Entrepreneurial Guru Jason Cohen—Capital Thought, Capital Factory, WP Engine, and Life—Talks About Startups, Mentoring, Investing, and What Makes a Great Idea Work!

Jason Cohen is ‘one of those guys’ anybody would aspire to be—genuine, motivated, brilliant—and indeed, in a class of his own. ‘Entrepreneurial Guru’ of Capital Thought (Lean Customer and Product Development for Startups), Capital Factory (Early Stage Accelerator Program for Tech Startups), and WP Engine (Finely Tuned WordPress Hosting Service), Cohen shares his thoughts with HOLLYISCO on a series of questions surrounding his business, business models, startups, tech, the future (hint: mobile and ‘gamification’), seeing internet darling Amanda Palmer in New Zealand, and yes, Cohen references liking one of my classical favorites, Sergei Vasilievich Rachmaninoff, along with Depeche Mode.

Jason Cohen is Managing Director of Capital Thought. Co-Founder, WP Engine. Director, Capital Factory.

So, if you’re in the business of life, and the game of understanding some inalienable truths—tech, business, startups, or what-not—Cohen’s interview answers are a must read. As well, for any startups considering this summer’s Capital Factory Accelerator Program—deadline to apply is March, 27. Cohen says, “So hurry up!”

« Introducing Jason Cohen »


How many business ventures are you personally involved in? Capital Thought, Capital Factory, WP Engine, and anything else that you can share?

That’s enough right? (Wink!)

Capital Thought is the structure by which Joshua Baer and I launch new startups and help others through consulting. In particular, we launched WP Engine last summer and it’s doing great!

Capital Factory is an incubator in Austin, TX (with applications for this summer due March 27, so hurry up!). I’m a mentor and investor.

Would you describe Capital Factory as mostly an incubator program? For those who might not know what an incubator program is, can you explain what that is and a little bit about how your specific program works, who can apply? What is the competition to get accepted into the program—like ‘American Idol’ for business startups?

Each year, 5 companies get $20k in cash, $20k in services (like office space, PR work, design work, legal work, and tons of donated software), and 20 mentors like me guiding them during a 10-week summer program culminating in Demo Day, in which hundreds of angel investors, venture capitalists, and entrepreneurs see the pitches and network.

What makes Capital Factory different from other excellent programs like Y-Combinator and TechStars is that we don’t raise an external fund; rather, the mentors ourselves put in our own money. Also to be a “mentor” is a high bar—you have to have started at least one very successful company, ideally with an exit. No academics, no one who was “just there for the ride.”

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What is WP Engine? What was missing in the marketplace that compelled the creation of WP Engine?

WP Engine is the best WordPress hosting service, ensuring your site is fast, scalable, and secure.

Automattic, the company behind WordPress, has a fantastic service for those wanting a free or very inexpensive hosting solution, but it’s limited in many ways exactly because they couldn’t afford it otherwise; for example you can’t install plugins and you can’t use Javascript for things like Google Analytics.

There’s various options for people with huge blogs and huge budgets, including a “VIP” service from Automattic or having an in-house staff.

But I saw a huge gap in the middle between these extremes—millions of people who self-host WordPress because they’ve outgrown the limitations of Automattic, but cannot afford (and don’t need) the high-end  solutions.

That’s WP Engine!

At what point in your life did you know that you’d be going the entrepreneurial route and that was the thing for you? How has that journey been—ups and downs, disappointments and gains?

I’ve always been compelled to do projects. It’s not a decision, it’s a personality trait. Eventually it becomes clear that if you want to work on your own projects full-time, it has to make money, and that’s a startup!

Of course all entrepreneurial journeys are full of ups and downs, not just financial but emotional. It’s easy to say that, hard to live it.

Is it worth it? Only if you’re compelled to do it. Otherwise you’re much more likely to find happiness—remember that?—doing something more stable and less stressful.

Do you thrive on, or particularly enjoy, working with a specific business model, or subject?  (I know, the ones that make money, right!)

It’s funny you said it that way because most “businesses” I see do not have a way to make money.

Of those that do, most don’t have a way to make more money than it costs to run the business and acquire new customers.

That’s not an exaggeration—I track this kind of thing. It’s data.

It’s surprisingly hard to find business models that create more money than it consumes, and in a small enough amount of time that you can fund the gap (whether self-funded through a day-job or externally funded). I believe (but this part isn’t based on hard facts) that this is the primary reason most business fail. That is, most people’s ideas are pretty good—you’ve identified a pain and some other people agree—so it’s the business model that typically doesn’t work.

In the past few years I, like many, am enamored with subscription-based, web-based services, because repeating revenue is better than one-off revenue, and web-based tools are easier to upgrade and scale and promote.

