[raiyu]

That’s become less and less true as the capital required to start a business has diminished and virtual products allow for rapid and unprecedented scale.

For me and my brother we were immigrants, divorced household, single mom as some bread winner, didn’t attend Ivy League schools, paid for college through debt, and started a business with savings from working full time at system administration, which was self taught, while being in college.

Fast forward 20 years, DigitalOcean IPO’d.

Our mother did provide a roof over our heads but we had no inheritance, and no friends and family round.

We built a service oriented business doing web hosting first. Service businesses are traditionally much cheaper to start because there is no product development cost to front with zero revenue.

Then after a decade of that we built digitalocean as a product business which was financed from the cash flow of our original business.

By the time we closed our series Seed in Digitalocean we were already well past $1MM ARR and in one year went from $100k ARR to $18MM ARR.

Having less resources does force you to be more scrappy and figure things out that other people who have a safety net often give up on.

Point is it can be done either way.

[monero-xmr]

Doesn’t matter if you were raised by an alcoholic who fed you beatings for breakfast. Many people will still claim luck and argue that no one should ever try to do great things, much safer to wagemax and invest in index funds and not step out of your lane.

Your story is the correct attitude and the reality of creating real wealth. Unfortunately many will denigrate your story.

[chii]

but one must also temper the idea that you can be self-made, just as long as you put in the hard yards. Wasn't there a recent ask HN front-page thread about how the poster was ready to give up being an indiehacker and an entrepreneur?

it is indeed much safer to min/max wage & work-life balance, and spend that time improving yourself. Then, use the capital to invest. But you will not reach billionaire status doing this - but you can make enough to be comfortable.

[raiyu]

Hard work alone will not garauntee success, but I think there is also a tremendous amount of knowledge that you can pick up that a lot of entrepreneurs seem to ignore, that greatly increases their likelihood for success and also reduces how much time they spend going in the wrong direction.

Likewise there are also so many great mentors out there now, and many of them are happy to give a helping hand, expecting nothing in return, because they recognize how much others have helped them, that if you aren't reaching out to those folks and finding them, then you are doing yourself a disservice.

Don't build in a vacuum. And by that I don't mean simply get customer/user feedback, but I mean have mentors, both active, and inactive - that are constantly reviewing your ideas with you. The inactive ones come from reading books like innovators dilemma, and the active ones, you need to find and reach out to and get them on-board, just like you would reach out to VCs and pitch for funding.

[fairity]

Congratulations. I can relate with your journey - going from living in cockroach-infested apartments to bootstrapping a $70m ARR business. Random question, but do you think it's feasible to go public without institutional investors? My co-founder & I have been seeing a ton of businesses with seriously weaker financial metrics going through SPAC's (see GETR). But, we're wondering if this outcome is gated by first raising from VC or PE.

[raiyu]

Is it possible yes. You do not need VC to go public. It’s not a requirement.

Also this whole journey started a decade ago. There are many more avenues for liquidity and for raising capital. However it is a bit gated.

However if you have good advisors and ensure you retain control with board structure and dual class voting shares you shouldn’t look at as a negative

[fairity]

Thank you. We turned down VC because we're concerned about the stranglehold they have on exit outcomes. I guess everything is negotiable, and I need to get better at communicating our concerns around control in a way that builds trust with investors. It's cool that you're open to having conversations like this. I imagine when you're publicly successful, you get inundated with people seeking help.

[aprdm]

Thanks for sharing, big congrats! Do you feel there were others that tried a similar path but failed ? And why do you think that is ? E.g: do you think if you started over from today you would have a good chance of creating another service like DO?

[raiyu]

I think there are several major lessons there that can be generalized to an extent.

1. If you don't have the funds to start a business directly, you may have to acquire them indirectly. In our case building a service business was much faster and you could literally setup a single server at a datacenter and call yourself a web host. So the startup capital was small and something that you could certainly acquire by saving while working a high paying job like System administration back in the day.

2. Be in the right place at the right time - this one is key for pretty much everyone everywhere and is one the of the main factors in success and failure. By itself it isn't everything but it is a huge component. We started doing web hosting before AWS existed and when the largest player in the space was Rackspace. There was plenty of room for small up-start individual providers and the internet was still rapidly expanding and also very much still catering to the early adopters.

3. Learn Business - You hear the stories of people like Mark Zuckerburg starting something in college and then building one of the largest companies in the world, but those are ideas that require a special time and place in history. Where the product is the key driver to it's success in many ways, and many non-consumer startups don't get as much attention, but I would certainly recommend learning business. That doesn't mean get an MBA, but read business books. That's what we did between our first company and then starting DigitalOcean. We definitely made a ton of mistakes with the first business and the books helped to elucidate what we did wrong, while also showing us what are the right questions to ask to avoid those same mistakes in the future. I think of business lessons like laws of physics, it's better to know them if you are going to be building around them and certainly the results speak for themselves. The first business peaked at around $5MM in revenue and $DOCN will do over $500MM this year.

Another DO? Definitely not. It was a time and place that allowed us to be successful. Plus if DO exists competing with it head on wouldn't make sense. Also if it didn't exist, I imagine someone would make a similar company that would succeed. You can see this clearly with all of the different versions of Heroku that people tried to build. DigitalOcean's success means that there is a market for the service that it provides and so, someone would have come along and created something to fill that void.

Lastly, I think that a lot of great businesses have to sound a bit stupid at the beginning. If they didn't sound stupid then someone would have built it already. Occasionally you can have a good sounding business idea, but then literally, nothing compelling should exist in the space as a competitor. Otherwise, it would already be done. So in a sense the fact that it sounds "stupid" means that it's different. Now is it good different, or bad different, that's a question that you have to figure out. But often that difference is the crux of what is the key driver for your success.

For us it was creating a simple version of AWS and competing directly (though in our case we felt it was indirect enough) with them. For Airbnb it was the crazy idea that people would pay money to stay in a strangers house. Occasionally an idea actually makes sense from the start. If you use a data warehouse and tried to do analytics before Looker it was a bit of a pain in the butt so Looker does seem straight forward. And certainly DataDog already existed in many different flavors, such as Nagios, but repackaging something and then riding another wave (AWS) can create massive success if the "wave" is large enough.

I think to truly count yourself as "fantastic" at the game of startups you would need to create 3 successful businesses. Because so much of it is chance, timing, luck, that can't be ignored. But if you can do it 3 times, I think that definitely speaks to a person's ability to spot the intersection of so many critical factors.

[tasuki]

I hate paying for things but love paying for my DigitalOcean droplet. You must be doing something right.

[raiyu]

Appreciate it, thank you =]

[andsoitis]

Congratulations.

[raiyu]

Thank you =]