This week’s changes at Engine Yard, with more detail


I was on our weekly customer call this morning and I heard directly from customers that we haven’t done the best job of communicating some changes that happened earlier this week at Engine Yard.

First, let me apologize for this. We’ve tried to be open about important things, but sometimes it’s not always clear how much or how little detail is right.

To our customers, partners, and the Ruby and Rails communities at large, I want to reassure you that we are financially very sound and we intend to be here for years and years.

Our new CEO and everyone at Engine Yard are making the company better and making our long-term goals more attainable.

I hope the following timeline will help clarify things:

* Tom and I started Engine Yard in 2006. We brought in Ezra and Jayson as founders #3 and #4 a little bit later in 2006.

* Tom and I shared the CEO role in 2007.

* I was CEO alone in 2008.

* During 2008, we took investments from Benchmark, New Enterrpise Associates, and Amazon. We were growing fast and this sped things up even more.

* By the middle of 2008, all 4 founders agreed that Engine Yard was growing so fast that we needed someone with the experience to grow the company WAY beyond my/our abilities. I have experience running companies with simple operations in Support, Finance, Sales, etc. Engine Yard grew to 80+ people by the end of 2008 and the organization has grown more complex right along with our customers and the market.

* Someone with prior experience scaling a business from small to medium to large can benefit Engine Yard and its customers a great deal, and I can learn a lot from such a person. Thus, I see this as a good problem to solve.

* We started a search and interviewed a number of fantastic candidates in the Summer, Fall, and Winter of 2008.

* The 4th quarter of 2008 saw a lot of change and analysis. We brought in some great consultants to help us better understand our market and the internals of our business (how to run a financial organization in addition to bookkeeping, where we could operate more efficiently, etc). Add to this the changing landscape with things like cloud computing and we found ourselves needing our first formal budgets and plans for the coming year.

* The overall plan encompasses everything from slightly changing our support, sales, and account management organizations; to bringing out new AWS-based services; to open-sourcing our Vertebra software. The plan took months of input from every part of the company. With regards to layoffs, we decided it was best to wait until after the holidays.

* Back on the CEO search, we were getting into the holiday season and John Dillon stood out as a superb candidate. He’s a great guy and has fantastic experience. At earlier points in his life, John was CEO of, CEO of Hyperion, and he held sales & engineering positions at Oracle & EDS. John earned a degree in engineering from the U.S. Naval Academy at Annapolis and an MBA from Golden Gate University.

* We made a deal with John over the Christmas break and it was decided that he’d start when the holidays were over.

* Which leads to this week. We did the layoffs on Monday – the same day John started. I want to clarify that there’s no connection between John and the layoffs, nor between my stepping down as CEO and the layoffs. The timing is simply because Monday was the first full work week in 2009.

* Some have asked about my role moving forward. My role is supporting John as he learns the details of Engine Yard, its customers, and its community. I will define a new role for myself where I can use my 3 years at Engine Yard to help us make the best possible decisions.

I hope this helps!

If you have any questions or comments, please feel free to email me at: lwalley at engineyard com


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Fun Stuff & Business History



I co-founded Parallax in 1987 with my best friend. We were both fresh out of high school. We grew from a bedroom operation to a $3M/yr business.

I learned a TON at Parallax! We strugged for several years to find a market we fit, but once we did, were were able to "pivot" (today's term!) into that market and then execute on manufacturing, marketing, and distribution. We didn't even know the term "VC", so we *had* to make money! We took $20K from friends & family and had day jobs to bootstrap those early years.

As I left Parallax in Winter 1996, Radio Shack started carrying our BASIC Stamp computer.

I spent a few years trying to make money in the mobile-messaging space. Unfortunately, I learned lessons about how to spend all of my cash chasing a market that simply was not yet developed enough. I wish I had known about VC :-)! I closed up shop and put up a notice saying "goodbye" to my customers.

Which led to a San Francisco VC-funded startup in 1998. They were in the mobile-messaging space and were on the normal VC route as everyone else back then. Unfortunately, it didn't end pretty, but my friends and I learned a lot through the CEO, who was nice enough to tell us how things worked with his Board, the investors, etc.

I got laid off along with most other tech folks in SF in 2000. What does one do at a time like that? Start Quality Humans, Inc. as a way to offer my programming services to clients. QHI grew to employ 8 guys working around the USA.

My friend and QHI consultant, Tom Mornini, saw Ruby on Rails coming over the horizon, so we started offering Rails consulting. Within a few months, Tom noticed that Rails clients didn't want to worry about details; they just wanted to deploy their apps.

That led me to co-found Engine Yard in 2006 with Tom, Ezra Zygmuntowicz, and Jayson Vantuyl. We built a great business and then took VC after a year from Amazon, Benchmark, New Enterprise Associates, and others. I served as CEO until Jan, 2009, when we started building an executive team who can take EY up a few more notches.

I reflected on major pain points we experienced at EY, and recurring billing was one of them. That led me to Chargify.

In Chargify, I joined great folks from Grasshopper. It's been very cool working with the team as we grow Chargify in 2011.


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