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$10 Million Round For Ruby On Rails Startup Heroku (YC W08)

158 points by whyleym 16y ago

friendstock 16y ago
congratulations!
terrellm 16y ago
Congrats guys - 60,000 app milestone last week, $10m funding this week. It's a great service and I'm glad to see it continue to grow.
jacquesm 16y ago
That's actually really cool. I'm not ruby/rails user, but if I were I would certainly use Heroku, it is one of the YC backed companies that really stand out for me. From the design of their website to the naming schemes, the price points and so on it all seems to be equally well thought out. Back when considering which platform to try next (python/django or ruby/rails) I was very impressed with the way they did their best to minimize the surprise factor and to really inform the user up front of what they're getting in to. The documentation is also excellent. I still don't know if I made the right choice, but I'm a bit too far in to django now to easily back out again so I guess I'll stick to it, but to see Heroku has now found very solid financing is definitely a factor to consider.
- mrduncan 16y ago
  In case you (or others) weren't aware, they also introduced experimental support for Node.js a couple of weeks ago. http://blog.heroku.com/archives/2010/4/28/node_js_support_experimental/ http://blog.heroku.com/archives/2010/4/28/node_js_support_ex...
  - messel 16y ago
    Very cool, had no idea. Have that on my list of things to play with.
- dschobel 16y ago
  I've only used it for proof of concept (read: free) projects and I agree with you about everything but you see a lot of people bitching on HN about the pricing and how costly it is to scale an app on Heroku. Not sure how much of that is just venting or how much it actually keeps some people at bay but it's pretty obvious some (anonymous people on an online forum, FWIW...) think it too costly.
  - jacquesm 16y ago
    I think they should factor in how much it would cost them to run this on their own infrastructure for comparison purposes at the same levels where they'll have to pay Heroku. Only then you'd be comparing apples-to-apples and then you'd see that by the time you've factored in the 24x7 system administration, monitoring, guy-on-standby for when you're on the road and so on that it really isn't that bad. Of course it will be higher in absolute dollars if you don't factor in your own time and how much that costs, maybe there is even a small premium if you do, but outsourcing has other advantages besides the ones that translate directly in to money, and those can be valuable by themselves (for instance the time freed up). If you can't make your business model earn back what Heroku costs you at a given scale then that is of course a problem, but if you can't do that then you probably have a problem anyway, and even free servers wouldn't solve that.
  - vtail 16y ago
    Many people underestimate the cost to do (proper) system administration, as well as cost/time/skill required to do (proper) scaling
- mhartl 16y ago
  In case you want to take the Rails plunge, my Ruby on Rails Tutorial book is available online at http://www.railstutorial.org/book http://www.railstutorial.org/book, and it uses Heroku starting in Chapter 1 (i.e., http://www.railstutorial.org/book#sec:deploying http://www.railstutorial.org/book#sec:deploying). Three years ago (when my first Rails book came out), covering deployment in the first chapter would have been unthinkable, but with Heroku the unthinkable becomes $ git init && git add . && git commit -m "init" $ heroku create $ git push heroku master Subsequent deploys go like this: $ git commit -am "Changed some stuff" $ git push heroku (The book is currently in progress, but I've written 11 of 12 chapters, so it's likely to be done before you would have time to reach Chapter 12. Also, the current book uses Rails 2.3.5, but a Rails 3 version is also in the works.)
  - mhartl 16y ago
    By the way, the Rails Tutorial site itself is also hosted on Heroku. By setting the appropriate header, I've arranged for Heroku to cache the site's static pages, which on subsequent requests get served with blazing speed (see, e.g., http://docs.heroku.com/http-caching http://docs.heroku.com/http-caching). (Because of its read-only file system, Heroku doesn't support Rails page caching, but that's OK: their Varnish cache (http://varnish-cache.org/ http://varnish-cache.org/) is even faster. :-) Thus, though designed principally for dynamic applications, Heroku is also great for static content.
deleted 16y ago
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djb_hackernews 16y ago
