[petercooper]

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 – 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]

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/

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]

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]

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]

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]

I'll offer you a bacon sarnie and a £20 credit at Funstation in Leeds.

[petercooper]

How about £25?

[makk]

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.

[snorgle]

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.

[filmgirlcw]

I’m not debating anything you’ve argued (I don’t know enough to know one way or another, except I will say that as an end-user, I remember liking DO’s documentation more in 2011 than Linode’s, but that doesnr mean the content is wasn’t still largely copied), but didn’t Slicehost (RIP) innovate the whole docs/tutorials as a sales funnel thing?

I’m sure DO took a lot of inspiration from Linode, but it always seemed like the heir apparent to Slicehost, which was the best designed/marketed/documented VPS host until it was sold off/shutdown.

[snorgle2]

100%. Good memory, too. Slicehost probably deserves credit as well. I’m not arguing for who deserves it. Arguing for who doesn’t. Slicehost’s approach to a number of things was better in a lot of ways and they did documentation a little differently, but you’re right, the funnel concept is the same (between all three).

I miss them too. They were respectful competitors and I know they were generally liked by competitors. There’s just a fine line between getting the idea for a funnel and copying its entire execution down to subscribing to RSS. I think there was mutual respect between both companies on that. With DO, not so much.

To be clear, it’s not Apple vs Google here, it’s the idea of DO coming out of the gate with that execution being a stroke of genius. They had (thanks for the reminder) multiple precedences and actively copied from at least one.

[dotancohen]

Why are you posting from multiple accounts? snorgle, snorgle2, both of which are recently-registered accounts? You might have an innocuous reason, but it seem a suspicious workaround to site rules or voting.

[CRConrad]

Wild-assed guess: They forgot the password for the first one, so made a #2?

[phphphphp]

You're right that the Linode library existed prior to DigitalOcean's founding but DigitalOcean did innovate: they understood the value of technical writing as a conversion tool, and paid for it. Linode did not pay for articles until more recently, and so the Linode library was comparatively weak for a long, long time. The Linode library was helpful for customers, certainly, but it was never comparable to what DigitalOcean achieved with their content. You can argue that DO were able to achieve what they did because of raising money, but to suggest they copied Linode wholesale is revisionism.

I won't get into the weeds of Linode vs. DigitalOcean but there were very important differences in approach, and eventually Linode was copying DO's ideas (for example, the introduction of low-resource low-cost servers, the design...). Linode was a trailblazer in the industry, for sure, but DigitalOcean wasn't just "Linode plus capital".

edit: Linode started paying in 2014[1] after DigitalOcean[2]

[1] https://www.linode.com/blog/linode/write-for-linode-get-paid... [2] https://web.archive.org/web/20131111064358/https://www.digit...

[snorgle2]

I gave lengthy examples of copying that I observed firsthand. You don’t believe me, ask Sam K, whose work was diligently and routinely copied. Linode Library also credited customers for contributions publicly and financially since its launch in 2009. They expanded the program later to anyone interested to scale it beyond one-offs. The whole point of Linode Library was conversions so your distinguishing of DO’s “innovation” is baffling; what, you think we hired three people to write about nginx because it was fun?

Of course Linode eventually copied DO back. That was the terms of the relationship established by DO. We were too busy dreaming of copying AWS at the time to see the threat. We ruled out $10 and lower Linodes again before DO was founded due to our support resources. DO forced that hand later (I assume, that was after I left).

I am obviously biased having worked there (worth noting I left on awful terms), and I am aware of that, but some of what I’m saying is purely objective and, again, probably provable with study of IA. If you’re going to refute my first hand, lived experience and call it revisionism, you’ve proven my point of making this comment at all.

[phphphphp]

Linode included affiliate program links for authors, that's not comparable to paying cash. I can't speak to whether DO did copy article contents (though I remember the rumours at the time and don't doubt it) but there is a meaningful gap between asking people to contribute vs. paying for the content, and that's why DigitalOcean achieved so much with their library despite launching later: people actually wanted to write for DigitalOcean.

I was a Linode customer at the time the library launched, I was a Linode customer when DigitalOcean launched, and I was a Linode customer years after DigitalOcean launched: Linode was the best VPS provider of the time, undoubtably, and influential for those that followed (including DigitalOcean) but DigitalOcean was much more than a VPS provider and they pushed the industry forward in ways that Linode never even tried. Diminishing what they achieved as being "Linode but with money" is nonsense.

What you remember and what is true aren't one and the same, as is evidenced by the Linode blog showing payments began for articles in 2014.

[snorgle2]

You’re talking past me, particularly harping on the blog you found from 2014 despite me directly addressing it in my reply to you (and using it to question my recollection), so it’s clear we’re not going to agree. I’m also not a fan of being told events and discussions I was a part of, firsthand, and pissed off about, firsthand, is me failing to remember the truth accurately; that’s really insulting, fundamentally, and is not an approach you should take with someone sharing their lived reality, especially when you were on the paying end and not the employed end. The rumors you heard corroborate. It happened. Notice the usually-HN-active DO folks haven’t jumped on me yet? They know it happened, too.

Again, I left on horrible terms. That’s really important to remember as you think about my motivations. I’m not here to score points for a side, which you seem to have inferred.

[ohashi]

I have worked tracking web hosts for over a decade now and have always followed Linode and Digital Ocean being that both were/are major players.

I'm curious when you think Linode lost the ball (I am assuming you accept that premise at this point in time given their size differences) and why?

Digital Ocean seemed to execute better and scale further, you put forth it was simply fueled by VC money. I know Linode had some major security incidents over the years which have harmed its reputation.

Curious if you're willing to share your thoughts on how it all played out for an industry observer?

[petercooper]

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.

[mbesto]

> 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]

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.

[rchaud]

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]

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-ca...

[rchaud]

He's an oversensitive tech billionnaire that spends a lot of time on Twitter.

[AlchemistCamp]

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

[CRConrad]

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]

Product Hunt.

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