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Bootstrapping a Web Hosting Company to $60 Million: Christopher Aker, CEO of Linode (Part 4)

Posted on Friday, Jul 11th 2014

Sramana: You launched Linode in 2003. How did the company revenue ramp over time?

Christopher Aker: For the first few years, we were constrained by the number of machines we could put online. We still managed to do 200% to 400% revenue growth year-over-year. It is a lot easier to do that when the numbers are smaller.

I did about $200,000 in revenue in just the first six months of business. The next year, we did $600,000 and the following year we did $2 million. The year after that, we did $5 million. We started to slow down in terms of percentage revenue growth because that number was phenomenal. That is when other guys started realizing that this was a big industry and that they should probably get in on it. It was folks like RackSpace and Amazon as well as some of the smaller competitors that have popped up now and then. The new players have obviously accelerated the competitiveness of this entire industry.

Sramana: Where are you at in terms of revenue today?

Christopher Aker: This year, we will do over $60 million.

Sramana: The industry landscape has changed a lot since you started in 2003 to where we are today in 2014. It has become a very competitive industry. What do you see as your comparative strategy? How do you navigate the market at this point?

Christopher Aker: Our philosophy at this point is surrounding simplicity, clarity, and ease of comprehension. If you look at RackSpace, Amazon, Google, and others the pricing structure is complex and variable. It is also unpredictable. We think that might be okay if you are building the next Netflix or DropBox, but for the most part, people are not going to need that level of complexity. They just want something easy that allows them to have some boxes online.

Our approach is to bundle all of the resources together, which is completely the opposite of what folks like Amazon do. Amazon charges you for every component they can meter. That is really complex and expensive. We offer a single flat fee with everything bundled together.

Sramana: So you are offering a simple pricing model that is very easy to consume?

Christopher Aker: Correct. Our user experience is something that we also focus on making as simple as possible. We are constantly working to improve that experience. Users want to clone instances and maintain a golden master that they can create multiple instances from. We have been trying to provide the tools to our customers to make their lives easier. We have a mobile app, we have the command line interface app, which we released earlier this year, and several other tools.

This segment is part 4 in the series : Bootstrapping a Web Hosting Company to $60 Million: Christopher Aker, CEO of Linode
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