$10 Million Round For Ruby On Rails Startup Heroku (YC W08)(techcrunch.com)
techcrunch.com
$10 Million Round For Ruby On Rails Startup Heroku (YC W08)
http://techcrunch.com/2010/05/10/former-microsoft-execs-lead-10-million-round-in-ruby-on-rails-startup-heroku/
19 comments
In case you want to take the Rails plunge, my Ruby on Rails Tutorial book is available online at http://www.railstutorial.org/book, and it uses Heroku starting in Chapter 1 (i.e., http://www.railstutorial.org/book#sec:deploying). Three years ago (when my first Rails book came out), covering deployment in the first chapter would have been unthinkable, but with Heroku the unthinkable becomes
$ git init && git add . && git commit -m "init"
$ heroku create
$ git push heroku master
$ git commit -am "Changed some stuff"
$ git push heroku
By the way, the Rails Tutorial site itself is also hosted on Heroku. By setting the appropriate header, I've arranged for Heroku to cache the site's static pages, which on subsequent requests get served with blazing speed (see, e.g., http://docs.heroku.com/http-caching). (Because of its read-only file system, Heroku doesn't support Rails page caching, but that's OK: their Varnish cache (http://varnish-cache.org/) is even faster. :-) Thus, though designed principally for dynamic applications, Heroku is also great for static content.
In case you (or others) weren't aware, they also introduced experimental support for Node.js a couple of weeks ago.
http://blog.heroku.com/archives/2010/4/28/node_js_support_ex...
http://blog.heroku.com/archives/2010/4/28/node_js_support_ex...
Very cool, had no idea. Have that on my list of things to play with.
I've only used it for proof of concept (read: free) projects and I agree with you about everything but you see a lot of people bitching on HN about the pricing and how costly it is to scale an app on Heroku.
Not sure how much of that is just venting or how much it actually keeps some people at bay but it's pretty obvious some (anonymous people on an online forum, FWIW...) think it too costly.
Not sure how much of that is just venting or how much it actually keeps some people at bay but it's pretty obvious some (anonymous people on an online forum, FWIW...) think it too costly.
I think they should factor in how much it would cost them to run this on their own infrastructure for comparison purposes at the same levels where they'll have to pay Heroku.
Only then you'd be comparing apples-to-apples and then you'd see that by the time you've factored in the 24x7 system administration, monitoring, guy-on-standby for when you're on the road and so on that it really isn't that bad.
Of course it will be higher in absolute dollars if you don't factor in your own time and how much that costs, maybe there is even a small premium if you do, but outsourcing has other advantages besides the ones that translate directly in to money, and those can be valuable by themselves (for instance the time freed up).
If you can't make your business model earn back what Heroku costs you at a given scale then that is of course a problem, but if you can't do that then you probably have a problem anyway, and even free servers wouldn't solve that.
Only then you'd be comparing apples-to-apples and then you'd see that by the time you've factored in the 24x7 system administration, monitoring, guy-on-standby for when you're on the road and so on that it really isn't that bad.
Of course it will be higher in absolute dollars if you don't factor in your own time and how much that costs, maybe there is even a small premium if you do, but outsourcing has other advantages besides the ones that translate directly in to money, and those can be valuable by themselves (for instance the time freed up).
If you can't make your business model earn back what Heroku costs you at a given scale then that is of course a problem, but if you can't do that then you probably have a problem anyway, and even free servers wouldn't solve that.
Many people underestimate the cost to do (proper) system administration, as well as cost/time/skill required to do (proper) scaling
Heroku user here. One word encompasses Heroku: incredible. Fastest Rails deployment I have ever seen. I'm not surprised that they received the funding—more like really excited.
EDIT: Also, the add-ons they have are really good, and they have a ton in the pipeline. They have all the tools I needed to get up-and-running (including a tool that sends your local DB to the production Heroku server or vice versa in one command).
EDIT: Also, the add-ons they have are really good, and they have a ton in the pipeline. They have all the tools I needed to get up-and-running (including a tool that sends your local DB to the production Heroku server or vice versa in one command).
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One of the longstanding hesitations for cloud computing is "my whole business will depend on someone else's business, what if they go under?"
With $10mm in the bank, 60k apps in the cloud, Amazon's AWS backend, Heroku's rockstar team, and a real revenue model, I think it's safe to say that you can bet your business on Heroku.
My new project sure as hell will...
With $10mm in the bank, 60k apps in the cloud, Amazon's AWS backend, Heroku's rockstar team, and a real revenue model, I think it's safe to say that you can bet your business on Heroku.
My new project sure as hell will...
Even before they were "proven" I think Heroku was significantly less risky than some other platforms, since it's a pretty standard open source stack.
If you really had to move off of Heroku (if they went under or become prohibitively expensive) you could move onto your own servers running essentially the same stack (except of course manually configured and maintained), which is more than you can say for AppEngine, for example.
