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Comment by shubhamjain | Hacker News Reader

I think one of the underappreciated point of github is its excellent business model. The freemium model of providing everything for free if your code is public and charging only for private repositories allowed them to grow exponentially with rising popularity among open source projects.

Sourceforge and Google code tried to cater only for open source projects, while never thinking that code hosting is the problem that needs to be solved.

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I wish Sourceforge would have come to that realization.

Anytime I search for something that tends to be older enterprisy-ish code and it shows up in Sourceforge (iText for example) I can never figure out what the hell is and isn't an ad. If I didn't know better I would suspect a malware vendor purchased it and turned it into a honeypot for lazy devs.

Yes, this, a thousand times yes. The transparently-malicious abuse of ads on SourceForge is a tragedy and it's been that way for years and years. It is a honeypot for lazy people (or those without meticulous attention to detail) and the malware venders didn't even have to purchase the site. SourceForge just rolled over and let them do it.

Dalton Caldwell, who once worked at SourceForge, blames the ad-supported business model as the underlying reason Sourceforge sucked[1]. The users were the product and the real customers were the advertisers no matter how much he and his coworkers wanted to believe otherwise. He credits GitHub's straight up reliance on just user revenue as the key to the quality of their product.

We've all been duped into thinking that ads give us things for free. Sourceforge and all other ad-supported sites are not only not free, they are costing us more than if we just paid[2]. We users neec to hear Maciej Cegłowski[3] exhortation, "Don't Be a Free User"[4].

I can't wait for the day when more people realize that entire web is being held hostage by advertising and a web without ads would be to today's web what GitHub is to Sourceforge.

[1] http://daltoncaldwell.com/an-audacious-proposal

[2] https://news.ycombinator.com/item?id=8585237

[3] https://news.ycombinator.com/user?id=idlewords

[4] https://blog.pinboard.in/2011/12/don_t_be_a_free_user/

Is there a reason/ability to pay Github if all your work is open source (ie. no private repos)?

There's certainly no reason to, but the brilliance of the model is that you repay open source generosity in kind with a killer tool. Naturally open source developers also tend to have day jobs, and then which commercial option do you think they'll be pushing for in all those companies?

Of course it only works because the product is brilliant, and the product is only brilliant because it was created by open source developers scratching their own itch. I don't think the lessons really apply to the wider web.

"Sourceforge and Google code tried to cater only for open source projects, while never thinking that code hosting is the problem that needs to be solved. "

Actually, Google didn't care at the time. We weren't catering, Google Code required you be an open source project to use it. It literally was not trying to solve this problem, because it did not want to.

We knew commercial code hosting was a problem to be solved, we just didn't care :)

Yeah, focus is good.

Glad to see you're happy about not caring.

Have to respect that.

At the same time though, competition is great -- plenty of me wishes you guys had tried to compete via a paid offering, one which may have lasted longer or even have been profitable. And, as a paid offering, potentially brought in some revenue and therefore maybe also had more funding/staff/effort/polish/etc. Provide choice at the very least...

And, even still, maybe Github or similar would have been better -- but I can't help but think that more competition would have resulted in a better outcome [for everyone] than a product shutdown...

> " The freemium model of providing everything for free if your code is public "

I actually prefer Bitbucket model of free private repos for tiny groups. I found myself with a lot of repos that I don't want to share until they are in a minimum quality state.

That model of Bitbucket came up AFTER Github established itself.

True, and I also find it BETTER. It actually came when Atlassian bought out BitBucket[1]. I personally believe GitHub success is founded on git "winning" the DVCS wars, but I won't downplay the fact that they contributed to this.

[1]: http://techcrunch.com/2010/09/29/atlassian-buys-mercurial-pr...

  True, and I also find it BETTER. It actually came when Atlassian bought out BitBucket[1].

Wow, I never knew that. I thought Atlassian created BitBucket. Thanks for the link.

I think GitHub's role in the DVCS war is huge. Git got an early lead thanks to Linus Torvalds, but it was GitHub that let it ultimately steamroller Mercurial and the also-rans. GitHub was the war-winner because of Metcalfe's law - as soon as it had a 40% advantage in numbers, it had a two-fold advantage in value, and from there there was no going back from there.

