Billy of the Week: Chris Aker
They sold it for $900 million in cash. They don't really mention much about the company other than it was doing over $100 million in revenue. What they don't mention is the guy who started it, he bootstrapped it, raised no outside money, and owned 100% of it.
All the way through the sale?
All the way through the sale. Owned 100% of it.
A million dollars isn't cool.
You know what's cool? A billion dollars. So let me tell you this quick story. This was not a big headline. I bet you didn't even see it. So my friend, uh, I was in college at the time. He's a little bit, he's older than me, so he was not in college. He was probably in his 30s when I was 21. He started this company called Linode. Did you see yesterday a company called Linode was acquired for $900 million in cash?
Yeah. Who bought it?
It was, um, um, is it called Akamai?
Akamai.
Yeah. Akamai. And so they bought it for 9, the, our, the, everything I'm gonna say is, is, is relatively public, or it's— you could piece it together in a bunch of different articles, but basically they sold it for $900 million in cash. They don't really mention much about the company other than it was doing over $100 million in revenue. What they, what they don't mention is the guy who started it, he bootstrapped it, raised no outside money and owned 100% of it. So his name is Chris. He, uh, I knew him when I was in college. We're not back all the way through the sale, all the way through the sale, owned 100% of it. Um, the company— all right, let me give you a little bit background. I think when they sold, they had like 300-ish employees, but throughout their existence, they had a relatively small staff. Like, like, they were doing like multiple millions of dollars in revenue per employee, and it was— it wasn't run like a family business, but almost kind of like a family business based out of New Jersey. So basically, this guy—
what does it do? What is Linode?
So I'm not in this space, so excuse me, but basically, it's— it's basically like the generic term is this It's cloud computing. So basically before Amazon Web Services was around, Linode was there. And I think some of their customers are like Walmart. So they host, they help host, you know, applications and websites is the, is the non-techie version, uh, that I'm, that I would say. But what are you looking at the website? What's it say?
I'm looking at the website. It basically says, you know, cut your cloud bill and your cloud bill in half. Um, it's basically like deploy Linux servers in the cloud is the idea. I think we use this by the way, at my previous startup, I remember seeing a bill for Linode, probably.
They're, they're pretty popular, but they, because they were bootstrapped, they couldn't quite keep up with like, uh, what was the other competitor? I think DigitalOcean, which is like publicly traded now for multi-billions. But basically in the early 2000s, like 2005 or 2006, Chris worked at this company called, uh, HealthStream, which was, uh, it's not important. It was just a boring company. And they, he worked in like with, with computers, with tech. And he, he grew up with an Apple and loved tinkering with computers, but he, what he noticed was that hosting was really expensive. So he basically locked himself in his apartment, uh, from like 2002 to 2003 and like had a year's worth of savings and like locked himself in this apartment to code and build this website. And he was like, if it works, it works. If it doesn't, it doesn't. So he launches it and right away it does good enough to pay his salary, like single digit hundreds of thousands of dollars by year 2, because this was in early 2000s. I'm, I don't even think Amazon Web Services was around at this point. And if it was, it was like, brand new. And in fact, this whole idea of cloud computing was brand new. At HealthStream, Chris was like, look, we've got to like spend all this money to buy servers. What if we just like bought a bunch of servers and rented it out to people? And that was like the idea, because it's, it's really hard for a small business who doesn't want to create a bunch of servers in their office to like actually host a website, host applications, things like that. So that's where the idea came from. And so it grew like a little bit year over year. It wasn't growing like crazy for a long time. Um, but it was doing okay. Chris kind of was always obsessed with automation, so he did a really good job of automating a lot of the parts of the company. Uh, and so they could hire relatively small staff, you know, like only like 10 or 15 people for the first handful of years, even when it was getting close to making, um, over $10 million a year, still really small. And basically the way it worked was I don't think he ever took out a loan. I don't— it was 100% self-financing. And so it would make a lot of money, like these businesses can make, on $10 million in revenue, you can make $4 million in profit. But in order to get to like $30 million in revenue, you've gotta go open up a warehouse or rent a warehouse and buy a bunch of servers. And there was times where like my friends who worked there along with Chris were literally like tinkering and assembling the servers. And they did this for years and years and years. And it, and it grow, it grew nicely. And they did a really good job of like automating their customer service. Even for a long time, Chris was answering the customer service. It grew really quietly. He's not on Twitter. I don't know if you Google him, you might find two pictures. There's basically nothing out there about him. He's based out of Philly and he bought a bank like a, like a physically a bank that was the home. It was a bank turned house. It was the house from the real world Philly. He bought it and they did an article about him, how he was restoring this bank and Linode. It was Linode's new office, but he was taking a little bit of money off the table, enough to buy a $10 million bank. Um, but owned the whole thing. And just yesterday it was announced that it was sold for $900 million in cash.
