The Exchanges

Q Always, always tough. I guess, I guess for me then, what did you look for in those investors? Was it kind of pure operational experience that they could apply to you? Was it partnerships? Was it kind of developer centric experience of kind of developer communities?

A Well, it was really interesting because we, we basically pushed everybody and the two investors that we loved the most was, uh, Jerry Chan from Greylock and Peter Levine from Andreessen Horowitz. I mean, first of all, I mean, those are both top tier VC firms. They have tremendous portfolio companies and a great reputation. So all of that was kind of table stakes. So it really was about the personal relationship with that individual, how well they understood the business, how well they understood the market, how much they kind of believed in what we were doing. And how much we felt that we could really partner with this person and they could really help us drive the business forward and be a mentor to us. And those were the two individuals that we absolutely fell in love with. And they both happened on the last day of a, of a four day nonstop back to back to back to back VC pitching, which was kind of insane. And you say the same thing, 20 times and you just get tired of your own voice. And we were just really fortunate that we were able to, you know, work out a deal with a Peter Levine and And Jason Horowitz, and obviously his experience with GitHub and being on their board was fundamental. He was the CEO of ZenSource. So he definitely knows our space. He knows the developer. He's been an operator himself. So he understands the founder journey. He understands the complexity of …

AI assessment note: “it really was about the personal relationship with that individual, how well they understood”

Q Absolutely. Do you think it's something you have to, uh, really kind of attack from day one, or do you think it's something that you can process and think about as time progresses and you scale?

A I mean, I think ultimately it's, you're better off attacking it from day one. I think that it's kind of hard to know how to attack it from day one without having some experience. And I think one of the challenges of being in New York, I mean, We've been here for a number of years, you know, several decades, really. We really didn't have a tech scene 10 years ago, so when it came time to have a career, there wasn't a company like Google or Facebook to join in New York for the most part, so, you know, our understanding of culture in New York City was a bit limited. Now, with all the startups, and hopefully us as well paving the way, it's a much more understood process, but that's the kind of thing where you can read about it, you can, you can get questions about it, but it kind of seemed foreign. You know, we remember, you know, having one of our Series A, You know, potential investors come by and had like our technical due diligence and this person had this huge technical background and we're sitting there shitting our pants thinking, oh my God, he's going to look at the code and think like this is a piece of shit. And the only thing that he wanted to talk about was culture. And I was so surprised that somebody with this huge technical background is going to spend all of their time, not even talking about the code, but just talking about, tell me about your culture. And I think …

AI assessment note: “ultimately it's, you're better off attacking it from day one.”

Q Absolutely. Do you think it's something you have to, uh, really kind of attack from day one, or do you think it's something that you can process and think about as time progresses and you scale?

A I mean, I think ultimately it's, you're better off attacking it from day one. I think that it's kind of hard to know how to attack it from day one without having some experience. And I think one of the challenges of being in New York, I mean, We've been here for a number of years, you know, several decades, really. We really didn't have a tech scene 10 years ago, so when it came time to have a career, there wasn't a company like Google or Facebook to join in New York for the most part, so, you know, our understanding of culture in New York City was a bit limited. Now, with all the startups, and hopefully us as well paving the way, it's a much more understood process, but that's the kind of thing where you can read about it, you can, you can get questions about it, but it kind of seemed foreign. You know, we remember, you know, having one of our Series A, You know, potential investors come by and had like our technical due diligence and this person had this huge technical background and we're sitting there shitting our pants thinking, oh my God, he's going to look at the code and think like this is a piece of shit. And the only thing that he wanted to talk about was culture. And I was so surprised that somebody with this huge technical background is going to spend all of their time, not even talking about the code, but just talking about, tell me about your culture. And I think …

AI assessment note: “I think ultimately it's, you're better off attacking it from day one.”

Q said, this is a horrible idea in a crowded, crowded space. Uh, fuck you, VCs. Uh, not a great thing to say on a VC show, actually. Anyway, uh, at what point did this Perspective then transition. Cause you know, you've had very successful fundraisers since, and you've been extremely successful in this field. So when did this change and how's the journey been for you when you compare rounds?

