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Comment by marcinzm | Hacker News Reader

As I see it Hashicorp has failed to create a viable business model in an environment where there isn't unlimited perpetual VC money. Now they're at the stage of giving up and simply trying to shake down those who have managed to make better business models.

It's usually not a good idea to be near a company flailing like this since who knows what their next rent seeking approach will be. A company with nothing to lose is a dangerous partner to have.

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The worst part is they did create a viable business model. They were profitable when they had their IPO. They then pretended that the IPO was just another Series X investment, blew all the money, and went negative on their cashflow.

Hashicorps problem isn't that their business model doesn't work, it's that they are really bad at their jobs. They ignore customer feedback, laid off support people, and then jacked their prices up. It's a self inflicted wound, and instead of trying to fix it they just keep making it worse.

I've worked for three companies now that went to hashicorp to buy TFE and left with a quote equal to a quarter or more of revenue and the sales rep acting like they are the second coming and obviously we are stupid for not thinking they bring that much value to our org. No org invests 1/4 of their revenue on a single tool. So we used atlantis or spacelift or hand rolled GHA scripts and saved a fortune.

We are trying to pay them and they are being so unreasonable with pricing that we can't give them our money

It’s been that way for years with them. It’ll be interesting to see if they go the road if a private equity buyout, or they’re acquired by a technology company for the copyright/trademark.

Have you actually read the financial statements? None of what you just wrote is remotely true.

I looked it up and you're right, but it's also striking to me how much they spend on sales and marketing: almost 75% of their gross revenue in 2023!

Definitely, the fact they're rent seeking against similar small companies clearly shows that. Sad that rather than looking inward to improve themselves they've decided to just attack others.

Blew all that money? They still had about $1B in the bank at the last earnings, and they only raised $1.2B in the IPO iirc

A company that loses money is a dangerous long-term partner, full stop.

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