If it costs $40 to acquire a new customer, and you expect a customer to stick around for long enough to spend $90 then it's totally worth doing that, but you need $40 now to make 90$ over some period of time.
Raising massive lump sums of money is about VALUATION. You have been led to believe this is the only way to go about building a software business like this.
It's all a major silkscreen for the colder simpler goal of generating a lot of eventual wealth for a specific cast of people.
Again, no shame or emotion here. It's just how business is done in this world.
This works for some but not all business ventures.
There's a reason corporations were invented in the Age of Sail. If you build 5% of a ship, you can't sail to the New World and bring back 5% of the resources. You just sink in the harbor.
(The moral implications of relating modern VC-invested corporations to rapacious European conquests of the already-inhabited-thank-you-very-much New World is not lost on me.)
I believe there are healthy ways to start up a business that has startup costs too large to bootstrap. I agree with you that VCs are often not it.
You might describe these people as "capitalizing a venture", in fact, or "venture capitalists".
But congratulations, you've successfully created a small "local" business with a decent number of customers who are reasonably loyal. You should be happy with what you have and possibly invest in future generations who want to colonize the moon or something (assuming you want to expand your wealth)
At some point, you need the capital investment to build a big ship, and the return on that investment is zero unless you build the whole ship.
There's a big reason VC and angels were and largely continue to be only game in town. No one understands or would risk loaning millions of dollars on a high risk business aiming for marginal incremental growth.
VC's and angels wouldn't be interested in that, either.
The only consumer company that I think of that went from “initial value proposition” to “not sucking after it went public” is BackBlaze. None of their new offerings has taken away from their initial “unlimited cheap backup”.
You are completely missing the point of venture capital here.
Of course, bootstrapping exists, but I can't point to any similar companies to Fly which have achieved standout success in an area like this with a model like that.
> Raising massive lump sums of money is about VALUATION.
Valuation is merely a side effect in pursuit of market dominance or hopefully establishing a niche monopoly.
Who does this allocation?
That being said, there's certainly many businesses that raised too much money based on bullshit, had the founders take money off the top, and then have to drastically change to become sustainable, especially in the ZIRP era. But I don't see that happening here.
You’re describing the current state of the world
We’re there already. The entire system is built to exploit everybody who does not have significant capital to fight back against it
If what you say were true, the world would exist as a series of 3-5 megacorps, and small businesses would not exist. Since they do exist, how do you square that with your claim that only the "extremely rich would be able to start a business of any size" is currently true?
4.7M of the 8M US businesses have <5 employees.
https://www.census.gov/newsroom/stories/small-business-week....
Starting a business requires little more than filing incorporation documents with your state.
Growing a business to dominate a market and get crazy rich may require outside funding, but growing a business to support and maintain your individual lifestyle does not.
On the other hand, it makes it easy for your competitors to reach customers.
I'd argue that, on the whole, the internet has made starting "just an idea and a garage" businesses harder, because they now face immediate, maximally-funded competition. Whereas pre-Internet they would have been geographically/physically protected for awhile.
True, net win for customers, efficiency, etc. (maybe). But you couldn't start a Starbucks these days.
Their income is similar to that of most working professionals and their assets are similar to the savings of most working professionals. They entrepreneured themselves into having a job, they're not the investor/capitalist multimillionaires we picture when we think of rich people.
>the world would exist as a series of 3-5 megacorps, and small businesses would not exist
The economy exists as the 500 megacorps that make up the s&p 500. Small businesses just fill in the gaps and are for the most part beholden to the megacorps for their business, their supplies and/or their financing.
Just because someone takes funding, doesn't make them any less or a part of some "built" system. Even my favourite bakery could never have got started without funding - with debt not equity. It doesn't make him any less brilliant. He would've had to be extremely rich so start the business otherwise
Our biggest advantage is working together as a community, and our biggest flaw is not helping each other when we easily could.
Organically growing a business; bootstrapping sounds fine, until you try to do something that potentially has any global impact.
