May 10, 2023
Aaron Ginn is the co-founder of Hydra Host, The Foundation for American Innovation, and Fabius Labs. Hydra Host specializes in providing data centers with unparalleled provision, management, and security solutions, allowing them to focus on their core competency- hardware and infrastructure. The Foundation for American Innovation is a company of innovators and policy entrepreneurs working to advance a more perfect union between technology and the American republic. Fabius Labs is a full-service product agency that works with founders and entrepreneurs to bring their ideas to life using technology.
Julian:Hey everyone. Thank you so much for joining the Behind Company Lines podcast.I'm here today with Aaron Gin, CEO and co-founder of Hydra Host. Hydra Hostspecializes in providing data centers with the unparalleled provisioning,management, and security solutions, allowing them to focus on their corecompetency, hardware and infrastructure.
Aaron, I'm soexcited to chat with you. Not only, discussing all what you've done in yourcareer in terms of a growth. And thinking about how you've been able to not only,be a part of companies, scaling companies, but also being kind of a, within thetech ecosystem and also what you're doing at Hydra Host, which is, I think,extremely valuable as, as data becomes.
So much moreimportant and even that much more challenging to make sure that we're storingit in the right locations, that those centers are managing the informationwell. It's secure and all that is incorporated with, functioning and makinggood product that I think the end user we don't appreciate as much.
So before we getinto all that with Hydra host, what were you doing before you started thecompany?
Aaron:yeah, yeah. Thanks for thanks for having me. So the what I was doing for Hydrois I've, this is my fourth company with my co-founder. So I've done fourcompanies with Governor Garrett. And this is my second company with my otherco-founder, rial.
So we've been doingvarious types of building companies, projects, everything from creating like a,a think tank actually in dc It's the most prominent think tank for our views ontechnology in DC now to building services business. I think that there's astrong bias towards, like the only type of company you can build is ones thattake investor money and that is not the case.
And I can tell youfrom doing three that are not investor based. Before that I'm must known forrunning product and technology at a company called Everlane, which is a billiondollar fashion company. And then Garrett started a company that went throughRice and then he sold that I was in the sort of SAS tele space.
And then Ariel wasactually he's the youngest of all us. He actually is a, was going to Universityof Miami for finance and then learned how to code and then dropped outtacollege. Yeah. So that's when he started working with us. So, so yeah, I'vebeen, I've been kind of doing startups for over a decade.
First was likehealthcare and then into like e-com, social media. And then had some touchinginto to politics and then came back and then, met up with Garrett and then westarted doing company since then.
Julian:Yeah. And what in particular was the common thread between those companies?Were you looking to solve a particular problem?
Were you. Interestin a certain experience that people were having and trying to solve it indifferent, industries. What in particular do you think was the common threadfor why why you chose to work on those projects? Being that they weredifferent, healthcare to fashion mm-hmm.
To all thesedifferent things.
Aaron:Yeah. Well, well, I think that there's a little bit of over complexity whenfounders are thinking about what they wanna do and why they wanna do it. Yeah.I think most of the stuff you hear from sexual entrepreneurs, there's actuallylike hubris. It's something that they sort of, Post ho ergo proctor hawk afterthe fact analysis of like, oh, I'm gonna justify something cuz I am successful.
When there, there'skind of a bit of more of a wandering that happens, I think for successfulentrepreneurs that they, that they find something that's interesting to themand they just kinda pursue it and then they kinda see what happens. So I treatit more as like an expression of like art or discovery.
That I amshowcasing something about my personality or my interests, and then we kind ofbuild the team around that, and then we kind of pursue it. So, the, thedecisions that we made between Garrett and I I am lucky to have done fourcompanies Yeah. With the same co-founder. And, and I think that that's, Rareand this world.
But having aco-founder has led, as another investor will tell you, is like, it's like asecond marriage, right? Yeah. And, and when you find somebody you can work withthat is flexible and just knows what you're good at, what they're good at, whatyou're bad at, et cetera, and you just kind of do stuff together cuz of the,and they.
Built in trust.It's something that's kind of magical and you can't really replace it. So we'vedone stuff that Garrett was very passionate about. I've done stuff that I'vebeen very passionate about. But one of the things that I think is reallycritical for successful companies is that founder relationship.
Yeah. Cause it doesdefine the culture, the success of the company, how you resolve problems, whatyou wanna work on. And, and, and we've just always been consistent on like, weare, we are good at certain things about those things as founders. Yeah. But weboth like enjoy working together and we both use our capabilities and strengthsto build different companies and products out of that.
And so we kind oftake in more discovery approach like that. That as we build things, otherthings come up and other demands from customers, other needs from customers.And then from there we then built the company. So the active building companyis much more fun for me than the actual subject area.
And I think thatlike the founders can get really obsessed around like the founding idea and themoment when in reality that's gonna change. And cuz if you're like at any realsuccessful company that has like, kind of defined a segment, what they startedout with was very different than what they ended up becoming.
Julian:Yeah. Yeah, it's the adaptation, the evolution. And thinking about obviouslyjust ta tapping into your experience, thinking about how you've seen that atdifferent types of companies. Is there something that, you know, and you'veworked at a lot of growth, which I obviously I wanna touch on in terms of, whatthat involvement means and what growth actually means at different companiesand.
Where's the focusand things like that, but how does, kind of the, the inner workings ofcompanies kind of change as the product changes? And what are some ways thatyou've seen companies, be really successful at, defining their product and,scaling their customer base?
And what have,you've seen at companies that maybe have missed a Mark A. Little bit, or could,could have, could have hit it a little bit more. Anything that in particularthat stood out to you?
Aaron:Yeah. Like I'm, I'm definitely strongest at like the zero to one step. Sodeveloping a team, creating the vision?
