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This is part of a broader trend. Last year, Balaji Srinivasan tweeted about the idea of SaaS companies buying media companies – https://twitter.com/balajis/stat

This is part of a broader trend. Last year, Balaji Srinivasan tweeted about the idea of SaaS companies buying media companies – https://twitter.com/balajis/status/1374363031417753609 https://twitter.com/balajis/status/1374363031417753609 – and as an observer/operator in this space, I've heard about a lot of conversations going on behind the scenes with larger companies expressing an interest in smaller media companies (including my own - I value autonomy too much but for the right multiple.. :-D). Consider Hubspot buying The Hustle, Robinhood buying MarketSnacks, Stripe's various acquisitions (like IndieHackers), Insight Partners bought The New Stack.. and this is all happening in the developer space too. Subscription based companies with high cashflow but high customer acquisition costs will continue to buy attention-based companies with relatively low acquisition costs because, frankly, the owners of the latter are generally quite happy with "modest" (<$40m, say) exits that the former can easily cover.

senko 5y ago
As a (casual) reader of several of the newsletters you maintain: Peter, hang in there, don't sell! :-D For those who are not familiar (if that's possible), check out https://cooperpress.com/publications/ https://cooperpress.com/publications/ To your (& Balaji's) point - one of tried and true methods of customer acquisition for SaaS is content marketing, but it's a very long game and you need to have quality content. Acquiring a blog or a media company that already has that has clear ROI. DO already has a solid knowledge base of articles ("How to ... on Ubuntu Server" almost always leads to DO) but mostly for the back-end part of the stack. From that perspective, buying CSS-Tricks is not too surprising.
- petercooper 5y ago
  Haha, thanks! I've had a few serious acquisition conversations over the years, but it's never made sense because I enjoy what I do already and don't really want to move on to something else :-) Like many people, I would take "retire forever" money (and probably end up still working anyway) but that hasn't been on offer.
  - yurishimo 5y ago
    If you're comfortable sharing what amount "retire forever money" is for you, I'd be interested in what that number is. See profile for DM options if you don't want to post it publicly!
    - petercooper 5y ago
      It wobbles around depending on my mood. At the most basic level, though, enough to pay off the mortgage, do a few fun things, and create a fund to draw down at 3.5% per year covering two good incomes – so somewhere in the $6-8m zone. If I were sick or had to stop working for some critical reason though, obviously that would drop pretty quick given lack of options.
      - thehodge 5y ago
        I'll offer you a bacon sarnie and a £20 credit at Funstation in Leeds.
        petercooper 5y ago
        How about £25?
mbesto 5y ago
> but high customer acquisition costs will continue to buy attention-based companies with relatively low acquisition costs because, I don't disagree with the thesis, but is the ROI actually there? Why not just pay the media company to be an exclusive partner? Maybe it's just putting the acquisition cost on the balance sheet instead of the income statement?
- altdataseller 5y ago
  You lack control on what you want to do with the publication. Any of your competitors can bid higher, for instance. Or if you decide to do a campaign announcing a new feature, they might say No because they're busy/doing something else. This is probably pennies for DigitalOcean, btw, in the whole scheme of things.
makk 5y ago
Their strategy from the start was to use evergreen technical content to attract devs, to raise the visibility of their products with target customers. It diminishes their early insights to cast this acquisition as merely part of a trend.
- petercooper 5y ago
  DO is smarter than most and has really nailed it with their content development program. When I say "trend" I'm not being negative, I'm speaking about broad industry movements which this deal can still be lumped in with, regardless of how smart or specific any individual deal or buyer is.
- snorgle 5y ago
  DigitalOcean’s strategy with evergreen technical content was to duplicate Linode’s strategy with evergreen technical content wholesale, down to individual articles. Linode Library, including a complete custom CMS and community engagement strategy to pay Linode users to help generate evergreen, was in place and driving conversions long before DigitalOcean was founded. They cribbed just about everything substantive from Linode documentation including the editorial structure that allows churning out content (install X on Y, basically, and enumerate administration verbs, Xs, Ys every time you deploy a new OS for users). I distinctly remember multiple Library articles getting rewritten about a week later and appearing on DO’s site with just enough distance to be unique, but it was clear that our work was on the screen while they wrote it based on document structure and technical approach (this was in the early “catch up” phase, roughly 2011-2012; it’s probably established enough now that this is no longer the case). More than once they not-so-subtly rewrote the technical approach to distinguish it and ended up breaking the instructions. They took verb ideas, they took X ideas, they took whole documents and shoved them in a blender with their systems. This is likely provable with Internet Archive but I’ve never bothered to look - I left Linode a decade ago. I wouldn’t have left this seemingly negative for no reason comment had you not identified DO’s documentation strategy as an early insight. It was an early insight, but absolutely, definitively not theirs. They raised the VC to get exposed to this audience and successfully presented nearly all of Linode’s business insights as their own, and it’s understandable that it seems that way if you didn’t follow Linode before DO. The first several years of DigitalOcean’s existence made it very clear they looked at Linode and said that, but with funding rounds. And that’s fine. They’ve done well. But let’s not attribute insights to their copies of things; their primary corporate insight all along was realizing Linode was handicapped with bootstrapped capital alone. And to give them credit, it was undeniably savvy to apply Linode’s successes to scaling DigitalOcean. It just means it’s not their ingenuity in any sense of the word.
rchaud 5y ago
I think Balaji is more interested in having SaaS create their own Ministry of Information to do their PR instead of needing to rely on journalists who seem to be generally unfriendly to him.
- riffic 5y ago
  no idea who this guy is or what makes him an authority but from a quick google about unfriendly journalists this is quite something: https://boingboing.net/2021/02/15/silicon-valley-investor-called-for-far-right-mob-to-harass-vulnerable-journalists.html https://boingboing.net/2021/02/15/silicon-valley-investor-ca...
  - rchaud 5y ago
    He's an oversensitive tech billionnaire that spends a lot of time on Twitter.
- AlchemistCamp 5y ago
  He made a very early call on Covid being a serious threat and promoted masking. Recode then wrote a piece about "Tech bros too afraid to shake hands" and since then his relationship with US media has deteriorated: https://twitter.com/balajis/status/1228447944287932416 https://twitter.com/balajis/status/1228447944287932416
  - CRConrad 5y ago
    Given that the Boing Boing post linked above references doxing journalists (and stuff "contravening the Geneva Convention"!) from 2012-13-14, I don't think that Covid tweet is what started it.
tiffanyh 5y ago
Product Hunt. This was VC's way to invest in a media company.

