🎙️ Episode #13

Matt Mullenweg on the Challenges and Successes of Building a Remote-First Company

Show Notes

Matt Mullenweg is best known as the visionary co-founder of WordPress and Automattic. He’s rightfully secured his place as one of the most prominent figures in the tech world and — more specifically — a pioneer of remote working,

Despite having no physical headquarters, Automattic currently has around 2000 employees working from 90+ countries and was recently valued at US$7.5 billion, making it one of the largest globally distributed companies in the world. WordPress is the biggest CMS in the world (and a movement of sorts), powering over 43% of the internet. Matt’s influence on tech has been far-reaching and revolutionary, and it’s not an exaggeration to say that his initiatives have changed the game.

While Automattic is Matt’s main focus, he also advises and invests in startups through his company Audrey Capital, and hosts Distributed, a podcast about the future of work and the foremost companies and leaders driving it. 

In the second episode of plugin.fm season 2, we pick Matt’s brain about the challenges of building a remote-first company and the wins that arise from succeeding. Matt shares his insights and advice on navigating the pitfalls of a flexible workplace and building a successful remote-first company — ranging from accountability and compensation to hiring and productivity.

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Thanks to Matt for joining us and providing such valuable advice about building successful distributed companies. Join us next week with Stranger Studios owners Kim and Justin Coleman as they discuss the challenges of bootstrapping a software company with your spouse.

plugin.fm is brought to you by Freemius, your all-in-one payments, subscriptions, and taxes platform for selling software, plugins, themes, and SaaS. If you enjoyed this episode, head over to plugin.fm to check out previous episodes.


Chapters & Episode Notes

00:00 – Intro

01:34 – Navigating the Landscape: Building a Distributed Team with Matt Mullenweg

06:27 – Unveiling the Hidden Advantages of Distributed Work

09:11 – Addressing Early Technological Challenges in Distributed Teams

17:37 – Setting the Tone with Early Hires: Cultivating Culture and Processes

26:54 – The Matt Chat: A Deep Dive into Automattic’s Hiring Process

30:23 – Rebuilding Trust in Distributed Teams: Strategies for Restoring Confidence and Collaboration

39:57 – The Future of Work: Navigating Remote, Hybrid, and In-Person Models

43:54 – Outro

Transcript

Matt:  I don’t care how many hours you work or when you work. I care about how well you work.

Patrick: Matt Mullenweg is best known as the visionary co-founder of WordPress and the CEO of Automatic, one of the largest globally distributed companies in the world.

Matt: If someone’s playing solitaire all day, but they’re getting the work done, it becomes about output-based management rather than input-based management.

Patrick: With no physical headquarters, Automatic currently has around 2,000 employees working in over 90 countries, and was recently valued at 7.5 billion. Wow!

What do you think are some of the non-obvious advantages of going distributed?

Matt: You can hire people that you wouldn’t normally be able to hire from companies that aren’t distributed. Companies like, you know, Slack, Snap, or Facebook are taking people back to the office. So they’re kind of going back on the word, which of course breaks trust with their employees, which means those people are very recruitable.

Patrick: Hello everyone. And welcome to another episode of plugin.fm. My name is Patrick Rauland, and my guest today needs no introduction. He is one of the most prominent figures in the tech world and a bona fide pioneer of remote working. Matt’s influence on tech has been far-reaching and revolutionary. It’s not an exaggeration to say that his initiatives have quite literally changed the game. In fact, in this interview, I realized that one of the hiring practices I learned from Automatic and had completely forgotten about it until this chat.

Based on the intro, you’ve probably guessed that we’ll be exploring the challenges of building a remote-first, also known as a distributed company, and the successes that come from getting it right. Welcome, Matt, and thanks for joining us on plugin.fm.

Matt: Thank you so much. It’s great to be here.

Patrick: I think let’s just start with the landscape today. In today’s day and age, it is not uncommon at all to hire remote team members. But when you started Automatic back in 2005, I think it was pretty novel. How did you make the decision way back in 2005 when it was a different world, a different context to build a different, distributed team?