Also, Heroku was acquired in 2010. I know that the prevailing sentiment around here is that the acquisition was a mistake, but Heroku has been owned by Salesforce for 13 of it's 16 years of life...
To be clear, I’m not saying that venture is intrinsically evil, but also companies are explicitly trading off higher burn rates and higher raise rounds to reduce the need to build all of this in house. That’s not a bad idea because it’s usually better for the business to scale as quickly as the sales channel can fill it rather than be stuck on difficult engineering roadblocks.
No, it's not. It's emotionally manipulative propaganda that is thinly-veiled political ranting, and so is your comment, and neither belong on HN. Stick to interesting, intellectually stimulating discussion, please.
I don't think you can build an interesting public cloud without raising money, unfortunately. At least, not without jumping back in time 25 years and starting then.
Just because a startup might raise prices in the future shouldn't stop you from using their products - with a caveat, that is, how easy it is to shift to another operator. I haven't used fly.io personally, so I don't know about that - could you elaborate on shifting to another provider just in case?
Do you provide a seamless offboarding experience?
Or do you lock in customers?
It's pretty easy to move off, though. `fly launch` generates a Dockerfile you can run pretty much anywhere.
Only if your condition is that you want to do it in the next 3 years.
Given 15, I imagine quite a lot is possible.
There are a couple of things working against a boostrapped public cloud:
First, you gotta buy expensive kit. And then hope you can make your money back over the next 18 months.
Funding this is hard. You could try to borrow money, but that (a) increases your underlying cost and (b) dictates how you sell. You can't borrow money against developer usage / traction because banks don't know how to value that. So you have to do top down sales and land some big, committed customers before you can use debt.
The sales model constrains the product. There is no big, committed customer on the planet that will buy global infrastructure from a company who hasn't built it out yet. So you won't be building a global cloud, you'll end up in one region.
And, no big committed customer is going to buy something novel. They do not care that "fly launch" makes it easy for a dev to launch a new project. They care that they got the best possible pricing when they were shopping for their hardware. They might care that they can run k8s on it.
This is all fine, though. I'm not opposed to it. But I think it leaves you with something that's not as good as AWS, even though it's cheaper.
They literally run physical servers all over the world (at least, that's my understanding from their website). I've got to imagine then that this business has huge capital costs, and it's nearly impossible to grow a very capital intensive business without outside capital.
I don't disagree with your main point. Everyone has seen "enshittification" eventually take over all tech startups as they switch the focus from satisfying users to satisfying investors. But I just don't see how you build a business that requires running servers all over the world without a lot of capital.
That's the promise of pay-per-minute (or even second) cloud computing, right? You don't spend what you don't need _right now_.
But Fly.io makes a good point about reaching critical mass to discuss better prices from their vendors. I can totally understand that.
Maybe I misunderstood your point, but that's the promise for cloud computing customers. Fly.io is a cloud computing provider, and those are all hugely capital intensive businesses.
I genuinely struggle to understand how Fly.io managed (manages) to have this much physical server presence to date, having raised only ~$16M prior to this round. Hire a dozen engineers and that money starts to go fast. The regions page [1] shows 34 cities largely across 4 continents, but technically across 6 if you count the 1 region each in Africa and Australia.
Maybe they have managed to get inside other existing cloud's data centers and it's not literally their own physical hardware, or behind-the-scenes they are leasing collocated servers, etc.
I would love some insight here if one of the founders in the thread sees this.
For what it's worth: we've been on our own hardware ever since we launched, long before the 14MM Intel/Dell round. It's really the only way we can see to make the margins make sense. A big part of the premise of AWS and GCP is that they're allocating hyperscaler-grade resources to the task of making sure they claim most of the margins in hosting things on their own platform, not middlemen --- though that may be more true for some services (like EC2) than others (like S3).
> Why We Raised A Bunch Of Money
> Here's what we think it takes to build this kind of platform:
> A hardware fleet. Fly.io has always run on its own hardware. There are fun, technical, “control your own destiny” reasons to rack hardware instead of layering on top of commodity clouds. But it's really just economics. If you want to get people to build apps on your platform, you need a shot at being around 10 years from now. Hardware is what makes the margins work.
i was in this business until a couple of years ago.
we'd quote prices for potential customers currently in public cloud and they literally wouldn't believe us. it actually became an impediment in the sales cycle and part of the reason we sold. people are dumb, but i'd be even dumber if i expected them to change for my benefit.
