How Railway says no to 90% of ideas and keeps winning | Jake Cooper (Founder, CEO)

Jake Cooper (0:00)

Most startup devices are overrated. I didn't even really start this as a company. It was never a fully intentional thing until it got to a point where I had no job offers but a few angel checks. And I was like, all right, screw it, I can always go back. I work sun up to sun down, Monday to Friday, and then I try and close my laptop until Sunday afternoon. We say no to 90% of stuff internally, right? We're just like, no, as of right now, we're not going to conferences. Or as of right now, we're not doing this specific stuff. Because we say no, we say no, we say no, and then when it's inevitable, we say, yes, that's the thing we're gonna go in and do. My approach for talent is never be stingy with talent. I'm evaluating comp every half. It's probably moving every quarter.

Never even really crossed my mind to have this in person because remote allows us to pull the best people from literally every facet of the world. We don't use AI internally for any of the memos or things that we go in and put together. Nobody should have to read the thing that you have swapped out and just pushed onto somebody else.

How do we go in and get to 80 people next year, right? Maybe 100 and then we're doing 500 mil, maybe more in revenue. You don't realize how fucking bad of a manager you are until you get better at being a manager.

Nakul Mandan (1:09)

Jake Cooper told me something over dinner last night that defines how he's building railway. He said, if Stripe is doing something, if Cursor is doing something, he doesn't want to hear it. He solves the problem himself first. Only as a last resort, he checks what others have done. That one trait explains everything about Jake. It's why he's a solar founder, why the company is fully remote, why with only 40 people, he's approaching $100 million in ARR, why there was no sales team until last year, and why a software company owns $90 million of its own hardware. Railway is one of the defining infrastructure companies of the AI era.

But the more interesting story here is the operating system of the person building it, and what happens to that operating system when the company goes from 100 million of ARR to 500 million and beyond.

Jake, welcome to the show.

Jake Cooper (2:05)

I'm excited to be here. This is awesome.

Nakul Mandan (2:06)

Great.

Most people would have found Railway in the last 18 months and would accordingly position the company in their minds as infra for wipe coders. But the company has existed since 2021, what is the origin story that they might be missing if they just discovered Railway?

Jake Cooper (2:21)

Yeah, 2020 actually.

The origin story is we started out as a way to provision databases. I was like, hey, there's no good way to do stateful application hosting or database hosting at that point in time. We started as a database and we've just basically walked all the way up the stack, moving to back ends, and then front ends, and AI-based applications now and everything else like that. I think the fact that everybody's discovering us is very interesting because we started so deep and then we walked our way back. Then we've also gone back deep again with a bunch of data center stuff that we're building.

Nakul Mandan (2:53)

In those years, like 21 to maybe early 25 or late 24, what were those years looking like in terms of revenue? It seemed like there was a lot of free tier layers and at one point, you were even losing 500K a month. Walk me through those years.

Jake Cooper (3:11)

I mean, when you're starting a business and you're an engineer who has never run a business before, you're really focused on the product. Still to this day, I'm core, core, core focused on the product. I've just gotten better at letting go of those sections and delegating them and then being like, okay, cool. But I wasn't in the early days. I was like, okay, cool. We got to make a really, really great product that people are going to go in love and all this other stuff. And then so I think it was kind of right around when we did our Series A or whatever, but we were burning a ton of money or shortly thereafter or whatever. And yeah, we had a ton of original developer love because people were just like, oh, this is awesome. It's so trivially easy to just spin up database back in whatever at this point in time. And again, I was an engineer and had no idea about pricing and packaging. How are you going to go in and do this? We talked a little bit about this last night at your house. It's the highest leverage thing that you can ultimately do. And so I looked at the balance sheet at one point, I was like, oh, shit, this is not good.