Matt: Well, you know, WordPress came first. So I co-founded WordPress in 2003. So I’ve been working in open-source projects, contributing and even prior to 2003 involved in online communities, whether that was forums or IRC or Usenets or, you know, that was really I would say my primary social interactions, actually, you know, I had friends in person, but like, I was connecting with my tribe online and, you know, how open-source works then and works now is very much people from all over the world, united by like a common passion or goal, working together online. And then the tools are all different. Like we didn’t have as much broadband, we use CVS instead of Subversion or Git. We used SourceForge instead of GitHub or GitLab. So, the tools were different, but the basic structure of it was very much like today. Instead of Slack, we had IRC. We had all these different IRC rooms for WordPress, and actually they’re still running on Freenode. You can still visit the hashtag WordPress. A lot of people don’t know this, but Slack was actually modeled on IRC. It’s basically IRC plus Emoji. And so yeah, these early versions of the tools allowed us to collaborate all over the world. And some of the first people who were part of WordPress. We’re all over the world. The co-founder, Mike Little, we had never met in person. He was in the United Kingdom. My first colleague at Automattic was Donico Cueve. He was in Cork, Ireland. You know, so we were already spread out. And, you know, I was in San Francisco by the time Automattic started. I dropped out of college, moved there, taking a job and was about to leave the job. And I was like, well, San Francisco is expensive. Why would I move people here? Because we had no money. And then, you know, make them leave their families and their friends and, you know, all sorts of things, to come to this city, which is, I think, great, but, you know, there’s also immigration. Donna goes to Ireland. There’s just so many things to worry about. So, let’s just work where we are. And also, we got the added bonus, especially those early days. Because we’d all be working so much and we’d kind of pass the torch throughout the week. So I’d like to work until midnight when Danica would get up and I’d give it to him. I’d go to sleep, wake up in the morning, he’d kind of pass it back to me. So there was just a lot of, it was like a relay race that I think allowed us to move a lot faster than our companies who were only working, you know, one shift per day. We were working two or three.

Patrick: Yeah, that’s fantastic. So is it kind of you had the ideal people in mind? And then they were all, they were outside of the U.S. And then because they were outside of the U.S., you already knew them from your online social presence. And rather than moving them to San Francisco, it was, let’s just have them be distributed, distributed, not remote, distributed. 

Matt: And not just that we knew each other, we’d already been working together, doing the exact thing we wanted to do with the company, which is to build great software together. So there are some folks in the U.S., you know, I think, where was Ryan at the time? He might’ve been in California. Andy, I feel like was in Vermont or Texas or, you know, folks are just spread out everywhere. 

Patrick: Fantastic. Would you go back and, you know, in time and do anything differently with how you started Automatic? Distributed?

Matt: Good question, what would I do differently? Probably a lot of things if I really thought about it, but you know, it’s also that like even the mistakes we made or things maybe we had to do to learn, myself and then, the fellow who joined as a, so I had a CEO about six months after Automatic started my business soulmate, Tony Schneider, he’s actually still involved with the company today. And, he was in San Francisco and so we’d, we’d kind of crash and like. If we needed an office or to meet up, we’d either go to restaurants or coffee shops or just, you know, one of our investor’s offices. True Ventures was getting started at the time. And so they allowed some coworking space and actually it was early. This was kind of before coworking was a thing, but some of the very first coworking spaces were in San Francisco. So, you know, that and coffee shops, you know, San Francisco coffee shop scene is kind of fantastic. We’ve got a library. He’s like, just kind of work around the city. The city was our office or at home, you know? 

Patrick: Fantastic.

Lots of entrepreneurs that I know are fans of SOPs or Standard Operating Procedures. And while those are good when it comes to building a vibrant company culture, there are even easier things that CEOs should do. Stick with us as we talk about what you should do for your first couple of hires.

Patrick: Okay. So let me ask you about, so I think there’s some large benefits to distributed work. Like I think one of the biggest ones is you can hire the best person for the job, wherever they are in the world, right? That’s probably one of the biggest benefits of it. But I imagine there are also some non-obvious advantages to building a distributed team. If you have any in mind, can you go into what are, what do you think are some of the non obvious advantages of going distributed? 

Matt: Yeah. You can also hire people that you wouldn’t normally be able to hire from companies who aren’t distributed. So, you know, I actually love that some of these companies, like, you know, Slack, Snap or Facebook are taking people back to the office, including some of the ones who said, you can stay remote forever. So they’re kind of going back on their word, which of course breaks trust with their employees, which means those people are very recruitable. Some percentage of them want to, some percentage don’t, and so they’re going to be on the job market or open to offers that you, and again, these are people you might not otherwise be able to recruit.

Some of the best people you would want to hire are loyal to their company, and so they’ll never leave unless the company betrays their trust somehow. This is why when Elon bought Twitter, it was such a generational opportunity to bring on amazing things. talent, because some of these people would have been lifers at Twitter.

They never would have left, but because the trust was broken often by being laid off sometimes accidentally, they were all of a sudden on the market and you can hire some really great people. We actually hired, I don’t know exactly how many, but we got like 900 applications. I think we ended up hiring like 15 of them for Twitter.

Patrick:Fantastic. I have tried to think about how much remote or distributed matters to me because I’ve been looking at some jobs and part of me is like, I think it’s at least $30,000 a year. If someone was like, “All right, Patrick, the exact same job but you have to go into the office five days a week,” that’s probably at least five figures at minimum, probably somewhere like $30,000. It’s such a big perk, so I can see how you’d use that as a carrot to attract some talent.

