Raising VC funding for a solo-dev OSS project | Hacker News Reader

Raising VC funding for a solo-dev OSS project

blog.tooljet.com

156 pointsnavaneethpk68 comments

To put it into a little context: ToolJet seems to be the leading open-source alternative to Retool, which has recently raised money at $3.2B valuation[1].

Moreover, according to the founder, Retool hasn't even needed any VC money for a couple of years now[2]:

> We actually didn't need the money (we're cashflow-positive). In fact, we haven't touched the money from our Series B (in 2020) nor our Series C (in 2021).

So, ToolJet obviously must look like an attractive investment to any early stage VC in this software category.

[1] https://news.ycombinator.com/item?id=32264454

[2] https://news.ycombinator.com/item?id=32264969

Has anyone tried both? I deployed Tooljet at work because I needed a self-hosted Zapier alternative, but I seem to remember running into some issues and ending up dropping it. I can't be more specific than that as I don't remember, though I think it was related to documentation/getting started quickly, so I was wondering whether others had more experience.

ToolJet cannot be used as an alternative for Zapier as it doesn't have workflow automation capabilities. Probably this was the reason for dropping.

Ahh, you're right, I remember now. I deployed n8n instead later, thanks.

How is n8n? I've been wanting something like Zapier but I can't seem to do HTTP calls to endpoints not in the list of actions.

It's OK, we don't use that either. I think I had lots of issues trying to set up the GitHub webook and I abandoned that as well, sadly. It was fairly easy to set up the main UI otherwise, though.

A few weeks ago I tried a lot of low code tool(building kit)s.

Tooljet was one of them, but I failed at getting the docker container (following https://docs.tooljet.com/docs/contributing-guide/setup/docke... ) to run.

I can point you to my Harbormaster[1] repo if you want, then you just specify the variables and it runs.

[1]: https://pypi.org/project/docker-harbormaster/

I must admit I haven't used (coming from windows development) docker a lot before, and I was doing it on my Macbook. But all the other tools worked.

So tools like yours existing mean, that there can be trouble having several "docker composed" applications running at the same time? That may explain my (for me inexplicable) errors when trying Tooljet.

No, running multiple apps is fine. In fact, it's what Harbormaster does, it just helps you manage server deployments a bit more easily.

Why raise two rounds, diluting your own shares, if you then don’t spend it to grow and capture a larger market? It seems counterintuitive to me.

Surly the VCs expect you to spend the investment, and not doing so isn’t maximising the value of their investment?

Because raising capital sets a price on the company. Now we know retool is $3.2B in value.

The Retool's founder explained this in the linked comment:

> TBH, fundraising is kind of like charades: it's a way to signal you are doing well, without telling people your private company metrics. I wish we never needed to fundraise, and could just focus on building great products and working with customers instead. :)

If they didn't need the money, they could do just that.

The real advantage is for when they decide to sell in X years. Instead of being bought for 1B by Microsoft they'll get 5B because other VC overvalued them in the past.

Yeah it is signal to potential customer, employees and also it always help if you have some money at bank.

It's a signal to me that they're not confident about their market position and will probably need to return the money when VC gets tired of waiting for the growth they typically demand.

They would have never been able to raise three consecutive rounds with increasing valuations without demonstrating to VCs the growth they typically demand.

Firstly, if you're going to raise at all, why not raise when you are in the strongest possible negotiating position (ie when you don't actually need the money)? Presumably they think they may need the money at some point in the future. If you are burning through your runway that gives you additional pressure and VCs can run out the clock and delay rounds to try to get a better deal. Having cash committed takes all of that off the table, and even if there is a downturn etc you have your funding secured from a position of strength and don't need to go cap in hand down the Sandhill road during tough times.

Secondly (some) VCs bring more than just money to the table and by becoming part of their network you get access to their help etc. In my experience even for some pretty big-name VCs this is a dubious benefit but some people like it.