senko 5y ago

As a (casual) reader of several of the newsletters you maintain: Peter, hang in there, don't sell! :-D For those who are not familiar (if that's possible), check out https://cooperpress.com/publications/ https://cooperpress.com/publications/ To your (& Balaji's) point - one of tried and true methods of customer acquisition for SaaS is content marketing, but it's a very long game and you need to have quality content. Acquiring a blog or a media company that already has that has clear ROI. DO already has a solid knowledge base of articles ("How to ... on Ubuntu Server" almost always leads to DO) but mostly for the back-end part of the stack. From that perspective, buying CSS-Tricks is not too surprising.

petercooper 5y ago
Haha, thanks! I've had a few serious acquisition conversations over the years, but it's never made sense because I enjoy what I do already and don't really want to move on to something else :-) Like many people, I would take "retire forever" money (and probably end up still working anyway) but that hasn't been on offer.
- yurishimo 5y ago
  If you're comfortable sharing what amount "retire forever money" is for you, I'd be interested in what that number is. See profile for DM options if you don't want to post it publicly!
  - petercooper 5y ago
    It wobbles around depending on my mood. At the most basic level, though, enough to pay off the mortgage, do a few fun things, and create a fund to draw down at 3.5% per year covering two good incomes – so somewhere in the $6-8m zone. If I were sick or had to stop working for some critical reason though, obviously that would drop pretty quick given lack of options.
    - thehodge 5y ago
      I'll offer you a bacon sarnie and a £20 credit at Funstation in Leeds.
      - petercooper 5y ago
        How about £25?

