Aug 11, 2020
On leading Automattic, founding the Yahoo Developer Network, and investing at True Ventures with Toni Schneider
I spoke with Toni Schneider, partner at True Ventures and former CEO of Automattic. During his time at Automattic, Toni helped WordPress.com grow to a top 10 global internet destination with close to a billion monthly visitors. He has previously worked as an engineer on NASA projects, as VP of technology at Aureal Semiconductor, as CEO of Oddpost that was acquired by Yahoo, and as founder of Yahoo’s developer network.
Toni shared more on taking his operator learnings to investing, the history and future of API businesses, growing into and with the CEO role, acquisitions, and finding balance.
On moving from CEO of Automattic to partner at True, Toni notes the shared focus on identifying, evaluating, and cultivating talent and opportunities. As an operator and as an investor, you are presented with numerous possible candidates for hire and many business areas to expand into. Cutting through the noise and having a true sense and intuition for how real an opportunity is is crucial for both roles.
With his prior operating experience, Toni is able to build more rapport with founders, earn more credibility, and add value through helping founders determine which decisions are actually consequential in the overwhelming sea of possible focus areas.
Automattic pioneered the distributed company model and operated successfully as a remote only company for over a decade prior to COVID times. As the world moves toward this distributed model Toni is able take his learnings from Automattic to better identify future of work opportunities and help his portfolio make the transition.
As a former operator, Toni brings with him a great deal of founder empathy and an ability to truly listen to founders in and outside of the portfolio, even if and perhaps especially when their ideas do not initially match his own. He approaches investment evaluation processes with humility and with an open mind to listening to those closest to the action: the founders themselves and their customers. He has learned first hand that investor consensus is not always correct. Fitbit (one of True’s portfolio companies), for example, was passed on by many early stage investors because consensus at the time was that hardware was far too risky. Similarly, in the operating world, Automattic went against consensus as well in pursuing a freemium model, rather than an ads based one.
On API businesses, Toni reflects on his time starting the Yahoo Developer Network after Yahoo’s acquisition of his company Oddpost (which formed the basis of Yahoo Mail). At the time, Toni saw an opportunity to bring APIs to websites packaged in a more visual, broadly accessible way. Web 2.0 had gotten many people excited about mashups, taking many websites and integrating them in some symbiotic way (APIs enabled these integrations). Toni was interested in evangelizing APIs as an encapsulation of the foundation of computing potential and wanted to bring them to a broader audience through the Yahoo Developer Network.
In the early days, many tech companies abstained from using APIs out of fear that they may cannibalize their existing products (they wanted people on their actual platforms rather than access their product through a different medium). But over time, massive companies like Twilio were built from the ground up fully as API first businesses with incredible engineering teams and without a need for a major sales or marketing engine. APIs represent a simple and elegant business model: you never have to chase down your customers to pay or push clunk advertisements. As technology developed, all kinds of use case specific APIs arose, from spam fighting to membership management to identify verification.
On growing as a CEO, Toni highlights the transformative experience of Young Presidents Organization (YPO), an off the record, peer CEO group. At YPO, everyone is a stakeholder in you, not your business, so everyone feels empowered to be open, find their strengths, and help others do the same. Being a CEO can be quite lonely, so YPO is a great platform to connect with others with shared experiences.
On acquisitions, Toni underscores how the decision to sell is frequently much more personal than fully rational. In many cases, the business itself grows quickly with impressive metrics but there are some fundamental doubts (like structural monetization challenges or a founder who cannot grow with or at the rapid pace the company) that prevent it from being an inevitable standalone company.
Sometimes, you may have not seriously considered an acquisition but when an acquirer approaches you or the topic otherwise comes up, the possibility begins to seem increasingly sensible and appealing.
On balance, Toni shares the influence growing up in Switzerland had. Switzerland has a very different work culture from the United States. In Switzerland, taking time off is quite normal and encouraged even. Feeling empowered to take time off when needed has been incredibly helpful for Toni in finding work life balance.
Having a family and juggling competing interests has also helped him be more disciplined with his time and figure out his true priorities. At YPO, Toni learned about taking active control of his life instead of letting it happen to him. Even seemingly minor things like being late to a call is a choice. Some people will frame it as the previous call running over, but the reality is that you let the call run over by staying on instead of hopping off on time. While articulating your priorities may seem daunting or overly bold, people actually respect when you are clear. Figure out where you are truly needed and delegate the rest.