Say Fly will eventually get acquired or IPO, their founders will justify it that they could use that money to work on Fly's mission statement or if they've had their fill of servers go on to build further startups in Fusion, AI, or Space Technologies or even give to charity (take your pick).
When they do get acquired/IPO the natural bureaucracy of large organisations and shift in incentives will set in (we've been here before with Heroku/Salesforce and SendGrid/Twilio...) and they'll become slow, more risk-averse, and ultimately less innovative catering for enterprise and other large businesses (where the easy corporate money is at) instead of scrappy startups and curious hackers.
This is where Fly 2.0 comes in 5 years down the line reaching No. 1 on Hacker New, where utilising the latest technology they'll create a completely new and innovative solution that will solve the current problem even better than now and they'll start by catering for startups and hackers until they themselves get acquired/IPO.
This doesn't mean it's necessarily a bad thing - founders get a chance to cash out, consumers get cycles of new innovation.
Founders and Investors get rich and repeat the whole thing!
Yes tell me how beneficial “cycles of innovation” are to the average person who increasingly can’t afford rent or food because checks notes every company is doing this cycle so nobody is getting paid except founders and investors and are increasing profits to a degree that would make usury blush.
So what is the solution!? You too should become a founder and investor so that you aren’t getting screwed over anymore! Aka if you can’t beat ‘em join em —-that old ethical chestnut.
> There are customers who are comfortable engaging with tiny Fly.io, and others who are comfortable engaging with the Fly.io that raised an additional $70MM led by EQT ventures
There's the other kind of customer who sees that "$70MM led by EQT ventures" is a liability and will inevitably screw over their customers at a later date.
Consider the economics of decentralized utility tokens vs this shareholder capitalism. The former can help developers make a profit ONCE on the PRIMARY sales, at a predictable rate, and mostly turn the network over to the participants to transact and control. The protocol can stay open and the company no longer has any power to increase rents or piss everyone off by spying on everyone or subverting democracy. So compare, say, Ethereum or IPFS vs something like Twitter or Facebook which are controlled by a small group of people like Elon or Zuck. (My money’s on Zuck for the fight btw.)
Let’s explore how Facebook got to where it is. Remember Zuck was an open source bro who turned down M$ for $1M and ended up open sourcing Synapse. He built Wirehog, as a decentralized file sharing network.
I was attending TechCrunch Disrupt 2010 in NYC and personally heard Sean Parker speak proudly about how they “put a bullet in that thing” — because it threatened corporate profits and rent extraction.
Sean Parker learned not to mess with corporate profits, when his company Napster got sued into oblivion by the other “lock up the IP monopoly” industries — music and movies. MPAA and RIAA. So he started Plaxo and learned to be VC.
Then he brought Peter Thiel, the guy who seriously advocates “competition is for losers, build a monopoly”. He gave Mark a lot of good advice and the VC industry turned him from an open source bro into a corporate golden boy who buys up the competition, the founders of which leave in disgust after their golden handcuffs are off (WhatApp, Oculus, and yes Instagram). This isn’t an isolated story. Elon owns Twitter. Bezos owns Amazon. The nicer guys like Ohanian and Jack got out, after selling, though. And they all want decentralization now.
Moxie left WhatsApp and started an end-to-end encrypted messenger (Signal). Out of all the former founders (Tim Berners-Lee, Brendan Eich, Jack Dorsey, etc) Moxie may be the only one who is skeptical of decentralized architectures, and mostly because he thinks it is too slow to innovate. But even Moxie — if you remember - was going to fund WhatsApp honestly through $1 a year fees, until he and Jan Koum “sold out” for a $19 Billion payday. I don’t blame them… but there is a reason WhatsApp became this:
https://indianexpress.com/article/technology/social/25-perce...
