WP Engine passed $100M ARR after Cohen made thirty people say they would pay $49

The story

On 4 January 2018, Jason Cohen used A Smart Bear to say two things at once: WP Engine had passed $100 million in annual recurring revenue late the previous year, and it had closed $250 million of financing from Silver Lake. The post is a founder announcement, not an audited filing. He opened with the objections he still wanted on the record. People said there was no money in hosting. WordPress was just a toy. After Smart Bear he should have aimed at something bigger. He was sure people said similar things to Heather Brunner when she joined as CEO. Silicon Valley-oriented technology press, he wrote, did not cover the company because it was not in San Francisco, even though it was more successful than most of the startups those outlets covered.

He walked the clock backward so the round would not look invented. The blog switched to WordPress in 2009. That year he vetted the idea after the blog crashed a dedicated server whenever it hit Hacker News. Coming-soon launched in April 2010. A three-minute Series A pitch came in 2011. Brunner joined as CEO in 2013. Offices opened in San Francisco, San Antonio, London, Limerick, and Brisbane across 2012 to 2017. In 2018 they launched what he called the first Digital Experience Platform for WordPress. The blog, he said, had taken a back seat to the business.

The $100 million ARR line is his, dated to late 2017, on the same page as the close. The company was less than eight years old, which he invited readers to turn into a growth-rate story, not a CAGR he calculated. That revenue, he wrote, came from 75,000 customers and 500 employees across six offices on three continents. Every day, 5 percent of the online world, roughly 3.5 billion people in his parenthetical, visited a customer on WP Engine. Those counts are operating color beside the round, not a census independently checked here.

Silver Lake's $250 million, he said, mostly paid back early investors. A nice chunk was primary capital for growth, security, quality, and bets they had not had space to explore. He listed NPS above 70, historic-low cancellations, uptime, and culture. That list is not an audit of ARR. He still ranked the first customer as the entrepreneurial high, the hit that hooks the founder, then said this later moment was even more thrilling.

He reserved the sharpest credit for Brunner, CEO for four and a half years. Readers might assume the success was his prescience. He would take credit for lift-off of the rocket. The reason they were in that position, he wrote, was her leadership, strength, vision, and execution. Period, full-stop. He closed with a line from a year earlier: Look what we did. The 2018 post is a financing thank-you. It is not the 2010 method that decided whether hosting was a business.

That method is the December 2010 post on the same blog. He wanted to kill the myth that WP Engine emerged perfect from the ocean. Inspiration matters; turning an idea into strangers paying is a process. He had not done it properly at Smart Bear. This time he was methodical. The first idea after leaving was a marketing-measurement engine from Smart Bear, two years of spreadsheets, Perl, and Access that only he could run. Founders he talked to all needed it. Meetings in Austin called it a good idea. Thirty of thirty loved retroactive campaign definitions Google Analytics lacked.

Price destroyed the agreement. Some said the tool would save them $1,000 a month in marketing spend and still had to be free. Others said $50 a month was easy if he targeted small business, until training and marketing costs with that audience looked large. Others insisted he go after big accounts at $1,000 a month with professional services. Price, he wrote, is not just a number. It dictates target market, competition, feature set, and the route to customers. If you do not talk about price, you have not proven a business. After about two months he killed the marketing-measurement idea. He did not want it to die. He had seen enough ideas to know you can have a decent idea and no business model.

WP Engine has the same story with a different outcome, which is why he called the process repeatable. He needed something like it for his own blog. The server crashed on Hacker News. Page-load time was bad. He had been hacked, and WordPress was known for being hacked constantly, more often because of poor IT than the software itself. He searched for hosting that would help with speed, scalability, and security and found nothing. People said it did not exist and that they needed it too. After the marketing-tool song and dance, he knew those statements were not sufficient. He hit meetings again, email, phone, in person, anyone with a blog. Would they pay $49 a month if he fixed those three problems? What if he added a push-button staging area he had built for himself?

The reaction was different. Some people said they would pay $49 a month just for staging. When part of the pitch is already enough, and you are comparing that reaction to an actual price, he wrote, you know you are over-delivering. He did not start WP Engine until he had 30 people saying they will give him $49 a month. Not would, but will. In the end, 20 actually did. He added that the message later resonated with hundreds of thousands of people and that new people signed up every day though they had still spent $0 on general marketing. The 30 and the 20 are pre-product commitments and conversions in a 2010 essay. They are not the 75,000 customers in the 2018 announcement. The $49 is the price he floated before code, not a 2018 average contract.

Read the two posts as one founder refusing to let a private-equity headline overwrite the first paying customers. The $100 million ARR and $250 million close are Cohen's January 2018 disclosures. The 5 percent, 75,000 customers, and 500 employees travel with that announcement. The 30-and-20 and the $49 sit in 2010, after he killed an analytics idea because price would not cohere. People said there was no money in hosting. He asked for money before he built the host.