How do you know this guy? You said you knew him in college. He was at your college or you just know him while you were in college?
So when I was in college, um, I used to work for that show I told you, American Pickers, and a guy came in and he was like, I start internet companies. And I was like, oh really? I like entrepreneurship. That's cool. Will you like just let me hang out with you? And he let me hang out with them. And this guy, his name was Casey. He became the, uh, he was in my wedding. I became friends with him for years and years. He was probably 35 when I was 21, or probably 10 years older than me. And Casey helped Chris get Linode off the ground and was the COO for a decade or so.
Gotcha. Uh, wow.
And Chris, now at this point, he's got this like huge collection of BMW motorcycles. So for motorcycle fans, there's like motorcycle fans is like a subcategory of like car enthusiasts, and BMW vintage motorcycle fans is a subcategory of that. And Chris owns, I think, one vintage BMW motorcycle from every single year ever produced. And so we are all motorcycle nerds, and we would geek out over that stuff, and we would ride motorcycles together.
Dude, I need a white guy, rich guy hobby. This is what's holding me back. I realize I need to start fucking buying motorcycles from, you know, the 19— anything like 30 years ago, and then I need to care about it, and I need to learn how to restore it and like polish it or whatever. I need to become Tim Allen from Home Improvement and have this like thing in my garage I'm always working on so I can just— when I meet these guys, I got to have something to say. You got that. You have that something to say. I'm like, what am I going to say? Like, you know, hey, what's up, bro? You like the NBA? And it's like, yeah, me and 100 million other people. There's nothing to get excited about.
So Rolexes or rare watches is one of those.
If you had to spend $30,000, it's just so hard to care about these things, dude. Why do I— I can't care about it. I see it. I just feel nothing. I'm dead inside.
Yeah, it sucks, man. You got to get passionate about something outside of your house. Yeah, like you fucking dork.
Like, I literally don't leave my house, dude. My, uh, the chef was like, hey, um, we need more gas for the grill. And I was like, oh, I was like, oh grills need gas? And I was like, because I never grilled. And so I was like, okay, where do I get that? And she's like, you know, just like next time you're at a gas station. I was like, I don't really go to run errands. She's like, next time you're out running errands, just grab one. I don't really go run errands. And so like, she's like been asking for 2 months. Just, I finally got it and I was like so proud of myself. And she's like, so did you forget every time? I was like, no, no, I just don't really go out of my house unless it's like for very specific things. Like I'm taking my daughter to the playground. I'm going to a restaurant and back home.
You need to live a little. Like last night I went to Home Depot just to walk around and look like, like in the evening. I was like, I've been at home all day. I'm going to go walk around Home Depot, see if like, let's like, let's check out like how many Home Depot workers do you know by first name? No, but like, dude, what you could do if you go to Home Depot, if you see a guy wearing Carhartt and paint on on their pants, you don't even have to ask a worker. You could just ask that guy who's there shopping. That's why Home Depot rocks.
He'll take an hour to help you.
Yeah. It's like, hey, do you know where the wood screws are? Yeah, I got you, bro.
Like, I wouldn't even know what to ask. I would just be like, hey, do you know what Home Improvement goods are?
Yeah, man, you need to get a hobby.
Like, I bet Ben has one. Ben, do you have— Ben has one because he's like a history buff. Another white rich, rich white guy hobby to have is like, you know, studying, you know, great men through history. Ben, do you have any other, you know, very, um, rapport building, um, rapport building things?
I don't know that I do, but I don't know if you guys have seen this, but Marc Andreessen has been going nuts of like reading history books and then tweeting about history. Yeah. So like, I, I feel like that could resonate with some of the, that crowd. Yeah.
Yeah, like if I was with Marc Andreessen and I could not talk about tech, we would be on a silent retreat. It would be a silent meditation.
Ben, by the way, you gotta keep your camera on because when I see you laugh, I know we're onto something. Um, um, anyway, yeah, you need to get a hobby. Rolex is a good one. A lot of people like that. If I see someone with a certain Rolex, I talk to them about it. Um, cars is good, but I have a feeling you don't even know how to drive. So I would stay away from that.
I learned how to drive at age 19. So, cause I just wasn't interested. Yeah.
How your wife ever dated you shocks me.
Don't listen to music. I only listened to sports radio my whole life. So if somebody's like, what songs do you like? I'm just like, oh, you know, I'm cool with whatever. And they're like, oh, you're a fucking weirdo, huh?
Oh my God. That's great. Uh, yeah, you need to get a hobby, dude. But, uh, this is the story of Linode. Kind of a cool story, right? You never really. Talked about it.
No, that's, that's awesome.