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DigitalOcean S-1

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Re: DigitalOcean S-1

#141

Post by jamroom »

stanmancan wrote: post #131
yte14 wrote: post #75

Earlier quoted context omitted.

I remember Linode being hesitant to dip below $20 because the thinking was that it would diminish the quality of support. That thinking was reinforced when you started with $10 (if I recall, it’s been nearly a decade) and we started getting large numbers of refugees burned by experiences with your support organization. Neighboring comments tell me it’s still a problem. We consciously didn’t want to grow $5 fast becau…

I was a huge Linode fan for years. I used them exclusively. DO showed up and slowly but surely started being the better deal. Lower entry points, better specs, and then finally a more robust product line. I slowly found myself going to DO for new servers and eventually moved everything there for simplicities sake. Linode still has a special place in my heart, but they have some work to do if they want to remain compe…

Wow - really? I use both Linode and DO extensively and Linode is better on almost all fronts in my experience. Faster servers, better network, Linode's Object Storage is way better than DO's "spaces" and Linode's support is hands down the better of the two. If you're going to spend $5 on a server why would you go with DO unless you're already there?

Re: DigitalOcean S-1

#142

Post by [deleted] »

tgtweak wrote: post #136
neom wrote: post #32

Interestingly it was very clear at around $10MM ARR that DO was on a trajectory to IPO. You can thank Moisey Uretsky for a fantastic product idea and his brother Ben for CEOing it for so long. Congratulations to everyone who was involved in building DigitalOcean, it was an INCREDIBLY wild ride in the early days, lots of chaos but through all the chaos and disfunction, I think everyone involved knew this day would com…

I'm really happy to see Ben and Moisey get this far. They are both extremely competent sysadmins and system architects too. They retained a lot of equity as well - good to see.

[deleted]

Re: DigitalOcean S-1

#143

Post by JonoBB »

RKearney wrote: post #38
cashewchoo wrote: post #19

Earlier quoted context omitted.

This. DO, imo, crushes AWS's pricing, documentation and ease of use for anyone but big enterprises. I used their managed k8s for a personal project as someone who's never used k8s before and it: * didn't cost more than the $10 droplet it ran on * just worked * super easy to operate * has had no issues so far If I were working for any kind of not-ridiculously-large business that wasn't connected to an endless funnel o…

How do you figure? $10 DO Dropplet gets you 1 CPU, 2GB RAM, 50GB SSD, and 2TB of bandwidth. $10 AWS Lifghtsail instance gets you 1 CPU, 2GB RAM, 60GB SSD, and 3 TB of transfer.

The performance of that DO droplet will be far in excess of Lightsail.

Re: DigitalOcean S-1

#144

Post by cube00 »

coder543 wrote: post #137
cube00 wrote: post #121

Earlier quoted context omitted.

A floating IP address couldn't be used in my case because I needed a reverse DNS entry and "Floating IPs do not support PTR (rDNS) records." Along with other limitations such as "we do not support IPv6 floating IPs. All floating IPs are IPv4" and "floating IPs do not support SMTP traffic" https://www.digitalocean.com/docs/networking/floating-ips/

When would rDNS actually be useful? It's probably a failure of imagination on my part that I can't think of a use case where I would want that. Why not just use normal, forward DNS?

It's a requirement to send mail to some servers.

"Set up valid reverse DNS records of your IP addresses that point to your domain."

https://support.google.com/mail/answer/81126

Re: DigitalOcean S-1

#145

Post by Denvercoder9 »

coder543 wrote: post #137
cube00 wrote: post #121

Earlier quoted context omitted.

A floating IP address couldn't be used in my case because I needed a reverse DNS entry and "Floating IPs do not support PTR (rDNS) records." Along with other limitations such as "we do not support IPv6 floating IPs. All floating IPs are IPv4" and "floating IPs do not support SMTP traffic" https://www.digitalocean.com/docs/networking/floating-ips/

When would rDNS actually be useful? It's probably a failure of imagination on my part that I can't think of a use case where I would want that. Why not just use normal, forward DNS?

Having functioning and accurate reverse-DNS is required for mail servers, as lots of mailservers reject mail from servers without correct reverse DNS. There's likely other protocols where having functioning reverse DNS is a necessity or strongly advantageous as well.

Re: DigitalOcean S-1

#146

Post by gen220 »

stephenSinniah wrote: post #109

From the risk factors summary: Implications of Being an Emerging Growth Company We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We may take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal controls over financial reporting audited by our independent registered public…

From your snippet:

> We may take advantage of these exemptions for up to five years or until we are no longer an emerging growth company, whichever is earlier.

