Interview with Ben Uretsky, Founder of DigitalOcean (Techstars Graduate)

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digital-ocean-logo-accelerateRecently we managed to catch up with Ben Uretsky, Founder and CEO of an a great company called DigitalOcean. This interview is an extract from the book Accelerate, which launches today! Accelerate is the first comprehensive guide to the fast-paced world of accelerator programs featuring 230 accelerator programs spread across 46 different countries. Included in this book are responses from over 150 entrepreneurs whose businesses have benefited from participating in an accelerator.

DigitalOcean was Founded by Ben Uretsky, Jeff Carr, Moisey Uretsky, Mitch Wainer and Alec Hartman in 2011 and is a graduate of the Techstars Boulder accelerator program of 2012. DigitalOcean has more than 259,000 subscribers and to-date has raided $40.2 Million in funding.

DigitalOcean is passionate about making complex infrastructure simple for their users with a seamless enjoyable experience. DigitalOcean is a cloud hosting service built for developers. Customers can create a cloud server in under a minute, with servers located in New York, San Francisco, and Amsterdam.

The interview below focuses on DigitalOceans experiences while participating in the Techstars program.

Ben Uretsky“During our accelerator experience, we had a handful of amazing mentors that helped shape our product and focus our vision for DigitalOcean. However, it was Jason Seats who had the most significant impact, contributing some of the key ideas that helped us understand the market and drive DigitalOcean’s growth. For example, one of the things Jason was adamant about was not paying for marketing. He felt building organic awareness, and acquiring customers through strong content, was a very important part of the business.

It was also Jason’s idea to promote the community around our service, so we poured a lot of resources into curating a library of tutorials on open source and sysadmin topics. Today we have over a thousand articles, with hundreds of thousands of users participating in the discussions around those articles, whether it’s through submitting one of their own for publication to answering questions in the community. And what’s great is that all of these tutorials bring in a ton of customers – we are getting nearly two million unique visits to the community section of our website every month.

This is all part of our marketing strategy, and it allows us to cut the cost of customer acquisitions in half because of how efficient it is at delivering the right people to our site. We can target our ads and build brand credibility based on the information that we are discussing. Ultimately, DigitalOcean is introduced to millions of people around the world at a much faster and affordable rate than pay per click advertising. And it’s thanks to Jason’s strong belief in organic marketing and building community that DigitalOcean was able to scale so quickly. But we also believed that paying to acquire the right customers, when done strategically, could be an effective method of driving growth. So Mitch, our CMO, used an ideal combination of both of these elements to help bring DigitalOcean to where it is today.

Jason’s advice would challenge our beliefs, but it was always with the intent of building a more successful company. If we look at the bigger picture, with over 100 mentors in the program, we certainly felt a lot mentor whiplash – and not everyone was always on the same page. Some would tell us that we needed to target more for our product, while others questioned our ability to compete with Amazon. A few even suggested pivoting to something completely different, because they didn’t see how we could make a dent in the market. But each time we’d attempt to do something else, we found ourselves returning to our original hypothesis around simplifying cloud infrastructure. At the end of the day, it was good to be challenged and forced to see things from different perspectives, but our passion for empowering developers would lead us to devoting 100% of our energy behind the original concept for DigitalOcean.

When it came to our demo day experience, there was certainly pressure to raise capital in conjunction with the presentation. I feel as though that may not always be the best course of action – it’s easy to over-focus on it and lose sight of other important aspects of maturing your company. We tried to raise a $500,000 seed round exiting demo day and it took us about two and a half months to claw enough investors together. It was a very difficult process; we had about 12 or 13 different participants that would sign up then drop out.

When we took some time to step back and look at the business, we realized we were growing faster than we initially anticipated, and we weren’t even confident that $500,000 would provide sufficient runway in exchange for the equity that we were giving out. After reflecting on the bigger picture, we made the right decision and chose to cancel the seed round. We were able to continue operating for another six months until we engaged with IA Ventures, who then restarted the round where we raised $3.2 million in the summer of 2013. We have since gone on to raise an additional $37 million, led by venture capital firm a16z.”

– Ben Uretsky

 

 

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