From Internet Plumbing to Tweeting With Zappos: The Dyn Story

4/10/12Follow @gthuang

If the Internet needs a plumber, Jeremy Hitchcock is your man. It’s not sexy, it’s not glamorous, but as they say, someone’s got to do it. And if that someone does it right, well, he can build a very profitable, 150-person company right here in the great Northeast.

That company would be Dyn (pronounced “dine”), based in Manchester, NH, about an hour’s drive north of Boston. Hitchcock helped get the Web infrastructure firm off the ground in 2001, together with chief technology officer Tom Daly, when they were in school at Worcester Polytechnic Institute.

Hitchcock is a self-described garage techie who talks in a low-key way about his company’s story. But over the past decade, Dyn has bootstrapped and grown up in parallel with the Web. The company now counts among its customers Angry Birds, Bit.ly, CNBC, The Guardian, Mashable, Etsy, J. Jill, Playdom, StumbleUpon, Salesforce.com, Twitter, and Zappos (owned by Amazon.com). Its Boston-area customers include City Sports, NESN, and DataXu.

Dyn provides managed DNS and e-mail delivery services to businesses small and large. While DNS (Domain Name System) is boring enough that I won’t explain it in detail here—the technology is 30 years old—suffice to say it is a global system that involves mapping URLs to Internet Protocol addresses used by servers and routers to serve up Web pages and other data when they are requested. DNS is a fundamental part of how the Internet works. It’s also one of those things you only notice when it’s not working.

So it seems accurate to say there’s more to Dyn than just plumbing—more like it provides a crucial service so that CTOs, networking administrators, and heads of IT departments can rest more easily. “We’re the traffic controller. We direct content to the eyeball as quickly as possible,” says Hitchcock, the firm’s CEO (see photo, left).

It is that speed and reliability that big customers like e-retailers and media sites want from Dyn. And as the Web has evolved dramatically, so has the company. For the first few years, Hitchcock says, Dyn was about being “a really good infrastructure provider” and a “great lifestyle business.” Indeed, the company had only about 20 people up until 2006, and has not taken outside funding to date. “We never said, ‘There’s money in those hills in the DNS world,’” he says.

But there were some key inflection points early on. In the early 2000s, after the tech bubble burst, Hitchcock and his team—mostly still in college—were building a company around helping consumers and small businesses do things like manage remote access to PCs. “There was a lot of skepticism about the people on the Internet who were doing stuff,” he says. “We found it a really interesting training ground to think about value, and about being cash-flow positive from day one.”

Around 2003, the company switched from being a mostly free service to having a subscription-based revenue model. And Dyn started to gain some traction with a new wave of Internet companies. “We woke up and realized it’s a technology space—you either grow or you die,” Hitchcock says. At the same time, the founding team decided to locate the company in Manchester, which was home, rather than move it to San Francisco, New York, or Boston, say. It’s a choice that seems to reflect the team’s commitment to having a work-life balance—and an impact on the local ecosystem.

One management lesson Hitchcock has learned over the years is the importance of having non-engineers in the leadership team. “As a group of technologists, we were fairly skeptical about traditional sales and marketing,” he says. “We were kind of late to the game in rounding out our management team.” In fact, Dyn didn’t hire a head of sales until 2008.

Hitchcock calls his company’s culture “work hard, play hard”—which is not exactly surprising for a tech startup. “We think of ourselves as the Zappos of the Northeast,” he says. That’s a little more interesting, because Zappos, the e-retailer of shoes, is known for its customer-centric approach, as well as its 10 cultural tenets (among them: create fun and a little weirdness; and be adventurous, creative, and open-minded). “We think a lot about the people we have at Dyn. We lease talent, we don’t own it,” Hitchcock says. He adds that it’s a priority to create a “good environment where people can learn and develop.”

Zappos is also an important customer of Dyn’s. That selling process started rather unconventionally—no traditional sales and marketing channel—with some “tweeting back and forth with [Zappos CEO] Tony Hsieh, saying, ‘We think we can save you money on DNS,’” says Hitchcock. That eventually led to an introduction, and after the usual due diligence, the e-retailer has signed on for the past three years.

Since 2009, Dyn has expanded into e-mail delivery services, along with making three acquisitions: EveryDNS, a rival based in San Francisco, EditDNS, an Arizona-based DNS firm, and SendLabs, a New Hampshire-based e-mail delivery startup. Last year Dyn opened a small labs division, overseen by Daly, charged with working on partnerships and finding new areas for the company to dive into.

But its underlying technology hasn’t shifted much—rather, it has remained key to businesses whose Web presence has become increasingly important. “People are approaching these core fundamentals in the context of everything changing,” Hitchcock says. “A lot of [our business] is making it more accessible and easier when people use more heterogeneous [IT] environments.”

Last year, Hitchcock says, Dyn’s revenue was in the “high teens” of millions, as compared to $10.3 million in 2010 and $3.7 million in 2007. The company plans to grow to as many as 175 employees by the end of 2012, he says. And look for Dyn to add to its stable of 17 data centers around the world. While Hitchcock continues to fend off venture capitalists with a stick, he says the company has no plans to take a growth funding round or make any big changes to its structure. “We could be more profitable, but I think the work-life balance is more than worth it,” Hitchcock says.

So where does Dyn go from here? It’s certainly interesting to see a company born from the ashes of the dot-com bust build a sustainable business on that next wave of Web companies. “Our master plan is we’ll be more and more important” in the Internet world, Hitchcock says. Now, with the explosion of mobile Web technologies and devices, Dyn will have to maneuver carefully to keep growing.

“It’s hard to predict where stuff is going. We have to be nimble and adaptive,” he says. “The only thing you can do is have constant vigilance.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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