Matt: It might be more depending on the rest of your situation. So if you’re needing to live near some of these tech companies are based in the most expensive places in the world, like the Bay Area, and then you have to also add in how much is school going to be? All the public school is going, you have to do a private school. Private school alone could be $30,000 a year per kid. Are you moving away from your family so all of a sudden you don’t have the free babysitting or pet care or whatever it is that takes care of your home when you travel? So those sorts of things can add up to where I’d say it could actually be pretty significant.

Patrick: Fantastic. So okay, since 2005, technology, I think, was weak originally. So I remember joining Woothemes around 2010, let’s say, and we were using Skype before we got, I think we were on before Slack, there was chat, and before HipChat, I think there was Skype. And Skype is not meant for running teams, right? Like I think the technology was really weak back then. Technology certainly improved. You know, technology is an obvious one, but besides technology, what were the biggest challenges of being distributed in the beginning?

Matt: I think when we started we were on AIM, we adopted Skype. What people forget about Skype is that that was the time when you used to get charged per minute on your cell phone, and long-distance calls were expensive, so Skype proved free voice calling to everyone in the world. It’s funny; we actually didn’t have any meetings before we started using Skype, and then we just do like a voice meeting once every couple of months or something. So every new piece of technology actually enables a different form of work together. You know, Zoom, I would say for better and worse. Since we started using Zoom, we do a lot more meetings because it’s just nice being able to see your colleagues and such. Other breakthroughs, I’d say we definitely benefited from. We were very inspired by the early days of Google, and so at the time when we were starting, people would still buy net apps or multi-million dollar large servers that were centralized points of failure. Like very famously, there was a big host called Media Temple, which was later bought by GoDaddy. They had these giant storage servers, and they tried to use that to scale. We were of the era, partially because we didn’t really have any money, where we did lots of cheap servers in redundant fashion and with really good failover built into our systems architecture. So I remember like the first servers there was these companies in Texas like what was it called, EV1 servers or Planet servers. I forget all the different names, but they’re actually in like Houston, Dallas, and they had servers you could just buy on a credit card. They would spin them up immediately, and you know, they could be as cheap as like $70 or $80 per month, which was just revolutionary. And so I started actually just before WordPress started doing hosting where I was like, “Oh, my original business model, I think what was it? I was like, ‘Okay, because I build websites for people and then I sold the hosting afterwards. I was like, ‘Okay, I can charge them $20 a month. I get 500 people to pay me $20 a month. Yeah, that’s like I’m done. I can retire basically because the server was only $70 a month.’ And so that would be, you know, call it something like $100,000 a year, which you know, as a kid in Houston, that’s an unimaginable amount of money. Yep, it’s more than my dad made. It’s more than like H. So that was kind of my whole business model, and it’s funny that’s sort of what I do now still. Some of the numbers have changed, and yeah, providing hosting always just felt like a really valuable part of the service. So yeah, I think the cheap servers that were on-demand kind of pre-cloud, you know, the growth of the underlying technology like Apache, the LAMP stack (Linux, Apache, MySQL, PHP) was nascent at the time, but like again, not standard. A lot of people are doing heavy Java stuff or other things, but we decided to bet on these technologies. Shared hosting, you know, we try to make WordPress that ran everywhere and then later the one-click and all and updates. Trying to think what else, open source was around for a while.

Patrick: Were there challenges hiring the first couple people? Like were there, you know, were there challenges in getting those first maybe text meetings on the ground or on the schedule or getting features released? Were there those types of dynamics?

Matt: I’d say the first couple were actually the easiest because it’s folks I already knew and had already been working together with, and so we liked each other, we worked together like we kind of, it was a very known quantity and so that was just more like, hey, now let’s get paid for doing what we were doing for free and let’s get paid for it. That was honestly the original business model of Automatic, like hey, let’s just try to make enough so we can pay ourselves and work on this full-time because again we were doing it for free anyway. Honestly, if I wasn’t getting paid I’d still be doing WordPress, so it’s one of those things, it’s nice to get paid for your hobby. I would say what was much more challenging was kind of the next 30 or 40, you know, so after those first 10 or 15, like scaling the team to a bigger number, we started to hire people that hadn’t worked in open source or remote before. We had to hire for non-engineering roles and, you know, you mentioned not a lot of companies were doing it at the time, there were definitely a few examples, some like Wolfram that maybe even went back to like the ’80s with Stephen Wolfram, is like a remote CEO, but not a lot of sort of tech startups. So I would say, you know, one thing that was very challenging was just fundraising, as a lot of really fantastic investors had never seen an internet-changing company being built in this way and they didn’t want to invest in it. They said, you know, they taking lots of risk building a new thing, you know, you have a new market, a new product, a new everything. Open source is already kind of weird. There weren’t a lot of open source companies. Don’t do this weird, too, you know, like choose one or maybe two areas to innovate in, don’t try to innovate in like six or seven areas at once, which we were definitely trying to do. Like I wanted to create a virtual currency. I was like, there was like eight things I was trying to do at once, so I cut some of them out, including the virtual currency, although there’s still a credit system on WordPress.com to this day, kind of behind the scenes. But yeah, we cat picked our battles, which first and foremost was open source. Had this idea that if we created kind of an open source community later, even a nonprofit that was paired with a for-profit that created a fly effect between them that they could do something that neither could do on their own, something better than any could do on its own or any nonprofit could do on its own. There’d be something very complimentary there, what Charlie Munger might call a Lollapalooza effect. And then yeah, the remote work, which we called it at the time later distributed, also felt like a competitive advantage, again not just for hiring great people but also that kind of like 24/7 work and early days of startup you really need to move as fast as possible. Your only competitive advantage was speed because we had less money, fewer people, we had less experience, we had no idea what we were doing, so speed was I would say, you know, if not the best competitive advantage, maybe even the only competitive advantage we had.

