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We raised a bunch of money

fly.io

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Re: We raised a bunch of money

#181

Post by tptacek »

lazyant wrote: post #114
berkle4455 wrote: post #41

Earlier quoted context omitted.

A company with ~60 employees raising $70M seems pretty noteworthy to me. That's a lot of cash to go toward 14 jobs https://fly.io/jobs/ .

Not even 14 jobs, there's only one (or two) open positions listed there.

We'll be hiring for many of these positions again shortly. We weren't funding constrained, just people constrained; there are whole sprawling threads on HN about how annoyed we managed to make some people (a small minority of applicants, but that doesn't make it any easier for us to metabolize) with our responsiveness in our hiring process. We halted most hiring to retool and nail down hiring processes, and also to onboard all the people we hired (so they can help us do more hiring stuff).

Raising lots of money to hire 2 people is a funny flex, so I sort of wanted to leave this unanswered, but I also don't want to miss an opportunity to put on a hairshirt and talk about things we fucked up.

Re: We raised a bunch of money

#182

Post by mordae »

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…

Or maybe 20 customers who believe that having a shared ship might form a join stock company to take care of their respective 5%... and when the venture proves itself, they might convert it to a publicly traded company and let it scale up with demand.

Re: We raised a bunch of money

#183

Post by jondwillis »

da39a3ee wrote: post #128

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)?

It can be for both static content and dynamic computation/content.

Re: We raised a bunch of money

#184

Post by Zetice »

munificent wrote: post #148
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?

> why are you on a site whose community is literally created and run by a startup accelerator? Why do missionaries go where no one believes their religion already? The idea that you must already be a believer in some community to participate in the community makes little sense and certainly isn't a good way to make progress. > I guess my only other question is why seek attention like this? Would you also characterize…

All commenting is attention seeking, my question was: why do it antagonistically like this?

And further, why go on a (holy) mission to convince people funding companies is bad? That's a weird windmill to tilt at...

Re: We raised a bunch of money

#185

Post by cj »

kunalgupta wrote: post #112
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…

So like which products do you use, then?

A lot of companies are bootstrapped or "seed-strapped".

My company raised a $1.2m seed after doing a startup accelerator in 2015, used it to get to profitability, and we've been growing 40% YoY for a very long time without any additional outside capital.

It's also a huge selling point to prospective employees while interviewing candidates: "Unlike many other startups, we haven't raised lots of money, we're profitable, we've never done lay offs. That's all possible because we have product market fit and we have a sustainable business model. Our customers (rather than VCs) fund our growth."

Personally, I really like the "seed strapped" model... raise 1-2 million in order to find PMF and begin an early sales/marketing function with the goal of reaching profitability before the $1-2 million is burned through. It also creates a short window to fail fast... lots of companies raised way too much money and will end up failing very slowly.

"Failing very slowly" is what should be avoided.

Raising huge amounts of VC is a signal the company couldn't sustain their growth with their current revenue and operating model. It's also a signal that the company is likely using inorganic / unscalable tactics to grow, which might work now but won't work forever. That means the company will likely pivot their model at some point (from an employee perspective, that means higher risk of lay offs, and from a customer perspective, that means higher risk of price hikes in the future, etc)

Re: We raised a bunch of money

#186

Post by gtirloni »

hn_throwaway_99 wrote: post #136
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…

While I tend to agree with your overall thesis, and I get particularly baffled when some SaaS company, whose nearly sole expense is payroll, feels the need to raise hundreds of millions of dollars, fly.io is a cloud infrastructure company. They literally run physical servers all over the world (at least, that's my understanding from their website). I've got to imagine then that this business has huge capital costs, a…

> it's nearly impossible to grow a very capital intensive business without outside capital.

That's the promise of pay-per-minute (or even second) cloud computing, right? You don't spend what you don't need _right now_.

But Fly.io makes a good point about reaching critical mass to discuss better prices from their vendors. I can totally understand that.

Re: We raised a bunch of money

#187

Post by mrkurt »

Aeolun wrote: post #163
mrkurt wrote: post #49

Earlier quoted context omitted.

The simple answer is: we sell something people want to pay for (VM time, network services, etc). We'll obviously want to improve our margins over time, but there's a market price for this stuff and we don't have pricing power. I don't think you can build an interesting public cloud without raising money, unfortunately. At least, not without jumping back in time 25 years and starting then.

> I don't think you can build an interesting public cloud without raising money Only if your condition is that you want to do it in the next 3 years. Given 15, I imagine quite a lot is possible.

I am skeptical that Hetzner or OVH or similar could get off the ground starting in 2023.

There are a couple of things working against a boostrapped public cloud:

First, you gotta buy expensive kit. And then hope you can make your money back over the next 18 months.

Funding this is hard. You could try to borrow money, but that (a) increases your underlying cost and (b) dictates how you sell. You can't borrow money against developer usage / traction because banks don't know how to value that. So you have to do top down sales and land some big, committed customers before you can use debt.

The sales model constrains the product. There is no big, committed customer on the planet that will buy global infrastructure from a company who hasn't built it out yet. So you won't be building a global cloud, you'll end up in one region.

And, no big committed customer is going to buy something novel. They do not care that "fly launch" makes it easy for a dev to launch a new project. They care that they got the best possible pricing when they were shopping for their hardware. They might care that they can run k8s on it.

This is all fine, though. I'm not opposed to it. But I think it leaves you with something that's not as good as AWS, even though it's cheaper.

Re: We raised a bunch of money

#188

Post by toyg »

Dwolb wrote: post #138
mrkurt wrote: post #102

Earlier quoted context omitted.

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…

If your customers are really SMBs it’d make sense to partner with low-code/no-code platforms. Those things are so slow (for reasons which escape my small brain).

Probably because they build their margins by overcharging to run the resulting apps on oversubscribed AWS instances.

Re: We raised a bunch of money

#189

Post by jondwillis »

yieldcrv wrote: post #16

so I'm guessing Vercel and Netlify deploy cloud functions only to the "least worst datacenter"? while Fly.io deploys compute instances to more regions and also has a database? asking because I've been content with Vercel and Netlify's CDN for frontend assets and simply stopped doing system design around relational storage, when I want to stay on a free tier.

No, with Vercel at least you can choose other “primary” data centers than northern Virginia. I haven’t used Netlify for a few years so I can’t speak to that.

Re: We raised a bunch of money

#190

Post by toomuchtodo »

Zetice wrote: post #176
toomuchtodo wrote: post #110

Earlier quoted context omitted.

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.

I imagine some folks have their curiosity burn out at a certain point. Your point is taken.
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