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We raised a bunch of money

fly.io

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Re: We raised a bunch of money

#291

Post by ultrasaurus »

fishtoaster wrote: post #31

"Why do startups write announcements like these?" I've been at a bunch of companies with a bunch of raises. 100% of the time, the announcement was an excuse for press. If you can come up with any excuse to get an article published in a bunch of tech press (other than "CEO arrested for embezzlement + harassment at the same time"), you get a bunch of free advertising. Bonus points if your target customer tends to read…

They aren't wrong that there are some companies that feel more comfortable if you have more money in the bank BUT most companies wildly overestimate how much prospects care. Case studies in their industry & Gartner quadrant > $100MM in the bank.

TL;DR: It's an appendix slide in your first meeting deck, don't put it up front :)

Re: We raised a bunch of money

#292

Post by tptacek »

tedmiston wrote: post #279
hn_throwaway_99 wrote: post #136

Earlier quoted context omitted.

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…

> They literally run physical servers all over the world ... I've got to imagine then that this business has huge capital costs, and it's nearly impossible to grow a very capital intensive business without outside capital. I genuinely struggle to understand how Fly.io managed (manages) to have this much physical server presence to date, having raised only ~$16M prior to this round. Hire a dozen engineers and that mon…

The short answer is that none of our regions are so big that we have to own our own top-of-rack switching yet (though some are getting close), so we can take a random spot in (say) an Equinix rack, rather than having to engineer a network (we run our own BGP for Anycast, but our uplinks are just DAC connections to our upstream providers switches.

For what it's worth: we've been on our own hardware ever since we launched, long before the 14MM Intel/Dell round. It's really the only way we can see to make the margins make sense. A big part of the premise of AWS and GCP is that they're allocating hyperscaler-grade resources to the task of making sure they claim most of the margins in hosting things on their own platform, not middlemen --- though that may be more true for some services (like EC2) than others (like S3).

Re: We raised a bunch of money

#293

Post by hn_throwaway_99 »

tedmiston wrote: post #279
hn_throwaway_99 wrote: post #136

Earlier quoted context omitted.

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…

> They literally run physical servers all over the world ... I've got to imagine then that this business has huge capital costs, and it's nearly impossible to grow a very capital intensive business without outside capital. I genuinely struggle to understand how Fly.io managed (manages) to have this much physical server presence to date, having raised only ~$16M prior to this round. Hire a dozen engineers and that mon…

I think it's a good question, but the linked article says unambiguously near the bottom that they run their own hardware:

> Why We Raised A Bunch Of Money

> Here's what we think it takes to build this kind of platform:

> A hardware fleet. Fly.io has always run on its own hardware. There are fun, technical, “control your own destiny” reasons to rack hardware instead of layering on top of commodity clouds. But it's really just economics. If you want to get people to build apps on your platform, you need a shot at being around 10 years from now. Hardware is what makes the margins work.

Re: We raised a bunch of money

#294

Post by HeyLaughingBoy »

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.

Sure. And in 15 years you'll have something that might have been relevant 15 years ago.

Re: We raised a bunch of money

#295

Post by nologic01 »

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…

other things being equal, organic growth via paying customers is the time-honored way of avoiding the pathologies you mention.

in this model speculative capital is only required in the very early stages. a company either reaches a symbiotic relation with its clients or not. the burden is primarily on intrinsic aspects of what the startup venture delivers and how much this resonates in its sector.

the VC model is basically turbo-charging this process. though it is risk capital and not lending, it creates an implicit, arbitrarily sized liability that need not have much to do with the underlying value proposition. it removes the organic cashlow constraint via a faustian bargain.

the "beauty" of it is that you can't have both models in the same economy. the set of ideas that are ripe for exploration at an given era are what they are. if some people pursue them while being on steroids this means there is no room for people to explore them in a less toxic way

Re: We raised a bunch of money

#297

Post by kkielhofner »

cnity wrote: post #150
kkielhofner wrote: post #56

Earlier quoted context omitted.

People forget AWS is 20 years old. When I routinely remind people of that fact they often remark (incredulously) with "WHAT? Really?" When I think about it the entire paradigm of "regions" itself seems completely antiquated in the grand scheme of things. AWS has made a few moves on this but in the end you're largely still tied to this fundamental regional concept in terms of control planes, etc and you incur the ridi…

The question of whether "the edge" takes off will come down to whether or not the culture at large will swallow the illusion at its heart. You cannot remove the concept of a region any more than you can remove the concept of "the computer" in a cloud environment.

"The cloud is just someone else's computer" - that ship sailed at least a decade ago.

Re: We raised a bunch of money

#298

Post by devoutsalsa »

ultrasaurus wrote: post #291
fishtoaster wrote: post #31

"Why do startups write announcements like these?" I've been at a bunch of companies with a bunch of raises. 100% of the time, the announcement was an excuse for press. If you can come up with any excuse to get an article published in a bunch of tech press (other than "CEO arrested for embezzlement + harassment at the same time"), you get a bunch of free advertising. Bonus points if your target customer tends to read…

They aren't wrong that there are some companies that feel more comfortable if you have more money in the bank BUT most companies wildly overestimate how much prospects care. Case studies in their industry & Gartner quadrant > $100MM in the bank. TL;DR: It's an appendix slide in your first meeting deck, don't put it up front :)

After the SVB collapse, hopefully they have the $100MM as $250K in 4000 different bank accounts to duck under those FDIC insurance limits.

Re: We raised a bunch of money

#299

Post by superq »

dmix wrote: post #193
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.…

I'm curious have you ever tried to raise money for a tech business before? There's a big reason VC and angels were and largely continue to be only game in town. No one understands or would risk loaning millions of dollars on a high risk business aiming for marginal incremental growth.

> marginal incremental growth

VC's and angels wouldn't be interested in that, either.

Re: We raised a bunch of money

#300

Post by ethbr0 »

matwood wrote: post #288
Zetice wrote: post #213

Earlier quoted context omitted.

I am so curious why you repeatedly spit in the collective face of the millions of small business owners in the US and around the world. If what you say were true, the world would exist as a series of 3-5 megacorps, and small businesses would not exist. Since they do exist, how do you square that with your claim that only the "extremely rich would be able to start a business of any size" is currently true?

I would also add to your point that starting a business is easier than it has ever been. While far from perfect, the internet has been an amazing equalizer.

On the one hand, it makes it easy for you to reach customers.

On the other hand, it makes it easy for your competitors to reach customers.

I'd argue that, on the whole, the internet has made starting "just an idea and a garage" businesses harder, because they now face immediate, maximally-funded competition. Whereas pre-Internet they would have been geographically/physically protected for awhile.

True, net win for customers, efficiency, etc. (maybe). But you couldn't start a Starbucks these days.

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