If you really had to move off of Heroku (if they went under or become prohibitively expensive) you could move onto your own servers running essentially the same stack (except of course manually configured and maintained), which is more than you can say for AppEngine, for example.
Anybody knows what percentage of these 60,000 apps are actual paying clients? If e.g. 50,000 of these apps are free, even for a modest cost of $3/month to host each one, that quickly adds up to ~$2mn of cash burn / year.
Another interesting question is how well they scale. http://success.heroku.com/ has some interesting companies, but nothing with very high traffic (or am I wrong)?
PS. I'm a happy heroku user myself.
Another interesting question is how well they scale. http://success.heroku.com/ has some interesting companies, but nothing with very high traffic (or am I wrong)?
PS. I'm a happy heroku user myself.
The trick with the free apps are, that you only have one dyno. And after a certain amount of inactivity it will be shut down. Next time somebody tries to reach your app, it will automatically be started again. So, the majority of these free apps are practically no-cost for Heroku.
Exactly right. Pay, and you don't get loading request delays.
It means they would just need ~1800 paying users with my bill to cover the costs.
Do I read it right that your bill is about $10k/year?
Given that their profit margin on a paying customer is not 100%, more like 15-20%, they would probably need 5x as much, or 10k paying customers, to cover the costs.
Given that their profit margin on a paying customer is not 100%, more like 15-20%, they would probably need 5x as much, or 10k paying customers, to cover the costs.
yeah, a bit more than that, I use it for GetAppsDone.com.
The basic bill would be much lower but I once you start adding addons the bills adds up quickly.
The basic bill would be much lower but I once you start adding addons the bills adds up quickly.
Are you happy with the service/bang for your buck that comes with that bill? I'm curious as I've just started using Heroku and I'm a little nervous about the costs associated with scaling...
Very happy so far. We only had problems with very few gems. It's definitely not the cheapest options, but definitely worth considering that you could easily have mvp up at 0 cost, and skipping all the headaches that managing a ruby server involve.
Congrats guys - 60,000 app milestone last week, $10m funding this week.
It's a great service and I'm glad to see it continue to grow.
It's a great service and I'm glad to see it continue to grow.
Congratulations to Heroku! I've been using their service for years and it is truly awesome. I hope this money pushes them even further.
One note on the article though, it says: "Heroku aims to make software development more accessible for a wider range of people. It does so by providing a browser-based programming environment that cuts out steps traditionally needed to produce RoR applications."
Didn't they cut that entirely? Even Heroku Garden is closed right?
One note on the article though, it says: "Heroku aims to make software development more accessible for a wider range of people. It does so by providing a browser-based programming environment that cuts out steps traditionally needed to produce RoR applications."
Didn't they cut that entirely? Even Heroku Garden is closed right?
You're right. They must have some really old stock summary from when they wrote about Heroku long ago. Heroku's business is exclusively hosting Ruby (and now Node.js) apps that you write normally.
Wondering ? has anyone migrated from engine yard to heroku or vice versa, and reasoning. I've read several reasons on why one is better than the other, but just wondering what some of the users experiences are
I found it easier to use Heroku, but I think Engine yard maybe a better price point depending on what resources and other stuff your server needs. Very comparable though
I'm wondering why they need to raise money at all. Aren't they charging for their services? I'd feel more comfortable knowing that they're a self-sustaining business, as opposed to a startup that needs to raise money. Maybe there's a good reason, though...?
You don't raise 10 million if you don't know what you're raising it for, to me this speaks of a fairly detailed plan on how they intend to spend that money.
Think of money that you can get your hands on before you've earned it as a growth accelerator. You could for instance stave off a potential competitor by grabbing a larger share of the market than you would have been able to do if you both relied on organic growth. In the arms races that start-ups are bound to find themselves in sooner or later a couple of million in hard cash can make an enormous difference in the long term outcome.
Think of money that you can get your hands on before you've earned it as a growth accelerator. You could for instance stave off a potential competitor by grabbing a larger share of the market than you would have been able to do if you both relied on organic growth. In the arms races that start-ups are bound to find themselves in sooner or later a couple of million in hard cash can make an enormous difference in the long term outcome.
Yes, but specifically talking about Heroku, what do you suppose the plan is? If it were Engine Yard (at least the pre-EC2 version) I would know--they need to buy a lot of servers. But I figured Heroku would be able to stay a lean mean profit machine without taking big funding. Is their model out of whack? Too many free apps (aka marketing expense) to be subsidized by the paid ones?
If I were to hazard a guess I would say they are planning a very large roll-out with some heavy hitting marketing and they expect the free traffic to go through the roof for a while, significantly outpacing the normal conversion rate, and hence their ability to finance this out of their normal cashflow. Another option is that they intend to take over a competitor (EY you've already mentioned, I'm not even aware of any others in the ROR space, but there may be more), if that's it they'll be facing some major integration issues due to the different approaches.
But that's really looking at the tea-leaves, I have 0 evidence for any that.