Whatever the failings of Web3 smart contracts may be, the shareholder capitalism driving Web2 has predictably led to the same outcome — the platforns that all of us come to depend on are controlled by a few people and we never know what they will do.
Reddit? Got sold and shittified recently.
FogBugz? Same.
It goes on and on. The reason the parent and grandparent comment are the way they are is because we see this over and over. But realizing the consequences of funding projects in this way, what is the alternative? Utility tokens. They are easy to create, to crowdfund (do it legally through a broker-dealer like Rialto Markets), and now this year there is a legal precedent for secondary sales once you have the network up and running: http://blockchain.news/news/baf7670d-74ad-4c8f-aed6-c95afdc0...
We don’t need the old boys network anymore!
People on HN say that Web3 has no use cases. This is just one of many. It’s easy to do, anyone here can use it to crowdfund their own project with people around the world, who become stakeholders, and guarantee to your users that you won’t have the same pitfalls the GO described. Funding platforms in this way solves many problems.
EDIT: To the various people who see the word “Web3” and downvote just based on that… go ahead! Downvote but make an argument! Say something. You’re always so silent when it comes to substantive reasons, yet so opinionated with the downvote. What happened to intellectually honest debate? I would be happy to hear constructive counterpoints.
Don’t build your app on someone else’s platform. Whether it’s Twitter and Periscope, or Apple vs mamy developers (https://www.washingtonpost.com/technology/2019/09/05/how-app...) … build on a permissionless platform that isn’t owned by any gatekeepers. Like the Web. Or Ethereum. Or Polygon.
Utility tokens and micropayments via trustlines are exactly done for that purpose.
But okay, I'll bite. How is fly.io not the Web?
Well, fly.io is not the Web, but also it’s not the point
The closest I can get to what your questions is to say, it’s under the control of a for-profit company financing itself with shareholders who want to see profits? That’s true of many companies, the sentiment in the GP comments applies to the general pattern of becoming enshittified after a large investment / sale, not specifically fly.io
And more generally: people do things for money. Companies wanting a profit is not a bad thing. That urge can go wrong, but that risk is mitigated, in fly.io's case better than most, by the lack of lock-in technology choices.
For example, if you want to, for some insane reason, build an application that uses Microsoft's CosmosDB, then your data is stuck in Azure forever. Fly.io doesn't have that problem, as they use things you can run elsewhere.
So: what is the problem, as pertaining to the topic of this comment page: fly.io?
That's just the main point right? Everything becomes essentially Kickstarter/Patreon subscriptions, and maybe you pay a little more fees to exchange your money to tokens?
Its surely an appropriate argument to make I guess, just falls a little flat to me personally. Like I just want to use a service and not get ripped off, I don't want to enter into and have stake in some distinct governance structure for every service I want use.
Utility tokens need a decentralized network so there is no single point of failure. Just like the Web itself (1.0) disrupted gatekeepers at newspapers, TV and Radio stations, etc. that you used to have to pay (“payola”) to get the word out. VOIP lowered the cost of long distance phonecalls to pretty much zero by eliminating middlemen, too. The infrastructure providers shouldn’t ALSO control your app layer, that’s the point!
Blockchain is the most widespread and proven way thus far to eliminate the middleman, and it’s there right now, you can deploy a token in a few minutes if you wanted. Many people here seem to keep repeating the mantra that “Web3 has no good applications” but here is one that literally solves the societal problem you are complaining about and has done so with IPFS, Ethereum, Polygon and many other permissionless networks.
It’s a wall of text because there are literally so many detailed examples, that I chose to engage in a few. I like to back up what I’m saying so people don’t think I’m just talking out of my ass. Now the ball is in your court to explain why you disagree anyway.
But you're not going to convince anyone to swap out VC funding for utility tokens by talking about Napster and FogBugz.
What about posting on a forum owned and operated by a venture firm?
Do you use Google? Slack? Facebook? The list of venture backed tech firms is endless.
I don't even disagree with the general sentiment...but your resolution seems particularly short-sighted.
Not a convincing list of companies there...
