Sam tells the story of Christopher Aker, who bootstrapped Linode — a cloud computing company — from his apartment starting around 2002, raised zero outside money, owned 100% of the company, and sold it to Akamai for $900 million in cash. The conversation drifts into how Sam knew Aker through a mutual friend he met while working on American Pickers, and then into a digression about hobbies, rapport-building with rich guys, and why Sam doesn’t leave his house.
Speakers: Sam Parr (host), Shaan Puri (host), Ben (producer)
Intro: The $900M Bootstrap Nobody Talked About [00:00:00]
Sam: They sold it for $900 million dollars in cash. They don’t really mention much about the company other than it was doing over $100 million in revenue. But 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.
Setting the Scene: Linode and the Acquisition [00:00:30]
Sam: Let me tell you this quick story. This was not a big headline — I bet you didn’t even see it. So my friend, I was in college at the time. He’s a little bit older than me, probably in his 30s when I was 21. He started this company called Linode.
Shaan: Did you see yesterday? A company called Linode was acquired for $900 million dollars in cash.
Sam: Yeah.
Shaan: Who bought it?
Sam: It was — is it called Akamai?
Shaan: Oh come on. Yeah, Akamai.
Sam: So they bought it. Everything I’m going to say is relatively public, or you could piece it together from a bunch of different articles. But basically they sold it for $900 million dollars in cash. They don’t really mention much about the company other than it was doing over $100 million in revenue. But what they don’t mention is the guy who started it — he bootstrapped it, raised no outside money, and owned 100% of it. His name was Chris.
I knew him when I was in college — all the way through the sale, owned 100% of it.
What Linode Was [00:01:45]
Sam: Let me give you a little background. I think when they sold they had around 300 employees, but throughout their existence they had a relatively small staff. They were doing multiple millions of dollars in revenue per employee. It wasn’t run exactly like a family business, but almost. Based out of New Jersey.
Shaan: What does it do? What is Linode?
Sam: I’m not in this space, so excuse me, but basically — the generic term is cloud computing. Before Amazon Web Services was around, Linode was there. I think some of their customers are like Walmart. They help host applications and websites — that’s the non-techie version I would give. What are you looking at on the website?
Shaan: The website basically says “cut your cloud bill in half.” It’s basically “deploy Linux servers in the cloud” is the idea.
Sam: I think we used this by the way at my previous startup. I remember seeing a bill for Linode probably. They’re pretty popular. But because they were bootstrapped they couldn’t quite keep up with — what’s the other competitor? I think DigitalOcean, which is publicly traded now for multi-billions.
The Origin Story: Locked in an Apartment [00:03:00]
Sam: Basically, in the early 2000s — 2005 or 2006 — Chris worked at this company called HealthStream. Not important, it was a boring company. He worked with computers, with tech. He grew up with an Apple and loved tinkering, but what he noticed was that hosting was really expensive.
So he basically locked himself in his apartment from like 2002 to 2003, had a year’s worth of savings, and locked himself in to code and build this website. He was like, “if it works, it works; if it doesn’t, it doesn’t.”
He launches it, and right away it does good enough to pay his salary — single-digit hundreds of thousands of dollars by year two. Because this was in the early 2000s, I don’t even think Amazon Web Services was around at that point. And if it was, it was brand new.
In fact, this whole idea of cloud computing was brand new. At HealthStream, Chris was like, “look, we’ve got to spend all this money to buy servers — what if we just bought a bunch of servers and rented them out to people?” Because it’s really hard for a small business to actually host a website or host applications. That’s where the idea came from.
Growing Quietly, No Outside Money [00:04:30]
Sam: It grew a little bit year over year — it wasn’t growing like crazy for a long time, but it was doing okay. Chris was always obsessed with automation, so he did a really good job of automating a lot of the parts of the company. They could hire a relatively small staff — only like 10 or 15 people for the first handful of years, even when it was getting close to making over $10 million a year. Still really small.
Basically the way it worked — I don’t think he ever took out a loan, it was 100% self-financing. So it would make a lot of money. These businesses can make, on $10 million in revenue, maybe $4 million in profit. But in order to get to $30 million in revenue, you’ve got to go open up a warehouse or rent a warehouse and buy a bunch of servers.
There were times where my friends who worked there along with Chris were literally tinkering and assembling the servers themselves. They did this for years and years and years, and it grew nicely.
They did a really good job of automating their customer service. For a long time Chris was even answering customer service himself. It grew really quietly. He’s not on Twitter. If you Google him, you might find two pictures — there’s basically nothing out there about him.
The Bank House and the $900M Exit [00:06:00]
Sam: He’s based out of Philly and he bought a bank — like literally, physically, a bank building that was converted into a house. It was the house from the Real World Philadelphia. He bought it and they did an article about him about how he was restoring this bank, and Linode was using it as their new office. He was taking a little bit of money off the table — enough to buy a $10 million bank. But he owned the whole company.
