DigitalOcean's S-1, And The Compound Interest Of Developer Products
DigitalOcean recently released their S-1, and it makes for super interesting reading. Specially if you care a little bit too much about Developer Ecosystems and developer tools (guilty as charged).
With 570,000 customers in 185 countries, DigitalOcean's ARR is $357million as of December 2020. Pretty impressive. They closed 2019 at $254.8million. 65% of their revenue is classed as "International" as of December 2020 - pretty impressive for a business HQ'd in the United States.
Yet, when you look at the breakdown of their expenses, the fact that two thirds of their revenue is generated outside of their "home" market makes perfect sense. From their S-1:
"We have a highly efficient self-service customer acquisition model, which we have recently complemented with a targeted inside sales force. Our sales and marketing expense as a percentage of revenue was approximately 14%, 12% and 11% in 2018, 2019 and 2020, respectively."
You read that right. Last year sales and marketing expenses were just 11% of overall revenue. Compared to most SaaS businesses at a similar run rate, that's tiny. Shopify, for example (according to their IPO filing), budgeted 43% of their revenue for marketing in 2014.
That's the power of dancing with developers.
DigitalOcean count 5+ million unique community and website visitors per month. "Our community is bigger than us" is a core value of DigitalOcean. And - quite literally - how they do business.