Patrick: I do feel like iteration is undervalued in businesses. It just seems this is a total tangent but just moving quickly and iterating on things that you can iterate on. There’s some things you can only do once and you try to do it well but many things in business you can just do over and over again. Your first webinar is not good; your 10th webinar is excellent by comparison. So I love companies that focus on speed because you can always get better at that.

Matt: Well, and the kids are talking about it now. I think maybe it was Mr. Beast or someone who was like to do it 100 times. Yeah, if you post 100 videos through YouTube I’ll look at it and there’s actually like a Zen story about this that I’ll butcher but basically it’s a story of the Zen master goes to two of his students tells one of them hey take 100 days and make the best FS that you can or the best cup or something. He goes to the other one and says take 100 days and make 100 cups, you know, 100 vases. And at the end of it, who do you think has the better vase? The one who spent like 100 days making one of them or the one who spent made a hundred of them in 100 days? It’s obviously the latter. And the same thing with learning to draw or whatever just doing it repeatedly is undervalued because almost everyone gives up and so if you can stick with something every day show up every day with consistency, you’ll be amazed at what you can accomplish.

Patrick: No one’s going to disagree that it’s a good idea to define standards for your company. What might not be obvious though is that you want to set really high standards. Matt’s going to cover that as well as other advice from General and Dunwoody.

Patrick: Okay, so moving on, I did want to ask about early on in a company. So a lot of the people that listen to this are running their own small software companies. Early on, I think those first couple hires really set the tone for the rest of the culture, right? It’s like going from the founder to one employee. Like that person is responsible for 50% of the culture. I know it doesn’t quite work like that, but they do have a large impact. What sort of processes should you put in place so that you’re communicating and collaborating with those first couple hires?

Matt: I’d say there’s two sides to that. One is that humans learn by imitation. And when we’re kids and learning to speak and walk, but also as adults when you enter a new social situation. Just the other day, you know, we have some big meetups coming up. A lot of people haven’t been to meetups before. People are sharing that at their first meetups, they looked to what the more experienced people, how they were acting and what they were doing and modeled their behavior after that. So you know, it’s one of those things leading by example isn’t just one way of leading. It might be the only way of leading. You got to set a good example. And that’s regardless, I would say, of position hierarchy. It’s more about tenure as long as those people are still there. If they have a longer tenure, they will lead by example. The good news is though that I would say every additional person can redefine your culture. In fact, hopefully does. Hopefully your culture is not a static thing just set by those first few people that it evolves and expands as you’re able to bring in more people and a bigger diversity of people and more roles or specialization. One definition I like of culture is like what people do when no one’s looking. Yeah, you know, do they tidy up the bathroom or pick up the trash in the hallway when there’s no one there or something like that. And so it’s the sort of sum of all of those interactions between every single person and all the leadership by example that happens there both in seniority and tenure. And you know, I really love one of our board members has a fantastic book. Her name is General Ann Dunwoody, and the book is called A Higher Standard. Highly recommend it. It’s leadership strategies. General Dunwoody, she was the first-ever female four-star in the US military, any branch. Wow, so her story is just really fascinating and inspiring. I actually came across her story when I was studying distributed organizations because people don’t think about it as a distributed organization because the military has bases and everything, yeah, but you know she, her command I believe was 60,000 people, like 160 countries, all right, that’s way bigger than Automatic, more people. Or you know, a budget was like $60 billion or something ridiculous. And so gosh, what did the military figure out or what did the Postal Service figure out or what did companies with, you know, field offices in every city, you know, there’s so many examples of this. What did newspapers or journalism figure out when they have reporters all over the world, how they collaborate, how they set the culture, all the things people ask like how do you set the culture, how do you know if people are working, blah, blah, blah. Well, how do you know if you’re a reporter and in Baghdad is working if you’re in New York City? Like, well, are they writing the stories, are they responding, are they communicating? Like it’s kind of similar stuff. Yeah, so General Dunwoody talks about how, you know, your standard is also the lowest thing that you accept. I mean like if you tolerate a low quality of behavior or an exception to your role that becomes a new standard and a lower standard. So part of setting standards high is you know making sure that things are done, you know, the way you do anything is the way you do everything. The military doesn’t have people make their bed and press their uniforms because it’s important in battle to have the Chris or for your bed to be made, but it’s one of those habits that is easy to check and if it’s not happening, you also wonder like did they clean their gun properly or pack their parachute properly or do any of the other hundreds of things that need to be done consistently and with precision for a high-functioning organization and individual to operate.