mbesto 5y ago

> but high customer acquisition costs will continue to buy attention-based companies with relatively low acquisition costs because, I don't disagree with the thesis, but is the ROI actually there? Why not just pay the media company to be an exclusive partner? Maybe it's just putting the acquisition cost on the balance sheet instead of the income statement?

altdataseller 5y ago
You lack control on what you want to do with the publication. Any of your competitors can bid higher, for instance. Or if you decide to do a campaign announcing a new feature, they might say No because they're busy/doing something else. This is probably pennies for DigitalOcean, btw, in the whole scheme of things.

makk 5y ago

Their strategy from the start was to use evergreen technical content to attract devs, to raise the visibility of their products with target customers. It diminishes their early insights to cast this acquisition as merely part of a trend.

petercooper 5y ago
DO is smarter than most and has really nailed it with their content development program. When I say "trend" I'm not being negative, I'm speaking about broad industry movements which this deal can still be lumped in with, regardless of how smart or specific any individual deal or buyer is.
snorgle 5y ago
DigitalOcean’s strategy with evergreen technical content was to duplicate Linode’s strategy with evergreen technical content wholesale, down to individual articles. Linode Library, including a complete custom CMS and community engagement strategy to pay Linode users to help generate evergreen, was in place and driving conversions long before DigitalOcean was founded. They cribbed just about everything substantive from Linode documentation including the editorial structure that allows churning out content (install X on Y, basically, and enumerate administration verbs, Xs, Ys every time you deploy a new OS for users). I distinctly remember multiple Library articles getting rewritten about a week later and appearing on DO’s site with just enough distance to be unique, but it was clear that our work was on the screen while they wrote it based on document structure and technical approach (this was in the early “catch up” phase, roughly 2011-2012; it’s probably established enough now that this is no longer the case). More than once they not-so-subtly rewrote the technical approach to distinguish it and ended up breaking the instructions. They took verb ideas, they took X ideas, they took whole documents and shoved them in a blender with their systems. This is likely provable with Internet Archive but I’ve never bothered to look - I left Linode a decade ago. I wouldn’t have left this seemingly negative for no reason comment had you not identified DO’s documentation strategy as an early insight. It was an early insight, but absolutely, definitively not theirs. They raised the VC to get exposed to this audience and successfully presented nearly all of Linode’s business insights as their own, and it’s understandable that it seems that way if you didn’t follow Linode before DO. The first several years of DigitalOcean’s existence made it very clear they looked at Linode and said that, but with funding rounds. And that’s fine. They’ve done well. But let’s not attribute insights to their copies of things; their primary corporate insight all along was realizing Linode was handicapped with bootstrapped capital alone. And to give them credit, it was undeniably savvy to apply Linode’s successes to scaling DigitalOcean. It just means it’s not their ingenuity in any sense of the word.

rchaud 5y ago

I think Balaji is more interested in having SaaS create their own Ministry of Information to do their PR instead of needing to rely on journalists who seem to be generally unfriendly to him.

riffic 5y ago
no idea who this guy is or what makes him an authority but from a quick google about unfriendly journalists this is quite something: https://boingboing.net/2021/02/15/silicon-valley-investor-called-for-far-right-mob-to-harass-vulnerable-journalists.html https://boingboing.net/2021/02/15/silicon-valley-investor-ca...
- rchaud 5y ago
  He's an oversensitive tech billionnaire that spends a lot of time on Twitter.
AlchemistCamp 5y ago
He made a very early call on Covid being a serious threat and promoted masking. Recode then wrote a piece about "Tech bros too afraid to shake hands" and since then his relationship with US media has deteriorated: https://twitter.com/balajis/status/1228447944287932416 https://twitter.com/balajis/status/1228447944287932416
- CRConrad 5y ago
  Given that the Boing Boing post linked above references doxing journalists (and stuff "contravening the Geneva Convention"!) from 2012-13-14, I don't think that Covid tweet is what started it.

tiffanyh 5y ago

Product Hunt. This was VC's way to invest in a media company.