Vercel raises $150M Series D(vercel.com)
vercel.com
Vercel raises $150M Series D
https://vercel.com/blog/vercel-funding-series-d-and-valuation
198 comments
Super simple answer - because there is an unprecedented abundance of capital (to the tune of nearly $1T for private capital markets) and they were very likely oversubscribed on that first round. So...why not?
Where do you get this information? I believe you, but I'd like to look more into it.
If you're asking about the oversubscription, many fundraising rounds these days are highly competitive and oversubscribed due to an abundance of capital. So it's common for hot companies to have many suitors.
I was mainly asking how does one know that there is an abundance of capital? Is there some specific report or datasheet to look at?
Yeah, there's stuff like this: https://pitchbook.com/news/articles/2021-us-vc-fundraising-e...
This data corroborates first and secondhand experience from being close to people on both sides of the table wrt technology funding. Most people aren't shy about discussing the topic as it's just taken as a fact of life in the current environment.
This data corroborates first and secondhand experience from being close to people on both sides of the table wrt technology funding. Most people aren't shy about discussing the topic as it's just taken as a fact of life in the current environment.
https://www.bain.com/globalassets/noindex/2021/bain_report_2...
Page 19
FTA:
It’s hardly surprising that many GPs were afraid Covid-19 would put an end to the past decade’s golden era of private equity fund-raising. But those fears turned out to be unwarranted. Global fund-raising of $989 billion was a decline from 2019’s all-time record of $1.09 trillion (see Figure 18). But it was still the third-highest total in history, and if you add in the $83 billion raised for SPACs, it was the second highest. All told, the industry has raised almost $5 trillion in capital over the past five years. Buyout funds alone raised about $300 billion in 2020, or $340 billion if you include SPAC capital aimed at buyout-type targets, estimated at $41 billion (see Figure 19).
Page 19
FTA:
It’s hardly surprising that many GPs were afraid Covid-19 would put an end to the past decade’s golden era of private equity fund-raising. But those fears turned out to be unwarranted. Global fund-raising of $989 billion was a decline from 2019’s all-time record of $1.09 trillion (see Figure 18). But it was still the third-highest total in history, and if you add in the $83 billion raised for SPACs, it was the second highest. All told, the industry has raised almost $5 trillion in capital over the past five years. Buyout funds alone raised about $300 billion in 2020, or $340 billion if you include SPAC capital aimed at buyout-type targets, estimated at $41 billion (see Figure 19).
Thank you!
I guess because they can? They must have phenomenal growth numbers.
Is it just me or have rounds been getting much larger these days?
They’ve been ballooning for years. Seed rounds are now $3-$10m, A rounds are $20-$50m, etc.
The amount of money flowing into venture capital is unprecedented. I run a startup that raised a seed round in June. I’m a co-founder but I’m our CTO, not CEO and I still get 5-10 emails per day from random VCs asking if we need funding.
There’s no way this ends well. But I think it’ll take a decade to shake out.
The amount of money flowing into venture capital is unprecedented. I run a startup that raised a seed round in June. I’m a co-founder but I’m our CTO, not CEO and I still get 5-10 emails per day from random VCs asking if we need funding.
There’s no way this ends well. But I think it’ll take a decade to shake out.
How much of a networking does one have to do to achieve such a number?
And is your product past MVP?
My co-founder and I ran a startup before this, which was also VC-backed, so we had around 6+ years of networking built up from that. You meet hundreds of VCs along the way. So it was never an issue of finding investment for this new venture. It was finding the right investors.
We raised our pre-seed round in 2020 without anything, just a pitch deck, and fully remote. We didn't meet our investors in person until several months after closing on the round.
We raised our Seed this June based on having roughly 100 companies using our product, a good percentage paying us. So while I wouldn't say we raised our Seed round with PMF, we were (and are) showing signs of PMF.
So yeah, our product is a bit past the MVP stage, but not by much. We still have bugs that come up almost every day, and we fix them as fast as we can. However, the product has matured greatly in the last six months.
We raised our pre-seed round in 2020 without anything, just a pitch deck, and fully remote. We didn't meet our investors in person until several months after closing on the round.
We raised our Seed this June based on having roughly 100 companies using our product, a good percentage paying us. So while I wouldn't say we raised our Seed round with PMF, we were (and are) showing signs of PMF.
So yeah, our product is a bit past the MVP stage, but not by much. We still have bugs that come up almost every day, and we fix them as fast as we can. However, the product has matured greatly in the last six months.
And what does the "right innvestors" mean in this context, if, I assume, the thickness of the wallet is not an issue here?
It’s a few things.
- positive reputation. Other founders enjoyed their experience.
- provide value through their network. This is the foundation YC built themselves on. Investors that introduce you to paying customers, other founders, other investors, etc.
- leave you alone and only help when you ask for it. These are the best types of investors. They provide advice only when you ask.
Those are the most important things.
- positive reputation. Other founders enjoyed their experience.
- provide value through their network. This is the foundation YC built themselves on. Investors that introduce you to paying customers, other founders, other investors, etc.
- leave you alone and only help when you ask for it. These are the best types of investors. They provide advice only when you ask.
Those are the most important things.
you have to look like money in the environment you are raising capital in, in which case the networking is more fruitful and your company can be more flimsy.
if you have a different physical look or unfamiliar background, the metrics for your existing company are way more important and the bar is much much higher and the multiples investors accept are way way lower.
or just do a crypto version, which is much more inclusive, global, faster, and leapfrogs this rodeo.
if you have a different physical look or unfamiliar background, the metrics for your existing company are way more important and the bar is much much higher and the multiples investors accept are way way lower.
or just do a crypto version, which is much more inclusive, global, faster, and leapfrogs this rodeo.
