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We raised a bunch of money

fly.io

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Re: We raised a bunch of money

#121

Post by donmcronald »

gotmedium wrote: post #88
AndrewKemendo wrote: post #45

Will you be publishing a follow up blog post about how you’re increasing API user fees once you’ve monopolized your particular market? Or how about how you’ll be increasing margins for investors in 5 years as you prepare for your IPO? Why won’t you suffer the fate of every single other tech company that raises a shit load of money which is completely and irrevocably selling out any pretense of being beneficial for cu…

If that is the case, then you shouldn't be using Apple, Google, Intel, Nvidia, Stripe, Shopify, Meta, Git, etc etc. Companies raise money now to generate cash flows in the future from a wildly risky innovation. Assuming the thesis is correct, the company will then to pay it back to investors (VCs and their investors including Endowment Funds), but also employee and taxes. As companies grow, they pay more taxes, and t…

How does Git fit with the rest of those?

Re: We raised a bunch of money

#122

Post by Solvency »

esteth wrote: post #103
Solvency wrote: post #92

Earlier quoted context omitted.

This is the cold truth. The entire process of raising money in the modern software world has nothing to do with creating a better product and business specifically. It's simply the de facto step-by-step playbook process one follows if one is an entrepreneur with the eventual become very rich. There is nothing novel, innovative, or remotely surprising about this process. It is well defined, well established, and simpl…

Sometimes funding is necessary to grow income enough to sustain the business or hire more engineers or whatever you want to do. If it costs $40 to acquire a new customer, and you expect a customer to stick around for long enough to spend $90 then it's totally worth doing that, but you need $40 now to make 90$ over some period of time.

There is an entirely possible and alternative funding model that perpetually allocates a responsible amount of incremental funds for the purposes of novel R&D. It's trivial to imagine how a responsible incremental funding approach could create a better, more transparent, more estimable, more reportable, more mappable, more rigorously trackable innovation process.

Raising massive lump sums of money is about VALUATION. You have been led to believe this is the only way to go about building a software business like this.

It's all a major silkscreen for the colder simpler goal of generating a lot of eventual wealth for a specific cast of people.

Again, no shame or emotion here. It's just how business is done in this world.

Re: We raised a bunch of money

#123

Post by tptacek »

awkward wrote: post #94
geraldwhen wrote: post #2

“ The result of this is an Internet where all of the world's CRUD apps are hosted in Loudoun County, VA (motto: "where tradition meets innovation"), at Amazon's us-east-1 in Ashburn, a city with so many Rails apps that one of them was elected to the county Board of Supervisors.” So true it hurts

Unfortunately, the motto is "I byde my time". Seems like he could have still made a joke without making it up.

We got this off the Loudoun County website! We do our research for these things!

Re: We raised a bunch of money

#124

Post by mrkurt »

gaffneyc wrote: post #59

I'm a pretty happy Fly.io customer and glad to see the direction things have been going overall. While it's great to see Fly is getting more resources to continue improving and building the business I worry about the inevitable VC Countdown Clock to Exit. What does this new round mean for Fly's long term independence?

I don't think we can build a company like this without a lot of money.

We're to the point where we're making $10-25mm capital expenditures in one go. And we have to to optimize our own costs. Optimizing our own costs means long term independence.

What I think I've learned about VCs is: the trick to long term independence is to find investors who already value the sales mechanism. Bottoms up, dev focused "sales" is something investors like, now (this was not true in 2012).

Re: We raised a bunch of money

#125

Post by xeromal »

donmcronald wrote: post #121
gotmedium wrote: post #88

Earlier quoted context omitted.

If that is the case, then you shouldn't be using Apple, Google, Intel, Nvidia, Stripe, Shopify, Meta, Git, etc etc. Companies raise money now to generate cash flows in the future from a wildly risky innovation. Assuming the thesis is correct, the company will then to pay it back to investors (VCs and their investors including Endowment Funds), but also employee and taxes. As companies grow, they pay more taxes, and t…

How does Git fit with the rest of those?

I assume they mean GitHub

Re: We raised a bunch of money

#126

Post by arandr0x »

candiddevmike wrote: post #29
geraldwhen wrote: post #2

“ The result of this is an Internet where all of the world's CRUD apps are hosted in Loudoun County, VA (motto: "where tradition meets innovation"), at Amazon's us-east-1 in Ashburn, a city with so many Rails apps that one of them was elected to the county Board of Supervisors.” So true it hurts

Unfortunately for fly, us-east-1 has better reliability then their product.

I've worked on the reliability team at a place that made what they call an "edgy app" (long before fly, so we made our own stuff on baremetal) and to be fair, reliability is the actual challenge when you're talking multi-region seamless deployments of scalable web platforms. It makes or breaks that kind of product at least for the original market.

Money doesn't contribute all that much to solving it though. It's usually time to make the early mistakes, continuous improvements, etc. But AWS had several decades to solve this, whereas fly clearly hasn't, so I'm not sure I'd count them out yet.

Re: We raised a bunch of money

#127

Post by tptacek »

mrkurt wrote: post #102
styren wrote: post #83

I'm really struggling to understand fly.io's path to profitability considering the relatively low margins for SMB/hobby clouds. They could have the whole world on their free tier but what happens when it's time for EQT to cash out? Can they build enough features to make fly.io a serious option for companies? I just can't see myself using it or pushing for it at any of the companies I've worked for unless it's a <5 pe…

I don't want to sound flippant, because this is hard as fuck, but the profitability path for us is reasonably simple: have good unit margins, attract customers, help them grow. We have good unit economics. The riskiest, most terrifying thing we've done is start with our own hardware. For dev focused infrastructure, what we need to do is attract a lot of devs, get them to take us to work, and then help their employers…

I was hoping Kurt was going to do an extended spiel on hardware margins and bandwidth pricing. You should keep needling him for this, because it's super interesting.

Re: We raised a bunch of money

#128

Post by da39a3ee »

Can someone remind me, what is "edge"? It it hosting server-side applications in a position in the network topology that minimizes latency to end users? Or is it that, but for static resources (so similar to the concept of CDN)?

Re: We raised a bunch of money

#129

Post by syrusakbary »

I wish they mentioned how their service competes against new-comers to the space such as Wasmer Edge [1]. (they kind of mention Javascript, I guess in reference to Cloudflare Workers, but they miss Wasm somehow!).

In any case, congrats to their team and VCs on the round!

[1] https://wasmer.io/products/edge

Re: We raised a bunch of money

#130

Post by ryandrake »

hgsgm wrote: post #75
bearjaws wrote: post #51

Earlier quoted context omitted.

The math is pretty straight forward. Cost to make article = $2000 Article gets 100,000 views Fly.io converts 1% of views to paying customers 1,000 new customers. Revenue per customer = $10 monthly MRR goes up by $10,000 Obviously I am pulling these numbers out of my ass, but there a pretty direct path to value. This is way more efficient than Google ads in a competitive space, I can only imagine hosting related ads a…

That math works for any old blog post. Advertising a raise specifically is to get attention from customers and the industry as a legitimized successful operation.

At the very least, it's marketing. I have no idea what they do, as I'm not in that particular web development niche and don't know what an "edgy app" is, but it made it to the top of HN, so people like me now know at least that there exists a company called fly.io.
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