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We raised a bunch of money

fly.io

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Re: We raised a bunch of money

#171

Post by nwienert »

EGreg wrote: post #57
madeofpalk wrote: post #50

Earlier quoted context omitted.

Exactly what went through my head when reading > There are customers who are comfortable engaging with tiny Fly.io, and others who are comfortable engaging with the Fly.io that raised an additional $70MM led by EQT ventures There's the other kind of customer who sees that "$70MM led by EQT ventures" is a liability and will inevitably screw over their customers at a later date.

[flagged]

Great points. Don’t fret the downvotes. It’s cooler to be proven right in the face of popular doubt.

Re: We raised a bunch of money

#172

Post by dadrian »

Solvency wrote: post #92
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…

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…

You raise money to pay for costs of running the business. If you couldn't raise money, then only people who are already extremely rich would be able to start a business of any size, let alone one that requires deploying physical hardware in multiple regions. Good luck getting even four regions for less than $1M. The world would be far worse off if all tech businesses had to be bootstrapped.

That being said, there's certainly many businesses that raised too much money based on bullshit, had the founders take money off the top, and then have to drastically change to become sustainable, especially in the ZIRP era. But I don't see that happening here.

Re: We raised a bunch of money

#173

Post by [deleted] »

munificent wrote: post #146
Solvency wrote: post #122

Earlier quoted context omitted.

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.…

> 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. This works for some but not all business ventures. There's a reason corporations were invented in the Age of Sail. If you build 5% of a ship, you can't sail to the New World and bring back 5% of the resources. You just sink in the harbor. (The moral implicat…

[deleted]

Re: We raised a bunch of money

#174

Post by flagged24 »

berkle4455 wrote: post #106
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…

I don't think they they'll need to increase, fly.io is already rather expensive as far as cloud offerings go today: shared 8 vCPU / 16GB VPS is $85/mo at fly, Hetzner is $16/mo for the same.

It's worse. For a 16 vCPU + 32GB RAM + 20TB traffic (fly.io has max 8 vCPU) I would pay around $750 on fly.io instead of €30 on Hetzner. People are willing to pay a lot for I guess an easy deploy story ?

Re: We raised a bunch of money

#175

Post by nradov »

Solvency wrote: post #122
esteth wrote: post #103

Earlier quoted context omitted.

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.…

That alternative only works in the absence of competitors who raise capital to pursue more rapid growth. It is an arms race to an extent, but if you don't play the game then you may get locked out.

Re: We raised a bunch of money

#176

Post by Zetice »

toomuchtodo wrote: post #110
Zetice wrote: post #99

Earlier quoted context omitted.

Honest question: why are you on a site whose community is literally created and run by a startup accelerator? It's a given you realize how antagonistic you're being here, so I guess my only other question is why seek attention like this?

Curious people are allowed some latitude when historical performance predicts future outcomes [1]. This is "not the first rodeo" as it were. Agree being antagonistic is not welcome, but it should not be unwelcome to ask hard questions about how something won't end up the same. I like the Fly.io folks! But asking questions should never be off the table; how else would you be curious? [1] https://ourincrediblejourney.t…

> My new heuristic is that I avoid every single company that raises venture funding.

This is not what curiosity looks like, is my point.

Re: We raised a bunch of money

#177

Post by samtho »

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…

Further, it seems like these highly integrated “app platforms as a service” have been the primary type of dev tool that VCs are drawn too given the complete vendor lock in they provide/demand. It worked for squarespace, wix, Shopify, et al. Vercel has a softer sell on this, and firebase was one of the first to offer a fully managed database in this space.

My hot take is that these platforms are relying on an influx of new developers who need a friction free way to build and deploy applications to learn and showcase while selling to companies that don’t have time or budget to create a full dev team and CI/CD environment, creating both sides of supply and demand. Pricing is engineered in a way such that it gets very expensive the moment before companies notice how much cost it incurs but the cost to switch aways is much higher.

I agree with the heuristic of avoiding VC-backed products, it fosters incentives that often leave otherwise loyal customers holding the bag for a product who price does not match the service provided. It is for this reason I consider high vendor-lock-in products rather insidious.

Re: We raised a bunch of money

#178

Post by bishopsmother »

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…

"We make decent margins right now" - Funding and longevity [0] (a post from July 2021).

[0] https://community.fly.io/t/funding-and-longevity/1957

Re: We raised a bunch of money

#179

Post by dadrian »

gizmo wrote: post #40

Okay so they raised 100m which means they need to work towards a 1bn exit. And if they want to keep their momentum going their r&d cost will go through the roof. Because they have to build the whole stack and it all has to be rock solid (eventually). It’s an immense engineering effort. I get how this looks profitable on paper, because Fly charges for compute, and hardware and bandwidth are cheap. But the real expense…

That's backwards. Profitability at scale is about the _only_ way for a cloud provider to be profitable. There's a reason you don't see a bunch of small cloud providers, the economics only work at scale.

Re: We raised a bunch of money

#180

Post by ZiiS »

munificent wrote: post #146
Solvency wrote: post #122

Earlier quoted context omitted.

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.…

> 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. This works for some but not all business ventures. There's a reason corporations were invented in the Age of Sail. If you build 5% of a ship, you can't sail to the New World and bring back 5% of the resources. You just sink in the harbor. (The moral implicat…

You can build a small ship and a track record of profitable trade with the next port, then the next country over before undertaking an ocean crossing.
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