This my be the wrong question since I'm not too familiar with Heroku, but is anyone working on something similar for Django?
- jacquesm 16y ago
  http://news.ycombinator.com/item?id=252784 http://news.ycombinator.com/item?id=252784
- njl 16y ago
  I just came up for air from working on my take to browse hacker news for a bit. A lot of work for one man, but I'm moderately pleased with the progress I've been making.
- waxman 16y ago
  Isn't that what Google App Engine is? Heroku is a cloud-based deployment and hosting solution for Ruby apps (and soon to be Node.js javascript apps too). Google App Engine is for Python and Java.
  - weixiyen 16y ago
    goog app engine doesn't work with tornado =/
    - csytan 16y ago
      Yes it does.
  - jackowayed 16y ago
    But GAE doesn't have a SQL db. Now, for some apps that may even be an advantage, but these frameworks are really setup for having a SQL db behind them. The same exact code that you would deploy to a VPS can run on Heroku without issue, save some limitations like the read-only filesystem. That's a big plus.
  - messel 16y ago
    Don't forget JRuby and they have a fix for the spin up time with http://gist.github.com/331854 http://gist.github.com/331854 Deferred Dispatcher.
ique 16y ago
Congratulations to Heroku! I've been using their service for years and it is truly awesome. I hope this money pushes them even further. One note on the article though, it says: "Heroku aims to make software development more accessible for a wider range of people. It does so by providing a browser-based programming environment that cuts out steps traditionally needed to produce RoR applications." Didn't they cut that entirely? Even Heroku Garden is closed right?
- jackowayed 16y ago
  You're right. They must have some really old stock summary from when they wrote about Heroku long ago. Heroku's business is exclusively hosting Ruby (and now Node.js) apps that you write normally.
justindz 16y ago
Grats guys. One of my favorite web services, ever. One day when my actual job keeps me a bit less busy, I'll be upgrading my service and using it even more.
trevorturk 16y ago
I'm wondering why they need to raise money at all. Aren't they charging for their services? I'd feel more comfortable knowing that they're a self-sustaining business, as opposed to a startup that needs to raise money. Maybe there's a good reason, though...?
- mrkurt 16y ago
  A company that doesn't need to raise money is in an awfully good position if they decide that they can use extra money. $10 million is a huge amount, it sounds like they have huge plans.
- eli 16y ago
  Tons of profitable businesses raise money. Sometimes it's the best way to scale to the next level or expand into a new market. It's wrong to assume they aren't profitable.
  - trevorturk 16y ago
    Sure - that's why I'm wondering if there's a "good reason" aside from that they need to raise money to remain in business. Maybe they'll be able to provide some more insight on their blog at some point.
- jacquesm 16y ago
  You don't raise 10 million if you don't know what you're raising it for, to me this speaks of a fairly detailed plan on how they intend to spend that money. Think of money that you can get your hands on before you've earned it as a growth accelerator. You could for instance stave off a potential competitor by grabbing a larger share of the market than you would have been able to do if you both relied on organic growth. In the arms races that start-ups are bound to find themselves in sooner or later a couple of million in hard cash can make an enormous difference in the long term outcome.
  - wrs 16y ago
    Yes, but specifically talking about Heroku, what do you suppose the plan is? If it were Engine Yard (at least the pre-EC2 version) I would know--they need to buy a lot of servers. But I figured Heroku would be able to stay a lean mean profit machine without taking big funding. Is their model out of whack? Too many free apps (aka marketing expense) to be subsidized by the paid ones?
minalecs 16y ago
Wondering ? has anyone migrated from engine yard to heroku or vice versa, and reasoning. I've read several reasons on why one is better than the other, but just wondering what some of the users experiences are
- messel 16y ago
  I found it easier to use Heroku, but I think Engine yard maybe a better price point depending on what resources and other stuff your server needs. Very comparable though
- andrewvc 16y ago
  My company's a paying customer and we migrated from EY to Heroku. I think they're roughly comparable but the deal breakers for me were Postgres, Addons, and the Git Workflow.
  - minalecs 16y ago