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> There’s no way this ends well
How do you think it will end?
How do you think it will end?
Not the original poster, but economies work in cycles... so eventually money won't be free, and funding won't be so easy.
When that happens, lots of VC-fueled companies will shut down.
In other words, I think it ends with a return to a funding climate similar to 2015-2016 where money was available, but money also wasn't free. And financing rounds were smaller.
When that happens, lots of VC-fueled companies will shut down.
In other words, I think it ends with a return to a funding climate similar to 2015-2016 where money was available, but money also wasn't free. And financing rounds were smaller.
Aren't we close to an abundance of energy and thus a huge expansion of the economy?
There will be much more resources that can be bought with money, so money will be worth more, compensating for any bubble that is created right now.
There will be much more resources that can be bought with money, so money will be worth more, compensating for any bubble that is created right now.
Because when the sun is shining, you go make hay.
Am I the only one around here that is less and less excited about Vercel as they raise more and more money?
Since your comment is popular you may not be the only one but then the question is: why? I am genuinely wondering why you would get less and less excited the more they raise. Any specific reasons?
Thanks!
Thanks!
I think it should be the opposite. When they were raising from just Google, I was worried they might get acquired and ruined.
If they raise so much that they have to IPO, great!
If they raise so much that they have to IPO, great!
Yes personally I'm afraid at some point Vercel will just sell out like Heroku did with Salesforce and stop investing in R&D.
Lee from Vercel here. Happy to answer any questions about Vercel and our plans for this new round of funding.
Hi Lee, any plans to remove the restriction from the Hobby plan that disallows any sites transacting any sort of commerce? To my knowledge, Cloudflare Pages and Netlify don't have this restriction.
Any plans to add IPv6 support? I see that you use the 76.76.21.21 as a vanity IPv4 address surely you can do the same IPv6 as well.
This is the main reason I refer clients to Netlify as I use IPv6 support to measure the maturity of a platform and its engineers.
This is the main reason I refer clients to Netlify as I use IPv6 support to measure the maturity of a platform and its engineers.
Why would you use this as a metric?
Working for AWS and working with hundreds of customers a whopping 0 of them ever required ipv6.
Working for AWS and working with hundreds of customers a whopping 0 of them ever required ipv6.
How do you feel about GCP?
Hello Lee, congrats and thanks for taking questions.
In advance I'll apologize for being this direct, answers can get fishy sometimes these days, so I will parameterize my query, so to speak:
What portion (concrete numbers) are at minimum being earmarked for supporting open source projects and devs directly? I don't mean t-shirt budget and things, I mean what is the total amount of funds that will be donated directly to open source projects and devs?
In advance I'll apologize for being this direct, answers can get fishy sometimes these days, so I will parameterize my query, so to speak:
What portion (concrete numbers) are at minimum being earmarked for supporting open source projects and devs directly? I don't mean t-shirt budget and things, I mean what is the total amount of funds that will be donated directly to open source projects and devs?
Happy to clarify, but hard to give exact numbers. First, Next.js – we invest into our core team and also growing that community (events, supporting creators, etc). It's a major investment for us. Then, we have a bunch of other open-source libraries and frameworks that we support, like SWR, SWC, webpack, and friends. We also sponsor and support frontend frameworks like Nuxt, Astro, Svelte, etc (through OpenCollective and GitHub Sponsors) as well as giving free Vercel accounts to teams like tailwindcss.com! Finally, we hired Rich Harris (creator of Svelte) to work on Svelte full-time and grow that open-source community.
Thank you for the response; should we interpret this as there will be minimal transactions in the form of direct donations of currency to open source projects and developers? I hope this isn't taken as you being grilled, I just had a specific question that I don't feel has yet been answered.
Just curious, if you already have NextJS, why support other frameworks like Svelte, Nuxt etc? Aren't they competitors in a way? Or is it more that Vercel is a platform that can host any framework so as long as customers use Vercel versus others, you don't really care which framework they use?
Any plans introducing better and more transparent growth usage plans in between Pro and Enterprise?
We have been faced with surprising charges that weren't clearly defined besides 'fair usage' policy.
Thanks Lee.
So what are your plans for this funding? I know that Vercel just raised $100M a few months ago (it seems).
So what are your plans for this funding? I know that Vercel just raised $100M a few months ago (it seems).
We're using the funding to:
- Support open-source projects
- Make the Web Edge-first
- Build the end-to-end development platform
- Grow our team
Happy to dive further into any of these. We did raise our Series C in June: https://vercel.com/blog/series-c-102m-continue-building-the-....
- Support open-source projects
- Make the Web Edge-first
- Build the end-to-end development platform
- Grow our team
Happy to dive further into any of these. We did raise our Series C in June: https://vercel.com/blog/series-c-102m-continue-building-the-....
How can you possibly make the entire Web edge first? Would a precondition not be to capture all of the web traffic through Vercel first?
What do you mean by edge first?
We believe the future of the frontend is "at the edge"[1], meaning it's as close to your customers as physically possible. The only way to beat the speed of light is to be closer[2]. Frameworks and tooling should be designed with this constraint from the start[3].
[1] https://vercel.com/edge
[2] https://rauchg.com/2014/7-principles-of-rich-web-application...
[3] https://vercel.com/features/infrastructure
[1] https://vercel.com/edge
[2] https://rauchg.com/2014/7-principles-of-rich-web-application...