Thirdly the founder gets to act like a bigshot raising a pile of cash.

It's quite interesting that a successful HN launch effectively created ~$10m worth of value, as tooljet was able to raise $1.5m+ within a couple of weeks whereas fund raising efforts before were rejected.

To offer my perspective on it. For the startup I am currently building Caido, we decided to go bootstrap. We started working on the project early 2021 and full time since the beginning of 2022.

We put around 15k in the business as of now and we are still only two working on it. It is realy hard and we have other contracts to pay the bills. I would say I worked around 60h / week for the past 6 months without any vacation.

That being said I still prefer that to VC and the closer we get to commercial launch, the better I feel about that decision as we are somewhat of a niche product and when I look back at me of 6 months ago I was way too green to be put in charge of 1.5M$ and I expect I will say the same in 6 months (feels like years passed).

Now that I got a couple punches in the face and dealt with actually building a business (paperwork, accounting, lawyer, goverment stuff, people issues, etc) in a "safe" environment I feel I would better prepared to build a rocketship.

You’re been wise. As soon as money is invested that’s not your own, the business is in long term trouble.

You're being downvoted but this is especially true of open source projects. Raising money ties the future of the project to the future of the commercial endeavor and misaligns development incentives.

I’m writing from the knowledge of VC money and becoming a publicly traded company.

If you’re actually interested in a generational business, you do not give it away.

Wow. There seems to a number of low-code OS internal tools creator projects. The earliest one I remember is AppSmith. I was really impressed back then and I am really impressed still.

The really like the level of abstraction these tools bring.

Budibase is another!

https://github.com/Budibase/budibase

You should mention this is your project. Preferably in your profile as well, considering that you spam it so often.

I noticed this too. This is the typical dark pattern “growth hacking” that makes people distrust apps like Budibase.

You should really considering following the 10:1 rule from reddit. Your comment history is not a good look.

"For every 1 time you post self-promotional content, 9 other posts (submissions or comments) should not contain self-promotional content."

Somebody should do an API to enforce a certain ratio. Should be trivial with OpenAI et al.

Shameless plug, also check out Lowdefy - https://github.com/lowdefy/lowdefy

Everybody wants to rule the world

I enjoyed the quote in leeoniya's bio yesterday, which I stumbled upon: "All problems in computer science can be solved by another level of abstraction.. Except for the problem of too many levels of abstraction."

More interested on how you secured the investment.

I'm currently pitching for seed for a profitable algorithmic trading company. Cold contacted nearly 60 investors, heard back from 7. Secured one client but no seed yet.

> More interested on how you secured the investment.

Here seems to be the answer: create an open-source alternative to a B2B SaaS product with $xxxM valuation, and then demonstrate a huge traction on Github in a very short period of time.

The investors will get in touch with you themselves.

> I'm currently pitching for seed for a profitable algorithmic trading company. Cold contacted nearly 60 investors, heard back from 7. Secured one client but no seed yet.

Would an algorithmic trading company be considered as a software company or as a hedge fund?

Ran into the exact same problem with a client. Industry and investor type matters as well. Software automation is a hot space and most investors understand it (or claim they do). Capital markets startups are tricky.

A fund is a completely different structure. A proprietary trading company trades its own capital.

What effect does the code base have on adoption for a OSS internal tool?

ToolJet - rails / react

AppSmith - Java / react?

Budibase - node / react?

- correct me if those are wrong.

But we were looking at these tools internally recently, and there were many factors in the decision (sso & self hostable being big ones).

But I’m interested to know from others the extent to which code base & framework decisions of the tool impacted adoption decision.

Stack matters a lot if the project is open-source. We migrated ToolJet's backend from Rails to node after the beta launch last year. We've documented the thoughts behind out decision here: https://blog.tooljet.com/migrating-toojet-from-ruby-on-rails....