    so .. did you go back to engine yard ?
markbao 16y ago
Heroku user here. One word encompasses Heroku: incredible. Fastest Rails deployment I have ever seen. I'm not surprised that they received the funding—more like really excited. EDIT: Also, the add-ons they have are really good, and they have a ton in the pipeline. They have all the tools I needed to get up-and-running (including a tool that sends your local DB to the production Heroku server or vice versa in one command).
- deleted 16y ago
  [deleted]
waxman 16y ago
One of the longstanding hesitations for cloud computing is "my whole business will depend on someone else's business, what if they go under?" With $10mm in the bank, 60k apps in the cloud, Amazon's AWS backend, Heroku's rockstar team, and a real revenue model, I think it's safe to say that you can bet your business on Heroku. My new project sure as hell will...
- tlrobinson 16y ago
  Even before they were "proven" I think Heroku was significantly less risky than some other platforms, since it's a pretty standard open source stack. If you really had to move off of Heroku (if they went under or become prohibitively expensive) you could move onto your own servers running essentially the same stack (except of course manually configured and maintained), which is more than you can say for AppEngine, for example.
messel 16y ago
As a guy who learned a little php for the first time last year, and then moved on to Ruby late in the year Heroku has been very helpful to kicking Rails servers live. A+ for ease of use, and as I learn more I see opportunities in other server environments. My cofounder is kicking up nginx, thin and padrino My favorite heroku project (and personal first) http://imagebrowser.heroku.com http://imagebrowser.heroku.com enjoy. Semantic entity extraction and image browsing as well as search within twitter streams.
chuhnk 16y ago
Love heroku for my micro sinatra apps. A well deserved $10mil
frou_dh 16y ago
I was so impressed with the design and usability of Heroku's site and system - it's near perfection, which is a hard thing to say about software.
vtail 16y ago
Anybody knows what percentage of these 60,000 apps are actual paying clients? If e.g. 50,000 of these apps are free, even for a modest cost of $3/month to host each one, that quickly adds up to ~$2mn of cash burn / year. Another interesting question is how well they scale. http://success.heroku.com/ http://success.heroku.com/ has some interesting companies, but nothing with very high traffic (or am I wrong)? PS. I'm a happy heroku user myself.
- davidedicillo 16y ago
  It means they would just need ~1800 paying users with my bill to cover the costs.
  - vtail 16y ago
    Do I read it right that your bill is about $10k/year? Given that their profit margin on a paying customer is not 100%, more like 15-20%, they would probably need 5x as much, or 10k paying customers, to cover the costs.
    - davidedicillo 16y ago
      yeah, a bit more than that, I use it for GetAppsDone.com. The basic bill would be much lower but I once you start adding addons the bills adds up quickly.
      - aarongough 16y ago
        Are you happy with the service/bang for your buck that comes with that bill? I'm curious as I've just started using Heroku and I'm a little nervous about the costs associated with scaling...
        davidedicillo 16y ago
        Very happy so far. We only had problems with very few gems. It's definitely not the cheapest options, but definitely worth considering that you could easily have mvp up at 0 cost, and skipping all the headaches that managing a ruby server involve.
timinman 16y ago
From the rate that these guys innovate, it's obvious they're working hard - and at the right things. I'd bet this will pay off for the investors. I have one app on heroku, it's probably easier to use, but I have more apps on Google Appengine with jruby simply because it stays free-er for longer. I've come up against Heroku's free limits.
mark_l_watson 16y ago
Good for them. Heroku provides great service, and I wish them well.
c00p3r 16y ago
It is really cool startup. Smart concept - git powered deployment, very clear and beautifully visualized information, and excellent, even stunning web design. Add to that some Japanese/Zen flavor and it's almost perfect. Very good taste. I'm glad that they're successful. It's good when a good taste wins.
drewjohnson 16y ago
I loaded my first Heroku app last week. As promised, they made it very easy and snappy to deploy. When I ran into a problem, I was able to file a ticket and get a resolution by the next business day. Phenomenal service, especially considering I was only using their free offering.