[3] https://vercel.com/features/infrastructure
My out of ass opinion. This edge stuff could be nice if only there was some good DB that utilised this model. Then we could have simple to write/work web apps competitive with mobile (if only Safari supported preload)
Planet Scale is probably the closest to what you're describing here.
https://planetscale.com/
https://planetscale.com/
They gave CDN a new name to milk venture capitalists.
To me, the difference between a CDN and an Edge Network is that the former is for hosting static assets, where as the latter is for both storage _and_ code execution.
The three major CDNs (Akamai, Cloudflare and Fastly) all support code execution at the edge, and all have (or will have) storage at the edge too
There's also a real question of whether Vercel and Netlify are really at the edge when they’re mainly running in AWS, GCP etc data centers rather than deploying their own hardware at edge locations, ISPs etc.
Don't get me wrong I think Vercel and Netlify are interesting but they seem to talk about being ‘on the edge’ while they really aren’t ATM
There's also a real question of whether Vercel and Netlify are really at the edge when they’re mainly running in AWS, GCP etc data centers rather than deploying their own hardware at edge locations, ISPs etc.
Don't get me wrong I think Vercel and Netlify are interesting but they seem to talk about being ‘on the edge’ while they really aren’t ATM
Shhh the vcs might hear ya haha
Why did you jump the question above this asking for concrete numbers on open source support? I’m interested in this as well
I answered :) https://news.ycombinator.com/item?id=29318420
Is Vercel a Netlify alternative mainly focused on React? I've been using Netlify a lot because I have been developing mostly in Vue and sometimes a bit using Nuxt.
What was most enticing to me (apart from free tier for personal projects, but I see Vercel has one too?) is that there were a lot of tutorials, guides how to setup CI/CD using Azure Devops/Github etc. So basically no matter what I have chosen there was neat guide for the system. I know that its nothing too complicated to create one from scratch but trying out new tools without documentation might be sometimes too bothersome and there are sometimes things that could take a lot of time to solve on your own. I hope you guys will also provide some guides how to integrate Vercel with existing projects on Azure Pipelines or other CI/CD alternatives. Would really want to try a compare.
We're focused on supporting all frontend frameworks (and we created Next.js, so that's one of our favorites). You are correct, we have a free tier for your personal projects. While we do have git integrations with GitHub, GitLab, and Bitbucket, you can always build custom CI/CD with our CLI/API to support your provider of choice. Good feedback on a guide specifically for Azure, we will create this!
How are you going to stop Facebook employing Embrace, Extend, Extinguish.
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React is free and open source, they could always fork it and I guess they are protecting their backs by supporting Vue and Svelte ( employed the creator full time to work on Svelte )
Any support fo HIPAA compliant workflows?
Any plans to support Vue as well?
We already support Vue and Nuxt (and all other frontend frameworks): https://vercel.com/new/templates
can someone eli5 why investors are throwing so much money at Vercel, Netlify and Gatsby?
what kind of promises are they making in exchange of the capital?
why don't more capable platforms like Render or Fly.io raise as much?
what kind of promises are they making in exchange of the capital?
why don't more capable platforms like Render or Fly.io raise as much?
Have you seen returns on CloudFlare? I guess they hope to grab even more by mixing this with ala Heroku + Firebase maybe.
heroku dropped the ball on easy to deploy cloud infra
These companies can get big enough to be acquired by AWS , Azure at some point. This is now the new Heroku.
The next big startup could be an application on Vercel maintained by 2 people instead of a tangle of micro services and AWS configurations maintained by 20.
The next big startup could be an application on Vercel maintained by 2 people instead of a tangle of micro services and AWS configurations maintained by 20.
Being "acquirable" is one of the things you often forego at valuations like this.
Why ? Valuations are generally high these days and Big tech has the cash. If there’s a crash all valuations go down and they’re even more acquirable.
The acquisition doesn’t have to happen at these valuations for the investors to make money. See - Liquidation preferences
The acquisition doesn’t have to happen at these valuations for the investors to make money. See - Liquidation preferences
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they don't run backend/databases though?
This is likely fine for the typical "Digital Transformation" projects at huge enterprises that have a ton of cash to spend on things like this.
Everything is a Mainframe or SAP installation under the hood somewhere, but layers and layers of API mean that product teams can mostly ignore the complexity and ship a mediocre app that is only really a frontend.
Everything is a Mainframe or SAP installation under the hood somewhere, but layers and layers of API mean that product teams can mostly ignore the complexity and ship a mediocre app that is only really a frontend.
They do have Edge Functions, which is similar to Lambda. Same with Netlify and Cloudflare. For DBs you have to seek somewhere else.
It's not really something that will run your Rails backend, but it has the potential of doing a lot for creative small teams.
It's not really something that will run your Rails backend, but it has the potential of doing a lot for creative small teams.
To clarify, we have Serverless Functions[1] which are similar to Lambda, as well as Edge Functions[2] which are similar to Cloudflare Workers.
[1] https://vercel.com/docs/concepts/functions/serverless-functi...
[2] https://vercel.com/edge
[1] https://vercel.com/docs/concepts/functions/serverless-functi...
[2] https://vercel.com/edge
Where are your edge locations - doesn’t seem to be any information on your site…
why would any sane person vendor-lock-in all backend code to a single provider?
You can deploy next.js application on any server which supports Node.js.
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You don't. You write your backend code and vercel (and others) turn it into serverless functions that can be deployed on AWS or Cloudflare. Or whoever else decides to offer serverless functions. Or you extract your backend and host it yourself. You're not vendor locking yourself.