Patrick: How do you know if someone’s a good fit? Like, what are the things that you ask them? What are the things you look for on the resume? Again, once maybe get past the first 15 people, you know, what are the things that you look for, because you want someone who’s trustworthy and can move quickly. So how do you dial in on that?

Matt: Yeah, I think the mistake we made after those first couple of folks is we’re like, okay, what do the big tech companies do that we look up to? Like, what’s Google do? What’s Microsoft do? So, we kind of looked at that. So, what they did at the time, and in some instances still do, is they kind of filter based on resumes or where you went to school, where you previously worked. So, a lot of resume-based filtering. Then they have pretty extensive interviews, you know, sometimes like 8, 10 hours. They ask puzzle questions, you know, write on this whiteboard like a tree, sort of different sorts of brain teasers, you know, how many manhole covers are there in New York City, sorts of things. That was kind of like from the McKinsey world. So, and so we did that, and we hired some people that, I would say, were very impressive on paper, you know, PhDs or stuff like that. But then once we started working together, it just didn’t work. And I also realized, like, hey, I dropped out of college. Like, it’s kind of hypocritical of me to only hire people with fancy degrees. So, we kind of looked at what had worked so well about our initial folks, and the key ingredient was, regardless of their background, we had worked together on something real. We’d built something together. So, what we started doing was we still did a little bit of screening, and I actually would personally screen every incoming application, and purposely made it where it was just an email, so people could send the resume in any format, they could format the email from anything, they could send it from anywhere, you know, someone came in from like a Hotmail, I was like, do they know what they’re doing, you know? So, I would do that first screen, mostly looking for attention to detail and writing ability. Then after that, we’d say, hey, let’s do a trial project. And how that evolved was, I think, free first, and then later we’d actually pay everyone a standard rate like 25 bucks an hour. And people were like, I don’t want to do free work, they thought we were actually going to use the work. We didn’t actually use any of the work, we just kind of wanted to have something real to try together. And that trial project was actually the key part of our hiring process until today. I would say it’s also really easy for engineering roles or customer support, like customer support you can actually give them some real tickets, engineering pick a real bug. Although now I think we do like, we have some synthetic projects we created, so there’s more consistency from one person to the other. It’s a little trickier for other roles like HR, CFO, what a trial project, you know, or a business person. But you can kind of figure out some versions of what would be part of their actual job and they just do it and you look at how. And by the way, it’s a two-way trial project, so you’re evaluating them, they’re also saying what it’s really like to work at the company, and maybe they like it, maybe they don’t. I mean, it’s just as people forget that it’s just as important that people really like working with the company and how you work together. And we’re fairly unique in how we work together. So, that was the thing that we figured out early on and we still do to this day. It’s a really important part of our process.

Patrick: I forget, it’s funny how things that you did over, you know, over a decade ago, almost two decades ago, are affecting me because I hired someone probably two years ago for a role, and we put, I think, the top like five applicants through a trial project. And it’s funny, I just, I forget how these little seeds that you or and other entrepreneurs planted years ago have worked their way into my processes. I didn’t even credit you in my brain that that was something that maybe you guys popularized.

Matt: Popularized, because, you know, if we open source these ideas and they’re successful in the marketplace of ideas, they just become part of the zeitgeist. We don’t need credit, like the reward is just like seeing it happen. Also, credit implies that we were the first people to ever do this, which I’m sure we weren’t. I’m sure I probably picked it up from someone. There were companies like 37 signals doing remote, you know, at a larger scale even before we did. And I think that’s also really cool. It also means that as more companies out there work like us, it makes things like acquisitions easier, you know, like when WooThemes later WooCommerce joined Automattic, the team was different but also worked in a lot of the same ways that we did. You know, they were into open source, they were built on WordPress, they were a distributed team like so, that was actually one of the easiest integrations of acquisition, which is the hardest part about the acquisition, that anyone had seen at that scale.

Patrick: Agreed. Having been on the other end of that, it was, it just felt like coming home to a big Thanksgiving dinner. It’s like, “Oh, this is my family, just bigger.”