158 points by whyleym 16y ago

congratulations!

Congrats guys - 60,000 app milestone last week, $10m funding this week. It's a great service and I'm glad to see it continue to grow.

jacquesm 16y ago

That's actually really cool. I'm not ruby/rails user, but if I were I would certainly use Heroku, it is one of the YC backed companies that really stand out for me. From the design of their website to the naming schemes, the price points and so on it all seems to be equally well thought out. Back when considering which platform to try next (python/django or ruby/rails) I was very impressed with the way they did their best to minimize the surprise factor and to really inform the user up front of what they're getting in to. The documentation is also excellent. I still don't know if I made the right choice, but I'm a bit too far in to django now to easily back out again so I guess I'll stick to it, but to see Heroku has now found very solid financing is definitely a factor to consider.

mrduncan 16y ago
In case you (or others) weren't aware, they also introduced experimental support for Node.js a couple of weeks ago. http://blog.heroku.com/archives/2010/4/28/node_js_support_experimental/ http://blog.heroku.com/archives/2010/4/28/node_js_support_ex...
- messel 16y ago
  Very cool, had no idea. Have that on my list of things to play with.
dschobel 16y ago
I've only used it for proof of concept (read: free) projects and I agree with you about everything but you see a lot of people bitching on HN about the pricing and how costly it is to scale an app on Heroku. Not sure how much of that is just venting or how much it actually keeps some people at bay but it's pretty obvious some (anonymous people on an online forum, FWIW...) think it too costly.
- jacquesm 16y ago
  I think they should factor in how much it would cost them to run this on their own infrastructure for comparison purposes at the same levels where they'll have to pay Heroku. Only then you'd be comparing apples-to-apples and then you'd see that by the time you've factored in the 24x7 system administration, monitoring, guy-on-standby for when you're on the road and so on that it really isn't that bad. Of course it will be higher in absolute dollars if you don't factor in your own time and how much that costs, maybe there is even a small premium if you do, but outsourcing has other advantages besides the ones that translate directly in to money, and those can be valuable by themselves (for instance the time freed up). If you can't make your business model earn back what Heroku costs you at a given scale then that is of course a problem, but if you can't do that then you probably have a problem anyway, and even free servers wouldn't solve that.
- vtail 16y ago
  Many people underestimate the cost to do (proper) system administration, as well as cost/time/skill required to do (proper) scaling
mhartl 16y ago
In case you want to take the Rails plunge, my Ruby on Rails Tutorial book is available online at http://www.railstutorial.org/book http://www.railstutorial.org/book, and it uses Heroku starting in Chapter 1 (i.e., http://www.railstutorial.org/book#sec:deploying http://www.railstutorial.org/book#sec:deploying). Three years ago (when my first Rails book came out), covering deployment in the first chapter would have been unthinkable, but with Heroku the unthinkable becomes $ git init && git add . && git commit -m "init" $ heroku create $ git push heroku master Subsequent deploys go like this: $ git commit -am "Changed some stuff" $ git push heroku (The book is currently in progress, but I've written 11 of 12 chapters, so it's likely to be done before you would have time to reach Chapter 12. Also, the current book uses Rails 2.3.5, but a Rails 3 version is also in the works.)
- mhartl 16y ago
  By the way, the Rails Tutorial site itself is also hosted on Heroku. By setting the appropriate header, I've arranged for Heroku to cache the site's static pages, which on subsequent requests get served with blazing speed (see, e.g., http://docs.heroku.com/http-caching http://docs.heroku.com/http-caching). (Because of its read-only file system, Heroku doesn't support Rails page caching, but that's OK: their Varnish cache (http://varnish-cache.org/ http://varnish-cache.org/) is even faster. :-) Thus, though designed principally for dynamic applications, Heroku is also great for static content.

deleted 16y ago

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djb_hackernews 16y ago

This my be the wrong question since I'm not too familiar with Heroku, but is anyone working on something similar for Django?

