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GitHub lost $66M in nine months of 2016

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Re: GitHub lost $66M in nine months of 2016

#252
post #190

Earlier quoted context omitted.

Perhaps you live in a world different from mine, but what you describe as "cartoonishly foolish" behavior I consider completely standard. Customers refuse to spend 5000 to make 20.000 all the time, or they're willing to waste weeks finding a different vendor that can offer the same for 3000. Others are willing to walk away from a great deal unless they get a discount, but are content with a tiny discount. Because a d…

> Because a discount to them signifies a moral victory, or that they're not being taken advantage of, or they simply want to believe they're great negotiators or something like that. I don't get it, but I have seen it often enough for it not to be unusual. Then why not raise your price to $99, and let them negotiate you down to... $35?

If you can get such a big discount, that's a red flag: the price was bogus, I'm being conned (or, more charitably, a communication error might have been made). It's typical for enterprise purchase of software or IT services, for example, to either discard or put in question offers that are quite below their competitors in the RFP.

But on the other hand, again, when dealing with enterprise purchases, the purchases department needs to demonstrate that they bring value to the table by lowering costs. So it is typical to make what you suggest and account for a commercial discount of 3-10%,depending on purchase size, etc.

You need to fight for it, but you are safe to grant it in the end.

This might happen even if you don't know about it, if your boss sets the prices and you can request a special discount for special clients.

Re: GitHub lost $66M in nine months of 2016

#253
post #190

Earlier quoted context omitted.

Perhaps you live in a world different from mine, but what you describe as "cartoonishly foolish" behavior I consider completely standard. Customers refuse to spend 5000 to make 20.000 all the time, or they're willing to waste weeks finding a different vendor that can offer the same for 3000. Others are willing to walk away from a great deal unless they get a discount, but are content with a tiny discount. Because a d…

> Because a discount to them signifies a moral victory, or that they're not being taken advantage of, or they simply want to believe they're great negotiators or something like that. I don't get it, but I have seen it often enough for it not to be unusual. Then why not raise your price to $99, and let them negotiate you down to... $35?

If you can get a big discount, that's a red flag: the price was bogus, I'm being conned (or, more charitably, a communication error might have been made). It's typical for enterprise purchase of software or IT services, for example, to either discard or put in question offers that are quite below their competitors in the RFP.

But on the other hand, again, when dealing with enterprise purchases, the purchases department needs to demonstrate that they bring value to the table by lowering costs. So it is typical to make what you suggest and account for a commercial discount of 3-10%,depending on purchase size, etc.

You need to fight for it, but you are safe to grant it in the end.

This might happen even if you don't know about it, if your boss sets the prices and you can request a special discount for special clients.

Re: GitHub lost $66M in nine months of 2016

#254

Earlier quoted context omitted.

> It was that conversation that made me realize how we've become accustomed to the quality and price of software that's been heavily subsidised by massive VC investments. Not to mention open source, sponsored by big companies, universities and passionate individual contributors. E.g. try and sell a compiler, a JS framework or an IDE.

> or an IDE I think JetBrains is doing fine...

and Atlassian is selling fine when there are heaps of open-source bugtrackers, wiki, git hosters, build engines and chat tools.

Re: GitHub lost $66M in nine months of 2016

#255
post #157
post #102

This is an example of how VCs distort the market for other businesses. I had a recent conversation with a prospect and they took issue with the price of our software. Our app is in a specialized industry (ie. a smaller market). We charge a per use fee of $35. This fee enables our customer to immediately earn nearly $200 (a 5x return with no risk to them). Despite the significant benefit and profitability of using the…

I agree with the idea that venture capitalists alter ("distort" is a loaded term) the market in their favor. That's part of the natural process of systems commoditizing their complements. But I really think that you characterize this in an uncharitable way with your example, which I have difficulty believing as it was stated. If your lead really understood that they would "immediately earn a 5x return with no risk",…

People do stupid shit like this all of the time.

Folks are trained to get many types of products for free. I've seen similar cases where businesses refuse to pay for things like licensed information that have a clear and obvious value.

Re: GitHub lost $66M in nine months of 2016

#257
post #60
post #3

The thought of losing Github to the startup graveyard is kind of scary. It was bad enough to lose Google Code and when SourceForge had their "great purge" of inactive projects.

We'll just move the code to gitlab. Git allow us to do it almost painlessly (well, with a missing issue backlog). It's not a big deal.

GitLab's self-hosted requirements are too high for my small needs so I use gogs.io.

It's a git web interface written in Go and is much more friendly on a VPS with small amounts of memory.

Re: GitHub lost $66M in nine months of 2016

#258
post #190

Earlier quoted context omitted.

Perhaps you live in a world different from mine, but what you describe as "cartoonishly foolish" behavior I consider completely standard. Customers refuse to spend 5000 to make 20.000 all the time, or they're willing to waste weeks finding a different vendor that can offer the same for 3000. Others are willing to walk away from a great deal unless they get a discount, but are content with a tiny discount. Because a d…

Too true. I had a potential client who had already spent months and a bunch of money on external consultants regarding an intermittent identity management integration issue. They heard about me through word-of-mouth. I offered a fixed-price "no win, no fee" rate equal to about a week of my normal hourly rate. I thought it was a great deal given how much they'd already spent, plus it gave some certainty to them around…

Forgive me if this comes across as patronizing, but I think you might avoid this in the future by doing the following:

* Charge daily or weekly, not hourly.

* Don't anchor your results to "free" (this includes not getting paid unless specific results happen).

* If a customer has been repeatedly burned by other consultants and believes this problem could be solved in an hour, consider either 1) avoiding those customers or 2) working on an agreeable scope that precludes an absurd amount of time.

I'm not saying that will fix all your problems, but if it helps, I've never encountered this issue with this formula.

Re: GitHub lost $66M in nine months of 2016

#259
post #235

Earlier quoted context omitted.

I live in the same world as you. My business has a proven model for digital publishers that generally increases their yield 2-4x yet they refuse to spend the percentage needed to make the deal happen. Sometimes pride can be so large...spend 5k to make 50k? No thanks..lol

1. They don't believe the benefit will be realised in their circumstance. 2. There is both opportunity cost and hidden cost for trying your solution.

And to add, these are reasonable things for a consumer to believe that are not evidence of irrationality.

Re: GitHub lost $66M in nine months of 2016

#260

Earlier quoted context omitted.

I'm not sure Google or Microsoft offer hope. The former seem like it would soon shutter it as not returning added value to shareholders and the latter like they'd subtly degrade access from non MS platforms until people wished Google had bought it and shut it down. It seems like other smaller companies have exploited the profitable parts of Github's niche out from under them. I think I here a bell tolling.

> the latter like they'd subtly degrade access from non MS platforms until people wished Google had bought it and shut it down. Maybe I'm too nice to them, but that doesn't seem like Microsoft's modus operandi anymore. These days they're all about getting people to buy more CPU cycles from Azure, rather than trying to seriously pursue Windows platform lock-in (which is a lost cause and they know it). I imagine if Mic…

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