61–70 of 289 posts
DigitalOcean has always had loads of debt, it's how you build such a capex heavy business, you use lease lines and credit.
I wonder if they would have if they didn't have to cut prices to compete with Vultr.
What is their current valuation? I wondered if google or microsoft would buy them, amazon can't due to anti-trust issues, but the others might be able to.
I'm interested to hear how the reasoning is behind thinking that Amazon would be hit by any anti-trust issues and not Google or Microsoft. As far as I know, all three of them are in the cloud/hosting business.
I moved to Scaleway now, it's still in a much earlier stage, cheaper and with unlimited bandwidth. I like the way you can still talk directly to their guys on slack to ask questions. However they're becoming big too. I hope they'll still love us and I don't have to move again soon :)
"Spruill told TechCrunch that DigitalOcean will scale to $1 billion in revenue in the next five years, and it will become free cash flow profitable (something the CEO also referred to, loosely, as profitability) in the next two." I find this to be incredible. DO is not a speculative e-business ... they are not a social network. They are the proverbial sellers of picks and shovels during the gold rush: "The way to get…
Did they miss their window? Would this business make more sense during the 2001 dot-com craze? Are startups currently afraid to go with anyone who isn't AWS/GCE/Azure because they understand the cost of moving platforms is high?
What is their current valuation? I wondered if google or microsoft would buy them, amazon can't due to anti-trust issues, but the others might be able to.
I'm interested to hear how the reasoning is behind thinking that Amazon would be hit by any anti-trust issues and not Google or Microsoft. As far as I know, all three of them are in the cloud/hosting business.
Earlier quoted context omitted.
Did they miss their window? Would this business make more sense during the 2001 dot-com craze? Are startups currently afraid to go with anyone who isn't AWS/GCE/Azure because they understand the cost of moving platforms is high?
No. Compare Linode and DigitalOcean. Linode bootstrapped, took very few financial instruments to aid the journey, had a few missteps along the way, completely reinvented the entire business more than once, and still serves a niche that makes them a successful (and profitable, as in real profitable, not imaginary profitable) company. Their margins are quite good. Slicehost had a solid business when Rackspace bought th…
Earlier quoted context omitted.
No. Compare Linode and DigitalOcean. Linode bootstrapped, took very few financial instruments to aid the journey, had a few missteps along the way, completely reinvented the entire business more than once, and still serves a niche that makes them a successful (and profitable, as in real profitable, not imaginary profitable) company. Their margins are quite good. Slicehost had a solid business when Rackspace bought th…
I don't disagree with you on your premise that AWS has an entirely different, and much larger size and scale than DO. And has a competitive advantage due to that. But your comment also seems to make the assumption that everybody should be content to let AWS (or Azure, etc, entities with very deep pockets) become a literal monopoly, and everybody should be totally fine with that.
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Can you expound on thoughts and prayers comment? wouldn't debt help equity holders? Or you think any value created by debt is going to be less than the cost of the debt?
debt holders are paid before stockholders, so their risk is smaller. if DO's revenues goes down it will be common stockholders's equity that will be destroyed first. let's say you have a mortgage on your house and your equity in it is roughly 10% of the house. now imagine you take a second mortgage/HELOC to invest-renovate the house, buy new furniture, build a pool, etc. - in good case your equity will be 10% of the…
Earlier quoted context omitted.
Did they miss their window? Would this business make more sense during the 2001 dot-com craze? Are startups currently afraid to go with anyone who isn't AWS/GCE/Azure because they understand the cost of moving platforms is high?
No. Compare Linode and DigitalOcean. Linode bootstrapped, took very few financial instruments to aid the journey, had a few missteps along the way, completely reinvented the entire business more than once, and still serves a niche that makes them a successful (and profitable, as in real profitable, not imaginary profitable) company. Their margins are quite good. Slicehost had a solid business when Rackspace bought th…
Earlier quoted context omitted.
"consider cash flow positive a better representation of actual profitability than the actual net profit/loss reported on the P&L" Wow. What a sad indictment of modern accounting practices that its accepted practice to create 'noise' to prop up a P&L (or avoid paying tax). I suppose you could do this with household expenses, but if you don't look at P&L in a household you would be ignoring things like credit card debt…
> What a sad indictment of modern accounting practices that its accepted practice to create 'noise' to prop up a P&L Income statements include things like depreciation. That's real, in a sense. It's future CAPEX. But for the present health of a business, particularly a levered one, cash is king. One way to think of it is in time frames. Cash flows are immediately relevant. If they're out of whack, it's an urgent prob…
Depreciation is past capex, not future capex. You could argue that the two are equivalent, because the assets being depreciated will need replacement in the future. But:
1. The assets' useful life may be longer (or shorter) than the depreciation schedule.
2. The future replacements may cost less (or more) or just not be needed at all.