How many venture backed companies do you think are involved just in me pressing the "reply" button to send this post?
It's a given you realize how antagonistic you're being here, so I guess my only other question is why seek attention like this?
I like the Fly.io folks! But asking questions should never be off the table; how else would you be curious?
[1] https://ourincrediblejourney.tumblr.com/
(it is unfortunate that something with so much value and enjoyment like HN is a product of an investment firm, but a component of life is compromise)
This is not what curiosity looks like, is my point.
I don’t think anyone wants HN to become an echo chamber that believes VC funding is the solution to all problems.
Why do missionaries go where no one believes their religion already? The idea that you must already be a believer in some community to participate in the community makes little sense and certainly isn't a good way to make progress.
> I guess my only other question is why seek attention like this?
Would you also characterize your own reply as mere attention seeking?
And further, why go on a (holy) mission to convince people funding companies is bad? That's a weird windmill to tilt at...
Svelte, SolidJS, Remix, and NextJS are all tied to San Francisco venture capitalism and that's got me worried about their future.
Go back to when I joined HN in 2012, and one of the most constant things you would hear over and over is exactly the stuff I’m saying now - namely MBAs and “start up” founders generally aren’t your friends.
The top advice in 2014 on HN: Unless you’re an early founder, you’re going to get screwed over no matter what in the start up until you’re better off working at a big company.
I stand by my point though that the culture has significantly changed since 2012 - you of all people know that.
Just go back and look a decade ago at when people would post “hey we raise all this money” posts.
A full half of the comments would be like “nobody cares that you raise money are you actually doing something important?” or similar.
Tbh I think it was a healthier perspective, and we need to bring more “hacker” back.
And you're being awfully reasonable now, once we've gotten past the bombastic opening claim. I think part of what makes HN great is that at least sometimes we can skip that opening wild claim.
you're basically going to be prevented from using anything that isn't an established enterprise(which are also beholden to shareholders) or consumer apps. You can't bootstrap anything that requires significant R&D or infrastructure unless the founder is already rich
This post seems to be referencing the Reddit API situation. The solution is to not make your company reliant on a single API , pretty sure with Fly you can deploy Docker containers so you could always switch easily if they tried to price gouge. If something is a critical component of your business you should always plan to be able to switch providers in a hurry for any number of reasons
I mean... raising prices ≠ "selling out any pretense..."
You're upset that a growing business lowers prices to grow faster? Ok, but maybe relax a little. You're upset that advertising-based businesses eventually shut down the ad-free clients that use the API? Ok, but maybe relax a little.
A business grows with low prices and loses some customers not willing to pay when they put up prices that reflect longer term sustainability. That happens, why does it have to be a moral outrage?
Yeah, if you're using a VC-backed startup expect the cheap services to get pulled back on when they hit IPO time.
My company raised a $1.2m seed after doing a startup accelerator in 2015, used it to get to profitability, and we've been growing 40% YoY for a very long time without any additional outside capital.
It's also a huge selling point to prospective employees while interviewing candidates: "Unlike many other startups, we haven't raised lots of money, we're profitable, we've never done lay offs. That's all possible because we have product market fit and we have a sustainable business model. Our customers (rather than VCs) fund our growth."
Personally, I really like the "seed strapped" model... raise 1-2 million in order to find PMF and begin an early sales/marketing function with the goal of reaching profitability before the $1-2 million is burned through. It also creates a short window to fail fast... lots of companies raised way too much money and will end up failing very slowly.
"Failing very slowly" is what should be avoided.
Raising huge amounts of VC is a signal the company couldn't sustain their growth with their current revenue and operating model. It's also a signal that the company is likely using inorganic / unscalable tactics to grow, which might work now but won't work forever. That means the company will likely pivot their model at some point (from an employee perspective, that means higher risk of lay offs, and from a customer perspective, that means higher risk of price hikes in the future, etc)
Through also it's not a fair compression because for the kind of services where being close to the edge and redundant over many places matters Hetzner isn't even an option. AWS maybe, but AWS is also pain in my experience.