It would make some sense though, given that they've ironed out a lot of the issues they had initially, their price points have been adjusted to the point where a lot of the users are happy (and I find it commendable how they worked with the userbase establishing how much was reasonable), the only thing they have to do now is sit back and watch it grow.
But they may have decided that sitting back and watching is not their style.
Time will tell, but I'll certainly be watching for any major announcement.
But that's really looking at the tea-leaves, I have 0 evidence for any that.
It would make some sense though, given that they've ironed out a lot of the issues they had initially, their price points have been adjusted to the point where a lot of the users are happy (and I find it commendable how they worked with the userbase establishing how much was reasonable), the only thing they have to do now is sit back and watch it grow.
But they may have decided that sitting back and watching is not their style.
Time will tell, but I'll certainly be watching for any major announcement.
Tons of profitable businesses raise money. Sometimes it's the best way to scale to the next level or expand into a new market. It's wrong to assume they aren't profitable.
Sure - that's why I'm wondering if there's a "good reason" aside from that they need to raise money to remain in business. Maybe they'll be able to provide some more insight on their blog at some point.
Cloud computing seems really hot right now--maybe they take the money while it's there.
A company that doesn't need to raise money is in an awfully good position if they decide that they can use extra money.
$10 million is a huge amount, it sounds like they have huge plans.
$10 million is a huge amount, it sounds like they have huge plans.
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Grats guys. One of my favorite web services, ever. One day when my actual job keeps me a bit less busy, I'll be upgrading my service and using it even more.
This my be the wrong question since I'm not too familiar with Heroku, but is anyone working on something similar for Django?
I just came up for air from working on my take to browse hacker news for a bit. A lot of work for one man, but I'm moderately pleased with the progress I've been making.
Isn't that what Google App Engine is?
Heroku is a cloud-based deployment and hosting solution for Ruby apps (and soon to be Node.js javascript apps too). Google App Engine is for Python and Java.
Heroku is a cloud-based deployment and hosting solution for Ruby apps (and soon to be Node.js javascript apps too). Google App Engine is for Python and Java.
But GAE doesn't have a SQL db. Now, for some apps that may even be an advantage, but these frameworks are really setup for having a SQL db behind them.
The same exact code that you would deploy to a VPS can run on Heroku without issue, save some limitations like the read-only filesystem. That's a big plus.
The same exact code that you would deploy to a VPS can run on Heroku without issue, save some limitations like the read-only filesystem. That's a big plus.
Don't forget JRuby and they have a fix for the spin up time with http://gist.github.com/331854 Deferred Dispatcher.
Silver Lining has some similarities: http://cloudsilverlining.org
http://kutoken.com/ exists, can't speak intelligently about the comparison, or their quality though.
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As a guy who learned a little php for the first time last year, and then moved on to Ruby late in the year Heroku has been very helpful to kicking Rails servers live.
A+ for ease of use, and as I learn more I see opportunities in other server environments. My cofounder is kicking up nginx, thin and padrino
My favorite heroku project (and personal first) http://imagebrowser.heroku.com enjoy. Semantic entity extraction and image browsing as well as search within twitter streams.
A+ for ease of use, and as I learn more I see opportunities in other server environments. My cofounder is kicking up nginx, thin and padrino
My favorite heroku project (and personal first) http://imagebrowser.heroku.com enjoy. Semantic entity extraction and image browsing as well as search within twitter streams.
I was so impressed with the design and usability of Heroku's site and system - it's near perfection, which is a hard thing to say about software.
From the rate that these guys innovate, it's obvious they're working hard - and at the right things. I'd bet this will pay off for the investors.
I have one app on heroku, it's probably easier to use, but I have more apps on Google Appengine with jruby simply because it stays free-er for longer. I've come up against Heroku's free limits.
I have one app on heroku, it's probably easier to use, but I have more apps on Google Appengine with jruby simply because it stays free-er for longer. I've come up against Heroku's free limits.
I loaded my first Heroku app last week. As promised, they made it very easy and snappy to deploy. When I ran into a problem, I was able to file a ticket and get a resolution by the next business day. Phenomenal service, especially considering I was only using their free offering.
congratulations!
Good for them. Heroku provides great service, and I wish them well.
Love heroku for my micro sinatra apps. A well deserved $10mil
It is really cool startup. Smart concept - git powered deployment, very clear and beautifully visualized information, and excellent, even stunning web design. Add to that some Japanese/Zen flavor and it's almost perfect. Very good taste.
I'm glad that they're successful. It's good when a good taste wins.
I'm glad that they're successful. It's good when a good taste wins.
From the design of their website to the naming schemes, the price points and so on it all seems to be equally well thought out.
Back when considering which platform to try next (python/django or ruby/rails) I was very impressed with the way they did their best to minimize the surprise factor and to really inform the user up front of what they're getting in to.
The documentation is also excellent. I still don't know if I made the right choice, but I'm a bit too far in to django now to easily back out again so I guess I'll stick to it, but to see Heroku has now found very solid financing is definitely a factor to consider.