The Magento Story: How A Student Launched The Software That Powers Billions In Sales

Roy Rubin was a student trying to make extra money on the side when he founded Varien, the company that went on to launch Magento, an ecommerce platform that enables billions of dollars in online sales.

He came to Mixergy to talk about why Varien grew (it had a lot to do with focus) and how the company launched Magento (his developers pushed him to do it).

Roy Rubin

Roy Rubin


Roy Rubin is the founder and CEO of Magento, the leading open source ecommerce platform. It was developed by Varien, the company Roy created as a student. Varien leverages the power of Open Source technology to help online merchants fulfill their business goals.


Text excerpts on the Magento story

Roy, still a student, launched Varien

I left the company and I wanted to go back to school. I said, “You know what? Let me just start this thing and see where it goes and I’ll go back to school.” I went to UCLA and we’ll see where things go.

And that was really impetus. It was basically a way for me to continue doing what I’ve been doing for years which is engineering and development and maintain a student lifestyle and have a company that’s trying its own thing.

There was no master plan

I didn’t really have a vision. I was just doing something for the business to maintain a competency level and I wanted to make sure that I was still learning and developing professionally myself. But there was no real vision. There was just a business to do what I said, which is maintain my knowledge and continue to grow that and make a little money on the side to fund a student’s lifestyle.

There wasn’t much focus at first

We were doing a bunch of everything. So we did content management systems. We did ecommerce, we did web applications, anything and everything people wanted. I wasn’t very selective back then, but understood that you have to be focused to succeed.

He had a breakthrough

I think the biggest breakthrough for us came in 2003 or 2004 with the understanding that there was an open-source product called OS Commerce that had a large following — but the service providers on the market weren’t really sophisticated, and there weren’t that many of them.

So I just spend a few hundred dollars in Google AdWords,  trying to get OS Commerce clients. Overnight I had way more than I could actually take on, so that was the biggest breakthrough and that allowed us to grow the business, develop an expertise around OS Commerce.

Then he landed a client that changed the business

If I look back I think that’s probably the biggest thing that really allowed us to move forward. With, I think, a fifty-cent AdWord advertisement, I landed our biggest client to date That company is responsible for basically funding Magento. So without that client — without that fifty-cent AdWord — we probably would not have launched the product. So that’s just a tremendous milestone and just an event that changed my life, changed the scene and the open source ecommerce market.

Doing consulting work revealed problems in the market

We worked in the space for a long time and understood very well what the platforms and the market could do and couldn’t do. We had clients calling us all day long and we had a name in the market and the clients called and said “you know what, here’s what I want to do and can OS Commerce do it?: and we said “well it can, but its just going to be very difficult to do that.”

Varien decided to create a solution, Magento

I had a couple developers that were basically saying “we’re bored of what we’re doing and we want to do something different,” and I had to occupy them because they were great and they’re a tremendous asset to the company

I said, “you know what? Why don’t I give you this little side project. Spend a couple months, and see where you are after that.”

They kind of sold this opportunity and this project to me and then I ended-up buying it. So I Ended-up saying “You know, let’s really go all-in. Let’s put everything we’ve got into this.”

Blogging helped establish their reputation

We blogged to establish Varien as a strong player in the market that developed an expertise and educates the market about the best practices we saw as important and trends we saw happening in the market.

We sometimes promoted our work, but it wasn’t the focus. I can tell you it was probably the minority of the posts on the blog if that even. It was rare that we wrote about our own work, initially at least. But we did work very, very hard to get posts up and to get them daily to make sure that people saw Varien at the top of their RSS feed and thoguht about what Varien was doing. And thinking.

Their community grew — and grew loud

You really have to disseminate between different types of stakeholders in the market and what they really want and what they can contribute back.

I don’t have some checklist formula to that. I listen to a lot of people and I’m very receptive to feedback and learning from their experiences. But I think at the end of the day, deep-down I have a strategy and I have a vision and I know that it takes a collective effort from our team to execute. I know what we can do and I know what we can’t do. Within those constraints and within the vision of the family that I have moving forward, I’m pretty confident that I’m making the right decisions.