Whatever the answer is, it’s probably the same answer for why many companies would likely be willing to pay more for fly.io than Hetzner as well.
There are so many forums you could go to, but you specifically select this one when you fundamentally dislike the premise? Why? It's just baffling behavior.
It's an open forum and presumably those running it prefer this outcome.
Fair enough.
It's important to remind people in the broader technical community that financial success should not the only goal, nor should it be required to maximize profit at the expense of customers.
Companies raise money now to generate cash flows in the future from a wildly risky innovation. Assuming the thesis is correct, the company will then to pay it back to investors (VCs and their investors including Endowment Funds), but also employee and taxes.
As companies grow, they pay more taxes, and this will let government spend in things like education, infrastructure, social security.
It's either this or socialism.
"Capitalism: The worst economic system, except for all the others"
As companies grow so does their ability to dodge taxes. That's why they're headquartered in Ireland, Bermuda or whatever the latest low corporate tax state is. Proportionally they're likely paying less than a corner store. I certainly pay more in income tax.
Fly.io are doing great I think and that they might one day charge more I’m not that upset by it at all. If fly.io can make money at a higher price that means they are adding more value.
I hasten to add you appear to be hanging out on a forum focused on VC funded startups.
"Growth" is the focus now, until the business dies (by acquisition, IPO or bankrupcy, all of which are bad for users).
This is going to sound wild, but believe it or not it takes quite a bit of capital to reserve capacity in data centers ALL OVER THE WORLD in order to, like, deliver on your core value prop of enabling deploying normal apps AT THE EDGE. This used to just be called making a capital investment (because it takes a lot of upfront capital), but then it became en vogue to whine about venture capital.
You may want your hosting provider to be capital poor and running a razor thin balance sheet on the brink of insolvency (aka bootstrapped) but I don't. Or you might want to lease your own space in a colo and rack your own servers and hire your own remote hands and your own sysadmins and dev ops with 24/7 coverage so if you have a hardware failure you can deal with it asap but I don't. Not having to do all that shit takes...capital.
Where would you have them fetch said necessary capital if not from venture capital firms?
Honestly, do you even know what you're bitching about? A theoretical monopolistic reality that a. does not exist and b. would not exist if fly did not theoretically create a product so good it made all their competitors irrelevant (note: this is not a monopoly, it's market dominance; they are very different)?
And honestly, if they're still around in 5 years, they probably should raise prices so they can continue to be around. Fly is literally orders of magnitude cheaper than running on AWS, and orders of magnitude easier.
Take your aimless cope elsewhere.
My hot take is that these platforms are relying on an influx of new developers who need a friction free way to build and deploy applications to learn and showcase while selling to companies that don’t have time or budget to create a full dev team and CI/CD environment, creating both sides of supply and demand. Pricing is engineered in a way such that it gets very expensive the moment before companies notice how much cost it incurs but the cost to switch away is much higher.
I agree with the heuristic of avoiding VC-backed products, it fosters incentives that often leave otherwise loyal customers holding the bag for a product who price does not match the service provided. It is for this reason I consider high vendor-lock-in products rather insidious.
How can you monopolize this market? There is no moat here at all. There are already trillion dollar companies competing here. They are selling a commodity.
The "etc." is basically thousands of other companies.
And if they did they also wont get the enterprise customers who are considering conservative alternatives.
Raising the 'right' amount should be the goal. Not 'as much as possible'
Money is like sex - only too much is enough.
First, businesses aren't in the business of leaving money on the table. That is fine for a non-profit, but ultimately they need to weigh money making with customer satisfaction and growth. It's crazy to think a business should not optimize here.
Second, you're conflating venture-funded consumer businesses with B2B businesses. Consumer businesses with venture funding are typically going to fuel growth/momentum by doing things which don't scale. But eventually push comes to shove. B2B business models are usually more transparent about what is a promotion and what is not. Consumer businesses don't always know how the business model is going to play out to even offer that transparency.
