Squarespace has lived through the eras of domain squatting, SEO keywords, social algorithms and is now launching AI tools. Here's what's next for the 20-year-old company.

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Hello and welcome to decoder I'm Nila Patel editor-in-chief of the verge and Decoder is my show about big ideas and other problems.

Today I'm talking to Anthony Castellana, the founder and CEO of Squarespace, the ubiquitous web hosting and design company.

If you've been on the web, you've visited a Squarespace site.

And if you're a podcast listener, you've heard a Squarespace ad.

I was excited to talk to Anthony because it really feels like we're going through a reset moment on the internet, and I wanted to hear how he's thinking about the web And what websites are even for in

If you're a Virchast listener, you know I've been saying it feels a lot like 2011 out there.

The big platforms like Facebook and TikTok are focused on entertainment content.

Twitter is going through, let's call them, changes.

People are trying out new platforms like Instagram threads and rethinking their relationships with old standbys like Reddit.

And the AI explosion means that search engines like Google, which has really become the last great source of traffic for webpages, just doesn't seem all that reliable anymore because Google is starting to answer more and more questions directly.

A lot of the things we took for granted just a couple years ago about how business on the internet worked are up for grabs, and I think that might be a good thing.

He founded Squarespace in his dorm room in 2003, and over the past 20 years he's seen a lot of these web ideas come and go.

Why would anyone even make a website in 2023?

Anthony's answer was fairly surprising to me.

He said a lot of Squarespace clients think of Instagram and other social sites as their homepage, and they only bring people to their websites to complete transactions because they have more payment options on the web.

That's a pretty huge shift in thinking and a radically different perspective on the internet and how users move around on it.

The other huge shift in thinking is obviously AI.

Where does all the content on a website come from?

And what does it mean if we just let AI write all of it?

It's already happening in interesting ways and pretty obviously bad ways.

And Squarespace is in the mix with new AI tools for generating sites and copy with OpenAI's tools.

I think these questions are pretty open, and Anthony and I got into it a little bit.

Squarespace also just made a pretty big acquisition.

They bought Google's domain registration business, which will make Squarespace the fourth largest domain registrar on the web.

I wanted to know how a deal like that goes down, how it works on a technical level, and of course how Squarespace is structured to support it.

I love talking to people who have been building on the web for this long, and Anthony was no exception.

Also, I think this is the most we have ever talked about pressure washers on Decoder.

Okay, Anthony Castellana, founder and CEO of Squarespace.

Anthony Castellana, you are the founder and CEO of Squarespace.

Squarespace is 1 of the sort of OG web companies.

I am very interested in the future of the web.

It seems like there's a few parallel revolutions going on with the web.

They're not sending traffic to websites anymore.

Something's happening with Google and AI and how they're going to send traffic.

And then AI itself, if there's a text box on the internet, people are shoving AI into it.

And it's going to flood us all with stuff.

It just seems like a lot of things are changing around the web, around how we think about the web, how we might navigate the web, why people might even make websites.

You've been at it for 20 years with Squarespace.

How are you thinking about all this change?

We celebrated our 20th anniversary in April.

So, you know, we're used to a web pre-social network phase, almost pre-YouTube, pre-iPhone, predominant browser was Internet Explorer.

So we've seen a lot, blogging was a word I used to have to explain to people what it meant when Squarespace launched.

And so, you know, we're no stranger to change on the web.

And you know, it's with that that I'm actually super excited about what it means for the future.

I mean, when Squarespace started, publishing on the web was an intimidating thing.

So we started as a blogging platform because, you know, starting a blog was easy.

And so from that, over the years, as browsers got more sophisticated, we transitioned into more and more graphically rich websites, a lot of portfolio websites and artist websites started on Squarespace about a decade ago.

Really, since then, we've been in an era of, really, the proliferation of a lot of different types of commerce on the web.

And especially commerce it's in the hands of people who you know couldn't build a online store services based business.

You know 10 years ago in the web technology too difficult but now the use web for all kinds of things.

And so I think having a space that you own on the Internet.

Right now that's authoritative is almost more important than ever right this is your online real estate.

You have a domain that you own Squarespace doesn't put anything on your domain or website that you're not putting there, we don't monetize through ads, nothing like that, and it's a way to transact, right?

So Squarespace supports a myriad of ways to transact from selling physical goods to selling services to booking appointments to, you know, we've acquired companies that let us get into the hospitality space and with reservations.

And so a lot of what we're focused on is, you know, 1, our fundamentals, just being the best place to go for a website in terms of ease of use and expressibility, but also really helping our customers make businesses, helping them transact, and really being part of the future of entrepreneurship.

You sign up for a Squarespace account, you set up a website.

Well, you gotta figure out how to get some traffic to it, which we should talk about.

And then somewhere down the end of that road, you've started a restaurant and you're using talk to manage reservations and bookings and stuff.

And now you're kind of like inside the walls of the business, right?

You're running some of their core functionality.

You start with, okay, this is a marketing platform all the way to now we're running your business.