jacquesm 16y ago
http://news.ycombinator.com/item?id=252784 http://news.ycombinator.com/item?id=252784
njl 16y ago
I just came up for air from working on my take to browse hacker news for a bit. A lot of work for one man, but I'm moderately pleased with the progress I've been making.
waxman 16y ago
Isn't that what Google App Engine is? Heroku is a cloud-based deployment and hosting solution for Ruby apps (and soon to be Node.js javascript apps too). Google App Engine is for Python and Java.
- weixiyen 16y ago
  goog app engine doesn't work with tornado =/
  - csytan 16y ago
    Yes it does.
- jackowayed 16y ago
  But GAE doesn't have a SQL db. Now, for some apps that may even be an advantage, but these frameworks are really setup for having a SQL db behind them. The same exact code that you would deploy to a VPS can run on Heroku without issue, save some limitations like the read-only filesystem. That's a big plus.
- messel 16y ago
  Don't forget JRuby and they have a fix for the spin up time with http://gist.github.com/331854 http://gist.github.com/331854 Deferred Dispatcher.

ique 16y ago

Congratulations to Heroku! I've been using their service for years and it is truly awesome. I hope this money pushes them even further. One note on the article though, it says: "Heroku aims to make software development more accessible for a wider range of people. It does so by providing a browser-based programming environment that cuts out steps traditionally needed to produce RoR applications." Didn't they cut that entirely? Even Heroku Garden is closed right?

jackowayed 16y ago
You're right. They must have some really old stock summary from when they wrote about Heroku long ago. Heroku's business is exclusively hosting Ruby (and now Node.js) apps that you write normally.

justindz 16y ago

Grats guys. One of my favorite web services, ever. One day when my actual job keeps me a bit less busy, I'll be upgrading my service and using it even more.

trevorturk 16y ago

I'm wondering why they need to raise money at all. Aren't they charging for their services? I'd feel more comfortable knowing that they're a self-sustaining business, as opposed to a startup that needs to raise money. Maybe there's a good reason, though...?

mrkurt 16y ago
A company that doesn't need to raise money is in an awfully good position if they decide that they can use extra money. $10 million is a huge amount, it sounds like they have huge plans.
eli 16y ago
Tons of profitable businesses raise money. Sometimes it's the best way to scale to the next level or expand into a new market. It's wrong to assume they aren't profitable.
- trevorturk 16y ago
  Sure - that's why I'm wondering if there's a "good reason" aside from that they need to raise money to remain in business. Maybe they'll be able to provide some more insight on their blog at some point.
jacquesm 16y ago
You don't raise 10 million if you don't know what you're raising it for, to me this speaks of a fairly detailed plan on how they intend to spend that money. Think of money that you can get your hands on before you've earned it as a growth accelerator. You could for instance stave off a potential competitor by grabbing a larger share of the market than you would have been able to do if you both relied on organic growth. In the arms races that start-ups are bound to find themselves in sooner or later a couple of million in hard cash can make an enormous difference in the long term outcome.
- wrs 16y ago
  Yes, but specifically talking about Heroku, what do you suppose the plan is? If it were Engine Yard (at least the pre-EC2 version) I would know--they need to buy a lot of servers. But I figured Heroku would be able to stay a lean mean profit machine without taking big funding. Is their model out of whack? Too many free apps (aka marketing expense) to be subsidized by the paid ones?

minalecs 16y ago

Wondering ? has anyone migrated from engine yard to heroku or vice versa, and reasoning. I've read several reasons on why one is better than the other, but just wondering what some of the users experiences are

messel 16y ago
I found it easier to use Heroku, but I think Engine yard maybe a better price point depending on what resources and other stuff your server needs. Very comparable though
andrewvc 16y ago
My company's a paying customer and we migrated from EY to Heroku. I think they're roughly comparable but the deal breakers for me were Postgres, Addons, and the Git Workflow.
- minalecs 16y ago
  so .. did you go back to engine yard ?