Yeah. Pushing like,like let's say an individual scrum team, so that typically I'm maximum Scrumteam typically is. 10 people, right? 10, 12 people. So like, that's like whereI'm really strong at is organizing that idea, creating the momentum, findingthe initial team, making them excited. Garrett is much stronger at the the nextstep, which is like where you're starting as they enter in to like different levelsof execs and management.
I would say that'sprobably the hardest part of any company is moving from where you're a smallagile team. We can talk to everyone every day. Everyone knows what they'reworking on to the next phase. It's really tough, like 20 ish when we startbuilding out management and start building out like directors and other execs.
Right, right.That's a very hard thing to move from. And, and so like I, I'm just much moreof an agile, like less process. And building out a company is like thedifference between like having a project, which is where I'm kind of strongerin like the initial startup phase, initial idea to a company is actually areally different, it's kinda the difference between maybe like a smallbusiness, an expression of a project to actually building a company.
And tho and thoseare not the same thing because you eventually you have to move to the zonewhere you're no longer in ic. Right, and that starts really fast. It's much,starts much faster than you think as a startup founder. Like really like c plusto like a is like when you start getting to that moment in that raise is whenyou actually move away from being an ic.
And if you can'tmove away from being an ic, you actually are not gonna be a successful man asuccessful company. You're not gonna be a successful startup. Everybody knowsabout an exec, a startup founder. Who is really good from that one to 12 range,and then they start scaling the company into the hundreds and they have thatfounder that never was able to scale into management.
AK stopped doing ICwork and they just kind of sit in the corner and do stuff. Right? But they havea title, but they don't really have management skills. They don't really, andthey're just kind of there. Right. And, and, and I think that, that as like afounding team, you always be cognizant of like the flexibility of like, okay,I'm not gonna be good at that.
And I need somebodyelse to do this for me. Like one helpful thing is like you can create like alist of things that. In order of things that you don't want to do, and then youbasically make that then the hiring sheet. Right. Of like, I'm not good atthis, I'm not good at this, I'm not good at this.
Right. And, andthat's a, it's a way of, you can sort of move yourself into actual managementand actual, like building a company. Yeah. But if you still remain in the ICrole. Yeah. It's, it's hard to say is that actually a company or like a project?Right? Right. Cuz a company is scale, it's multiple operations, multiple, like,it's basically seizing the moments actually become a operation that can be ahundred, a hundred person operation, a couple hundred thousand, something likethat.
And you can't dothat if you're remaining in the IC space. Yeah. You, you, your, your rolechanges. And, and, and so you gotta have other co-founders and other managementthat can come in and take those parts that you're not good at and scale withthe organization. But, but it's hard, it's hard to like, walk away from beingin IC when you, like, I find a ton of joy being in an ic.
But you know, youhave to kind of seize the moment and actually scale with what the teamneeds.
Julian:Yeah. Yeah. Thinking about, your contribution, especially as an early founderand thinking about the contributions, a lot of early founders, finding productmarket fit and, and then, identifying your icp, your ideal customer profile.
Describe theprocess and how you think about it being that you've, I, I hear this wordgrowth a lot and from what I understand and obviously. So, correct me if I'mwrong, it's, it's different ways to, either grow one part of the business,whether it's a customer set, whether it's your brand, whether it's yourmarketing engine.
And it's justfinding new ways to not only get people to understand what you do and who youare, but also to to purchase. Right. To get them to the point of purchase.Mm-hmm. How do you go about that process of. Finding the product market fit,what has been successful in mm-hmm. Your approach and what are the differentchannels that you know, you are, you use now that maybe weren't available or,you, you weren't using earlier on.
Aaron:Mm-hmm. Yeah. I, I, product market fits a bit of a an elusory like kind ofmoment because it is always like a, like a scaled, I, I think it more as likea, maybe like a, like a, More of a threshold function Yeah. Rather than anabsolute sort of determin terministic calculation. Yeah. Because, becausepeople who have it, they typically do notice it as an after the fact.
But how I got thereis a little bit opaque, right? Yeah. Yeah. And, and so you, you get like,basically, like I firmly believe in like lean methodology. It works. Thequestion is, do you have enough time to do it? Right. And, and you, the goal isto make as many bets as possible. So eventually you can hit a home run.
So the goal is tohave as many swings on to the pitcher so that you can basically hit it outtathe park. Right. Right. And so people underestimate, like just continuing thebaseball analogy, like, a baseball player that has, a batting average of over300 makes, 15 million a year.
Cause one of thehighest play athletes. In the world, and that means he hits the ball 30% of thetime. Yeah. Right. And, and that, and that's like, so it doesn't even countlike home runs and, singles and outs. The Yeah. Baseball's a highlymathematical sport. Right. So, so you, you kind of have to think about it thatway, which is, which can be a slog, is like, I, I am, I, I don't really believethis.
I, so I, I don'treally read. Business books from a perspective of like, I'm gonna learnsomething about this. I read business books as if it's narrative as I'm readingHarry Potter. Right? Yeah. Because the lessons that actually they, they, theylearned that they're trying to pass on to other entrepreneurs.
It's a bit likecontrite because like, I'm not Peter Thiel, I'm not Mark Cuban, I'm not David sI'm not Shama like, like I'm not Jason. Right. And, and we all have differentbackgrounds and strengths and extra capabilities in front of us. So I readbusiness books as, as like, kind of like, I'm interested in people Yeah.
And I'm, it's like,like I'm reading a biography of Churchill. Yeah. The same as like readingbiography about, some other famous investor or, or ceo. And, and so like, I'mtrying to gather like principles and like rules of life and values. But likethe, the, a lot of these times, like these people like, find.