The definition of "emerging growth company", from https://www.sec.gov/smallbusiness/goingpublic/EGC

> A company qualifies as an emerging growth company if it has total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year and, as of December 8, 2011, had not sold common equity securities under a registration statement. A company continues to be an emerging growth company for the first five fiscal years after it completes an IPO, unless one of the following occurs:

> - its total annual gross revenues are $1.07 billion or more

> - it has issued more than $1 billion in non-convertible debt in the past three years or

> - it becomes a “large accelerated filer,” as defined in Exchange Act Rule 12b-2

2020's gross revenue was 318m growing at 50-60m yoy from prior years. So, unless that growth is somehow compounding, the 5 years post-IPO is the most likely outcome.

The biggest implications are relaxed requirements around explaining executive compensation, and that financial control auditing (SOX-compliance) is not required.

It's not necessarily a bad thing for investors, but a trade-off. It means the company can focus more on growth and less elsewhere.

Re: DigitalOcean S-1

#147

Post by calderarrow »

stephenSinniah wrote: post #109

From the risk factors summary: Implications of Being an Emerging Growth Company We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We may take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal controls over financial reporting audited by our independent registered public…

CPA here.

The short answer is theoretically, yes, but in practice, it's not always practical to have transparent financial reporting.

For context, financial reporting is a tradeoff between cost and effectiveness. Whenever you're reading audited financial statements, you're reading an accounting professional's opinion which would be reasonable given a certain level of constraints. In theory, auditors could audit every facet of an organization and obtain 99.99% assurance, but the financial cost of doing so typically doesn't make sense for the company nor shareholders.

Of the reduced disclosures, the most significant is not having their internal controls audited. For a big company, this is a red flag because the financial accounts are only reasonable if you also have reasonable assurance that there are controls in place to prevent fraud and that they're working effectively.

But for smaller companies where most of the ownership is usually owned by founder-workers, employees, or early investors who are monitoring it on the ground level, there aren't many benefits from increased reporting over internal controls because if they are committing fraud, they'd mostly be defrauding themselves! That, combined with the fact that most early stage companies are already resource-constrained, makes regulators a bit more lenient because they assume investors/employees know what they're getting themselves into.

Now, when a company decides to go public, they need some time to adopt best practices and comply with broader regulations. That takes time, so regulators give them a few years to get the personnel and processes in place without penalizing them. But to cover their bases, they're required to make disclosures like above, so that early investors buying into the IPO know that they won't have similar levels of assurance about the financials for a few years.

Re: DigitalOcean S-1

#148

Post by ec109685 »

nickjj wrote: post #58
RKearney wrote: post #38

Earlier quoted context omitted.

How do you figure? $10 DO Dropplet gets you 1 CPU, 2GB RAM, 50GB SSD, and 2TB of bandwidth. $10 AWS Lifghtsail instance gets you 1 CPU, 2GB RAM, 60GB SSD, and 3 TB of transfer.

> How do you figure? The last time I checked Lightsail uses similar CPU credits[0] as their t2 ec2 instances. As long as you're only using a tiny portion of your CPU it's fine but if you start doing work on your instance where your CPU is being used for a sustained amount of time then you run out of CPU credits and performance is drastically degraded. DigitalOcean has no such mechanism. I've never had a droplet's CPU…

Yeah, your right: https://aws.amazon.com/lightsail/faq/

Re: DigitalOcean S-1

#149

Post by tgtweak »

nly wrote: post #139
gizmo wrote: post #9

Excellent growth, fair margins. Probably worth about $3bn. If it IPOs at less than $5bn it's probably worth picking up. Long term digitalocean will struggle to maintain its margins when competing with Azure and AWS on one side, and Cloudflare edge computing on the other side, so I don't think it can command the same kind of premium we've seen from other tech IPOs. A big red flag is that 570,000 customers bring in onl…

$50 seems pretty good when you can get a $5 droplet.

Believe it or not, $50 is great for a "self service" company like this. No enterprise sales teams pushing complicated billing or contracts, just customers (mostly devs/startups) choosing what they need without endless upsells. Looking at churn and seeing that per-customer number go up over time is the real tell here.

Keeping it simple is actually very hard :)

Re: DigitalOcean S-1

#150

Post by stephenSinniah »

calderarrow wrote: post #147
stephenSinniah wrote: post #109

From the risk factors summary: Implications of Being an Emerging Growth Company We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We may take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal controls over financial reporting audited by our independent registered public…

CPA here. The short answer is theoretically, yes, but in practice, it's not always practical to have transparent financial reporting. For context, financial reporting is a tradeoff between cost and effectiveness. Whenever you're reading audited financial statements, you're reading an accounting professional's opinion which would be reasonable given a certain level of constraints. In theory, auditors could audit every…

Very interesting, thank you for the insight.
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