The benefits that we got: - Contributions from around 200 contributors so far. - We built a plugin system and plugin development kit that helps community build plugins for ToolJet.

ToolJet anyway is extendable via JS ( use JS anywhere on editor, run custom JS snippets, bring your own React components, etc ), stack also being 100% JS/TS made sense for us.

> But I’m interested to know from others the extent to which code base & framework decisions of the tool impacted adoption decision.

I tend to judge the technical foundations of an open-source project by the programming language it is primarily written in.

From my experience, the highest quality implementations these days come either in Rust, Go, Clojure, Python, or TypeScript.

For older and well-established projects, it's usually C, C++, and Java.

I think what's important here, is not only the performance and the design of the programming language, but the entire ecosystem around it.

I am much more likely to rely on an open-source code that itself relies on high quality battle-tested dependencies.

I'm thinking about starting an OSS project as an alternative to Greenhouse and the likes (applicant tracking software) in written in PHP, as that's my main language at work.

However, I'm a bit relunctant seeing the hate the language gets even though I would use a modern framework like Symfony or API-Platform.

When you are building a SaaS product that only runs on your servers, you can use whatever you want.

But when you are building an OSS product, there are a couple of more things to consider: those who will run it, and those who will contribute to it.

For instance, I love the idea of Nextcloud, but I would neither run it, nor contribute to it as long, as it is written in PHP.

Currently, there are 161 comments on Hacker News with the words "Nextcloud" and "slow" in them:

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

The same applies to Gitlab, which is written in Ruby and runs on Ruby on Rails under the hood.

Currently, there are 1,656 comments on Hacker News with the words "Gitlab" and "slow" in them:

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

Had they made the right technological choices from beginning, there would be no need for articles such as "Why We’re Sticking with Ruby on Rails at GitLab" in 2022:

https://news.ycombinator.com/item?id=31684529

With the CEO of the Gitlab admitting in the comments:

> Performance is indeed worse. We're moving the 20% of the app consuming 80% of the compute to Go.

You should. I wouldn't consider a project not in php and applicant tracking is important.

Honestly I'm amazed tools like this are considered hot by VCs (hasura, retool, now this).

There are literally tons of similar solutions and I generally just pick one of the free / OSS ones when starting a new project I need to do quickly.

If it's client work I'm planning to maintain I'll just roll out custom code - it doesn't take that long more and the extra flexibility and not having to deal with 3rd parties are worth it.

I think the problem is that developers productivity is generally pretty low. This is not because doing the thing is hard: it's actually easier than it's ever been. It's just that developers like to add a lot of crap and friction all around the project.

Instead of going no code, companies should just fix their lazy attitude and change to a get-shit-done culture (I know, I know, it was popular 20 years ago)

I believe there is a more to this than you are considering. Just spinning something up can often be a quick fix which ends up as a time drain down the road. These tools tend to start out very simple, but over time the scope grows, like with all systems and before you know it your back-office software is spaghetti code, outdated, full of bugs and security vulnerabilities.

Considering that these tools often get the lowest priority, since they are used by only a handful of people to do administrative tasks, no dev wants to put up their hand to write some curd app as a side project which has the most access to cross account sensitive data. And even less so do companies want to hear that they need to allocate more resources to something that does not directly benefit customers.

Then there is also knowledge transfer. These tools are flexible enough to build useful things, but usually in a very structured way. By enforcing this, new devs which need to change something in the app can do it right away without breaking stuff. Try to do this on some custom app someone wrote long ago and has since left the company, and it will likely end with - I think we need to rewrite this thing...

Congrats on the project and company, looks really cool! Funnily enough I wanted to write the same post this week. I got lucky enough to get into this current batch of YC, but in the end you ended up in a great spot if you were able to raise directly 1.6M. Our tools have so many similarities, Windmill is also AGPLv3 (https://github.com/windmill-labs/windmill) and also self-hostable, and also about building custom internal tools. We focus a lot less on UI but on the run custom logic part as flows of Deno or Python (and we actually just released an open spec about it we call OpenFlow: https://github.com/windmill-labs/windmill/blob/main/openflow...). So in that sense we could be greatly complementary. If you would be interested to chat: ruben@windmill.dev.

