Rich Kilmer on Ruby and Rails at LivingSocial
Recorded at:

| Interview with Rich Kilmer by Obie Fernandez on Jul 29, 2011 |

Bio Rich is VP R&D for LivingSocial, and was previously CEO and Co-Founder of InfoEther, also co-founded Ruby Central, a non-profit promoting Ruby and its community. Prior to InfoEther, Rich was CTO & Co-Founder of Roku Technologies. In his 20 years as a software technologist, he has been a CEO, CTO, sales engineer, designer, consultant and a systems security manager in the Air Force at the Pentagon.

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1. This is Obie Fernandez with InfoQ here at RailsConf speaking to Rich Kilmer.

I’m now the vice-president of Research and Development at LivingSocial.


2. Thank you for adding that because for those of us in the community, the InfoQ viewing world that are not familiar with the deal that transpired, just tell us a little bit about your background and how it’s meaningful where you are right now.

For the last 11 years we were a consultancy - InfoEther and we grew the team over that time, we started actually doing Ruby development in 2001. So we were getting paid to do Ruby development when it wasn’t cool yet, Rails didn’t exist yet, but we’ve been doing it the entire time. We actually had a little bit of a product plan in the middle where we actually had investors come in and trying to fund our product. It didn’t work, so we flipped back to consulting and that was when Rails was taking off. We built up that business of doing Rails consulting. Chad Fowler was on our team, he was our CTO, Glenn Vanderburg joined our team, Bruce Williams and others. We just had a fantastic team: about a dozen folks that were developers and designers. We were like the full stack - consultancy in the Rails space; we’re doing very well as a consultancy. We were doubling our revenue every year and we were doing really great, we were on that trajectory.

Last fall we picked up LivingSocial as a customer, they’re in DC, we’re headquartered out of Northern Virginia, so we’re right there. I’ve known Aaron Batalion who’s the CTO and one of the founders of LivingSocial and Eddie Frederick who’s the president. I’ve known them for a long time, they were at Revolution Health before. I'd known that they’d done Hungry Machine which was a lot of Facebook applications. They built some of the fastest growing Facebook applications when Facebook launched their FA platform. We started talking and their specific need on the merchant side of what they did. So whenever we started working with a customer we tried to absorb their domain of what this was. This is the deal space where you have Groupon and everything like that. What we recognized within two days of just reading (we didn’t know a lot about this, we'd just read about this domain) is that what it is really is local merchants had never had the internet affect them, like big businesses had.

Big businesses had a website like Amazon and other kinds of e-commerce providers, but local merchants never had the internet do anything for them. This was the first time that an internet effect actually could affect small businesses. It just unlocks amazing amounts of commerce. You saw these companies, LivingSocial made 300 million dollars revenue last year and they were running the deal site from July. So we are on this amazing growth curve right now.


3. Here you are owning a really small consultancy, undoubtedly making plenty of money from the deal and they approach you and say "Hey, we’d like to buy it."

What was interesting was last fall we started working for them. We worked for them for maybe three or four weeks working on some mobile development for them - actually for merchants, things that we just launched, the instant stuff which is in the DC area. We are actually putting technology in the hands of merchants to allow them to interact with things in real time. We are developing that and Amazon announced the Amazon investment: 175 million dollar investment from Amazon in LivingSocial. That was a pretty big deal. I am like "Wow! Congratulations to you guys! That’s amazing!" The total round of that was 183 million dollars and it was soon after that (before Christmas); it was just amazing. Their engineering group was 12 people, they built everything with that size team. We know what people can do with Rails if you have really good people. You can do amazing stuff, you don’t need 100 people. You need really good people that are passionate about it and the framework allows you to just ...


4. Were they like crazy leveraged with data at that point? So this is 12 people driving 300 million dollars in revenue?

Technology-wise, absolutely. What you see on the consumer side is a very small amount of what’s been built, because there is backend stuff for managing all those deals. The email infrastructure to send out 35 million email messages a day is huge. They built all of this, including the operations side.


5. Their credit card system as well is something absolutely difficult.

Absolutely. Patrick spoke on that, one of the lead developers there spoke on that, on Tuesday, about how to do that and how to do it in such a way that things that they needed to do, hard problems that they needed to solve, they innovated and solved them working with credit card, the groups they dealt with. But what they did is they solved amazing problems very quickly - again, very smart, energetic people doing it.


