My First Million - Billy of the Week: Chris Aker

Episode Date: February 21, 2022

Sam Parr (@theSamParr) and Shaan Puri (@ShaanVP) talk about Billy of the Week Chris Aker and how he was able to maintain 100% control of his $900M company. ----- * Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. * Want more insights like MFM? Check out Shaan's newsletter. ----- Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. ----- Additional episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

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, 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, is it called Akamai? Akamai. And so they bought it for nine. Everything I'm going to say 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 don't mention is the guy who started it, he bootstrapped it, raised no outside money, and owned 100% of it. So his name was Chris. I knew him when I was in college, but not back from- All the way through the sale? All the way through the sale, owned 100% of it. The company, all right, let me give you a little bit background. And I think when they sold, they had like 300-ish employees.

But throughout their existence, they had a relatively small staff. 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 basically like the generic term is 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 help host, you know, applications and websites is the, is the non-techie version 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, clutch your cloud bill in half. It's basically like deploy Linux servers in the cloud is the idea. 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 they, because they were bootstrapped, they couldn't quite keep up with like, Like, what was the other competitor? I think Digital Ocean, 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 HealthStream, which was, it's not important. It was just a boring company.

And he worked in like with computers with tech. And he grew up with an Apple and loved tinkering with computers. But what he noticed was that hosting was really expensive. So he basically locked himself in his apartment from like 2002 to 2003. like had a year's worth of savings and like locked himself in this apartment to code and build this website. And he's 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 two. Because this was in early 2000. 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 do? 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. But it was doing okay. Chris kind of was always obsessed with automation. So we did a really good job

of automating a lot of the parts of the company. 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 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,

can make $4 million in profit. But in order to get to like $30 million in revenue, you've got to 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 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's new office. But he was taking a little bit of money off the table, enough to buy a $10 million bank. But own 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 met him while you were in college? So when I was in college, 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, he was in my wedding. I became friends with them for years and years. He was probably 35 when I was 21 or it was probably 10 years older than me. And Casey helped Chris get Linode off the ground and was the C.O.

For a decade or so. Gotcha. Wow. And Chris now at this point, he's got this like huge collection of B&W motorcycle. So for motorcycle fans, there's like, motorcycle fans is like a subcategory of like car enthusiasts. And B&W vintage motorcycle fans is a subcategory of that. And Chris owns, I think, one vintage B&W 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 motorcycle. 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 are. or rare watches is one of those. You gotta spend $30,000 and a stupid watch. 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. I literally don't leave my house, dude. The chef was like, hey, we need more gas for the grill. And I was like, oh, I was like, oh, I was like, oh, grills need gas? And I was like, okay, what 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 two 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, 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, you know, to a restaurant and back home. You need to live in a little. Last night, I went to Home Depot just to walk around and look. 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 if like, let's like, let's check out. How many Home Depot workers do you know by first name? No, like, dude, what you can do if you go to Home Depot, if you see a guy wearing Carhart and paint on their pants, you don't even have to ask a worker.

You can just ask that guy who's there shopping. That's why Home Depot's right. He'll take an hour to help you. Yeah, like, hey, do you know where the wood screws are? Yeah, I got you broke. Like, I wouldn't even know what to ask. I would just be like, hey, do you know what home and wear home improvement goods are? Yeah, man, you need to get a hobby.

I bet Ben has one. Ben, do you have, Ben has one because he's like a history buff. Another white, which 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 rapport building, rapport building things? I don't know that I do, but I don't know if you guys have seen this, but Mark Andresen has been going nuts of like reading history books and then tweeting about history.

So like I feel like that's your end, dude. That's your end, dude. Yeah. Yeah, like if I was with Mark Andreessen and I could not talk about tech, we would be on a silent retreat. It would be a silent retection. Ben, by the way, you got to keep your camera on because when I see you laugh, I know we're on to something.

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. Cars is good, but I have a feeling you don't even ought to drive. So I would stay away from that. I learned how to drive at age 19, so because I just wasn't interested. Yeah, how your wife ever day to do shocks me.

Don't listen to music. I only listen 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. 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. No, that's awesome.