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>it's really rare to find a lifestyle technology business. You... must live in a different world from me. I mean, I am a lifestyle "technology" business. Mo

by lsc 14y ago

>it's really rare to find a lifestyle technology business. You... must live in a different world from me. I mean, I am a lifestyle "technology" business. Most of my customers are, too... a whole lot of them are so small that they still have dayjobs. For that matter, most of my suppliers are, too. But think of all the web design firms that exist. All of the small-business IT firms. The small consulting shops of various stripes. There are huge numbers of these "too small for important people to care" companies. and so many web applications are thrown together by one person, just messing around. Many, probably most of my suppliers and competitors are also small operations owned by one or two people. Linode, as far as I can tell, started a lot like I did; and so did most of my smaller competitors. (Slicehost is the counterexample; my understanding is that they started in a very startup-y manner.) I mean, obviously, you get fewer firms as you raise your revenue cutoff. If you require millions of dollars a year in revenue, nearly all my customers fall off the list... but actually, probably not that many of my suppliers. I mean, I'm buying one rack from coresite, 5g from cogent, and 1.1G and 2 racks from he.net, but that's less than half my monthly outlay, and other than that, all that money goes to small private companies (and really, he.net might be considered a small private company that grew to be a not-so-small private company.)

patio11 14y ago
Slicehost is the counterexample; my understanding is that they started in a very startup-y manner. Maxed out their credit cards, tried to find angel funding in St. Louis, and got told the going terms were "We'll get 50% of the company to cosign a loan for you" so they continued to bootstrap, managed to successfully structure a pricing model such that customers pre-paid for services (allowing them to service most of demand), rode on to acquisition by Rackspace... if I recall correctly. (Pours one out for Slicehost.)
- lsc 14y ago
  hm. do you know where I can read more about them? or is this stuff you know personally? They did seem to grow... very quickly. My impression was that they grew much faster than linode or I. Of course, I have no numbers to back that up either way.
  - patio11 14y ago
    It's public knowledge which I picked up in being an early customer and fan of the company. I think much of the story is summarized here: http://37signals.com/founderstories/slicehost http://37signals.com/founderstories/slicehost
    - lsc 14y ago
      Interesting. thanks. I relate to "I have a limited shelf life in a big company" I mean, I'm literally 1/10th the size of slicehost when they were bought, but I have gotten a few companies courting me for a buyout... The thing is, at this point, they want the company for me, and it's pretty clear that I... well, I might stick around for a few years, but working for someone else just isn't what I want to do. I mean, I can be bought, like anyone, but I imagine that because I know this about myself? I kinda think that my attitude would scare off anyone that might buy us. I mean, to save time, I've actually come up with a formula for how much money I'd want; some lump sum dependent on the size of my company, plus another large sum for every year they want me to work for them, plus another (smaller) sum for every year they want me to avoid competing with them. I dono. This was mostly to save time; I was hit with two courtships within a relatively short period, and felt I was spending too much effort on it, but eh... I dono. I haven't gotten other nibbles for a while, so it's likely that it's rare enough that time spent on it isn't a huge deal. I've always taken Linode as the model for where I want to take my company; of course, I've gone off in kindof a different direction; I want to own a network, and a datacenter, while Linode has preferred to have multiple locations. (I mean, it's one or the other.)
    - lsc 14y ago
      man, 0-20,000 users in less than 3 years? damn. I've been at it for what, seven now? eight? and I've achieved 1/10th that. Even if we only count from the time when I kinda figured out the hardware end of things, 2007 or so, that's still five years.
      - patio11 14y ago
        Congratulations on your success. The overwhelming majority of people will never run a hosting company. Of those that do, many of them will be unable to sustain it to 2k customers and run it profitably for half a decade. With regards to the new knowledge that 20k customers is possible, that just gives you something to shoot for next, right? There's something you can do that starts at 2k users today and gets you to 20k users. You know that is possible, because other people have done it. So work on that. (Knowing from previous conversations that you're rate limited on customer acquisition by processes other than marketing I'd suggest, as the Slicehost guys did, "automating the "%#)(% out of everything" and then focusing on customer acquisition as your primary job, if that is a huge priority for you.) More broadly: philosophically, if we consider ourselves failures for not doing things other people have done, then we'll all be failures essentially all of the time. That strikes me as an unhappy bit of philosophy to adopt then.

by lsc 14y ago

patio11 14y ago

Slicehost is the counterexample; my understanding is that they started in a very startup-y manner. Maxed out their credit cards, tried to find angel funding in St. Louis, and got told the going terms were "We'll get 50% of the company to cosign a loan for you" so they continued to bootstrap, managed to successfully structure a pricing model such that customers pre-paid for services (allowing them to service most of demand), rode on to acquisition by Rackspace... if I recall correctly. (Pours one out for Slicehost.)

lsc 14y ago
hm. do you know where I can read more about them? or is this stuff you know personally? They did seem to grow... very quickly. My impression was that they grew much faster than linode or I. Of course, I have no numbers to back that up either way.
- patio11 14y ago
  It's public knowledge which I picked up in being an early customer and fan of the company. I think much of the story is summarized here: http://37signals.com/founderstories/slicehost http://37signals.com/founderstories/slicehost
  - lsc 14y ago
    Interesting. thanks. I relate to "I have a limited shelf life in a big company" I mean, I'm literally 1/10th the size of slicehost when they were bought, but I have gotten a few companies courting me for a buyout... The thing is, at this point, they want the company for me, and it's pretty clear that I... well, I might stick around for a few years, but working for someone else just isn't what I want to do. I mean, I can be bought, like anyone, but I imagine that because I know this about myself? I kinda think that my attitude would scare off anyone that might buy us. I mean, to save time, I've actually come up with a formula for how much money I'd want; some lump sum dependent on the size of my company, plus another large sum for every year they want me to work for them, plus another (smaller) sum for every year they want me to avoid competing with them. I dono. This was mostly to save time; I was hit with two courtships within a relatively short period, and felt I was spending too much effort on it, but eh... I dono. I haven't gotten other nibbles for a while, so it's likely that it's rare enough that time spent on it isn't a huge deal. I've always taken Linode as the model for where I want to take my company; of course, I've gone off in kindof a different direction; I want to own a network, and a datacenter, while Linode has preferred to have multiple locations. (I mean, it's one or the other.)
  - lsc 14y ago
    man, 0-20,000 users in less than 3 years? damn. I've been at it for what, seven now? eight? and I've achieved 1/10th that. Even if we only count from the time when I kinda figured out the hardware end of things, 2007 or so, that's still five years.
    - patio11 14y ago
      Congratulations on your success. The overwhelming majority of people will never run a hosting company. Of those that do, many of them will be unable to sustain it to 2k customers and run it profitably for half a decade. With regards to the new knowledge that 20k customers is possible, that just gives you something to shoot for next, right? There's something you can do that starts at 2k users today and gets you to 20k users. You know that is possible, because other people have done it. So work on that. (Knowing from previous conversations that you're rate limited on customer acquisition by processes other than marketing I'd suggest, as the Slicehost guys did, "automating the "%#)(% out of everything" and then focusing on customer acquisition as your primary job, if that is a huge priority for you.) More broadly: philosophically, if we consider ourselves failures for not doing things other people have done, then we'll all be failures essentially all of the time. That strikes me as an unhappy bit of philosophy to adopt then.