How the economics of multitenancy work

In the early days of Blacksmith, back when we were just a scrappy YC startup building a serverless cloud platform for CI workloads, we ran simulations to model our margins. We figured that with enough customers, the math would work out, and we crossed our fingers — but we didn’t have any real-world data to back up our predictions. About six months after we launched, I came across a blog post by Marc Brooker on the economics of multitenant systems. It captured what we were trying to do much more elegantly than the half-formed ideas in our heads. This post was heavily inspired by Marc’s, and reading it was a real moment of, "Oh! someone else has thought about this, and it makes sense." Now, we’re running thousands of jobs every minute and millions every month, and it’s been exciting to actually see this play out at scale and watch the math work in real life. Yet, people still often ask in disbelief how we actually make money from our setup — are we just burning sweet VC dollars with ... Read full article.