The path of these founders vividly illustrates how exceptional execution paired with fortunate timing can indeed attract success. In late 2021, two friends and former corporate developers at Comcast reached a turning point with their shared hobby. They had each constructed specialized computers in their New Jersey basements to mine Ethereum. Although they managed to generate some cryptocurrency, they acknowledged it wasn't sufficient to recoup their costs. Furthermore, the impending "Merge" network upgrade meant mining's days were numbered.

Adding to that, as Lu noted, the activity became "boring" within a few months. However, they had collectively invested an estimated $50,000, with their wives' permission. Lu and Singh understood that domestic peace required finding a new use for their graphics processing units (GPUs). Given their professional background in machine learning projects, they decided to convert their mining equipment into AI servers. This pivot occurred even before the launches of ChatGPT and DALL-E 2.

During the repurposing process, Lu stated, "We were seeing how really god-awful the software stack was for dealing with these GPUs." As developers, they identified a critical problem to solve. Runpod was created, as Lu described, "because we felt that the actual experience of developing software on top of GPUs was just hot garbage." By early 2022, their platform was ready for testing.

Runpod serves as a platform for hosting AI applications, prioritizing speed, easily configurable hardware—including a serverless option—and developer tools such as APIs and command-line interfaces. Initially in 2021, their integrations were limited, including support for tools like Jupyter notebooks.

Their next challenge was finding beta testers. "As first-time founders, we didn’t really know how to market or how to do anything," Lu recalled. "So I’m like, all right, let’s just post on Reddit." They posted in several AI-focused subreddits, offering free access to their AI servers in return for feedback. The strategy succeeded, securing beta users who later became paying customers. Within nine months, they had left their jobs and achieved $1 million in revenue.

This growth, however, introduced a new issue. "Six months in, business users were like, ‘Hey, I want to actually run real business stuff on your platform. But I cannot run it on servers that are in people’s basements,'" Lu explained. The New Jersey-based founders had not initially considered venture capital. Instead, they formed revenue-sharing partnerships with data centers to expand capacity, a stressful process that required constant foresight. Singh emphasized, "If we don’t have the GPUs, the market sentiment, the user sentiment changes. Because when they don’t see capacity from you, they go somewhere else."

Their user base expanded on Reddit and Discord, especially following ChatGPT's launch, attracting attention from venture capitalists. Malik discovered them on Reddit and initiated their first VC call. Lu admitted he didn't know how to pitch to investors initially. "Radhika was super helpful, even at the first conversation," he said, noting she explained the VC mindset and promised to stay in touch.

For nearly two years, Runpod operated without external funding. Lu emphasized the business had to be self-sustaining, so they never offered a free tier and avoided taking on debt, unlike some other AI cloud services with origins in crypto mining. By May 2024, amid widespread AI app enthusiasm, their early bet on AI hosting began yielding significant returns. The business had grown to 100,000 developers and secured a $20 million seed round co-led by Dell Technologies Capital and Intel Capital, with participation from notable investors like Nat Friedman and Daniel Chaumond.

While they haven't raised additional capital since, they are now preparing for a Series A round, backed by a robust business. Today, Runpod serves 500,000 developers, from individuals to Fortune 500 enterprise teams with multi-million-dollar annual contracts. Their cloud infrastructure spans 31 global regions and includes clients such as Replit, Cursor, OpenAI, Perplexity, Wix, and Zillow.

The competitive landscape is intense, with developers able to choose from major clouds like AWS, Microsoft Azure, and Google Cloud, alongside specialized providers like CoreWeave and Core Scientific. Nevertheless, the founders position Runpod distinctly as a developer-centric platform. They believe coding will evolve rather than disappear, with programmers becoming creators and operators of AI agents. "Our goal is to be what this next generation of software developers grows up on," Lu said.