IMO, Google's problem is that many enterprise customers believe they need on-premise, and realistically, Google cannot deliver on-premise solutions of systems designed to work on their Google scale platforms.

I mean, that google search appliance seems like a reverse engineering / wikileaks dream. 'Here's a box accesses internal customer documents, and nobody knows how to upgrade'.

My understanding is that GitHub makes the majority of its revenue by selling on premise versions. So there's another layer/level to the genius of their business model.

Do they have a sizable enterprise sales force, or is cloud-hosted github a sufficient demand generator of inbound sales?

Great question! I believe it's both. Cloud hosted becomes the lead gen and they've had to build a team to manage that deal flow. I don't think they're doing any cold outbound though.

Is it actually a good business model, though? My understanding is GitHub is not profitable, and relies on VC funding to keep operating. At this point it seems like it will never be profitable unless they find some other significant source of income (as there's no reason to believe that there's hordes of companies out there just waiting to start paying GitHub for private repos). What's going to happen when the VC funding dries up?

In August 2010: https://signalvnoise.com/posts/2486-bootstrapped-profitable-.... That might imply that at that time at least GitHub was profitable?

I have no knowledge one way or another.

GitHub took VC funding in 2012. $100M from Andreessen Horowitz and SV Angel.

I have no direct knowledge about their revenue stream, but profitable companies don't usually seek VC funding, and I've heard from other people (who may or may not actually know what they're talking about) that they're not profitable and are relying on the VC funding to operate.

And they're certainly spending money like it's not their own. Check out their ridiculous office: https://customspaces.com/office/DhXb6EKlE9/github-office-san.... And that bar. That's "we're spending VC money" behavior, not "we're spending our own revenue" behavior.

Their offices are not that different from Google's por AirBnB's, which are definitely profitable.

Taking VC's money is usually a sign of a company that wants to grow faster or want something else the VC may bring to the table (connections, expertise, ...)

I have no idea if they are profitable or not, but your comment seems to be based entirely on heresay.

I think it's a hard business model that's for sure.

Most people here think that Freemium works because you have Open Source developers who have 'day jobs' which means they'll be more likely to buy the private services. That's a bit of a stretch because it's mostly development managers who choose the development tools at any reasonable size company and they have a lot of other concerns.

There's also a scaling issue in model. A flat fee for a repository doesn't go much of a way towards paying for the total cost of developing and delivering a complete web platform where your costs scale by number of developers and infrastructure.

The major thing in Githubs favour is they are now the place for Open Source development so they have other revenue opportunities. I can imagine good revenue opportunities with large partners (e.g Microsoft) that want to reach out to developers: separately their large database of developers is a big asset for other services. Presumably, the VC money is predicated on new revenue streams over time.

I general, I agree with you. But I am concerned about their long-term profitability. Assuming that what I've been told is correct and they are relying on VC funding to operate, what happens when it dries up? There are indeed revenue opportunities with large partners, but who knows if that will ever actually pan out? I'm also a little skeptical about their ability to work with a large partner. I was told recently by an employee at a large tech firm (please forgive my vagueness) that said tech firm looked into using GitHub internally. But GitHub Enterprise was not suitable (it doesn't scale), and GitHub was hostile to the idea of providing a solution that did scale. This technology company needed a solution like the one that github.com uses (since that obviously scales) except completely in-house (like GutHub Enterprise). And they probably would have paid a rather absurd amount of money for it. But GitHub said no.

I'm relating this story because it feels to me like GitHub's culture is such that they can't "play ball" with large companies that need custom solutions. Enterprise may be a fine product but it apparently is only suitable for small-to-medium businesses (I gather that it basically can only run on one server and so can't scale for a large deployment, though I haven't personally investigated the matter).

My fear is that, assuming they are relying on VC funding to operate, in 5 years they'll run out of money and start shopping around for some large company to acquire them.

Addendum: I really hope I'm wrong and that they are profitable. I want GitHub to stick around for a long time. Who knows, maybe they only took VC funding because they thought it was worth giving up a portion of the company in order to afford swanky new offices?

SF had an "enterprise" version for running in-house, but IIRC it was fairly expensive. I seem to recall $10k+ when I tried to price it out in 2001. Totally not worth it for a small shop. Free tools like gforge sprang up as replacements, but were just as clunky to use, if not moreso, and were rather difficult to install.

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