Building a Sustainable Startup

Although Scalyr has been around since 2011, it feels like we are really just getting started.

So many tech startups come roaring out of the gate, pursuing growth at all costs. Sometimes this leads to spectacular success, but much more often it leads to burnout and retrenchment, if not outright failure. Many promising startups have failed due to early over-reach.

At Scalyr, we’re taking a different approach. We spent over three years with a small team, literally above my garage, taking our time to build the right product in the right way. Only after we’d built a differentiated product that our early users loved did we set out to grow the team and the business.

We have been absolutely blown away by the results:

  • Customer devotion: since we signed our first customer in mid-2013, we have not had a customer leave us for another solution. The sheer performance of our log management service has been a pronounced and sustained differentiator.
  • Word of mouth: once adopted, Scalyr tends to spread within an organization. We have had multiple instances of customers beginning at five-figure annual revenue and growing to seven figures.
  • Scalability: through multiple orders of magnitude of growth, we’ve been able to maintain the performance and functionality that makes Scalyr special.

We are building a real business with real customers, and I’m excited to share some of our recent progress.  

 

Origin story

Rewind to 2006. Amazon EC2 and S3 were still under wraps, Facebook was only available to .edu addresses… and Google had just acquired my startup, Writely – soon to be known as Google Docs. Pretty soon, I was leading a project to build a new storage infrastructure for applications such as 

Docs, Sheets, Drive, and Picasa. Google has a strong culture of internal tool development, and we soon found ourselves using 17 different operational visibility tools to maintain a reliable service. Seventeen! Together, they provided a lot of functionality, but juggling that many tools was a bit of a nightmare.

It was clear that there was a lot of room for improvement. Around the industry, it’s more common to see teams using four or five visibility tools, rather than 17. But everyone suffers from too many tools, too little insight, and too much time spent investigating issues. In 2011, after leaving Google, I started Scalyr to create a better solution. Our ultimate goal is to revolutionize operational visibility, making it easy to understand the behavior of modern, complex cloud stacks.

The first step on this journey is our log management service. Logs provide the most detailed view of server and application behavior and are a critical piece of the operational puzzle. But existing log management tools were so clunky and slow that people avoided using them. Most of these tools are built on traditional keyword indexes, a technology originally designed to search books. Rethinking the problem from first principles, we built a profoundly more efficient solution, proving blazing-fast search over terabyte-scale aggregated logs.

The early response was beyond what any of us thought possible. We raised $2M in seed funding in 2015 to jumpstart the business.

 

Building a Sustainable Business

We have a long way to go to fulfill our long-term vision. To accomplish that, we have to build a sustainable business with solid fundamentals. We’ve been thoughtful about our growth to date, building the team in proportion to revenue. In fact, we’ve been hovering around breakeven – some months even profitable – for the past several quarters.

Sustainable growth requires a delicate balance: be aggressive enough to seize opportunities, but conservative enough to maintain company culture and healthy finances. Combining growth with healthy, sustainable practices requires more than simply pacing yourself. It requires efficiency. With VC cash burning a hole in your pocket, it’s tempting to throw money at all your problems; but then you’re quickly looking for your next round, and you’ve fallen off the sustainable path. So we’re always looking for ways to become more efficient.

It helps tremendously that we have a sustainable product differentiation – performance – that’s linked to a fundamental technological advantage.

 

Powering the next stage

With solid revenue, delighted customers, and a clear path forward, we’re limited only by the speed at which we can execute. So I’m excited to share that we have raised a $20M Series A led by Shasta Ventures, with participation from Heroic Ventures, Susa Ventures, and Bloomberg Beta – bringing our total amount raised to $28M. 

 

By the way, we’re hiring 🙂

This is the 6th startup I’ve [co]founded. People sometimes ask which one is my favorite. Writely was certainly the splashiest. Spectre was pretty cool (and was the last time I got to hack assembly language). But I can say without hesitation, Scalyr is the most satisfying, rewarding project I’ve been lucky enough to work on. I truly believe this is going to be one of those companies where people will look back and say “I wish I’d been there when…” – well, right now is “when”.

There couldn’t be a more exciting time to join! We’re hiring across all teams – especially engineering, sales, marketing, and customer success. Take a look at our Careers Page and become part of the journey.