Product market fit.It's, it is something they kind of just found. It wasn't like, it was likefinding goals, it's finding treasure. So you wanna just increase the number ofrepetitions so you actually can achieve that and like create basically thenumber of times you're at bat and try to basically strike out as fast aspossible.
Yeah. Cause youstrike out, you learn something, you know something about the pitcher, whatit's trying to do, the game that the other team is playing. And, and, neverunderestimate grit. Because grid is like real and you just wanna like bebetting on the right things and like move fast. So I, I, I try to like biastowards more like successful pattern matching rather than like, trying tooveranalyze something cuz you're not really at the stage when you're like, atour stage of a company, like analysis provides insight, but ultimately at theend of the day, like it's a gut decision on what you wanna do as you reach likeseries B and C.
The goal is tocreate a much more systemized approach of how you make decisions, because thefounder can't make a decision everywhere. So you wanna create, metrics andrules and frameworks because you're hiring people who are not founders. You'rehiring people who don't have instinct and gut as strong as the founding team.
So you have tocreate other systems in there. And this first part of the phase of the company,it's basically, the successful company is determined on the gut instinct of thefounder. And how fast they wanna move on that instinct, like that's actuallygonna be the determination. All this other stuff that comes into play, likeexperimentation, data, are just really artifacts of justifying.
Yeah. What is yourdecision about how to make a bat, right? Because there's not enough data totell you what to do. Data doesn't actually tell you what to do. Analysis inhuman judgment is what actually makes a decision, right? Yeah. Numbers arenumbers. They, they have numbers have no agency. Like they, they, they're just,they're 4, 5 50, 5 10.
Yeah. Like, Likethat doesn't tell you what to do. Right. It tells you what it is. Right? And,and so don't underestimate the skill and the judgment of the founder to like,hear what customers are saying. Make a bet. Try the bet, swing struck out.Maybe hit a single right from that single, maybe hit a double, right?
Mm-hmm. But butmost of the successful stories I, I have, I have of friends that have, foundsomething, they feel very blessed because it is kind of like finding treasure.Mm-hmm. And, and so, they're, they're. The orientation of how to be successful.How you can find treasure is just creating as much data input so you can informyour judgment.
But then also likecreating multiple swings to where Yeah, do lightweight tests. Don't be afraidof it being like embarrassing. Yeah. Like, because you should have enough valueto the customer that even if it is embarrassing, they don't really care. Causeif one is like you're solving a problem big enough.
So where it's notfancy, right? Yeah. And, and if it feels more comfortable, push it evenfurther. Just make it like literally sell features via email. Just like email acustomer and be like, I don't, this thing doesn't exist yet, but I could buildit. What do you think about it? Right? Yeah. And, and then from there you canactually start building roadmaps.
So I alwaysencourage like super early feedback be fast, be slightly embarrassing becauseyou should solve a problem so severe enough that they don't really care causethey want the thing that bad.
Julian:Yeah. And I think people often underestimate how much, people want to beinvolved in the, the development of a project or problem.
They enjoy, helpingsomeone get to that next step. So it's like, like, like you said, it's like bea little embarrassing in other ways. Just like, extract your ego from theproject. Think about what can improve the project versus, how that projectreflects on yourself as a founder.
And, and changingthat mentality is definitely important. Moving into Hydra hosts, what inparticular inspired you to go in this direction? Being that, the previouscompanies don't really have a, it's not like you were working with data centerspreviously for sure.
But what inparticular was exciting about this problem that you're solving? And, and whatdo you, what do you believe is the potential to, after solving thisproblem?
Aaron:Yeah, like, it, it, it, so the, the initial Genesis was that having worked onvery expensive infrastructure, Yeah, cuz my focus on technology has always beenapplication layers.
Traveling is, is acommodity, but you actually have no choice. Right? So that's like, kind of likewhat happened with the ideas, like, it's the largest portion of spend at atechnology company's infrastructure. And as like an individual independent ofpeople it is the most highly business critical, and the innovation there hasbeen really weak.
Yeah. So originallywe started with like, how do we make things cross cloud? And then we found thatlike, actually that's not gonna be our views. Like that's not gonna not be thefuture. The future's gonna be hybrid mainly because cloud itself was builtunder a bunch of assumptions that are actually ended up not being true.
They were true. Andit came about, which was like managing data centers were hard and buying metalwas expensive and like networking was difficult and, and it was hard to runapplications. Now there's like, Thousands of open source projects, gettingmetals easy as I ever before. There are more data centers ever before.
Right. So the ideaof like a mega data center right, is becoming less and less relevant. Right.But what's becoming more relevant is edge. Yeah. More relevant is bespoke metallike GPUs, like how like hyper performs computing the video cards. And also youhave the other thing regarding like the politics of the, the nature of how peoplewant to live and work.
Yeah. That hasradically changed under the position of Amazon or aws. AWS was created anenvironment. Where essentially America ran the internet, right? Yeah. The, thedefinition of what is the internet was what? America, and that was the onlydefinition that existed. Now you have gdpr, you have different states atdifferent privacy laws.
You have, you havenations that are nations that are excluding access to different applicationslike China. With US companies, you would have they probab had probability quitehigh that TikTok is gonna be banned. Yeah. So now technology is not just this,Hey, it's fun. Look at all this stuff you can buy and like read weird blogs.
It's actually now anational security issue, right? Yeah. And so in that environment, the, the, youcan say onshoring, the nationalization of infrastructure is very anti cloudand, and cloud itself, which is quite valuable for certain things, is not theanswer to all things. And in an environment where like workloads being pushedout further and further, and that's only increasing as cell phones and TVs andhome internet becomes stronger and stronger.