Had seen Windmill a while ago, nice work and happy to chat, let me send you an email to get connected.

It is just my opinion that market opportunity for a tool like this is actually quite small. There are two constant struggles that I can of that you might be facing. People find the product great but don't know what do build with it. It is hard to be in front of the customers when the painpoint is there, and when the painpoint is there they might be solved it is some form. Secondly, developers will trivialize the product. Developers might say things like if I have to run scripts I would rather make it part of the service or it is just a UI to run my scripts, I would rather run it from my machine. Also, you can't really sell to larger orgs, tools like this don't have place and will be competing with retool and others. Don't want to discourage you but it is going to be a uphill battle. With works like a temporary replacement for CRM, backoffice tool for a very short window in small orgs. When they grow, they will either adopt point solutions or retool. Just my opinion.

> People find the product great but don't know what do build with it.

On https://hub.windmill.dev/ we are building tons of flows that you can import in one-click (also available from the product itself) so you get ideas of what to build with it.

> Secondly, developers will trivialize the product. Developers might say things like if I have to run scripts I would rather make it part of the service or it is just a UI to run my scripts, I would rather run it from my machine.

That is one of they key audience that I'd like to convince. I am a very skeptical and high-requirement developer myself and I would have loved to have had a tool like this. What's not to like, the performance overhead is very small (thanks to rust and v8 integration), and it saves you a TON of time to compose scripts the right way. You can self-host it so you can just 'run it from your machine'. You can make it part of your service, it exposes HTTP endpoints for both triggering the script/flow or just waiting for the script to finish and return the result, like AWS Lambda. Having your own self-hosted AWS Lambda does not sound nice ?

> Also, you can't really sell to larger orgs, tools like this don't have place and will be competing with retool and others.

What's your argument there ? You cannot ever sell to a larger org because there is a product that already exist and that already sell to larger orgs ? Being open-source and having openspec is imho a big competitive advantage for selling to large orgs.

I just took a quick look at hub. I saw the example for datadog and pipedrive. Datadog has a script to post metrics. I cannot think of a situation where I would use a script like that, you would rather want it to be from the service itself or the agent. To me it sounds like an anti pattern too. But that's just me. Secondly, for pipedrive i see scripts add user etc. I think in enterprise setting i would use a platform like better cloud that specializes on saas user provisioning. The thing that you are missing and lot of platform in this space is that if you market as it as a devtool then it is not good enough, dev workflow looks very different and you are force fitting this. What has a more cohesion? Adding a script in git, clone and executing it via your machine/teleport/strongdm etc or your service, that makes debugging through stuff more difficult, completely unnatural experience. I think self hosting AWS like lambda is a bad idea because there is huge operational overhead at scale. If you position yourself as CRM alternative, then it makes sense for smaller orgs, but then my argument holds because the moment they become bigger they will transition out of upper platform. Openspec is actually not a differentiator here, there is core problem, when the org mature they invest in point solutions to solve particular issues. I mean well for windmill, may be you have a better insight that I dont have. I have been tracking this space for a while and these are just opinions in the end and might be wrong.

> By choosing VC money, you also have to commit to an exit or a total failure.

I hope that exit strategy is not on the founders team mind at this stage.

Fortunately we were able to find VCs who believe that COSS is not meant for an exit or monetisation in the early days.

Read this article this week, and thanks for sharing!

We're building Lowdefy and have been bootstrapping for the past 3 years. I'll probably also post an article about this soon, it is definitely a whole different journey, and I often ask myself and the team if it is time to pivot our funding strategy.