A It's interesting. I mean, our, you know, we did, we did get, uh, certainly a lot of those, uh, quizzical kind of looks of how are you different love and your product and you're in a crowded space and your largest competitor is Amazon that likes to crush everybody. This seems like the worst idea on the planet, and I would agree on the surface. It definitely was a bad idea, but I think most great companies start off with bad ideas. Otherwise, everybody would be doing it, and there wouldn't be any space for you. You know, as far as a crowded market space, I think there's two ways to look at that. One is you're not changing user behavior, and a crowded market space means lots of customers, so I think there's always an opportunity to look at those spaces, especially if you firmly believe that The product that they've built is not one that you personally want to use. As far as getting VCs interested, I mean, we give a few talks to tech stars and they say, this is how not to do it unless you're digital ocean, then you can do stupid shit. Uh, but if you're not, then I would not do it this way. So for us, it's always, whether it was our C round or A or whatever, B round, it was always, Hey, we're digital ocean. The second slide is here's our revenue. And then we go into the story. You know, that was always, uh, the big driver for us is that when we finally hit our product market fit, th…

AI assessment note: “when we finally hit our product market fit, the growth was pretty insane”

Q said, this is a horrible idea in a crowded, crowded space. Uh, fuck you, VCs. Uh, not a great thing to say on a VC show, actually. Anyway, uh, at what point did this Perspective then transition. Cause you know, you've had very successful fundraisers since, and you've been extremely successful in this field. So when did this change and how's the journey been for you when you compare rounds?

A It's interesting. I mean, our, you know, we did, we did get, uh, certainly a lot of those, uh, quizzical kind of looks of how are you different love and your product and you're in a crowded space and your largest competitor is Amazon that likes to crush everybody. This seems like the worst idea on the planet, and I would agree on the surface. It definitely was a bad idea, but I think most great companies start off with bad ideas. Otherwise, everybody would be doing it, and there wouldn't be any space for you. You know, as far as a crowded market space, I think there's two ways to look at that. One is you're not changing user behavior, and a crowded market space means lots of customers, so I think there's always an opportunity to look at those spaces, especially if you firmly believe that The product that they've built is not one that you personally want to use. As far as getting VCs interested, I mean, we give a few talks to tech stars and they say, this is how not to do it unless you're digital ocean, then you can do stupid shit. Uh, but if you're not, then I would not do it this way. So for us, it's always, whether it was our C round or A or whatever, B round, it was always, Hey, we're digital ocean. The second slide is here's our revenue. And then we go into the story. You know, that was always, uh, the big driver for us is that when we finally hit our product market fit, th…

AI assessment note: “when we finally hit our product market fit, the growth was pretty insane”

Q What did you do wrong, do you think, most prominently?

A Well, I think there's a number of things. I mean, first of all, it's the sort of things that you don't really pay attention to. There's nothing Extremely complicated about business. Uh, it's really just a set of questions and the complexity comes in when you have to answer those questions. So for example, you know, our first business wasn't really positioned well. It was kind of like we're a server stack. We do the same thing as rack space. So why would you go with us instead of rack space? So they just had great positioning. It doesn't matter if our service is better or not because the customer never gets to the point of signing up. So even compare those things. And the question is really the thing that drives the creativity. So if you're going to start a cloud provider, You know, you have to answer the question of what's your position and it has to be unique and differentiated. Luckily for us, we kind of saw that every single cloud provider was, you know, a bit clunky. It wasn't really elegant. It wasn't something that you enjoyed using, you know, being a sysadmin and also writing code, like logging into all these cloud providers and struggling through the create process. I had to pause and answer questions to me that seemed backwards because I know what I'm doing and I'm pausing. And it's really getting in the way of me writing code. So how does somebody who doesn't know as …

AI assessment note: “our first business wasn't really positioned well”

Q I want to talk about love with you today. And, and don't worry, this does explain itself for anyone listening. The core thesis being the company's kind of central guiding element is love. And, and you said before that it's businesses that succeed are either needed or loved. So what do you really mean by this? And what category would you say then Digital Ocean falls into need or love?