Well, it really is towards the latter part.

Most of the time when people have a website up, they have a website for some reason, especially a paid website like you would have on Squarespace.

And usually it's to facilitate some kind of transaction.

You want to sell a digital download, a good.

And so a lot of our development efforts remain on this, I would say like enablement for entrepreneurs.

You know, some of those entrepreneurs may not have a website with Squarespace.

We have a lot of tools for entrepreneurs that, you know, it works better with Squarespace as a website, but you can you might have your website hosted elsewhere.

That's a split for me that is particularly interesting.

That the growth and the activity is happening at the, you're running your business and people are gonna sign up or they're gonna book calendar slots or they're gonna buy something from you.

You're launching a payments business in the fall.

All that is away from you're gonna start a website.

And that to me is, there's a break there that I think is just utterly fascinating.

That if I wanted to start a business tomorrow and get customers tomorrow, I'm not sure that starting a website is the way to go.

I might start with making a bunch of TikToks about my pressure washing business, or I might start with, I needed a guy to come and cut down a tree and I went and looked on Facebook before I went and did a Google search.

And I found the guy on Facebook in 4 seconds in my area.

That the marketing function for new businesses is happening on social platforms and it's not happening at the point of we should start a website.

Do you see that split Or is it, we just want businesses that are a little bit more mature and there comes a point when you will always need a website.

And I like the beginning with pressure washing business.

That was not something I've heard anyone lead with before on the spectrum.

Small business TikTok is my absolute favorite.

But to answer your question, I mean, again, going back to that 20 year history, we are very used to social networks being around.

They've certainly been around in parallel from every iteration of them from MySpace to Friendster to Tumblr, to Facebook, to Instagram, to TikTok, and sometimes they come and go, Sometimes they have more staying power.

We actually see more demand than ever for websites right now.

And the importance of owning that URL, because, you know, as you know, when you're within a social network, you're sort of beholden to them, right?

You're beholden to them in terms of reach you know when you're posting on the social networks not guaranteed.

That all your followers you reach when you post.

And you know again they come and go and so if you're really locked into an audience there.

If you're serious about what you're doing at all, that becomes sort of dangerous.

That being said, they're great for distribution.

We encourage all of our customers to be on whichever social networks are relevant to them, including incredibly niche ones, depending on, you know, where people start power washer businesses and how they all interact and collaborate.

The power power washing is a business that you should have.

Here's a new social platform that showed up.

I very much doubt that bite dance engineers in China built a platform with the intention of a bunch of 20 year olds in America starting pressure washing businesses.

But that's the content that started to go viral.

And then people started, and now we're at the point of the cycle where it seems like the money in pressure washing is not actually pressure washing, but selling masterclasses about pressure washing.

Right, and that cycle is just, is nuts to me, but it's a function of a distribution platform.

Yeah, and you know, what's really interesting is you see a different kind of content resonate across these different social networks.

A certain kind of content finds its way to Twitter, to Facebook, to Instagram, to tick tock, to any number of ones that have kind of gone away in the past.

I'd say 2 things just to also build on what you're saying.

1 of the actually big initiatives we have that will be launching in a couple months is our classes and courses business.

So I completely agree with you that there's a great amount of money to be made in selling classes and courses.

And then the other thing I would say is, again, towards our portfolio of brands, Squarespace bought a company called Unfold about 3, maybe 4 years ago now.

And Unfold was an app for creators on social media to basically do formatting around Instagram stories.

Your homepage may not start as a web page but yeah I.

Your Instagram feed is the beginning of where you want to start.

And we want to be around you and help you with the tools you need whether it's- you know a link in bio with our bio sites product, a full-fledged website, which might be too much for certain people or getting into the flow with commerce.

And so that's something we've definitely contemplated and certainly have been watching over the past 2 decades as we've coexisted with social networks.

Would you describe Squarespace today or in the future with those kinds of products is still primarily a website company.

I think the brand Squarespace, we've spent a considerable amount of money associating with the word websites and online presence and domains and, you know, all the things to go along with it.

I think as you get further away from the core of what Squarespace does, the other brands can resonate in a way that is just easier to explain to people.

I don't need to explain to people that Squarespace actually does everything.

And it just It just gets overwhelming for people.

And we'll probably be launching more brands in the future.

So that leads into the decoder questions here.

How is Squarespace structured now, and how have you changed it over time?

As you might imagine, it's in transition.

It's always in transition in some ways, but really this move from just the brand Squarespace to these other brands within a portfolio, and it's not that many of them, and they're hung together in a number of ways, right?

I mean, they're all kind of in service of entrepreneurs and their shared services, like our payments platform, which you mentioned that they'll all use together.

And we just started buying these brands and launching them probably only 4 years ago.

So for the most part of our existence, Squarespace was structured very, very functionally.

You know, my background is product and engineering and design.

And while, you know, we've had people running those functions here for quite some time, that's kind of like where I was kind of oriented, and of course, mostly towards the Squarespace product.

So around me would be an engineering head, a product head, a marketing head, a creative head, a customer operations and service head, and like all that sort of thing.