The idea ofcentralizing compute in like five locations in the US makes less and less sensebecause you cannot get past that. Fiber is a speed of light, like near speed oflight, but like essentially speed of light. So like you can't get faster thanthat. So literally it's as fast as possible and the demands are onlyincreasing, which means logically.
That you have tomove, right? Yeah. You have to move to a different geo, right? You have to moveto where there's data centers and east side of there is by the way, east sideof, LA west side of la, north side, south, right? All over the place. Right.Not just to serve, big Netflix or something like that, but to serve the localcompany that's doing some well workload, like things are becoming more and morewireless, right?
Yeah. Which meansit's streams. Which means that compute has to move closer to the customer, cuzit, it's too slow to do live streaming, to throw it all the way to SanFrancisco if you're doing live streaming from, la, right? Yeah. Like these areall things that by the nature itself, Public cloud is not optimized for, and,and it doesn't know how to really solve that problem.
And if it solves aproblem, it's super expensive. So small regionalized data centers that arelike, you could say mini data centers, mini data center movement are becomingmore and more popular because like these workloads are highly specific to tothe regionality that that's needed.
So whether that'sfor like. Performance reasons, security reasons to like, like politicalconcerns, whatever, like the, there's a huge unlocked potential that existswithin the 2000, the 3000 data centers all across America. That, are basicallyputting a lot of their, their work into public cloud or doing Windows as aservice to like enterprise companies that if you built out a bespoke, sort ofbasically like Airbnb style network of like, A data center that's attached to anuclear power plant.
Right. That'sbasically free energy, right? Yeah. And there is one, there's actually a couplein the world and nobody really knows they exist, but if you as a company, let'ssay REI or like, some other, green company, green piece or whatever, likegiving access to that to where they can run on that if they choose.
And that's theirpreference right now. They can't do that like they have to. Yeah. They have tospend months to try to go find these places and then set it up and then doprovisioning and they gotta do all this networking stuff. So what we do is workan easy button. We basically provide immediate access to bespoke data centersif you're doing ML workloads and AI workloads.
So where you can goto these places that have specialized characteristics to where the homogenouspublic cloud is actually not really useful for, and, and the pricing differencein the c in the scenario, right? They could, this could be as big as like 50 to60% cheaper in a more performant. And, and increasing performance, likedoubling the tripling in terms of performance.
But the reason whyyou can't get access to it, it's sort of like real estate that's like lockedaway. They didn't know existed. And so that's what we're trying to solve for isthat a company that is looking for access to a hybrid environment, data centerscan't do everything for you. And we're, we're not saying that, but you know, ifyou're running, really complex workloads at the edge, The cloud makes almost nosense to do that in.
Yeah. And, andrather the hybrid model, which we believe should be the future, which is youuse cloud to do certain things and you do data centers, certain things. Yeah.Cause it's more cost effective, it's cheaper, it's more secure. You knowexactly where it is. You control your own cage, you control your own networkaccess.
Actually makes alot of sense. And, and this is why every Fortune 100 company is hybrid cloud.They're not completely public cloud, they're hybrid because it doesn't makesense to give everything to public cloud. Otherwise you like bankrupt yourcompany or you like have to fire people. A great, a great post who should referto is a DHA Trace who started through SHIP signals he wrote over the last threemonths about his move from public cloud to data center.
Yeah. And he, he's,he's written several. He's, DHH is very opinionated by lots of things. Yeah.And, and he's, he's very, he's, he's announcing like managing your own metal ischeaper and faster than ever before. And by doing that, he saved severalpeople's jobs, like who's not to let go? Wow. So he took a 4 million, I thinkit was like Yeah.
$4 million bill.Yeah. Down to less than a million year. Right. That's huge for a company. Likethat's huge. And, and, and so I think that there is a, there is a sort of likezombie like behavior with public cloud that is more of a zero interest rate orlow interest rate phenomenon. But when you have interest rates at 5%, venturecapital is much more hard to get by.
You have to beperform at a higher degree of paying, paying out. Yeah. This is why you seethis shift to like cheaper infrastructure. Cause that is the, basically themost commoditized part of your business. Yeah. It's like it's electricity. Andwhy not pay for something that is cheaper, better, faster, more designed foryou?
Yeah. If you knowexactly what your workloads are gonna be.
Julian:Yeah. And tell us a little bit about the traction. How many data centers areyou working with? How many clients have you been able to, bring onto a privatecloud? Where's the company at now and what a particular are you excited aboutin terms of the next phase of growth?
Aaron:Yeah, yeah. So, so yeah. So it, it's, this is one of the things that you haveto learn is that not everything is a react. App that you can just throw intothe cloud. Sure. And, and it just works, right? Yeah, yeah, yeah. So as a, asa, as a background, as a software engineer, then become data, data analysts andthings like that, like, it's definitely how things you take for granted andlike how fast it's to do something.
So we're likeworking at like levels that are, I didn't even know existed. Right. So, sothere was a, there was kind of like a, a learning curve very early in thecompany about like, What is networking at a data center, right? Becauseinternet, like what we're functioning on is physically located into metal inthe place, right?
Yeah. And that kindof like we, we like, we like underappreciate that as like, as the expansion,even the fact of like, the obsession over AI stuff, like those are built onlike physical locations and you just kind of, oh, I go in here and do this andit's done. Right? Yeah. Like all that magic that happens.
So, so, it's, it'sbeen a lot of lessons learned about like how fast it actually is to able tobuild software that has to physically go a place. Right. And because when, whenyou have built a software company, or I've built software company before, youjust put it in the cloud Yeah. And it just doesn't, right.
But this, like, Iliteral have to move software from a place to another place and provision it ina physical location that I determine. Right. And that's like a, that's a verydifferent set of problems than. Than actually like, just throwing it into thecloud. So, so that has been a, a, a humbling aspect of like, going fromprototype to production has been, much harder than we talk as with most, most,as with most companies.