And just the other day it was announced that it was sold for $900 million dollars in cash.
How Sam Knew Chris [00:06:45]
Shaan: How do you know this guy? You said you knew him in college — was he at your college, or you just knew him while you were in college?
Sam: So when I was in college, I used to work for that show I told you about — American Pickers. A guy came in and he was like, “I start internet companies.” I was like, “Oh really, I like entrepreneurship, that’s cool — will you just let me hang out with you?” He let me hang out with him. This guy, his name was Casey. He became — he was in my wedding, I became friends with him for years and years. He was probably 35 when I was 21, maybe 10 years older than me.
Casey helped Chris get Linode off the ground and was the CEO for a decade.
Shaan: Gotcha. Wow.
Sam: And Chris now — at this point he’s got this huge collection of BMW motorcycles. For motorcycle fans, there’s motorcycle fans as a subcategory of 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.
So we were all motorcycle nerds and we would geek out over that stuff and ride motorcycles together.
The Rich Guy Hobby Problem [00:08:00]
Shaan: Dude, I need a white guy rich guy hobby. This is what’s holding me back. I realize I need to start buying motorcycles from, you know, 30 years ago and then care about it and learn how to restore them and polish them. I need to become Tim Allen from Home Improvement and have this thing in my garage I’m always working on. So when I meet these guys I’ve got something to say.
Sam: You’ve got something to say, right?
Shaan: I’m like, what am I gonna say? “Hey what’s up, you like the NBA?” And it’s like yeah, me and 100 million other people. There’s nothing to connect on.
Sam: What about Rolexes or rare watches? That’s one of those.
Shaan: If you had to spend $30,000… so hard to care about these things, dude. Why can’t I care about it? I see it and I feel nothing. I’m dead inside.
Sam: Yeah, it sucks, man. You’ve got to get passionate about something outside of your house. You dork — like you literally don’t leave your house.
Shaan: Dude, my chef was like, “hey, we need more gas for the grill.” And I was like, “oh, grills need gas.” I was like, okay, where do I get that? She’s like, “you know, just next time you’re running errands, just grab one.” And I was like, I don’t really run errands. She’s like, “next time you’re running errands, just grab one.” She’d been asking for two months. I finally got it and I was so proud of myself.
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 for very specific things. Like I’m taking my daughter to the playground, I’m going to a restaurant and back home.”
Sam: You need to get out a little.
Home Depot Night [00:09:30]
Shaan: Last night I went to Home Depot just to walk around and look at things. Like in the evening. I was like, “I’ve been at home all day, I’m going to go walk around Home Depot and see — let’s check it out.”
Sam: Like how many Home Depot workers do you know by first name?
Shaan: Zero.
Sam: What you could do — if you go to Home Depot and you see a guy wearing Carhartt with paint on his pants, you don’t even have to ask a worker. Just ask that guy who’s there shopping. He’ll take an hour to help you.
Shaan: Yeah, “hey, do you know where the wood screws are?” “Yeah, I got you, bro.”
Sam: Like I wouldn’t even know what to ask. I would just be like, “hey, do you know where the home improvement goods are?”
Shaan: Yeah, man, you need to get a hobby.
Ben’s Hobby and Mark Andreessen [00:10:15]
Sam: I bet Ben has one. Ben, do you have a hobby?
Ben: Ben has one because he’s like a history buff.
Sam: Another white rich guy hobby — studying great men through history. Ben, do you have any other rapport-building things?
Ben: I don’t know that I do. But I don’t know if you guys have seen this, but Mark Andreessen has been going nuts reading history books and then tweeting about history.
Sam: I feel like that’s your lane. Yeah. Like if I was with Mark Andreessen and we couldn’t talk about tech, we would be on a silent retreat. It would just be silence.
By the way, you’ve got to keep your camera on because when I see you laugh I know we’re onto something.
Shaan’s Hobby Deficits [00:11:00]
Sam: Anyway, yeah, you need to get a hobby. Rolexes is a good one — a lot of people like that. If I see someone with a certain Rolex I’ll talk to them about it. Cars is good, but I have a feeling you don’t even know how to drive, so I would stay away from that.
Shaan: I learned to drive at age 19.
Sam: Because you just weren’t interested?
Shaan: Yeah.
Sam: How your wife ever — shocks me. I only listen to sports radio my whole life. So if somebody’s like, “what songs do you like?” I’m just like, “oh, I’m cool with whatever.” And they’re like, “oh, you’re a weirdo, huh?”
Shaan: Oh my god.
Sam: Yeah, you need to get a hobby, dude. But this is the story of Linode — kind of a cool story, right? You never really talked about it.
Shaan: No, that’s awesome.