And now, you know, with the acquired companies and with the brands we're launching, we're sort of experimenting more with, you know, I guess what would be considered like a general manager model for less of a better way of putting it, just to make sure that these independent work streams and products can do what is best for them without having to always roll up through 1 centralized point, which, you know, Squarespace is a multi hundred million dollar, almost billion dollar now revenue run rate company that's public.

Did the leaders of that company have time to focus on 5 different other brands?

And so you move to this GM structure to give those brands more autonomy so that they can pursue what's best for their customers and not all that roll up to just a, what would otherwise be kind of a corporate bottleneck.

Yeah, so you are going into some sort of divisional structure now, right?

And are you splitting up so that you have, I don't know, multiple designers in multiple places or multiple product leads in multiple places, or are you still centralizing all that?

Depending on what's appropriate for the brand and who the leader is, sometimes we'll be centralized, sometimes we'll be dotted line.

You know are obvious to be centralized yeah H.

And then there are certain things you want to have centralized like payments.

And there's certain things that Squarespace is kind of- special at and- it should have centralized this brands can use the services.

And that's like our internal creative agency.

So when Acuity goes out to do a rebrand, they don't need to go externally to do that.

The people who worked on the Squarespace brand are more than happy to help those leaders make something that looks fantastic.

1 of these days I'm going to have a CEO tell me that they've decentralized HR, legal and finance.

And I think that might be the end of Decoder.

It's the 1 thing that everyone definitely centralizes.

But the difference is, where do you put design?

And everyone seems to have very different opinions about this

There are examples of decentralized, all those things, and you just are called a holding company.

So they're actually holding companies that have brands where they don't attempt to mix those at all.

We do Maybe there's a size where that's not appropriate I mean, I'm not exactly informed of how like Berkshire Hathaway works I think they wholly own those companies and I don't think they I think they got like 50 people their corporate office

Do you think that you would get so big that Squarespace has a website company and a scheduling company and your design services company?

I'm not sure we would ever get into kind of like using our agency externally, we would try to help it with the portfolio brands than going externally with it.

How many people at Squarespace right now?

We are a little over 1, 700, I believe a little shy of

Let's see, the biggest part by head count would be customer operations, but we're pretty lean across the entire company.

You know, if you compare a company of our size, you know, 1, 700 people to, we call it 1, 750, to our revenue level, which, you know, is right under a billion for this year, it's a pretty lean company.

So we've always had lean design teams, it's a very large engineering team, a medium-sized product team, a pretty tight marketing team, and then smaller legal and finance and support functions.

When I look at the chart of other big website companies, Automatic slash WordPress, I guess Automatic is kind of a holding company.

I'm looking at sort of the market share charts of different CMSs.

WordPress obviously dominates the internet.

It's like 64% of websites are on WordPress.

Then there's Shopify, Wix, Squarespace, around 3%.

When you think about growth, is it pure market share?

We want to take share away from WordPress.

Or is it we want to make more money from our existing customers?

It's a variant on your latter idea around money.

I would say that, you know, you can look at all of the URLs out there in the world and think, well, okay, which ones are even appropriate for us to host?

Some are, you know, large companies, some are large content based sites, you know, and really there's just, they're just all across the board and what those URLs are out there and I think that there's a certain subset of those URLs.

The ones focused around small business, the ones that are more creatively oriented, the portfolios, the them websites, that sort of stuff is really in the sweet spot for Squarespace.

And then, you know, also it's not a free product.

So, you know, we're never really going for just total count of URLs, because we want sort of a more serious user.

And I think Squarespace is in no way expensive for what you're getting from it.

I mean, we're talking under $20 a month for just so much functionality that's been developed over those 2 decades and more every day.

So it's not a URL count thing that I'm going for, it's which URLs and which are the more valuable URLs for us.

And so that gets us into, How are these URLs transacting?

Do we have permission to help them with the transaction?

Is the transaction even happening online?

You know, and how much of that transaction can flow through us?

You mentioned the payments platform we're launching later in the year.

A lot of people, you know, for smaller URLs, they buy the URL and bandwidth and storage were commoditized long ago.

You're not really paying attention to that stuff anymore.

And so how do we grow with our customers if it's not functionality and features or customers they're managing?

So by transaction volume, you mean you've got all the dentists in New York and you just want them to do more dentistry.

Because do the dollars flowing through when you actually go to the dentist, would that actually flow through us?

Versus, you know, if you're on top and you're booking a prepaid reservation, those dollars do flow through us.

Or if you're building a, you know, you're selling a service online and you check out online, those dollars do go through us.

So it's really like a really interesting question around how many dollars are floating around Squarespace?

I mean, unbelievable billions, tens of billions.

But how many do we have permission to touch and make, you know, make that transaction easier for the entrepreneur?

But as we think about the product roadmap, we're always thinking about, you know, how do we get more in there?

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Why would anyone make a website in 2023? Squarespace CEO Anthony Casalena has some ideas by Decoder with Nilay Patel