A Well, I mean, I think those two categories are pretty basic, right? And I think that there's something really unique and interesting that happens when those two categories intersect in life. So, I mean, obviously needed services is, you know, you think about the modern day life, what you need is new clothing, you need food. Uh, at this point in time, it's really hard to go to any major city and not find somebody with a cell phone. So those things are really kind of necessities. Electricity is a necessity. And oftentimes when you find needed industries for whatever particular reason, a lot of Love and loving the product and loving the service doesn't really fall into it because oftentimes, you know, the competition is a little bit different because they're needed. They can get by with things that are kind of a little frustrating. I mean, I think the best example in New York City is, uh, you know, cable providers, right? Whether it's internet or television, I mean, they're all horrible, but you're kind of stuck with one or two choices and you kind of, you have nowhere else to go. And at some point, somebody is going to disrupt that. And I think if you look at, you know, Apple's greatest success, I mean, Apple Build great products, but really what gave them this gigantic market cap of being the largest company in the world was the fact that they found this intersection of need and…

AI assessment note: “they found this intersection of need and love”

Q at applying it to you with DigitalOcean, and maybe even the team that you're building there. As altruistic and kind of lovely as that sounds, um, story-like even, uh, kind of with the immense growth and scaling of the team and the business that you have done with DigitalOcean, question from Aria at Techstars is, how do you fundamentally scale love, and what are the inherent challenges from doing so?

A Well, I mean, I think that the challenges are kind of in some ways similar to any company, right? I mean, I think that we certainly believe that we are at the intersection of a needed and loved kind of product because, you know, if you think about software eating the world and developers becoming a larger and larger group of people, absolutely need a place to run your code. And we kind of saw a gap in the places where you could run your code. We didn't really love their products. So we decided, hey, let's build a product for ourselves that we love and maybe somebody else will show up and think that It's pretty cool. And decide to use it. And then I think, you know, at the beginning of any company, you know, basically your culture and your entire foundation is just a collection of founders. And you basically spend so much time together that you kind of know each other completely and intimately in any way, shape, and form. So it's, it's quite simple to kind of get on the same page or just argue until you get there. And I think, you know, as a company begins to scale, you have to transform, you know, what each founder believes, what each founder stands for into an actual culture that then permeates the business. So I don't think that it really makes a difference, whether that's a culture of love or, you know, a culture of excellence or whatever you want to call it, whatever works …

AI assessment note: “I think the challenge is always, how do you actually scale your culture, right?”

Q Absolutely. And then I want to finish on next five years for you and DigitalOcean. You said there about kind of your relationship personally with the company. That's an interesting one. How do you see kind of the next five years playing out?

A Well, for DigitalOcean, I mean, I see those five years. I mean, I think when you first start out, you're thinking about The next day, then you get to the next week, the next month. At some point, you think in quarters. At this point, I kind of think about the next 10 years, and I really think about the companies that I find interesting and I admire in various ways, and I definitely see DigitalOcean in the next 10 years, you know, becoming one of those great companies, because the market is definitely large enough. If we continue to be able to expand, you know, our culture inside of our company, then I know that the products And services that we bring to the market will resonate with our customers. We'll be able to continue to give them value and, and have that value reciprocated in return. And really thinking about it from the 10 year cycle, if you look at some of the greatest companies in the world, I think it's easy to get distracted sometimes by companies like Uber, uh, you know, and Instagram. But the reality is, is that, you know, outside of those superstar unicorn companies, there's also a lot of companies like Salesforce, right? And you look at their market cap, you look at how much revenue they're doing, uh, And you say, wow, this is amazing. And what gets lost is that that's like almost a 20 year old company. And that's kind of how I think about digital ocean is like, …

AI assessment note: “I definitely see DigitalOcean in the next 10 years, you know, becoming one of those great companies”

Q What did you do wrong, do you think, most prominently?