So, yeah, so,we're, we we have a network of, of, of around a dozen or so, like data centerpartners around the country. We're selling it right now as like, A Shopifysolution. So, we're gonna do a roll up in probably towards the end of thisyear. So we're basically following the Shopify federated model.
So, they basicallyimplemented a single api. Yeah. They and checkup flow across multiple merchantwebsites. Right. That was it's value prop for years. Yeah. And so you just,you, when you would go buy a random, T-shirt from a vendor or order somecandles from someone, they on their website.
It was, it was donevia Shopify. Right. It was like a better version of like WooCommerce. Right.So, we plan on rolling everything up through Universal API to where if you werelike, oh, I want to find a really cool NVIDIA machine that is located in aregion I want, that has standardized SOC two and ISO and GDPR compliant.
That you can go toour single API and then you can find it. Right. So that's like the strategythis year. So we've been working on just data center implementations to buildout the marketplace, to build out the inventory, the SKUs, and then we'll thendo a roll up later this year where you can, as a company through a single api,th single programmatic interface, find, thousands and thousands of differenttypes of machines that you could use to solve particular workloads.
Julian:Yeah. And whether it's external or internal, what do you view as some of thebiggest risks for the company today?
Aaron:He, so the big, the biggest risk one is the like everybody in in in this momentis wondering about the economy. Now that affects like venture, right? Soventure has gone through an existential crisis in the last year and it's reallyunclear what's gonna happen.
The, obviously theobsession over ai. We have, we have a number of GPU providers, so like we're inthe same like epoch. And so I would say like that's probably the area that Ithink about the most because it's a, it's a non sort of what's the right wordfor it? It's a, it's a market risk that's like independent of you being able tooperate as a company.
So like I considerthat like the economy is really uncertain and. The, the patterns of what youthought was like the threshold to justify your next valuation is now gone.Right? Like, nobody actually really knows these numbers. Like the numbers fromlike, I'm in all these like, signal groups with different founders and VCs,like totally, the numbers are crazy.
Like they're allover the place. Like they, they're, they're, some of them are back to pre,2000, 2001 level. Interest rates were zero. Some of them are like assuming rateof like 5%, right? And, and so like that's a very, when you're leading acompany, it's pretty like scary cuz you don't know what the response is gonnabe when you go on fundraisers.
Before it was like,hit these metrics, hit these numbers, and then you, then you'll, then you'llmake it. Right now it's kind like, I dunno. And the mood is, is really bad. Thesecond is with us, it's like it's, we're seeking to be have a very clearhorizon towards breakeven. So we're, we're basically trying to build thecompany a little bit differently than we thought before.
So we like, we donesignificant goss gutting back way last year and and so we went through that,that, that. Was the right word. Medicine much sooner than many other companies,cuz we saw the, the we saw the basically writing on the wall of what higherinsureds were gonna do. So we basically preserved our runway and we've beendoing that really aggressively.
And so with that,like the, there, there's a differently, when you go talk about building acompany, a difference between surviving and growth, and sometimes that can be ahard way to figure out like, what is actually okay, we just need to do this tosurvive. So like, oh no, this is a growth opportunity we should bet on, right?
Yeah. So today it,it entrepreneurs are going through much more difficult time to before I forgot,like how to actually do a strategy. When before it was like, oh, the goodtimes, the money was cheap. Like you just kind of like grew as fast as possibleand that was it. This is much more like a balancing game between actual runninga business Yeah.
And running somefundamentals. Of course, you're still gonna lose money cuz you're venture back,but like building out those fundamentals. Can some, for some investors be like,oh look, they actually thought about this. They cut costs. They like manage,burn, they, they show discipline, they show thoughtfulness.
And so the growthmaybe, like if you're growing at two x a year, that actually may be amazingnow, right Before was like five extra required. Right? But the fact is you'reable to manage right. This situation. So like, that's like more of anoperational concern. The third has been, we wanna basically move fast and breakthings and we're.
It, it's harder toexplain what pipes we're building and foundation elements we're building oressentially we're building new rails on networking Yeah. To actually run thismarketplace. And that's a very hard technical task to do that. And because,there's a lot of assumptions about how infrastructure works.
That just is cuzthey use cloud. And what we're trying to build is like a new cloud that isessentially a new cloud that exists on new types of infrastructure, new typesof frameworks to where it is actually agnostic to where. Julie can go to ourwebsite and be like, I wanna buy that database center.
Oh, I wanna move itnow. But that happens in milliseconds. Yeah. Like that's new types of pipes onthe internet and, and so that's a big task. And so, settling for the fact oflike, we're a different type of company. We're not gonna be the. I make somerandom AI abstraction and then it grows really fast because someone's using ita lot.
Right. Because Idon't, I'm not really a company, I'm just built on top of chat, chat G B T,right? Yeah. So, we're like, we're not that type of company. We're much more oflike the bones of the internet and how the internet, like, actually I actuallybuild workloads on the internet. Like, that's, that's a very different type ofcompany.
And so, we're,we're, I guess, But I'm much more of like an Elon Musk type of entrepreneur.Not that I'm not even close to him, but like how he, what he finds interesting.Yeah. Which is kind of like boring problems. That's what he would say. That'swhat he created. The boring company. That's like how my mind works is like whatis like the simple thing that if it was better would have massive Yeah.
Impact in society.Right. And, and so he took on problems that now we view as sexy, predominantlybecause it's Elon Musk and anything he touches is interesting, but like he tookon pre Tesla electric cars. Were super boring. Yeah, yeah. It was Prius, right?Wow. Who wants that? And he made it interesting space flight.