Third, if your business model is advertising and data is your moat, then when you give away your data via API to promote distribution, yes you run into an issue later on when you need to advertise or you have underinvested somewhere (in Reddit's case it was mobile). For Reddit or Twitter, these mobile apps were profiting off their users/data while taking on none of the costs (infrastructure, moderation, etc.), and limiting their means of monetizing themselves. You don't need an investor to tell you that isn't in your long term interest.
To be fair, the fate of most of them is actually to fail. Hence this amplified effect of why VCs need such a standout massive return to make the fund model work.
That said, while it seems like it to us normal folk, in the grand scheme of VC, $25M is not really "a bunch of money". In 2021, a16z led or co-lead $3.2B [1] in funding rounds. I can't find a publicly available stat for how many rounds that entailed, but napkin math says 100–300. Of course the distribution is not linear, but if we take the 200 investments midpoint, that's a $16M check on average.
> My new heuristic is that I avoid every single company that raises venture funding.
IMO tech, startups at least, are not long-minded like this in general. Companies regularly come and go in 6–24 months. Good luck convincing the current and next waves of CTOs of not using venture-backed tech [that saves them tons of time for great prices right now]. And then portcos also often make deals with other portcos... the cycle feeds itslef in more ways than one.
It's like trying to change the color of the ocean with one single cup of red dye. At the end of the day, this is just a rounding error.
But also, Big Tech will end up acquiring many of the standouts a la Firebase or Heroku. Resisting the model won't upend or stop it.
[1]: https://news.crunchbase.com/liquidity/under-the-hood-a-decad...
Correct. It just is the case that one (the company and it’s philosophy) is a symptom of the other (nightmare unchecked capitalism).
Pretty safe bet that they'll stay cheap for a long time because of that.
Because outside of tech innovation, cost is still a mayor selling point.
Consider this perspective: Users of Fly.io are essentially getting a loan from venture capitalists. However, just like any loan, it has to be repaid eventually. Thus, it's prudent not to take on an excessively large commitment.
in this model speculative capital is only required in the very early stages. a company either reaches a symbiotic relation with its clients or not. the burden is primarily on intrinsic aspects of what the startup venture delivers and how much this resonates in its sector.
the VC model is basically turbo-charging this process. though it is risk capital and not lending, it creates an implicit, arbitrarily sized liability that need not have much to do with the underlying value proposition. it removes the organic cashlow constraint via a faustian bargain.
the "beauty" of it is that you can't have both models in the same economy. the set of ideas that are ripe for exploration at an given era are what they are. if some people pursue them while being on steroids this means there is no room for people to explore them in a less toxic way
Capitalism literally crowds out alternative forms of organization in favor for monopolizing a market in order to rent seek. This is the explicit path set by guys like Peter Thiel and is neither passive nor has compunction.
Don’t forget that regulatory capture is part of the game too - such that you can legally embed your philosophy in such a way that makes crowding out the defacto approach.
Nothing is forever. Five years is a long time. People need motivation. Enjoy and make use of things while they last. Nobody owes you anything.
But you have options.
You can have a business genius build a company that delivers great product forever without grinding employees into the dust, burning up founders and still outmaneuvering competitors.
You can have no product or a company going under because founders have stretched them thin, burned out and went broke ruining their lives pursuing a good idea that morphed into a sunken cost.
Or you can crazy pricing models justified by the desire to live like a VC LP while shipping a 3rd party API-dependent cute app. But without VC!
Or you can have a VC-subsidized business that ships a product at ridiculously low prices, locks you in for some 3-5 years and then goes ballistic and becomes unusable. But it’s been five years of a very good run, FIVE YEARS. And then the next will come to take their place.
Reading how five years is a short timeline for a low-cost-high-value product is wild. Now that’s some entitlement.
Why won’t you suffer the fate of every single other tech company that raises a shit load of money which is completely and irrevocably selling out any pretense of being beneficial for customers and employees (primarily) in the extreme long term?
My new heuristic is that I avoid every single company that raises venture funding. Hopefully others adopt this heuristic because by raising tons of money, so you are explicitly creating an adversarial relationship between the customers/users and your investors so everyone but your founding team and investors in the long term is worse off.