We're building apps for companies by almost exclusively using our product and iterating as the needs of our clients pushes the boundaries of what the platform can do. Although our medium term objective is to transition into an open-core company, the past few years of building many apps for businesses has exposed us to real world, high value problems. And since our OS community is relatively small still, it gives us the necessary feedback to learn and mature our ideas. The quote, "if you have 6 hours to chop down a tree, spend the first 4 to sharpen your axe" comes to mind - but with that I always wonder what opportunities we are missing because of it.

Congrats on the awesome product you guys are building!

Other articles I've recently found on the topic:

- https://supabase.com/blog/2022/03/25/should-i-open-source-my...

- https://stackoverflow.blog/2021/01/07/open-source-has-a-fund...

- https://www.lunasec.io/docs/blog/how-to-build-an-open-source...

- https://twitter.com/awilkinson/status/1233058058873405441?s=...

- https://github.com/anhtho-lago/awesome-opensource-company

I have tested it few months ago and really liked it! I was also impressed by the fast pace of itterations and new features added constantly. It powerful and fast. We decided to add it to our catalog of managed softwares on Elest.io

If you want to try Tooljet quickly you can deploy a fully managed instance of Tooljet in 3 minutes on Elest.io here:

https://elest.io/open-source/tooljet

Disclaimer: I'm the founder of Elest.io, @Navaneeth I have contacted you over linkedin to discuss about our revenue sharing program with OSS authors.

This project seems pretty popular around the world: https://ossinsight.io/analyze/ToolJet/ToolJet

While I really admire, and often use no-code/low-code tools, it's hard for me to see a clear and sizeable target audience.

Often, it's some sort of variation of a very technically-savvy intra/entrepreneur that has limited dev resources, there aren't many like that.

Coders usually stay away from these kind of solutions because they're often not as flexible as writing code, and force you to work in a method that has to also fit less-technical users.

I was using Zapier a ton and I loved it, but I'm a jack of trades entrepreneur, getting other people on my team to use it was much harder.

For coders that would stay away because of those limitations, we built Windmill (https://github.com/windmill-labs/windmill) as an OSS low-code builder allowing you to define flows (sequence of scripts essentially) made out of arbitrary code in Deno or Python. You can use it as a self-hosted AWS Lambda if you need to but can gradually leverage all the convenience of low-code builders when you feel ready to, and start reusing modules made by the community on https://hub.windmill.dev . You can see it as an open-source alternative to Pipedream which is very different from what Tooljet is doing. So hoping I am not hijacking too much the post as the tools have very different scope and are more complementary than competing.

why did you chose rust for backend instead of say python or js/ts which have wider developer audience?

Googling “no code market size” pulls up number of different sources saying it’s roughly $10-20 billion dollar market.

Zapier itself has a multi-billion dollar valuation.

Zapier is definitely one of the most successful ones, although, I'll take anything about market-size and valuations with a grain of salt, especially considering these are pre-2022 numbers.

The beauty with products like Zapier is that they have a very clear idea of what you can do with it: "connect product X with product Y".

Many of the other no-code/low-code products are very much open-ended and leave a lot of freedom to the user, on paper this sounds great, but when you try to explain your finance admin how they can build an app that will reduce 90% of their workload, they just got no idea what to do with it and keep on doing manual work.

There's another way. Look up "stairstepping" (popularized by Rob Walling et al).

The short version: build something small on the side, offer consulting around that, then change the mix of consulting/product to be more-and-more product until it's all product.

Goes to show that YC does not fund every great founder who applies.

I would say their feedback made sense. While the idea was convincing but it was just an idea, the product was only a couple of weeks into development and had zero traction.

Sure, it's hardest to get funding at the idea stage, when one most needs it. But if I look at your Linkedin, you had some cred as a founder, having had great success with your previous project.

Another great example of a solo-founder OSS project is HTTPie https://httpie.io/

Can only YC founders launch on HN? Is this a YC company?

Reply on news.ycombinator.com