Haven't yet used their /api serveless functions but I guess it's standard nodejs functions, so not that much vendor lockin
AFAIK they're working on it
Herkou’s exit wasn’t that great though. Granted, $200m isn’t an insignificant amount of money, but Netlify and Vercel are valued at billions. They would have to sell for 10x what Heroku sold for to meet expectations.
I just don’t see the valuations lining up, but I’ll probably be wrong.
I also don’t know who they get acquired by. I don’t see AWS making acquisitions like this. From what I’ve seen, it seems like they try to buy companies at lower valuations (than multiple billions).
I just don’t see the valuations lining up, but I’ll probably be wrong.
I also don’t know who they get acquired by. I don’t see AWS making acquisitions like this. From what I’ve seen, it seems like they try to buy companies at lower valuations (than multiple billions).
Heroku's exit was pretty huge for its time. In fact it was the largest YC exit to-date.
For context Heroku was created in 2008 just after the housing crash. By the time they exited Facebook was still 2.5 years away from going public and a solid seed round still looked like a few hundred grand if you were a hot company (on top of the ~17k you'd get from YC).
For context Heroku was created in 2008 just after the housing crash. By the time they exited Facebook was still 2.5 years away from going public and a solid seed round still looked like a few hundred grand if you were a hot company (on top of the ~17k you'd get from YC).
These companies can be disruptive innovators by focusing on Niches that the big companies won’t care about because they’re tiny. For eg - managed react applications.
IIRC Firebase was acquired by google.
But the plan is to go after all of AWS slowly from a different direction. Cloud flare is doing the same thing and their stock is going gangbusters.
Cloud services are one of the most profitable businesses to ever exist. There’s so much lock in and network effects. Especially with managed solutions like these.
Cloud services are one of the most profitable businesses to ever exist. There’s so much lock in and network effects. Especially with managed solutions like these.
But: The Innovator's Solution to the Innovator's Dilemma is well-understood at this point. Incumbents know well to not ignore upstarts. Knowing (Intel v ARM [0]) and reacting are two different things, of course.
[0] ref "red teaming at Intel", https://news.ycombinator.com/item?id=21095977
[0] ref "red teaming at Intel", https://news.ycombinator.com/item?id=21095977
It’s not easy because of all the bureaucracies and inefficiencies at large companies. Most employees at AWS are probably barely inspired compared to the people working at Vercel who can also ship much faster. Nothing new here just what PG has been saying for years.
> It’s not easy because of all the bureaucracies and inefficiencies at large companies.
The Innovator's Solution addresses these and other issues.
http://web.mit.edu/6.933/www/Fall2000/teradyne/clay.html: Even after correctly identifying potentially disruptive technologies, firms still must circumvent its hierarchy and bureaucracy that can stifle the free pursuit of creative ideas. Christensen suggests that firms need to provide experimental groups within the company a freer rein. "With a few exceptions, the only instances in which mainstream firms have successfully established a timely position in a disruptive technology were those in which the firms' managers set up an autonomous organization charged with building a new and independent business around the disruptive technology." This autonomous organization will then be able to choose the customers it answers to, choose how much profit it needs to make, and how to run its business.
The Innovator's Solution addresses these and other issues.
http://web.mit.edu/6.933/www/Fall2000/teradyne/clay.html: Even after correctly identifying potentially disruptive technologies, firms still must circumvent its hierarchy and bureaucracy that can stifle the free pursuit of creative ideas. Christensen suggests that firms need to provide experimental groups within the company a freer rein. "With a few exceptions, the only instances in which mainstream firms have successfully established a timely position in a disruptive technology were those in which the firms' managers set up an autonomous organization charged with building a new and independent business around the disruptive technology." This autonomous organization will then be able to choose the customers it answers to, choose how much profit it needs to make, and how to run its business.
> I also don’t know who they get acquired by. I don’t see AWS making acquisitions like this. From what I’ve seen, it seems like they try to buy companies at lower valuations (than multiple billions).
No reason why this won't change. A market leader needs to consolidate their position year-after-year. GitHub was a great acquisition AWS missed. They shouldn't want to miss the next GitHub.
No reason why this won't change. A market leader needs to consolidate their position year-after-year. GitHub was a great acquisition AWS missed. They shouldn't want to miss the next GitHub.
Yeah, or Amazon just copies their business model and launches it as another service on AWS.
Copying just the business model would not break through network effects, the kind of which GitHub has. Also see: https://medium.com/s/story/jeff-bezos-jack-ma-and-the-quest-...
I dunno, probably mostly we didn't ask for it? :)
why wouldn't you? other guys raising hundreds of millions!
Have they been speaking with Bryan Cantrill? https://news.ycombinator.com/item?id=28460504
What about Render and Fly.io make you feel they are more capable?
We (Render) announced our $20 million Series A yesterday: https://render.com/blog/render-series-a.
Why not $150M? All these companies were founded ~4 years before Render and it takes time to build to the point where these huge valuations and funding amounts make sense (to the extent they do).
Why not $150M? All these companies were founded ~4 years before Render and it takes time to build to the point where these huge valuations and funding amounts make sense (to the extent they do).
You're the only service apart of AWS and DO I'm aware of where I can host WordPress and static sites using the same account and dashboard. It's not the sexiest tech stack for Startups, but a WP plugin for static site generation and docker deploys (pro plan) would be killer.
There are some neat static site generator plugins out there (simplystatic, wp2static) which can be used in localwp, an easy to use and popular local dev environment from wpengine.
People could start with a static site for free/cheap, deployed from their local env to Render, and then move to docker when their sites and dynamic needs grow. This could make it a lot easier for peeps building their audience with blogs and digital products before they get into SaaS.
There are some neat static site generator plugins out there (simplystatic, wp2static) which can be used in localwp, an easy to use and popular local dev environment from wpengine.
People could start with a static site for free/cheap, deployed from their local env to Render, and then move to docker when their sites and dynamic needs grow. This could make it a lot easier for peeps building their audience with blogs and digital products before they get into SaaS.
We're in the PaaS space and we've recently went through fundraising - a good number of investors are basically just waiting and seeing on other PaaS solutions to see which one makes it to the top and then throw as much money at them as they can.
Now that's a lot of money. It seems admirable to have "Support open-source projects" as their first item but I wonder what portion of that funding goes to open-source. Is it an euphemism for hiring open-source maintainers to work on integrating their projects to Next.js stack? I mean certainly Vercel aren't just donating the money away.
But I assume most of the money goes to hiring new folk. Dunno how much new engineers you can get out of it. Anyway, good for them.
But I assume most of the money goes to hiring new folk. Dunno how much new engineers you can get out of it. Anyway, good for them.
They have such a terrible landing page though.
Having heard of this first time I tried looking it up and all I see is this:
> Vercel combines the best developer experience with an obsessive focus on end-user performance. Our platform enables frontend teams to do their best work.
The heading above it is even more nonsensical. So many words which convey absolutely nothing to me.
Can anyone please tell me what does it do? Is it a cdn or some kind of hosting?
Having heard of this first time I tried looking it up and all I see is this:
> Vercel combines the best developer experience with an obsessive focus on end-user performance. Our platform enables frontend teams to do their best work.
The heading above it is even more nonsensical. So many words which convey absolutely nothing to me.
Can anyone please tell me what does it do? Is it a cdn or some kind of hosting?
It hosts your next.js website.
CDN (edge network as they call it) + host your serverless functions. All that automatically after you push your code to a remote git repos.
Landing page just crashed my 2019 MBP (not just Safari) - restart required!
To be fair they jump right to the nuance of why you'd choose them, assuming you know who they are. Coca-Cola's website doesn't tell you what coke is, it talks about experiences/moments..etc. I share your frustration to some extent but I understand their reasoning.
Coca-Cola, Nike ... are some magnitudes different in brand recognition. They can afford to do that. I find it quite frustating when I'm on some startups' websites and after 1-3 clicks around I still don't know what their products or services do, lost in marketing/tech jargons. After that I just quit. Come on people, use English!
"To be fair they jump right to the nuance of why you'd choose them, assuming you know who they are.
Coke is 1) a drink. and 2) 7 Billion people know what it is.
Vercel is 1) complicate and 2) nobody knows who they are.
It's such an embarrassing problem for them, I find it hard to fathom how they even have new users, much of their language is dense and ridiculous like this.
Coke is 1) a drink. and 2) 7 Billion people know what it is.
Vercel is 1) complicate and 2) nobody knows who they are.
It's such an embarrassing problem for them, I find it hard to fathom how they even have new users, much of their language is dense and ridiculous like this.
"but I understand their reasoning."
It is not 'reasoned' and they are definitely not intentional in their focus, they have just put some scruff on a page that's confusing.
Companies fail at these things all the time because often there are no checks and balances.
It is not 'reasoned' and they are definitely not intentional in their focus, they have just put some scruff on a page that's confusing.
Companies fail at these things all the time because often there are no checks and balances.
Yup. What sells isn't actually the product, it's what feelings the product invokes!
confusion, frustration, anxiety
Vercel is a frontend cloud platform. It works with any frontend framework (or just HTML) you prefer. React, Next.js, Svelte, Vue, Nuxt, etc.
https://vercel.com/docs
https://vercel.com/docs
That does not explain what it does.
This is the exact same issue that came up last time they raised money, #1 post: 'What is it?'.
From the doc page:
...
"Vercel is a platform for frontend frameworks and static sites, built to integrate with your headless content, commerce, or database.
We provide a frictionless developer experience to take care of the hard things: deploying instantly, scaling automatically, and serving personalized content around the globe.
We make it easy for frontend teams to develop, preview, and ship delightful user experiences, where performance is the default."
...
That still does not say 'what it does'.
Is this a hosting service? Some open source UI like React? Does it to back-end logic?
Saying "It'A a Front End Framework That's Really Cool And Solves All Your Problems" is not marketing.
This is a fairly giant marketing/communications fail.
This is the exact same issue that came up last time they raised money, #1 post: 'What is it?'.
From the doc page:
...
"Vercel is a platform for frontend frameworks and static sites, built to integrate with your headless content, commerce, or database.
We provide a frictionless developer experience to take care of the hard things: deploying instantly, scaling automatically, and serving personalized content around the globe.
We make it easy for frontend teams to develop, preview, and ship delightful user experiences, where performance is the default."
...
That still does not say 'what it does'.
Is this a hosting service? Some open source UI like React? Does it to back-end logic?
Saying "It'A a Front End Framework That's Really Cool And Solves All Your Problems" is not marketing.
This is a fairly giant marketing/communications fail.
Sorry, but the comment you’re replying to definitely does explain what it is. It obviously requires some domain knowledge but that’s fair to assume.
This is not about comments on HN, it's about communication on their site.
I have enough experience to be able to know what it is from a quick summary, but I still don't quite get it.
It's an epic communications failure.
Vercel marketing team has created a huge problem on the funnel whereby a lot of casual / semi-interested visitors are effectively bouncing without having ingested a nominal understanding of 'what it is'.
Technology is not quite like brand marketing where 'Jordan / Kapernick / Yeezy' do the selling, it's generally something we need to understand in order for it to make sense. The 'aha' moment can only come after that.
Vercel does face the additional challenge that 'Next.JS' is not a widely known framework, and they have to additionally explain that, but it's not an insurmountable problem.
This is not uncommon in SaaS actually, but it is kind of ridiculous.
As a rule of thumb: if people feel the need to visit your Wikipedia page to understand 'what you do' - then the marketing department is acting against the best interest of the company, and is literally a source of confusion instead of clarity.
I have enough experience to be able to know what it is from a quick summary, but I still don't quite get it.
It's an epic communications failure.
Vercel marketing team has created a huge problem on the funnel whereby a lot of casual / semi-interested visitors are effectively bouncing without having ingested a nominal understanding of 'what it is'.
Technology is not quite like brand marketing where 'Jordan / Kapernick / Yeezy' do the selling, it's generally something we need to understand in order for it to make sense. The 'aha' moment can only come after that.
Vercel does face the additional challenge that 'Next.JS' is not a widely known framework, and they have to additionally explain that, but it's not an insurmountable problem.
This is not uncommon in SaaS actually, but it is kind of ridiculous.
As a rule of thumb: if people feel the need to visit your Wikipedia page to understand 'what you do' - then the marketing department is acting against the best interest of the company, and is literally a source of confusion instead of clarity.
Perhaps Vercel is ok having visitors bounce who don't understand what they do with the marketing copy as is. Maybe they're not trying to be everything for everyone?
No, there's no such thing. It's just bad marketing. Everyone wants more customers.
It probably means the vector of spread is word of mouth and other things.
SaaS companies are notorious for this.
It probably means the vector of spread is word of mouth and other things.
SaaS companies are notorious for this.
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Vercel might end up becoming the open source gig economy, the Uber of open source. With that investors money coming in, there has to be a winner takes it all market strategy that they are after.
I suspect that VC money will be used to acquire and influence key open source contributors, and commercialize their work after giving them fixed salaries to work on their projects.
I'm hoping to see them hiring more people to work on open source as oppose as acquiring the already well sponsored ones.
Anyway, congrats to the team and their success thus far! and I hope they keep the healthy spirit of open source.
I suspect that VC money will be used to acquire and influence key open source contributors, and commercialize their work after giving them fixed salaries to work on their projects.
I'm hoping to see them hiring more people to work on open source as oppose as acquiring the already well sponsored ones.
Anyway, congrats to the team and their success thus far! and I hope they keep the healthy spirit of open source.
Take careful notice of the restriction hidden behind an "i" icon on https://vercel.com/pricing that you can have max 10 users on the Pro plan before your frontend team has to have a sheepish conversation about how much the Enterprise tier is.
oof, that's ugly to hide like that.
Indeed.
Hey enterprise sales folks. If you want me to use your enterprise services, post your prices.
We're all adults here. If I can't afford your offering and you still want my business, we can work out a discount.
If you're going to make me hop through hoops to find or determine pricing, you go directly to the bottom of my comparison list, and possibly leave it altogether. If you're truly the only option in market you _might_ make it if I can't afford to build your service.
Stop foggy pricing. We've known since at least 2013 this is a bad economic practice.
[0] Miravete, E.J., 2013. Competition and the use of foggy pricing. American Economic Journal: Microeconomics, 5(1), pp.194-216.
Hey enterprise sales folks. If you want me to use your enterprise services, post your prices.
We're all adults here. If I can't afford your offering and you still want my business, we can work out a discount.
If you're going to make me hop through hoops to find or determine pricing, you go directly to the bottom of my comparison list, and possibly leave it altogether. If you're truly the only option in market you _might_ make it if I can't afford to build your service.
Stop foggy pricing. We've known since at least 2013 this is a bad economic practice.
[0] Miravete, E.J., 2013. Competition and the use of foggy pricing. American Economic Journal: Microeconomics, 5(1), pp.194-216.
That's usually not really practical. Even businesses that have transparent pricing by usage still have enterprise sales teams and their customers always want to negotiate. Usage patterns are all unique. Sometimes you can offer non-monetary value like case studies, beta testing, or some sort of in-kind service. You can trade on commitment times versus price per transaction or price per user or whatever. There's no easy way around it.
A top comment from reddit's sysadmin forum that is apropos:
> If SpaceX can list pricing for launching a payload into space on their website, you can do the same for your [...] software.
If I want to use your software as-is without access to your developers to prioritize features, there isn't a need for "enterprise" approaches.
> If SpaceX can list pricing for launching a payload into space on their website, you can do the same for your [...] software.
If I want to use your software as-is without access to your developers to prioritize features, there isn't a need for "enterprise" approaches.
Like I said, even places that list prices want you to negotiate. The list prices above a certain threshold are typically higher than most enterprises are actually paying because the get discounts in exchange for commitments or other considerations. True of all the public cloud providers.
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that's not how enterprise sales work
if you want them to have your business, then you have to post your budget
it's a great way to filter out orgs that have no money to begin with
and big businesses might be paranoid about their competitors knowing their costs
if you want them to have your business, then you have to post your budget
it's a great way to filter out orgs that have no money to begin with
and big businesses might be paranoid about their competitors knowing their costs
> if you want their business, then you have to post your budget
Getting someone's business means they are paying you.
Getting someone's business means they are paying you.
Note: parent comment to my comment stealth edited, in case anyone else noted the difference in quote and comment.
Point understood regardless. Basically enterprise sales are unwilling to sell a product, would prefer to sell an associated labor cost.
My prioritization remains though. If you obfuscate price, I want as little to do with your product as possible.
Point understood regardless. Basically enterprise sales are unwilling to sell a product, would prefer to sell an associated labor cost.
My prioritization remains though. If you obfuscate price, I want as little to do with your product as possible.
it might look like a terrible practice, but in reality it actually is a funnel
if you don't have serious money lined up (typically 5-6 numbers minimum) sales won't bother with you anyways
sometimes pricing can't be easily calculated and there might be many factors and even some custom agreements in place (like SLAs), which do add up the cost substantially
in my own projects, however i always list minimum commitment for every tier
but only because i don't have enterprise sales team
if you don't have serious money lined up (typically 5-6 numbers minimum) sales won't bother with you anyways
sometimes pricing can't be easily calculated and there might be many factors and even some custom agreements in place (like SLAs), which do add up the cost substantially
in my own projects, however i always list minimum commitment for every tier
but only because i don't have enterprise sales team
I don't care about having enterprise sales as much as about the "hide stuff behind bubbles" design, but it's still also interesting that here we talk a scenario where you easily could reach the "call enterprise sales" point with <$1000 monthly spend, which feels kind of absurd. One can hope the answer is an uncomplicated "ok, we'll unlock more contributors for another $20 per person", because anything else would be a waste of sales-people-time, but still...
also you can't use the free tier for any commercial activities
NOt sure I understand how anyone could have a problem with that.
I actually once switched to netlify cause their free tier allows commercial sites, the websites i made in this situation are pretty local and small and I doubt vercel would even notice but it was easier to just switch to netlify than research all the reasons why those websites can be considered commercial.
Ten front-end engineers will probably cover 95% of businesses out there, and at that point it's not a difficult conversation to have any more than asking for PyCharm licenses.
They could totally replace the icon with just a (Max 10).
They could totally replace the icon with just a (Max 10).
I have no quarms with tiers of pricing or restrictions, if that information is presented clearly. The current UI feels like a sneaky dark pattern.
For me as a casual observer of the space, the 2.5bn valuation seems mind-boggling. How?
I am most intrigued by Calendly valuation and their game plan.
Netlify is also at 2bn [1]
I think it makes complete sense. There's a lot of room to grow in this space. There's a lot of money going into tech salaries, and even then it's hard to find people. Anything that saves developer time and saves companies from having teams to build and manage cloud infrastructure is honestly very promising.
[1] https://pitchbook.com/newsletter/netlify-captures-2b-valuati...
I think it makes complete sense. There's a lot of room to grow in this space. There's a lot of money going into tech salaries, and even then it's hard to find people. Anything that saves developer time and saves companies from having teams to build and manage cloud infrastructure is honestly very promising.
[1] https://pitchbook.com/newsletter/netlify-captures-2b-valuati...
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Don't know specific growth numbers, but vercel is winning a lot of mindshare in frontend land
see nextjs repo: https://github.com/vercel/next.js/
and for frontend infra, vercel is a pretty great developer experience. Just hookup your github repo and on commit its deployed, behind CDN, preview branch URLs, etc
see nextjs repo: https://github.com/vercel/next.js/
and for frontend infra, vercel is a pretty great developer experience. Just hookup your github repo and on commit its deployed, behind CDN, preview branch URLs, etc
IMO this is .com bubble v2 in the making
Edit: grammar
Edit: grammar
Why do you say that?
Pets.com, the poster child of dotcom era excess, IPO'd at a $290 million valuation, and never had a market cap that exceeded $1 billion.
Today there three or four companies in the EV space alone that are either outright universally known frauds (Nikola) or where senior management has told investors that they will run out of money before ever making a product. Yet they all have billion dollar+ market caps (Workhorse, Lordstown, etc...)
Rivian, Tesla, and Lucid do have products but are worth $1.3 trillion together. What do you call that if not insanity?
Today there three or four companies in the EV space alone that are either outright universally known frauds (Nikola) or where senior management has told investors that they will run out of money before ever making a product. Yet they all have billion dollar+ market caps (Workhorse, Lordstown, etc...)
Rivian, Tesla, and Lucid do have products but are worth $1.3 trillion together. What do you call that if not insanity?
Fixation on vehicle companies isn't really relevant here.
It's totally relevant. Valuation for pretty much everything speculative went up many times over just the past two years.
Startup valuation is no different. Very unlikely to be a new normal, but a brief period of hysteria as has happened many times in history.
Not speaking to the Vercel case by any means... Not aware of their prospects or otherwise that justifies this value.
We'll pretty soon see those who have been swimming naked get crushed when the tide goes out. Likely happening around now/start of next year with Fed shift to tightening, and effect of 2020/21 transfer payments waning.
Vast majority of tech valued at 100x sales have no justification as an investment. It's dotcom 2.0, but with more legitimate businesses that are simply far overvalued.
EV is just the most obvious and visible manifestation of this. Rivian at 150B value with 0 sales and many competitors. You have to be pretty delusional to invest in things like this and expect not to lose big. And best case you may 2 or 3x many years from now? What kind of risk/reward tradeoff is that?
Startup valuation is no different. Very unlikely to be a new normal, but a brief period of hysteria as has happened many times in history.
Not speaking to the Vercel case by any means... Not aware of their prospects or otherwise that justifies this value.