markbao 16y ago

Heroku user here. One word encompasses Heroku: incredible. Fastest Rails deployment I have ever seen. I'm not surprised that they received the funding—more like really excited. EDIT: Also, the add-ons they have are really good, and they have a ton in the pipeline. They have all the tools I needed to get up-and-running (including a tool that sends your local DB to the production Heroku server or vice versa in one command).

deleted 16y ago
[deleted]

waxman 16y ago

One of the longstanding hesitations for cloud computing is "my whole business will depend on someone else's business, what if they go under?" With $10mm in the bank, 60k apps in the cloud, Amazon's AWS backend, Heroku's rockstar team, and a real revenue model, I think it's safe to say that you can bet your business on Heroku. My new project sure as hell will...

tlrobinson 16y ago
Even before they were "proven" I think Heroku was significantly less risky than some other platforms, since it's a pretty standard open source stack. If you really had to move off of Heroku (if they went under or become prohibitively expensive) you could move onto your own servers running essentially the same stack (except of course manually configured and maintained), which is more than you can say for AppEngine, for example.

messel 16y ago

As a guy who learned a little php for the first time last year, and then moved on to Ruby late in the year Heroku has been very helpful to kicking Rails servers live. A+ for ease of use, and as I learn more I see opportunities in other server environments. My cofounder is kicking up nginx, thin and padrino My favorite heroku project (and personal first) http://imagebrowser.heroku.com http://imagebrowser.heroku.com enjoy. Semantic entity extraction and image browsing as well as search within twitter streams.

chuhnk 16y ago

Love heroku for my micro sinatra apps. A well deserved $10mil

frou_dh 16y ago

I was so impressed with the design and usability of Heroku's site and system - it's near perfection, which is a hard thing to say about software.

vtail 16y ago

Anybody knows what percentage of these 60,000 apps are actual paying clients? If e.g. 50,000 of these apps are free, even for a modest cost of $3/month to host each one, that quickly adds up to ~$2mn of cash burn / year. Another interesting question is how well they scale. http://success.heroku.com/ http://success.heroku.com/ has some interesting companies, but nothing with very high traffic (or am I wrong)? PS. I'm a happy heroku user myself.

davidedicillo 16y ago
It means they would just need ~1800 paying users with my bill to cover the costs.
- vtail 16y ago
  Do I read it right that your bill is about $10k/year? Given that their profit margin on a paying customer is not 100%, more like 15-20%, they would probably need 5x as much, or 10k paying customers, to cover the costs.
  - davidedicillo 16y ago
    yeah, a bit more than that, I use it for GetAppsDone.com. The basic bill would be much lower but I once you start adding addons the bills adds up quickly.
    - aarongough 16y ago
      Are you happy with the service/bang for your buck that comes with that bill? I'm curious as I've just started using Heroku and I'm a little nervous about the costs associated with scaling...
      - davidedicillo 16y ago
        Very happy so far. We only had problems with very few gems. It's definitely not the cheapest options, but definitely worth considering that you could easily have mvp up at 0 cost, and skipping all the headaches that managing a ruby server involve.

timinman 16y ago

From the rate that these guys innovate, it's obvious they're working hard - and at the right things. I'd bet this will pay off for the investors. I have one app on heroku, it's probably easier to use, but I have more apps on Google Appengine with jruby simply because it stays free-er for longer. I've come up against Heroku's free limits.

mark_l_watson 16y ago

Good for them. Heroku provides great service, and I wish them well.

c00p3r 16y ago

It is really cool startup. Smart concept - git powered deployment, very clear and beautifully visualized information, and excellent, even stunning web design. Add to that some Japanese/Zen flavor and it's almost perfect. Very good taste. I'm glad that they're successful. It's good when a good taste wins.

drewjohnson 16y ago

I loaded my first Heroku app last week. As promised, they made it very easy and snappy to deploy. When I ran into a problem, I was able to file a ticket and get a resolution by the next business day. Phenomenal service, especially considering I was only using their free offering.