Right. We literallydefunded nasa. Yeah. Like, because we thought that this wasn't an interestingthing and he made it interesting again. Right. So tunnels, tunnels were notinteresting, even though it's actually an immensely interesting problem to me,like, but the, but I'm like urban science and stuff, so, and then he is made itinteresting.
Right. So that'skind of like how I think about like products and like to me it's like, how doesit impact the real world? I'm less interested in the like, whatever fan simplething that is the new in vogue, like venture capitalist, like trying to justifythe LPs why they didn't. Right. Like, like the, the, there's so many thingswrong with the assumptions behind AI from a basic economics perspective thatit's, it's kind of, it's kind of enlightening that a lot of the people that Ithought were like amazing business people.
We're maybe justinto hype and if there's something real in ai, I don't, I don't disagree. Imean, we provide GPS to people. I understand. Yeah. But there's like a, there,like even from a, just as a side point, I studied economics in, in college,like if it takes a. Less and less people to build value into a company.
That means it'salso more easily, easily commod Commoditizable, which means it's less and lessdefensible. Yeah, like it's, this is like basic economics people. So if ittakes like somebody two weeks to build a competitor or something, that meansthat it also takes the larger company two weeks to do it.
Yeah, like do weall forget Paul Graham's advice, which was what do things that don't scale?Right? Right. It's, it's like this, it's like this weird thing that's going onin people with ai that a lot of things that people are building are likeimmensely. I mean, I use, I use Jet pt, I have my engineering team use do useAutopilot.
But those arefeatures like a lot of things that are coming out in terms of obsession. Orfeatures like in, and there's also, like, I've gone and tested some of thethings that people have wrote, these long Twitter thoughts about millions andmillions of views, and they don't work. Yeah, yeah. Like the things thatthey're claiming it doesn't do.
Right. And, and sothat is like massive, like, I just think there's so many VCs that are bitingtheir hands or that's not the right phrase. Like they're, they're falling forsomething. Yeah. I think mostly as a narrative to justify. Getting money infrom LPs. Yeah. Something exciting. Something interesting.
Yeah. Something tocover for the fact that they paid, 20 times in a series D or I have a companythat's worth half that now. Right. We're trying to like create some narrativeshift. Yeah. AI is, AI is valuable. Like don't, your is is immensely valuable.It's simplifies so many things in my life, but a lot of those things arefeatures on something else.
And, and Shama hada great point on all in, which is, Was very underappreciated, but like if ChatGBT was really the next Google, why did they sell half of their business to ahosting company? Right. And it was such like a brilliant subtle point of likereturning these economics of like, they, there's probably somebody here youdon't think is here.
It doesn't meanit's not valuable. It doesn't mean it's not interesting. It doesn't mean shouldnot be invested in, but like, let's bring it back to the reality that likeyou're, the, the fact that you think you can make something, that like I couldpay someone on five or four. Like, is it, my computer is somewhat impressive.
Yeah. But I couldhave paid from the five or four. Right. Which means it was $5 of value. Right?Yeah. There, there's like, there's this, I feel a little bit like, I'm kind ofcrazy that like, like this is, I feel like the trajectory is going thisdirection and then a bunch of things will be funded and will blow up and thereare actually no value there.
But there'll be acouple of things that really come out of this. Like, I, I particularly thinklike, this will break. I think a lot of the things in hosting I, I actuallyreally believe that because hosting, like as in cloud is not really designedfor these new workloads like edge computing and M ml, ai ETL companies, right?
All these companiesare hamstring predominantly because they're built on the cloud versus like,this is actually forcing people now to be like, I don't need your cloudyfeatures. I don't need your Kubernetes. I don't need your SQL management. Idon't need your serverless. I just need a NVIDIA machine.
That is freakingawesome. Yeah. That can do this for me, right? Yeah. That's all I need. Right.And so I think it's breaking that down to where companies are looking outsidebecause running. GPU's and Amazon is freaking insanely expensive. Or the what'sthe, there's a GPU cloud company, fricking crazy.
Like 200,000,$400,000 a year for like one machine. Right. And, and I, I was selling machinesfor our new, one of our new GPU providers. I was selling for like, 60% lessthan that. Yeah. Because data centers don't have all these needs. They don't,like if you're getting drug data center, you're removing so many of themiddleman or travel agents removing the tunnel of the travel agents.
Yeah. And thetunnel of the weaknesses that exist within these cloud operations that prohibitproper access to bare metal. Yeah. And, and we just, I just don't think that,that, I think that's the, one of the good things is like workloads are onlycoming more complicated, more network dependent. And cloud is not good at thosetypes of things.
And, and so, thisis, this is, this will be a good breaking apart. The, the high, the highmetering that goes into cloud. Cloud is like not actually cheap. Yeah. It,it's, it's like paying, would you ever pay, McKinsey to do UX design for you?Of course not. Right? But that's basically what you're doing with cloud, right?
Is that you'reoutsourcing and you're paying a very high media fee. Not small. This isn'tlike, like the margins in cloud. Are like 30, 40%. Right? We're not, we're nottalking about stripe, which is like, one, two points, one point, right? This islike huge, right? Yeah. Yeah. And that value will erode and over the course, Ithink of this next decade, as you see workloads push out.
Yeah. Further andfurther where centralized computing doesn't make sense.
Julian:Yeah. Well, If everything goes, what's the long-term vision for HydraHost?
Aaron:That we are the, the Shopify style turn to Amazon aws. Yeah. So you come to uswhen you want environmental, you come to us when you want, like soc two highlycompliant environments.
You have likespecific needs around regionalizing, compute that like, basically cloud can'tdo. That that's what we want. So you wanna be able to come single interface.Single place where you can kayak request. Yeah. Some specific route, like on anairplane, some specific route, and that you can get that in withinmilliseconds.
