define that literally or is it just hard to get out of because a lot of people get stuck on this? You know, there's almost nothing that is literally irreversible. It's all a matter of costs like you get. You're an NBA general manager. You could trade somebody away, but you could always trade back for them. And you end up in this sort of the circular argument about thinking about decisions.

[01:16:34]

How do you how do you think of it that it's true that probably almost everything is reversible, but some of them, the cost is so high that it's unattainable?

[01:16:44]

I'll start naming things are things that actually people think is reversible, that are actually far harder to reverse, especially when you're successful taking an investor.

[01:16:54]

So who you choose to partner with might be reversible, but it might blow up on the way out, so it might actually be existential. So fundraising acquisitions both on both sides of the table are very, very hard to unwind and sometimes existential, if not totally reversible. But something you want to deliberately is particularly executive hires because an executive needs six to 12 months to ramp up. So and then you have kind of a year to do their thing. So if you make the wrong hire there, you kind of lost two years in the system.

[01:17:27]

So there's a lot of these that I think are worth approaching deliberately or just having a few turns on like writing. There's almost no writing that they can get better from some amount of editing. I'm sure there's a diminishing marginal return at some point. But, you know, this is a very crisp writer. Like how often is that first draft, like the best thing you've ever written?

[01:17:48]

Oh, God, no.

[01:17:52]

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

[01:18:10]

Talk to me a little bit about mental models and the mental models you use most commonly when you're making decisions for yourself or for automatic.

[01:18:18]

I think I'm struggling with this because I'm such a fanboy. Well, I mean, this is worth pointing out, right? Like, so our physical books, the great mental model series are direct result of you and your support of what we're doing. I mean, they wouldn't be possible. The physical copies wouldn't be possible without you and automatic. So thank you.

[01:18:37]

That's very kind. Although I believe I believe someone would respond sponsored if we didn't. But yeah, I was falling over myself to do so. By the way, if you haven't got the physical book, I encourage people to do it because it's gorgeous. The mental models, I think that, you know, we all operate on pattern recognition and most of these patterns are subconscious. And there's been great books written on this, like thinking fast and slow.

[01:19:00]

Although Dan Ariely is working on behavioral economics, all the great conversations that happen this year around bias conscious and subconscious like these are just patterns that we have. And I think far too often do we truly invest in creating deliberate patterns, ones that have don't just happen by accident, but that we truly challenge and choose to adopt in our life and actually practice much like an athlete. We practice a certain move or musician which practices scale. These can become the sort of raw technique of, I think, operating particularly under pressure, under duress or in high time-sensitive situations.

[01:19:38]

When you can fall back to this training, to these mental models, it is really very powerful. And that is the that latticework that that creates. I actually think about in musical terms, there's 12 notes in the Western scale. There's a nine scales between them. I mean, literally nothing. But there's all these combinations. But I play jazz and so it's all about improvisation. If you put someone who doesn't know all of the underlying technique and theory and just say, improvise, it's not going to be great because you need to know the rules to break them.

[01:20:09]

And maybe that's a mental model.

[01:20:12]

Well, there's a saying the young man knows the rules. The old man knows the exceptions.

[01:20:17]

I like that. You know, I inherited a lot of things from music, actually.

[01:20:20]

So before I start consciously thinking and discovered probably through your blog, like Charlie Munger and all those things, that the rules of music and learning music and delivered practice and performing and breathing and all these sorts of things I got from being a saxophone player, I think were a huge, huge benefit for me, just being like I was fundamentally an engineer.

[01:20:43]

I was like a coder, but I could get in front of a room and talk to people. And so, like leading a band, I could off the cuff, you know, respond to things and sort of like improvisation. I, I knew that the best things are created in a team.

[01:20:58]

And so even though a lot of my early days were what was more that solo coding and crazy 12 hour days with pizza and not to do those things like it, it was always trying to get other people involved, too.

[01:21:13]

It was actually funny whenever we talked about the multiple evolutionary branches that came off a B to redresses one of them. One of the things that happened was I actually reached out to the the people who started all the other branches said, hey, if we work together, that would create something better than if we were each recreating the wheel on our own.

[01:21:29]

And I think out of the five branches, like four of them joined up with WordPress. That's also the leaders of those other things merged because they had done really cool stuff. Like one of them is called B two plus plus, and it created a multisite version of WordPress. So where you could run like multiple instances on the one code base that then got merged and the WordPress became classic WordPress multisite and then that became WordPress dot com, which allows us to host hundreds of millions of sites in the same kopay, same databases.

[01:21:54]

And as super scalable way, where each incremental site only costs us like a penny per year. So that was part of that beauty of taking these multiple evolutionary branches and being able to adopt the best from different ones. So idea meritocracy probably, I think probably got that from Ray D'Alessio and principles.

[01:22:11]

Just if you dig into a lot of the most successful people, they also have the rule book, and I love it as well when they say I like this rule book doesn't need to be a rule book or guidelines.

[01:22:23]

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

[01:22:37]

I hope you do follow up to some of these conversations, like five or 10 years down the road where you can kind of revisit some of the ideas and see what changed, because to me, that Delta is actually pretty, pretty interesting. We're talking about a snapshot of moment of time of what I believe is the best practices and the best things. But if I'm still growing, hopefully I discover far better methods or better ways of approaching almost everything we've talked about.

[01:22:59]

Let's book it now. We'll we'll follow up on the structure and come back to it. And one of the things I love about you is that you're you're not only one of the kindest and most thoughtful people I know, but you're always trying to grow the pie with other people and you're always trying to make something larger through going with other people instead of just going really fast on your own. And I think that's a really unique attribute for you. I think it's awesome.

[01:23:23]

Thank you.

[01:23:24]

I would also say that's why everyone should ask for open source. Open source is a hack that gets competitors to work together. And when you think of you read sapience, what made humans who are weaker, slower, etc. outcompetes from an evolutionary point of view all the other animals and it was working together is story. It was collaboration and I believe all proprietary software to be an evolutionary dead end. Maybe they'll take 50 or 100 years, but what happens, just like what happened fairly quickly with like Encyclopedia Britannica and other encyclopedias and Wikipedia, is that the thing which is open to all and gets everyone working together?

[01:24:01]

If it truly gets that sort of like humanity working together on the same shared resource, you get the opposite of the tragedy of the Commons versus like the field being overrun. Each person operating in their own self-interest sort of kills the environment or kills the share thing. Each person operating in their own self-interest makes to share things better and better. And in digital world, we can do that because we have economists, economics of abundance versus economics of scarcity. And that's why open source will eventually win every market it's in.

[01:24:30]

It's you know, there were lots of competitors to WordPress in the blogging and space, which essentially bet on, you know, if we make all the money and have all the revenue and everything will be able to create something better than this unprofessional group of volunteers working in their spare time. And they really have lost a bet over the past 17 years. It's happening with e-commerce now, and I believe it's going to happen with every area that open source when there's a really great project and a project which is truly inclusive, responsive, evolves and has the economic incentives in line for collaboration versus Balkanization.

[01:25:06]

I think that's a great place to end this conversation. Together we go a lot further than we go alone. Matt, thank you so much for such a wonderful conversation. Thank you, Shane. Hey, one more thing before we say goodbye, the knowledge project is produced by the team at Furnham Street. I want to make this the best podcast you listen to, and I'd love to get your feedback. If you have comments, ideas for future shows or topics or just feedback in general, you can email me at Shein F-stop blog or follow me on Twitter, Chainey Parish.

[01:25:40]

You can learn more about the show and find past episodes at F-stop Blogs podcast. If you want a transcript of this episode, go to F-stop blogs.