The feedback that we get obviously helps kind of build that vision and the strategy. So it’s not like this is the direction we’re going to go and we’re going to just put our head down and go through the wall until it happens, it’s a vision that evolves and it’s a strategy that continuously changes based on the market opportunities.

The hours were (and still are) “nuts”

It’s monumental. The amount of hours that we put into the company today is just… it’s nuts.

At some point we hope that’s going to slow down. But I can tell you that in the eighteen to twenty-four months since we started the project, it’s been the exact opposite. I’ve always thought that, hey with the next release I think we’re going to be okay and maybe I can, you know, let go of the foot on the gas but no. It’s the exact opposite.

The mission is big

It changes as the opportunities change and as we start to make headway in various areas. But, I think the mission for us is really to,  first and foremost, disrupt the market in a way that democratizes ecommerce.

Roy’s advice to startups, based on his experience

I think the first thing that I would say is that you have to be committed one-hundred percent to it, and really focused on a niche. I think initially with our business we didn’t have a focus, which hurt us.

I think, longer term, to sustain a business that does a lot of things is difficult. Focusing is what gave us this opportunity. So, I think that’s a big, big area that I would share with someone who would start a new business, and if you’re looking to get into a business that is, I think, going to be successful, I think, you have to put a lot of the things that you were used to doing on the side. This is a full time job — much more than a full time job.

The level of dedication and commitment and sacrifice that you’ll have to make is tremendous. Not many people can survive. That’s, I think, what sets folks apart.

Full program includes

– Why Roy created phantom stocks instead of shares, and why YOU might want to use them in your business.

– Details of how a community built up around Magento before it was even built. Others on Mixergy have done the same thing, and you can too.

– Some discussion of how you can build a company when you have family obligations.

– More details. If you only read this summary, you might think that it was all simple. Listen to the full interview to get the full story.

  • This was a nice interview. Wish there was more time to drill Roy about Magento. Thanks Roy for taking the time to answer few of my questions. As always, thank you too Andrew for

    Andrew, regarding your questions posted above:

    – Longer post of excerpts works for me.

    – I use Magento. Currently, I'm working on two projects using the Community Edition. The learning curve is steep, but once you get the hand of it, it becomes easier. Few important core features are still missing, but thankfully there's some talented programmers who are filling the gaps.

    – eCommerce plays a major role along with social sites and worth writing a chapter about it. Since Magento is also available as Open Source, I believe it qualifies more for entry in the book over proprietary ecommerce softwares.

  • Andy

    Magento has everything but lacks easy of use. And it's slow as hell, as a script is cluttered overkill. Reminded me of Gallery2 when it finally came out.

  • Thanks.
    Your comment reminded me that I should thank you on this post. You're
    the one who suggested this interview. Thanks for that too.

  • Thanks for your feedback.

  • Me

    Tried Magento. It was horrible. Do not recommend.

  • Michael

    Hi Andrew, Great Interview – Is it just me or is Roy's track overlapping with your track in the MP3 audio file? I thought at first you were always talking over the top of him but then realised lol.

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  • Great interview with lots of great information about Magento plus around building up a successfull business! Thanks!

  • sameerb

    I have been using Magento very successfully for our online fitness equipment retailer: I can vouch for it being better than the other open source products out there. What issues did you face?

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  • Joel Spolsky

    Yes, the longer post is excellent. The more of your good notes you include, the better.

  • readycontacts

    Terrific interview. We have worked with Magento and can say that it is truly powerful. It can definitely be made easier to customize but I believe it is a work in process and will get there. Its better than most other ecommerce open source products and will evolve rapidly with a growing community.

  • Vow, its fantastic interview opening the windows of my views and thoughts for not only in e commerce but in any aspects of creation. True commitments always brings results which change the world as the magento did it. I deeply love magento for it being a true e-commerce as it fulfill the need of today and have future for tomorrow. Also I would like to thanks deep from my heart to Roy and his team for creating this wonderful piece of products. Magento seems to be Magnet-to all as its attracting lots of lots of users daily.