We'll pretty soon see those who have been swimming naked get crushed when the tide goes out. Likely happening around now/start of next year with Fed shift to tightening, and effect of 2020/21 transfer payments waning.
Vast majority of tech valued at 100x sales have no justification as an investment. It's dotcom 2.0, but with more legitimate businesses that are simply far overvalued.
EV is just the most obvious and visible manifestation of this. Rivian at 150B value with 0 sales and many competitors. You have to be pretty delusional to invest in things like this and expect not to lose big. And best case you may 2 or 3x many years from now? What kind of risk/reward tradeoff is that?
What do public EV markets have to do with private PaaS VC investments?
You would have a case if Vercel has no revenue, or no chance of becoming profitable. I don't know their numbers, and I'm sure the multiple is high, but relating this to EVs is a non-sequitur.
You would have a case if Vercel has no revenue, or no chance of becoming profitable. I don't know their numbers, and I'm sure the multiple is high, but relating this to EVs is a non-sequitur.
EVs are also venture funded startups, and the excess is more obvious there than in an obscure PaaS company. But still, two $100 million rounds within months of each other, as Vercel has done, is pretty outside of the norm.
I wonder how much of this round is secondary purchases of common stock from the founders. I would guess it's a pretty significant amount.
Employee's get in on secondaries also.
They do! My comment wasn't meant to be cynical. I'm just assuming the majority of a secondary would be to the founders.
Isn't already super trivial to get a nodejs app and running in not time on AWS or GCP? Why would I pay for this?
Sounds like you never used Vercel now AWS. I wouldn’t call AWS “super trivial” nor is Vercel equivalent.
"Isn't already super trivial to get a nodejs app and running" No. Hosting a node server on a bare metal vps is not "trivial". You need to deal with routing, auth, etc and that's even before you get a user on a different continent.
I think its a worthy exercise for new programmers but IMO there is 0 reason to waste the time and mental overhead. Im sure we all have about 6 projects languishing because we dont want to ssh into an instance and remember what the hell is going on in there. Maybe just me.
I think its a worthy exercise for new programmers but IMO there is 0 reason to waste the time and mental overhead. Im sure we all have about 6 projects languishing because we dont want to ssh into an instance and remember what the hell is going on in there. Maybe just me.
I'm happy for the folks at vercel, Next.js is really an amazing framework. Wish you all the best.
Can we expect IPO next year :p ?
Can’t believe
Money is free right now, get while the getting is good.
In that case I'll take 12 money please.
It’s free. Why only 12?
Can't get greedy now, I don't want to be responsible for the next wave of hyper-inflation.
Go on, have some more. It's only money :)
We detached this subthread from https://news.ycombinator.com/item?id=29317827.
wow....
No wonder the US dollar is about to hyperinflate. They're printing it like crazy and handing it out to speculative projects whose clients' revenues are also all denominated in worthless USD.
USD has become a liability for the world. The only reason China doesn't dump all their USD reserves is because they know the global economy will pop instantly because there's no real value behind it to support such big, unfairly distributed numbers in the pockets of so many unproductive people. The world is simply afraid of what comes next but they will have to face it regardless because time is running out and citizens of the world are tired of propping up this fiat pyramid scheme.
USD has become a liability for the world. The only reason China doesn't dump all their USD reserves is because they know the global economy will pop instantly because there's no real value behind it to support such big, unfairly distributed numbers in the pockets of so many unproductive people. The world is simply afraid of what comes next but they will have to face it regardless because time is running out and citizens of the world are tired of propping up this fiat pyramid scheme.
If the USD is hyperinflating then pretty much every other currency is also hyperinflating too. Check the other major currencies like Euro, GBP and JPY. The US Dollar is actually strengthening against these currencies and these countries don't have enourmous USD reserves.
All reserve banks print to maintain a stable exchange rate so they will naturally all hyperinflate together. EU governments are dumping a lot of euros on grants for useless speculative tech projects which have no chance of delivering anything of value. It's infuriating to be part of this system. Then people wonder why many don't trust the media or vaccines...
That said, I don't understand why the fiat exchange rates are stable (USD even coming out ahead as you say) but inflation is not even. In Europe, I'm not seeing any noticeable inflation in consumer goods but apparently consumer goods inflation is very noticeable in the US... But you'd think this uneven inflation should affect exchange rates. Why can't Americans get the same price for the same product as Europeans can? That should be a major arbitrage opportunity.
IMO, there is some serious manipulation going on here to prop up the USD and this may be what is causing the inflation and shortages in spite of stable exchange rates.
That said, I don't understand why the fiat exchange rates are stable (USD even coming out ahead as you say) but inflation is not even. In Europe, I'm not seeing any noticeable inflation in consumer goods but apparently consumer goods inflation is very noticeable in the US... But you'd think this uneven inflation should affect exchange rates. Why can't Americans get the same price for the same product as Europeans can? That should be a major arbitrage opportunity.
IMO, there is some serious manipulation going on here to prop up the USD and this may be what is causing the inflation and shortages in spite of stable exchange rates.
What, EU has big inflation problem as well. The real economy problems might start Feb 2022 from China according to Cathie Wood. I think investor know and rush to IPOs till the sun is shining.
Also agree that EU does distribution wrong way. It would be better if they simply gave more cash to extend reach of already succesful companies, maybe. Or just sane law to fund startups via shares EU wide.
Also agree that EU does distribution wrong way. It would be better if they simply gave more cash to extend reach of already succesful companies, maybe. Or just sane law to fund startups via shares EU wide.
What are the reasons for two rounds so close to each other?