Matt: That’s awesome.

Patrick: So, okay, so I have a bonus question here for you. We seem, we’re okay on time, so I feel like Automattic used to have a Matt Chat. Is that still a thing where, and I thought it was like later stages of the interview or where they and you would basically interview every, is that every single person, and do you still do that?

Matt: Yeah, it was probably the first thousand people or so.

Patrick: Okay. And what are you looking for in this, like when, you know, because you’re chatting to everyone, you might be hiring an HR person, a finance person, an engineer, a marketing person. What are you looking for in the Matt Chat?

Matt: Yeah, so by the time they got to me when the Matt Chat was at the very end of the process, we already knew we wanted to work together. It’s kind of a two-way thing. And so I would have a number of questions that were just more like getting to know the person, huh? And I would kind of iterate on these and experiment and sort of hit to like, somewhat of a, a template or framework that I found could flow really well in a conversation and would kind of help me learn about the person they were on text and asynchronous. So, you know, sometimes they could even take place over a few days. And also because, you know, at some point, why I had to stop doing it was we were just hiring too many people per week, and it, I became kind of a bottleneck, you know? And so people might have to wait like a few days or something to get the Matt Chat. And then at the very end of it, we’d sort of like, discuss compensation, everything, which was kind of easiest for me because I had access to, you know, all the HR information, everyone’s salary, everything like that. So, that was what the Matt Chats were, you know? At some point, our hiring rate exceeded what I could personally do. I think in 2021, we hired 71 or 700 people. So, you know, that would be a, that’d be a lot of Matt Chats if each one takes an hour or two. So, now there’s a version of it that’s usually done by HR at the end, but I think it’s more compensation-focused now. Maybe some fit questions or some, you know, they’re gathering like your time zone, where you are, visas, like all this sort of stuff that HR needs to. Fantastic looking for some culture fit. It was unusual. There were a handful of people that got turned away at that period, but very rare. And usually we’d use that as a learning, like, hey, what could we have caught earlier in the process? Because, again, we want to be respectful of people’s time. So one thing that’s very important to our hiring process because it would take a fair amount of time for people we hire is to say no quickly if ever we had indication that it wasn’t going to work out. So that way we weren’t wasting anyone’s time, including our own, although, you know, I would say where we’ve iterated the most is, you know, before. Something also that’s important to our hiring process is as much of the hiring is done as possible by, like, the best person in that role. So take your very best Engineers or your very best designers, you know, especially early on, they would review the resumes, do the chats, reach out to people, everything. You know, the good part of that was the potential hires are being exposed to your best folks. The downside sometimes is when we didn’t really track someone, you know, sometimes a process of hiring, which stretch out, and we might lose a good candidate not because they weren’t good or a good fit but because just a hiring process took like two months or three months.

Patrick: Yeah, got it. Okay, so there are a couple of things that are important for remote work, and I think the two most important are trust and accountability. Trust because you’re not seeing them every day, you’re not looking over their shoulder to see if their Excel file is open or their coding IDE is open. And I think just trust that they’re using your time effectively. How do you build that into the culture? How do you make sure that those are two important qualities in your culture?

Matt: Would you say those are qualities that aren’t important in an office?

Patrick:Okay, well, I will say those are hugely important in the office as well, but I think there’s a belief that the manager can, you know, you can look over someone’s shoulder and see that they’re playing solitaire and, you know, smack them on the fingers with a ruler. I don’t know, I don’t think that’s accurate, but I think it’s more important in distributed than in an office.

Matt: It’s an interesting thought experiment, though, that I think most of what makes a distributed company great is very similar to what makes an in-person team great or anything, and so a lot of our inspiration, you know, might come from books that could be 40 or 50 years old like Peter Drucker’s Effective Executive or, you know, some of these business books you can read and then apply the lessons. So just to sort of take that to the nth degree, you talked about looking over someone’s shoulder, gosh, if you have to do that, that’s already broken. And if you wanted to, you could do that remotely, you know, there’s companies that install software on their employees’ computers to make sure they’re moving their mouse or they record what’s on the screen so they literally are like looking at their screen in a 24/7 way, even more than you could in an office. Now, I wouldn’t want to work for one of those companies, and a lot of people wouldn’t because it does imply that lack of trust. So, the other thing is, even in an office, you know, if someone’s playing solitaire all day but they’re getting the work done, am I to say, you know? I have colleagues that always have a movie on a second screen, just like background noise, does that mean they’re watching movies all day? Maybe their Netflix account would look like that but really it’s, you know, like noise to help while they work and focus. So I think it becomes about, and this isn’t just distributed but more output-based management rather than input-based management. So again, your customers don’t care how many hours you work or what’s on your screen, they care about what value you’re providing to them. So that’s really where we try to look at it, and that also makes it a lot easier again because I don’t care how many hours you work or when you work or anything like that, I care about how well you work.

