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Bootstrapping a Web Hosting Company to $60 Million: Christopher Aker, CEO of Linode (Part 7)

Sramana: Why did you make the decision to build your business without external financing?

Christopher Aker: Once we started gaining traction, and once the industry woke up and realized where things were going, we have had incredible interest from VC firms. There has been a constant stream of phone calls and emails since the very early days of the company. I have had to validate that approach and do a little bit of soul searching. I concluded that there are three reasons to accept money from a VC. >>>

Serial Entrepreneur David Steinberg’s Four-Startup Journey (Part 5)

Sramana Mitra: That IPO was 2004?

David Steinberg: That’s correct

Sramana Mitra: You stayed with the public company till?

David Steinberg: 2007.

Sramana Mitra: Is that the timeframe in which you started the current company?

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Bootstrapping a Web Hosting Company to $60 Million: Christopher Aker, CEO of Linode (Part 6)

Sramana: Can you talk about your experience of trying to build an executive team and scaling a company with a larger footprint? Also, where are you building the company?

Christopher Aker: When the company had just three people, I moved back to New Jersey and that is where we established our offices. We are about 40 miles outside of Philadelphia.

Sramana: Do you have any operations in Nashville today?

Christopher Aker: No, we don’t. Everything moved. The only operations we ever had there was myself and my laptop. >>>

Serial Entrepreneur David Steinberg’s Four-Startup Journey (Part 4)

Sramana Mitra: I agree with you. Those are character traits that make great entrepreneurs. Without that, you’re not going to sustain because it takes a lot of work and energy. I’m trying to provide a framework that people can apply to ideas.

David Steinberg: What I was going to say is the things that made me a great entrepreneur were those things. But the thing that drove me to start my first company was I thought mobile phones were cool. It was something that I really liked. I do think that entrepreneurs picking something that they’re into is going to make it a much easier process. >>>

Bootstrapping a Web Hosting Company to $60 Million: Christopher Aker, CEO of Linode (Part 5)

Sramana: Is there any kind of segmentation where you get the most customer traction? You have a fairly sizeable business at this point. What is the distribution of your customer base? Are there any sizing or vertical segments amongst your customer base?

Christopher Aker: We track all of that stuff and we compare every couple of months to see if things are trending one way or another. It has been consistent this entire time in terms of us having a 50/50 split between business and consumers as customers. We have a 50% split between domestic and foreign customers. >>>

Serial Entrepreneur David Steinberg’s Four-Startup Journey (Part 3)

Sramana Mitra: That is a great resume. Can you tell me the story in a way that is useful for people to learn from?

David Steinberg: Here’s the learning. I do what’s called triangulation whenever I’m starting a business. I look for three different data points that say either the same thing or the opposite thing but lead to the same conclusion. What led me to believe that moving wireless sales from offline to online were a bunch of things? The first thing is I read a tremendous amount as the best way to learn is through read publications and online. I read an article in Advertising Age magazine that said that the Internet is going to explode and Internet marketing is going to grow at 25% a year. Two days earlier, I had read an article online that said the Internet was going to explode and content was going to grow at 17,000% a year. >>>

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

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. >>>

Serial Entrepreneur David Steinberg’s Four-Startup Journey (Part 2)

Sramana Mitra: Was this a company that you financed in any way or was it self-financed?

David Steinberg: I maxed out my credit cards and tried to get some money from my family. They would not give me any initially. I then went to my stepfather and said, “This is what I want to do.  I have this plan. Would you help me?” He said, “Absolutely not. You’re way too young to do this. Go to work for somebody for five years in the business and then I’ll lend you whatever you need.” I didn’t want to wait but we grew the business so quickly that within six months, we were already doing over a million a month. >>>