    Hats off to Varien Company !!!

    Rakesh Parsoya

  • Dear Magento users/producers

    Thank you for the wonderful interview about the Magento. I am interested as student to use for my upcoming company in web applications. Can anyone help to tell me where to start. I have a good command joomla, xoops, wordpress and drupal. My command of the cms applications is very limited I've to add that.

    I am looking for to hear from you.

    Mr Daud Ahmed
    Chariman of
    Somali Cultural Association in the Netherlands
    Somatca somali air traffic controllers Association in Diasporra

  • Hi Andrew,

    Overall interview with Roy Magento was okay…this is the firsttime i came across Mixergy … good way to be closer to the audience….

    What I would like to do is introduce ourselves.. is there a direct way to approach you please let us know..

    Poonam Lalka
    Skype: poonam.lalka

  • Hi,
    Great interview and Great site too. I only found it today but I will be subscribing to your RSS feed so I can keep up to date. I did a blog post on your interview which you can find here –

  • Brian

    Magento is very powerful, and very complex. It has a very high learning curve. If you need to do any customization, other than just re-skinning the templates, then expect to spend many many hours learning the system. While it is free, they offer a commercial version and paid support, and in doing this have basically ignored the free support forums. Take a look at the forums and you'll see a large amount of threads with 1 or 0 replies. In my opinion they're losing a ton of potential customers and frustrating existing customers (if you call a free user a customer), which is giving them a bad name in general. They need to invest heavily in providing support for the unpaid version, otherwise their reputation will tank. Unfortunately it probably is the best free eCommerce package out there, but with horrid customer service.

  • Andrew, For me the audio was not synced properly with the video. Not sure if it was on my end or yours.

    I am using Magento for my shop I switched over from Zencart. Overall I am happy with it, there are a few things that need to be added and fixed but it is ok out of the box.

    My biggest gripe is the community or lack of. While it was noted in the interview that it has a strong community I will disagree, especially when compared to other open source projects.

    Take the forum for example, If you look, there are probably thousands of posts that simply go unanswered. Something as simple as how do I get the “product alerts” to work is just ignored by the development team. I realize that they are using support as a revenue model but for minor basic configuration issues there should be some participation from Varien in solving those problems. especially in the early stages of the project.

    One also wonders if they intentionally make things difficult to force someone to purchase support. If that is the case it's certainly not in the spirit of open source.

  • mike

    the overlapping audio makes me hate you

  • The Magento is simply fantastic. Congratulations and much success …

  • green

    i try to use magento . first change you have to do make it easy to install like wordpress
    .make a video . what the puropse of software that you cannot install !

  • I built a dog boutique ecommerce store using Magento
    Initially I was overwhelmed as I have zero software experience – It was really difficult to wrap my head around – I asked a lot of people for technical support and very few people knew the program, I even had several people try and convince me to change platforms- the bottom line – I stuck with it – i got technical support from a guy I found on craigslist who knew Magento, he did work on my site and also gave me tutorials to get over the hump – now when I have an issue I search the magento community forums and find solutions. I got my store up and running – launched last week and I'm very happy with the way the store looks and the functionality on the back end. Thanks Andrew for being a great resource, I first learned of Magento at one of your mixergy events in Santa Monica.

  • What a great example of what can be done with Magento. Thanks for
    posting this. I think it'll help my readers understand what this
    platform can do.

    Andrew Warner
    (sent from my mobile)

  • Mike Smith

    It's not just you. It seemed to be getting more and more out of sync as time went on.

    Andrew, listen to the mp3 starting at about 48:10 to see what we mean. I love the content of your interviews, but stopped listening at this point because it was just too difficult.

  • I had never heard of Magento before.
    I love the idea of offering an open-source and a pro version. I also love how honest he is on his lifestyle.

    It's a great example of a company who, starting from nothing, found a niche to focus on.

    Can't wait to read it in your book.

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