Patrick: So, this actually works out, Matt. I have another question here. So, a couple of years back, I was at a company, and I feel like I lost my manager’s trust. And it made me realize, I’ve heard this before, but it didn’t feel true to me, that you can build trust over years, and it feels like you can lose it in an instant. And then, because that trust was lost, it was really hard to continue doing work. And sort of over the next couple of months, like our relationship just declined and declined. So, I just think it’s even more important in a distributed setting where you can’t easily see each other’s faces, and you’re not in the office together, you’re not bumping into each other. So, if in the case where you lose someone’s trust, I think some managers, like, ah, fire them, I’ll hire someone new. But let’s say it’s really, it’s a good employee, and that or that’s not the tactic you want to take, you want to keep your employees. How do you get that trust back? Because it seems really hard.

Matt: This is probably generalizable to any relationship, including with a friend or a loved one. I think first what I go to is just communication because I feel like trust, if I had to make a formula for trust, it’s trust equals communication multiplied by time. So when you have really clear communication over a longer period of time, to me that turns into trust. Clear communication is also like saying, “Hey, I screwed up,” or “I did something wrong,” or setting expectations correctly. Everyone messes up, and if you have a relationship working or personal, whatever, with long enough, like you’re going to disappoint each other at some point. If you can talk about that, you know, it’s probably better if you can admit it quickly, that’s the best. And if you don’t have the common view on it, like if you see it one way, they see it the other way, I think you need to keep communicating until you kind of come to a shared consensus reality, sorry, consensus on what happened in reality. You know, I would encourage if, you know, you’re talking mostly over text to try audio or video or get on a plane, plan a meetup, you know, maybe you need to spend some time in person. And, you know, finally, one thing that might help is, you know, setting conditions for how to rebuild it and make that a process. Like, you know, I feel bad apologizing sometimes, really important, but then, you know, what are the steps to start rebuilding it? If it’s irreconcilable, that probably means that one side or the other is digging in. Yeah, you know, because humans can forget. I mean, gosh, Nelson Mandela forgave his captors. Yeah, I mean, if he can do it, Jesus forgave his, you know, people who killed. Like, there’s many examples of being able to forget much bigger things than what typically happens in the workplace. And so if it’s not, if one person is digging in there, and doesn’t want to invest in rebuilding it, or it’s beyond their ability to, then, yeah, you probably do need to start a new relationship someplace else. Maybe that could be in a different team in the company, but, you know, maybe it also means like a new company would provide you the most or new role, new way of working would provide you the most flexibility because it does, you know, it’s hard to travel when you have a lot of baggage. Yeah, it’s hard to travel in life with a lot of baggage. That’s why, you know, one thing I feel like really important for personal relationships is like a statute of limitations. You can’t be arguing in 2023 about something, and, you know, something in 2017 is brought up or 2013. At some point, you have to say, “Hey, we’ve talked about that, we’ve resolved that, can’t keep bringing it up.” So that’s important.

Patrick: Yeah, so this was kind of in the middle of COVID, and we actually had plans to meet at one point, and then there was some sort of, you know, plane drama, and their plane was canceled, and he ended up not going to the event, and I went to the event. And part of me, you know, in hindsight being 20/20, I wish I pushed him harder to, like, we because we did have plans to meet in person. I think that might have prevented the trust break. But I didn’t push hard for it. I’m like, well, he’s the boss, he said he couldn’t make it, and anyways, I think I’m a big fan of the lesson I’m taking away is maybe I should have been more proactive. And because I, I know that even if my boss doesn’t think he needs it, it’s important for both of us to have trust, otherwise, we’ll eventually end at some point.

Matt: Totally. Yeah, it’s hard to imagine a long-term relationship without it, right?

Patrick: Some of the best practices for distributed organizations were popularized by, and you’re not going to get this, the Mongol Empire. They popularized concepts like freedom of religion, currencies, and even meritocracy. Stay tuned to learn what else Matt learned and how it applies to remote businesses.

There is more inspiration in the world than we think. I, you know, I think people look to Automatic as maybe some of the pioneers in remote work, but there are so many other companies that have already done this in other ways, in other relevant ways.

Matt: Including governments, how governments have worked or like, you can go all the way back to like what worked well and didn’t about like the Mongol empire, which there’s actually a fantastic book called, I think it’s Genghis Khan, Birth of Modernity and fun one to read because I got what I heard about the Mongols was, you know, invading, rape, pillage, all this terrible stuff, but we didn’t actually realize that they came up with some concepts that were fairly new, like the idea of meritocracy. You know, anyone who was born on any station could rise to the leadership, freedom of religion,currencies, like a lot of stuff started or was popularized by the Mongol empire. And one of the things that people don’t appreciate was the communication networks they created.