A Well, I think there's a number of things. I mean, first of all, it's the sort of things that you don't really pay attention to. There's nothing Extremely complicated about business. Uh, it's really just a set of questions and the complexity comes in when you have to answer those questions. So for example, you know, our first business wasn't really positioned well. It was kind of like we're a server stack. We do the same thing as rack space. So why would you go with us instead of rack space? So they just had great positioning. It doesn't matter if our service is better or not because the customer never gets to the point of signing up. So even compare those things. And the question is really the thing that drives the creativity. So if you're going to start a cloud provider, You know, you have to answer the question of what's your position and it has to be unique and differentiated. Luckily for us, we kind of saw that every single cloud provider was, you know, a bit clunky. It wasn't really elegant. It wasn't something that you enjoyed using, you know, being a sysadmin and also writing code, like logging into all these cloud providers and struggling through the create process. I had to pause and answer questions to me that seemed backwards because I know what I'm doing and I'm pausing. And it's really getting in the way of me writing code. So how does somebody who doesn't know as …

AI assessment note: “our first business wasn't really positioned well. It was kind of like we're a server stack.”

Q I want to talk about love with you today. And, and don't worry, this does explain itself for anyone listening. The core thesis being the company's kind of central guiding element is love. And, and you said before that it's businesses that succeed are either needed or loved. So what do you really mean by this? And what category would you say then Digital Ocean falls into need or love?

A Well, I mean, I think those two categories are pretty basic, right? And I think that there's something really unique and interesting that happens when those two categories intersect in life. So, I mean, obviously needed services is, you know, you think about the modern day life, what you need is new clothing, you need food. Uh, at this point in time, it's really hard to go to any major city and not find somebody with a cell phone. So those things are really kind of necessities. Electricity is a necessity. And oftentimes when you find needed industries for whatever particular reason, a lot of Love and loving the product and loving the service doesn't really fall into it because oftentimes, you know, the competition is a little bit different because they're needed. They can get by with things that are kind of a little frustrating. I mean, I think the best example in New York City is, uh, you know, cable providers, right? Whether it's internet or television, I mean, they're all horrible, but you're kind of stuck with one or two choices and you kind of, you have nowhere else to go. And at some point, somebody is going to disrupt that. And I think if you look at, you know, Apple's greatest success, I mean, Apple Build great products, but really what gave them this gigantic market cap of being the largest company in the world was the fact that they found this intersection of need and…

AI assessment note: “Apple Build great products, but really what gave them this gigantic market cap”

Q at applying it to you with DigitalOcean, and maybe even the team that you're building there. As altruistic and kind of lovely as that sounds, um, story-like even, uh, kind of with the immense growth and scaling of the team and the business that you have done with DigitalOcean, question from Aria at Techstars is, how do you fundamentally scale love, and what are the inherent challenges from doing so?

A Well, I mean, I think that the challenges are kind of in some ways similar to any company, right? I mean, I think that we certainly believe that we are at the intersection of a needed and loved kind of product because, you know, if you think about software eating the world and developers becoming a larger and larger group of people, absolutely need a place to run your code. And we kind of saw a gap in the places where you could run your code. We didn't really love their products. So we decided, hey, let's build a product for ourselves that we love and maybe somebody else will show up and think that It's pretty cool. And decide to use it. And then I think, you know, at the beginning of any company, you know, basically your culture and your entire foundation is just a collection of founders. And you basically spend so much time together that you kind of know each other completely and intimately in any way, shape, and form. So it's, it's quite simple to kind of get on the same page or just argue until you get there. And I think, you know, as a company begins to scale, you have to transform, you know, what each founder believes, what each founder stands for into an actual culture that then permeates the business. So I don't think that it really makes a difference, whether that's a culture of love or, you know, a culture of excellence or whatever you want to call it, whatever works …

AI assessment note: “I think the challenge is always, how do you actually scale your culture”