That, that's what,that's what we wanna build.
Julian: Ilove that. I always like to this, I love this next section I call my founder Ffaq. So I'm gonna hit you with some rapid fire questions and we'll see what weget. First question I like to open it up is what's particularly hard about yourjob day to day?
Aaron:One, one of, one of my, my aism you could say is that being a ceo, no one caresabout how you feel. Yeah. Right? Yeah. And I know every time I say that toanother exec friend, they're like, yep, that's true. Right? Yeah. And, and itis, I'm not complaining, I'm not promoting, that's, that's the exact opposite.
I love my g my job,I love my team. I love my co-founders. I my very blessed to work on things Iwanna work on and have the agency I do. But that's just downside. Like beingrational and being wise as a person means that every decision has a downside.Yeah. And, and be okay with that. And the downside is when you lead a company,you are the final bucks out to you and everyone brings their crap to you.
Yeah. And you don'thave the capability to. Share it out with other people. Cause what's gonnahappen? They're gonna be like, you're the boss. Why are you complaining to me?Right. Yeah. Yeah. So, so you just have to learn to be resilient and have likenon-company friends and things like that. Yeah. Like best friends, like, likea, a camaraderie crowd between if you're a ma male, like a camaraderie betweenmen that you know, you can share your feelings with and things you're battling.
And, and that,that's, that's one of the harder things of like, It's very easy goingautopilot. Yeah. When you are running a company and that can only get you sofar before you burned out.
Julian:Yeah, yeah, a hundred percent. Thinking about, your experience with runningcompanies and also, being a part of other companies and being in think tanksand things like that, and you mentioned it earlier about the fundamentals that,companies will be a little bit more, or at least in successful companies duringhard times.
I think they justhave that as a quality of theirs. What are those fundamentals for you and whatwill allow your company to kind of not only weather external, just uncertaintyas, as, environments ebb and flow, but also kind of build the foundation so youcan continue to scale on top of it. And scaling, being that add more resources,more team, more customers, more of everything.
What are thosefundamentals to you?
Aaron:So it's a question like, What are the fundamentals of like, the value? Likewhat, what would showcase in a company like show that they're successful? Like
Julian:Yeah. More. More so. Yeah. Like if, if, if a company was a machine and youlooked at its components, what are the components it has that allow it toactually Okay.
Build on top of,less philosophical. More mechanical.
Aaron:Yeah. Mechanical or tactical tacticals? Well, well actually I, I actually, Iwould, I would default to philosophical because I think that's actually whatyou can't really change in a company. Sure. I think the mechanical stuff is, isquite fungible.
Mm-hmm. And you canteach people new tools, but you, it is sort of like the, the saying of like,like you can't really change people in a company. Like you can't change yourvalues, you can't change your personality. It's work. Right. Work has meaning,but it doesn't change. Typically people existentially.
It's actually areflection of their existential values typically. Obviously there's exceptions,but, but the, the mechanical side would probably be around, like, the thingsthat I would look for is the sales orientation. I think having a really goodsales strategy tells people a lot about whether or not the company knows whatit's doing.
Yeah. And beinglike very clear on that. I think, I think product related things as well besecond after that can they actually execute, execute? Can they actually launch?Although if you have product market fair, like the, the best example of a badproduct organization is Twitter. Yeah. Like Twitter has always been a mess.
They've had moreexecutives you can count and, and Elon proved that when you bought the company.So, Yeah, it still has product market, right? So you actually do a lot ofdamage to your company, even if you have product market and no one goesanywhere, right? Yeah. So, but, but product itself is like, is a really goodsign.
Like how fast doyou ship? How do you develop tickets? How do you develop your strategy aroundthat? Sure. The guy, the leadership around that. And let's see if we can give athird like a. A third would probably be like, maybe their ability to pivot intosome different area. Like how fast can they actually cohesively as a company,like adopt new ideas and like do something about it.
Yeah. But the, butI, I think sales, the tip of the spear stuff in a company Yeah. Is reallyinsightful cuz it really tells you what they want to do and how they talk aboutthemselves. And what's their actual value?
Julian:Yeah. I know you mentioned some, some resources earlier, but I always like toask this question because I love how founders extract knowledge out of anythingthat they ingest.
Whether it's earlyin your career or even now, what books are people just continue to impact youand, and how have they been impactful for you?
Aaron:Sure. So, my father top list is the Bible. So I'm, I'm a late stage cleverChristian and. The Bible has taught me so much about humanity, life everythingfrom how to love people, how to have a good life, and how to be a goodexecutive.
So by far, like myChristian faith in the Bible, there's a reason why it's the bestselling book ofall time and has like never been updated, right? So we should humble ourselvesand not have chronological to operate and say that like there's a reason whythese things exist. And you are not the smartest person in the world, right?
So the humilityaspect of, I think being a leader is really, really critical to actuallyimproving your team and also impacting the world. Like if you come with thisarrogant perspective that like, it's all up to me, you're really gonna ignorecountless. Wisdom That is true regardless of the age of this.
True likeforgiveness. I, which is key to Christianity and grace is, is true today as itwas back then. Yeah. Because humans from a behavioral perspective, from apathology perspective, are the same. And, and you can go literally read likeraw letters from people in Roman times. They're dealing with the same stuff wedeal with today.
What am I gonna dowith my life? What am I supposed to go, like, what is meaning? What is purposelike? Same thing as we are today. Like, so, so take that, like thatmetaphysical approach to your life because you'll just be a better leader.You'll build better companies, you'll impact people to, to such a significantpositive degree that it, it changes their life and it's great.
The sec the secondwould be actually kind of non as I told you before, like I don't really needmany business books cause unless I'm gonna like do a biography right, thenI'll, then I'll read it. But like, history is history, particularly economichistory Yeah. Is immensely fascinating for like how to build a company and howto like, think about problems.
And becausefundamentally as a company, you're trying to solve a societal problem. Sothere's kind of a, to use a Greek word politic, politic means way to live.Companies are impacting that. And so if you read like economic history, whetherit's about, Leninism to. Muralism to histories of republics and kingdoms tellsyou a lot about like how people try to solve problems and how they think aboutthings.
So I think, I thinkthere's like a, I typically read biographies by historical figures like. I'veread one recently about mou, about linen, about Churchill. I've read one aboutWashington and Jefferson. So like, these really prominent figures are likereally impactful to the way I think about how people solve problems.
The third would belike philosophers. And so I read, even, I read a ton of people I don't evenagree with cuz that's not the point. So like, for example, like there, there'sJohn Rawles is probably one of the most important philosophers. I don't agreewith what he says, but he is the most important philosophers of our generation.
Yeah. I guaranteeyou that you have said things that he has written that you had, that youthought was your own idea. And people like that are immensely powerful tounderstanding marketing, understanding how to build a product, understand likewhere things are gonna go. Yeah. And raws and other ones I call pop popper.
A later one wouldbe kind of the early French Renaissance people, enlightenment people and earlymathematicians. Yeah. Like, Merton, he's another great one. Like all thesepeople have created these, what I call echoes and culture. That have a, a wayof feeding into what people want Yeah.
And what theydesire and what they're trying to do. And if you don't kind of know thosetrends, it, it's hard to distinguish about why certain things won and why thinkcertain things don't. Yeah. And, and I think that as a founder yet to be quiteobjective and look at things from the perspective of like, I may not want that.
Right. I may notwant this company to exist. I may not want this product to exist. Sure. Butlike, there, there are trends in human, human beings. Cause ultimately we'rebuilding companies serve humans that you can't defeat, right? Yeah. You can,you can build something that could maybe move the, this way move, this way.
But you, you gottalike understand that there, there are dialectics to use a alion phrase that youare in that is gonna perpetuate a certain type of way of thinking into thefuture. So if you look at like, one of the, I think one of the best examples inart. Economic, activity startups is biology.
So he is a veryskilled person in philosophy, and you, everything he's saying is connected towhat he believes the metaphysics of the world are going to. Sure. And that's avery valid way of building a company to knowing the vision, knowing thattomorrow is gonna be like, and, and so like, it's not that like necessarilylike if I read some call, call some popper.
So he, he'sbasically like a, I believe like an anti scientist guy. Yeah. So like, Hebasically created this like relative framework for truth and things like that,yada, yada yada. So, so Popper basically, tells me a way a lot of people like,like how to manage people who think that way to how to like, pull out ideas from,from him that could be impacting culture.
Doesn't mean it'slike impacting like what I'm gonna put in in the next brand, right? But like,as an, as a leader of a company, you have to like know these things because ifyou're successful, you're gonna be managing thousands of people. Yeah. And.They're not gonna know you, but you have to build a system and a company tomanage the narrative that's external to, to what you're trying to build and theprofit and the value you're trying to create in your company.
Julian:Yeah, yeah. I I, I love asking this question cuz I'd like to make sure wedidn't leave anything on the table. I know we're coming to the end of the show,but is there any question I didn't ask you that I should have? Or is thereanything we didn't bring up that you want to chat about last little bit beforewe give you time to give us your plugs, your LinkedIns and stuff like that?
But real quickYeah. Anything we left on the table here today?
Aaron: Imean, yeah, I mean, you, you could I, I would say what, what is the mostheterodox view of I have of technology right now? And and it's, and it's thatI'm a bear on ai. Yeah. So that may, that may haunt me in the future. I don't,I don't really care.
I've been wrongabout lots of things, and I'm still right about most things. So, I'm a bit of abear on, I would say I'm a bear on the ability to build a company in the space.Yeah. I'm very bullish. Usage in the, and utilization. And I haven't, I haven'tdone any, I haven't done an interview yet since I came to that conclusion.
Yeah, yeah, yeah.So, so, so that would be the thing. So I'm, I'm, I'm. I'm not on the ratestrain right now. I use, I use AI every day, but I, I think it's, it's hard tosee independent enterprise value being created apart Yeah. From existingplatforms. Yeah. I think it, it's, it's difficult for me to see that.
Julian:Yeah. Yeah. I, I'm somewhat in the same camp, but maybe we'll have anotherconversation about that at a later time. Yeah. Yeah. Yeah. But Aaron, it's beensuch a pleasure having you on the show and learning not only from your earlycareer, but how you kind of, Think about startups, think about buildingcompanies and what you're able to do in terms of adding.
Like you said,almost, almost this just new edge of infrastructure on something that's beenhighly regular and highly popularized, which is cloud and, and really thinkingabout it, at least from a, a builder's perspective to access those resourcesand those tools in a different way that, obviously benefits you monetarily, butalso with speed and all these different things.
So excited to seewhere you're gonna go with this company and. Where are you gonna take it? Thelast little bit is where can we find you? Where can we support, give us yourplugs, your LinkedIns, your Twitters, your blogs, wherever we can find you to,to be a fan of support.
Aaron:Yeah. So, so Hydra is Hydra Host.com.
Yeah. So easy. Ihave a pretty active Twitter personality profile, so that's a G I N N T. And Ialso have a sub that's AGN sub, where I write about philosophy, businessculture. More of like an expression of my, let's say non-business interests.Yeah. And used to be active on medium until like get canceled.
So, so now it'sall, now it's going to south.
Julian: Ilove that, man. I love that. And thank you so much for being on the show. Ihope you enjoyed yourself. I'm so excited to share this with the audience. Butagain, it's been a pleasure chatting with you today.