The business itself may not be a great business due to the amount of cost it takes to run it -- but it's necessary for the running of other ventures.
Sort of like highways and non-toll bridges.
There's no reason that GitHub couldn't be run profitably if they weren't just out there burning VC money as quickly as possible.
I was, of course, not trying to say that Phab was regressing but rather that GitHub had picked up the pace. There have absolutely been good improvements to Phab this year too!
Review groups and Projets (kanban) have both been great.
GitLab started applying pressure and I think GitHub responded well, staying competitive in the face of a competent challenger.
Exactly. That's what drives features and improvements.
VC money lets you buy new sneakers but if you're looking to lose weight, a tiger chasing you is a much stronger motivation.
I'd also like to point out that Github was probably the most important change in OSS software by a wide margin. People easily forget comfort they've grown accustomed to, but it's worth to take a trip into the past from time to time: https://sourceforge.net/projects/avogadro/?source=frontpage&...
(and that's today's sourceforge – they didn't do much, but 10 years ago it was definitely even worse)
Nice big fat waste of money, right there.
https://findery.com/Du/notes/githubs-oval-office-lobby
Hard to have much sympathy for that.
As an super-small-time investor who only owns stock in companies whose products that I use and enjoy, I can't knock them for it. For me, the logic is that whenever I tire of using something or no longer find it valuable, presumably I'll have early insight to sell the stock before the rest of the world catches on. I don't know if that same logic applies to proxy buying, but I suppose if you're intimate enough with your companies to know if they're abandoning Github for something else, as I don't know if pulling venture capital is as easy as selling the stock.
There's generally minimal liquidity. During a round, an existing investor may have the opportunity to sell some shares to new/other investors, but if she knows something that's not coming out during diligence, there's definitely something fishy going on. If the round is shaping up to be a major up-round, maybe an early investor wants to lock in a good return, but that's beside the point here. And then of course if things really aren't going well for the company, you're looking at the bad kind of liquidity event--a liquidation.
So if a VC wants to pull out based on a negative hunch, it's probably either impossible or the signal itself will doom the company if it wasn't already doomed.
Just my 2 cents as a first-time founder.
Is that a skewed view? Are there many big companies that would disappear without being able to move to a different platform in under 2 weeks?
I believe no VC is going to invest $50 million dollars purely in hope of vaguely helping the rest of their portfolio. While at the same time vaguely helping every other startup in existence, thus negating any advantage that might accrue to their own companies.
The reality is there is no reason for GitHub to have this much funding and spend so frivolously. This should be a warning.
The good news for them, is they can become much more. GitLab learned earlier on, the value of selling to Enterprise as opposed to startups. They (GitHub) really should have gone on a hiring blitz a few years ago, to find people who understood Enterprise.
GitHub, way over estimated the value of "social programming", when it comes to Enterprise. I would say 80% of programmers in Enterprise, are not passionate about programming and have no interest, in the "social" value, that is offered by GitHub Enterprise. The vast majority of Enterprise programmers see it as a job, and really don't care about what others are working on, unless it directly affects whether or not they can leave work on time.
What GitHub needs to focus on, is doing the hard things, that GitLab and Bitbucket will not be able to do, without serious R&D. I personally think, they should abandon Atom at this point, and use those resources to work on solving harder problems, that Enterprise would gladly pay for. Like better searches, better analytics/reports, better code reviews, and so forth.
As GitHub makes certain parts of the software industry significantly more accessible or cheaper, its complements will succeed commensurately. For example, easy access to, and encouraged proliferation of, skilled talent and robust open source (free) software.
That GitHub provides infrastructure for other startups makes sense, but I'd strongly push back on the idea that VCs will invest in a particular company like GitHub primarily because they think it will improve their investments elsewhere. That's a leap in market forecasting, and the simpler (Occam's Razor) and more rational explanation is that they expect(ed) a good return with some added benefit to "the ecosystem."
I'd be more in favor of this argument if you restated it slightly as, "Investors like investing in companies like GitHub because they can initiate feedback loops with their existing investments that result in mutual prosperity."
GitHub commoditizes (or more accurately, pressures costs lower to commoditization for) several complements that would otherwise reduce the profitability and viability of software based businesses. It provides widespread, free access to software as a hosting provider of open source software. It also provides widespread, comparatively low cost access to proven software talent as a sort of professional social network. As the costs associated with one part of an industry fall, the company that causes that decline and the companies that are complementary to those costs benefit greatly.
It is hard to start a new company offering a product for a market inefficiency that has been thoroughly solved for most use cases by commoditized, open source software. However, companies with a complementary relationship to that software will benefit greatly, either because they will have a wider market potential through new customers or because their own costs will drop precipitously. Similarly, developers commoditize themselves and their own costs to a company if they cease differentiating themselves or make it easier to find a supply of them. As an exercise, who do you think is better off in the video game industry - video game studios who make games with a de facto maximum price of $60 (ignoring DLC and in-game purchases), or Microsoft and Sony, who can charge for access to all of those games on an initial (hardware) and monthly (network) basis? Do you think it is in Apple's favor as a company that sells expensive hardware to have developers on their platform charge more or less for their software?
Anyway, my main point was acknowledging that, yes, GitHub makes a lot of other software companies easier through this principle, but no, I don't really agree that venture capitalists have this as an explicit investment strategy. That attributes to them spectacular market forecasting ability and there is a much simpler explanation, which is that they actually believe the company will do well.
But... we're talking hundreds of millions of dollars in investment. I believe that's too much cash to be just about subsidizing some other companies.
IMO: GitHub has a business model, a reputation and recurring revenues. They may be a "normal"[1] business, with long term value and stable returns over time.
[1] i.e. not yet another ephemeral app with no plan for monetization that grows 100x then sells for 20B and dies 5 years later).
A scrappy low-budget startup can do just fine with a medium sized vm on one of the several places renting vms, running a simple source code control system server. Blowing dozens of megabucks to build a palace in a high-rent district to replace something that's close to free seems, well, dumb.
I suspect they see it as a charity case, if true.
The question I'm asking is whether it's better enough to justify a vast investment. New businesses -- startups -- need to take actions to conserve their cash, and sometimes "good enough" is good enough.
It's especially important to get this right when one choice is an unprofitable unicorn-style company with vast cash outflow.
On the back end, software programming tools and Internet-based services make it easy to launch new global software-powered start-ups in many industries—without the need to invest in new infrastructure and train new employees.
But without that development we'd be stuck with less security, less features, and a blockchain that took weeks or months to download and verify (instead of days). Bitcoin is only possible because of the massive amount of development going into this unprofitable codebase.
And I believe that Blockstream's investors are well aware that they will never have direct ROI on many of those upgrades.
The latter half of the statement applies to Stripe as well. The big difference between GitHub and Stripe is that Stripe's business model is more directly tied to the growth of entrepreneurship economy: the more money goes through Stripe-powered businesses, the more money Stripe makes. In GitHub's case, the correlation is less direct and less predictable.
You probably meant this: