Matt vs. WP Engine: Thoughts from a former WordPress startup founder

The censored Reddit post on why Matt Mullenweg is really going after WP Engine.

As a former founder in the WordPress space, you may remember me from CyberChimps and the Responsive WordPress theme, I’ve observed the ongoing situation between Matt Mullenweg and WP Engine with interest. I was launching my own company around the time WP Engine first debuted in 2010. I know the founders and the original team well, and I also contributed extensively to WordPress and WordPress.org for about five years. Although I haven’t spoken to Matt in nearly a decade since selling CyberChimps, I do respect the work he’s done.

What I can tell you is from the beginning, WP Engine has been committed to open source and the WordPress community. Their only “thoughtcrime” seems to be not always aligning with what Matt wants. They’ve made significant contributions to the ecosystem, and their business decisions are understandable given the technical challenges that come with hosting WordPress sites. At one point, WP Engine even hosted my business until I outgrew them and switched to Pagely.

The trademark claims against WP Engine seem like a smokescreen. The legal structure where the WordPress Foundation, controlled by Matt as CEO of Automattic, owns the trademark and then licenses it exclusively to Automattic, is convoluted. Automattic is now trying to profit from this arrangement which is a legal loophole that’s being pushed to its limits.

If this case goes to court and WP Engine wins, it could set some interesting legal precedents. From a legal standpoint, Automattic and the Foundation could be at risk of losing their trademarks due to inconsistent enforcement and potentially using these trademarks as leverage to extract money from others. You can’t wait 14 years to suddenly enforce a trademark claim, especially when there are thousands of other WordPress-related companies using “WordPress” and “WP” in their marketing just like WP Engine. Matt’s position is legally precarious, and making this his primary public argument is foolish.

At the core of this issue is money. Matt has struggled to monetize WordPress effectively, despite raising nearly a billion dollars in venture capital over several decades, resulting in a business with only $155M+ in annual revenue. Automattic has been propped up by VCs, not by a sustainable revenue model.

In contrast, WP Engine generates $400M+ in annual revenue, backed by a more modest $290M in total funding, and is now supported by a major private equity firm. WordPress powers 43.5% of the internet and 62.7% of websites using a content management system. Matt deserves immense credit for leading the open-source project to such heights. However, his failure lies within Automattic, where his ideological biases and lack of business savvy have hindered effective monetization relative to the vast amount of capital he’s raised.

Simply put, WP Engine has succeeded where Matt and Automattic have struggled, creating a product and service that the market prefers. However, this does not justify anticompetitive behavior or attempts at extortion.

The pressure on Matt to monetize Automattic, likely driven by his VCs, seems to be behind his recent actions. The crux of this issue appears to be WP Engine’s decision to switch away from Automattic’s preferred Stripe payment gateway for WooCommerce installs—a move that could affect Automattic’s revenue if they receive kickbacks from Stripe. Yet, Automattic has no right to dictate WP Engine’s choice of payment gateway, as this could expose WP Engine to significant legal risks by effectively cutting Automattic into every transaction their customers make (WP Engine customers have no relationship with Automattic).

Matt’s recent actions have led to a series of missteps that could have serious legal and financial consequences for Automattic, the WordPress Foundation, and the broader community. His public statements about charity donations without disclosing where the money went (which also serve as tax write-offs) raise more questions like: How does Matt have so much money personally if his company isn’t profitable respective to the amount of capital raised? Were these donations used as an attempt to avoid capital gains taxes? Who did he give this money to? Why is he disclosing this now?

Meanwhile, his encouragement for the community to stop using WP Engine through the WordPress dashboard and cutting WP Engine customers off from WordPress.org highlights how disconnected he is from the implications of his decisions. His actions present a clear conflict of interest, and appear unprofessional and unethical at best, and potentially illegal at worst.

Unfortunately, none of this surprises me, given my past experiences within the WordPress community. If anything, I’m surprised it took this long for something like this to happen.

TLDR: When someone shows you who they truly are, believe them.

P.S. I originally posted this on reddit.com/r/Wordpress but the moderators censored it without reason, so screw it here it is on a platform Matt can’t “hack”.