So they were able to, you know, basically through incredible horsemen and relay, like communicate across their vast empire, which I think is the largest contiguous empire ever is this thing in humanity, like reaching from China all the way through the Mediterranean.

Yeah. Basically it was unbroken until I think it’s the black plague. So all of a sudden their ability to trade and communicate and move things around really fast with the plague became a liability.  We didn’t know what germs were things at that time. So, all of a sudden the disease was spreading and so the cities became balkanized and cut off and communication and trade, which was an asset before it became a liability. But the empire had a lot of new innovations until then.

Patrick: So, I want to talk about the Zeitgeist, like what’s happening in the world, in the news. So, you know, lots of CEOs – Mark Zuckerberg, Evan Spiegel from Snap – have sort of changed their tune on working from home. We talked about this at the top. At the start of the pandemic, everyone was working remotely, working distributed from home, forever. And now, lots of several big companies in the news who saying if you don’t come back to the office, we’re going to let you go. Where do you think remote work is heading? Do you think it’s going to go – are we going to go back to the office? You know, 80% of people – are we going to go back to distributed? Where do you think it’s going?

Matt: Well, yeah, it has been, in some ways, disappointing and, in some ways, exciting that these companies are not just going back into the office but, in some cases, going back on their word. You know, they promised their employees one thing and then changed that. If you’re an employee, the good news is not just Automatic, but there are companies like GitLab. By the way, Stripe has fully committed to distributed work. Shopify has fully committed to distributed work, so some pretty impressive, you know, hundreds of billions of market cap companies have committed to this. The final thing is that I’ll say, you know, it’s okay both ways. So, the great thing is I think it’s important that companies stick to what they promise, but, you know, some companies are going to prefer in-person, some companies are not, and the cool thing is some employees are going to prefer in-person and some companies, employees will not. So, I think there’ll just be a sorting. Absolutely, the percentage of folks who work this way as a percentage of the total workforce, knowledge workforce, will continue to go up. I think that’ll be an inexorable trend or secular trend, but it’s never going to be 100%. So, some jobs, like if you’re building hardware or something, might be very, very difficult to do in a distributed way. I was just at Sonos, and I spoke with their CEO to their employees, and, you know, they really tried. They are committed distributed, most of their employees were not in their office, but, you know, they’re making amazing speakers, so some of that hardware design and testing and everything didn’t need to be in person. But also, as we walked around, some of those QA, you know, they have, you know, the area where there’s like a 100 speakers plugged into things, they’re testing, like, the auto updates and all that sort of stuff, that the employees, the workstation was active, but the employee was remote, they were logging in remotely and working on it. I thought that was really cool. So, you know, but it’s hard to have, like, a, what’s the chamber called, I figure with the sound shaper is called, like, an anechoic or something like you can’t have one of those in your home. They have, like, the largest room in the country, and so like, you can’t like build that at home. So, yeah, and also one thing we forget about is hybrid, you know, sometimes people used to say like, sometimes remote, sometimes in office or, you know, home two days, at work three days. Yeah, we are also a hybrid organization in that we just let you be wherever you want for four weeks out of the year, but four weeks of the year we say, hey, you’re going to need to travel and go to a meetup or go to a conference or go to something where you’re spending time in person with your colleagues because, you know what, people often miss about our message isn’t that in-person isn’t important, it’s just it’s at 48%, you know, other companies want you in the office 48 weeks and be wherever for four weeks of vacation.

We say, okay, we want you to, like, wherever you want for 48 weeks and then somewhere specific for four weeks, but it’s important. And actually something we learned in hiring was to set those expectations because gosh, what you need to build that into your salary. That may be like. You need a cat sitter or childcare or something like that for three or four weeks out of the year. So, we don’t pay for that. So like you need to build it into your total compensation calculation. And so it’s actually, I think on all our hiring pages, like, “Hey, three or four weeks of travel per year.”

Patrick: Fantastic. Matt, I know you are out of time, so I just want to say thank you so much for joining us and for sharing all of your insights and wisdom. So thank you.

Matt: I really enjoyed it. And also Patrick, thank you for everything you do in the WordPress community. Like I really appreciate it. 

Patrick: Thank you. I appreciate that. And thanks to our listeners for tuning in. If you enjoyed this episode, hit the like button and subscribe to get those algorithms channeling traffic to our YouTube channel. If you’re on the plugin.fm website, be sure to hit the subscribe button for early bird access to our future content, or just share the episode on your social media accounts so that we can get the word out there and help fellow entrepreneurs like you. plugin.fm is brought to you by Freemius, your all in one payments, subscription, and taxes platform for selling software, plugins, themes, and software as a service. If you’re struggling to grow your software revenue, send a note to contact at freemius.com to get free advice from Freemius monetization experts. My name is Patrick Rauland, and thanks for listening to plugin.fm.

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