The next wave is obviously mobile, although I admit to being relatively ignorant about the whole thing.

Of course, when everyone is running one way, sometimes the smart money is on running the other way, so in no way should this be taken as a “rule.”

During SXSW was the ‘Startup Bus Finals’—what did you find to be the ‘wow’ factor in an event like the Startup Bus?  What business did they create and do you think it worked—compelling?

What’s amazing about Startup Bus and similar (e.g. Startup Weekend or 3-Day Startup) is how much can be accomplished in just a few days by a small, determined, talented team. Startup Bus is one notch more amazing because they did it with motion sickness.

It’s fun to do “judging” as a way to terminate the event, but to me that’s not the point, and it’s not the way to determine which business is “best.”

Rather, what’s compelling is that any group of motivated people can do this if they want to. If you can get something going in a weekend, how about ten weekends? How about evenings? Want to start a startup? Do it! It’s proof you can build a real business like that.

Where do you see the future of technology, code going? More specifically, how do you see the future of open net usage and control; i.e. government involvement?

Anyone who knows the answer to that ought to make a killing as a VC! And they usually don’t.

Mobile is already the “next thing,” but most companies still don’t know what to do with it, just as they didn’t know what to do with social media, or the Internet itself before that.

Also analogously, the definition of what “mobile” means in terms of user’s use and technology used and go-to-market strategies is itself changing constantly, so really no one “knows” and the game is to just try to stay ahead.

If you use SxSW as a bell-weather, last year was about “mobile” and this year is about putting game mechanics into non-game software.

Do you listen to music? If so, are you an active listener, or passive? Do you have a favorite band, sound, artist? Or, do you have a particular hobby outside of your gig?

I just saw Amanda Palmer in New Zealand, so I’ve been hooked on that lately. I have eclectic tastes though, so I’m just as likely to be listening to Rachmaninov as Depeche Mode.

What is your opinion on the importance of owning a dot com, versus a dot anything else? Are dot com extensions becoming of less importance due to the movement towards things like Google TV, etc.?

No one cares. And nowadays most shared links are shortened.

How often do you read? Books, business, news? How important is reading and staying informed in your business?

I feel you have to read and write all the time if you want to stay relevant and thoughtful.

However I’ve also found that reading too much in my own area of (relative) expertise tends to color what I write, and I don’t like that—the original point of my blog, for instance, is for me to figure out what I think about things. (Although now that there’s more than 22,000 readers, there’s now more than one point!)

Reading for inspiration and to shake up thoughts and of course entertainment is healthy. Reading so you can follow a formula or feel guilty about what someone thinks you “should” be doing is probably not only a waste of time but potentially harmful.

LASTLY: If I ran these two business concepts by you, which one do you think stands the most chance for success? It’s okay, you can be honest. [Please to note, I’m not a techie by trade.]

Anything that invents languages and replaces keyboards is way beyond me. Talk about hard.  Dvorak already did this. No one cares. Or pays.

I can’t evaluate the other thing—too far from my own experience.

Either way, I’d say get the business model concept, not just the description of the product, before asking. Otherwise even if it’s theoretically a good idea you’re wasting your time.

Also, ask potential customers instead of “experts.” Get 20 people to agree to pay you $X for it, THEN you have a good idea!

Thanks Jason Cohen—You Rock!


[Editor’s Note: The business concepts presented to Jason.]


(Tim O’Reilly mentioned “sensors” as the new future, Web 3.0, during his SXSW interview.)  So, this brings me to the fist one:

  1. LANGUATE.com. The first one involves writing a new language (sensor; code) and creating a new application (short-hand machine for code) for that language. The idea would be to create a universal “sensor code” along with the machine (hardware, software) to back it up, moving away from the QWERTY system. So, my invention would steer in the direction of creating a sensor-based universal language for techies—like music (there is an overtone series that can be measured mathematically) for code, utilizing the concept of the shorthand court-reporting machine—to implement the code:
  2. Off Google: “The secret to the court reporting machine – and the court reporting expert’s speed—is that the keys represent sounds rather than words. The court reporting professional has to learn to divorce their self from the way words are spelled and think purely phonetically. The court-reporting machine is not your standard QWERTY keyword. There are 22, unmarked keys. The keyboard is split into halves—one for the left fingers, one for the right fingers. And there is also a second level of keys that the thumbs rest upon.”


  1. MASHUPMUSIC.com. Open-sourced (think 4chan). Capturing creative content. Allows input. Think 4chan for music. “Garage Band” style interface—MIDI based. Saves in REAL time. Can’t manipulate the original track. Ten-tracks, then it’s locked and goes into a saved file to create the final piece. Socially engaging—creation of music memes, temes. Then, the process can be built into a reality-webside/TV show that features new music once a week.  Yes, it’s Mr. Potato Head for music!