7. Give us its synopsis.

The synopsis was: first you have to know what you are doing, what’s core to your business. Build that, don’t outsource that! Also, if you’re building something for other people to buy, don’t build something that’s going to be core to them.


8. So you got out of the consulting space and now you are burning down the forrest?

No. Here is the thing: we built a lot of core stuff for people, but (and it’s the same thing that you all did as well) when you were HashRocket, was you would go in, you probably built the core and then built the team and then transfered it off to them, right? That’s ok. The thing is what you don’t want to do is literally continually outsource that, because the core is what you are and that may shift (by the way) over time. So, you focus on what’s core to you, the other things you can integrate with. But when you do buy, make sure that the thing that you buy is flexible enough to not hamper your ability to move because the market is going to shift what’s core to you and it may shift to where that thing that you outsourced is now core to you and you need to bring it in or the thing that was core to you is not, you need to shut it off.

It’s more of this than being knowledgeable of that thing, know what's core, be on top of that thing, try and build up an internal team to do it - that was for technology, that’s just technology side. You don’t want to build an accounting system. Things are generic, you may need to go get people software or whatever else and do it and integrate with it. You pay for that, integration is not free either. The actual work of integrating with something takes time.

But the team was the second part of the talk: How do you grow a team? One way is organically, you bring in a developer, you bring in another developer. Every time you do that the team slows down and then comes back up and then goes down and then comes back up. One of the arguments for bringing us in, as the whole team was we were used to being dropped in and moving forward, not slowing things down but actually speeding them up. I never had all 12 of our team focus on one project. The first question I asked was "Do you really have enough work for all of us? We’re going to get bored." That’s not happened, there is so much to do in this business, because it literally is an entire area that the internet hasn’t touched that we’re innovating around. There is just a tremendous amount of work to do.


9. You have a historical perspective on the growth of the Ruby community, the adoption of Rails and then now seeing some massive world scale adoption - Groupon's on Rails, LivingSocial is on Rails, countless other examples of this, WordsWithFriends does a lot of stuff in Rails. Where are we going? We see the community evolving, getting a bit more mainstream, we see it in the folks that are here at the RailsConf this year. What’s going to keep you engaged with this community beyond inertia?

We adopted it not because it was cool. We both were working with it because it was good. The thing I love about Ruby and Rails is never going to change: it lets you move up and down levels of abstraction in the same language. I can write low-level network bit-packing protocols and high-level abstractions for domain models in the same language. I don’t have to switch in and out of that language. When I coded Java, and I wrote a lot of Java code, I always felt I was at the exact same level of abstraction because the language syntax was so inflexible that I always was dealing with all layers all the time. That’s not going to change. My desire to build software is not going to change. I think that more applications are going to be built in the enterprise.

For example, we had a lot of enterprise customers towards the end of our work and we actually handed them off to folks. We were like shedding contracts off, hard to do, but when that was happening, these big companies were building internal departmental systems. This is stuff they might have built in Lotus Notes or Cold Fusion, but they wanted an open-source alternative and Rails is perfect for it.

So we’re seeing a ton of things and I think a lot of the growth is not something that’s like startups, even though there are folks like ourselves and Groupon and others that actually have this tremendous growth, that are like poster children. But every corporation is probably looking at something like Rails and I think Rails is the perfect candidate for a full stack thing to build departmental systems. It might be built for 30, 40, 50 or 100 people, it doesn’t have the scaling requirement that somebody like LivingSocial would have, but it’s a tremendous opportunity; in other words: it’s going wide.


10. It’s still growing.

I think it’s growing tremendously. And they are just not vocal, you don’t hear about it. I gave a talk at GoGaRuCo last year about "The revolution won’t be tweeted", because the people who now experience the revolution of Rails don’t tweet. They aren’t like the hot new startup. I mean there are hot startups that are using Rails, but they are enterprise developers.


11. Given this evolution, what keeps you and Chad [Fowler] engaged in the community and still interested in what you are doing?

I just think it’s a great community. I don’t think it’s a better community right now and it’s such a polyglot community. We’re not afraid of people who are learning Clojure, learning Scala and learning different languages and different techniques, Erlang. It’s not about the language, it’s about the approach. I think this community draws people like that and we’re still here. I think that’s not changing. I’m excited about the opportunity. I love the application of technology to problems and we haven’t scratched the surface of the problems that we could actually address with it.