Linode bet the wrong way by prioritising more cores over SSDs and I think this slip up is what gave DO room to enter the market. Had Linode moved to SSDs earlier and offered their cheapest VM @ $10 instead of $20, DO's trajectory may have been a little different. Also, Linode was (and still is) very bad at marketing imho. DO definitely spanked them on that front (both through their content marketing strategy and just by virtue of their $5 SSD offering which caused all the geek hobbyists to jump over and start blogging about them).
Having said all of that, Linode are still going very strong and remain the much better option for production stuff. I have 3 machines with DO (two $5 ones and a $40 one) and about 15 with Linode (of varying sizes) and in my opinion Linode is head and shoulders above DO in terms of features, capability, professionalism and reliability. They just need to improve their marketing.