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GitHub lost $66M in nine months of 2016

bloomberg.com

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

#501

Post by Spooky23 »

dsacco wrote: post #263
Spooky23 wrote: post #255

Earlier quoted context omitted.

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.

Clear and obvious to who? What makes you believe this is not a Dunning-Kruger effect on your part? Do the customers have the same special insight you do? Most importantly, is it more likely that you're not as well informed as you think you are, that you don't fully understand the competing priorities at play, or that the business is actually being stupid, as you say?

Thanks for the message board psychological analysis.

In the example that I was loosely referring to, and are not at liberty to discuss in further detail, companies must pay to be qualified to bid on a specific type of business.

Firms that license some specific information are far more likely (on the order of 50%) to successfully bid. This information is clearly disclosed to them when they get qualified.

So they make a voluntary, significant investment to participate in a process, and then fail to take a simple step that would make them far more likely to make money. I call that dumb, but perhaps I am in fact too incompetent to make that assessment.

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

#502

Post by moritzplassnig »

monkmartinez wrote: post #331
moritzplassnig wrote: post #286

Earlier quoted context omitted.

Could be or they probably don't know the details of GitHub's business, product, etc. If you aren't an engineer, writing for Bloomberg and getting the financials of a hyped startup like GitHub, that article is the outcome in most of the cases. Imagine them writing about Docker - I doubt it would be different. Which is a bummer. I wish there would be somebody more closely analyzing the industry. There's so much going o…

> If you aren't an engineer, writing for Bloomberg and getting the financials of a hyped startup like GitHub, that article is the outcome in most of the cases. Imagine them writing about Docker - I doubt it would be different. And it shouldn't be different. If the financials are not well, then the financials are not well. Docker, like github, DOES NOT have their future "locked up" 100%. There are a lot of reasons why…

I think the financials aren't the actual problem & aren't as bad as the article frames them to be. Look at other SaaS companies at a large scale (eg. New Relic) - they also had huge losses after raising larger rounds. I'm not saying that burning such a huge amount is necessarily a good thing. I'm just trying to put it into perspective.

For me, it's especially not surprising because GitHub needed to heavily invest into GitHub Enterprise, start doing Sales, etc. to keep growing at the rate they wanted and they probably made a lot of mistakes when they started Sales. It's hard, and especially if you put Sales into a very developer-driven culture (=> takes you longer to figure it out => more mistakes => costs you more money). That all being said, some things they did are certainly a sign of being a bit too confident (office, etc.).

But, that's all not their biggest threat. You can get the burn easily under control and reduce cost especially if they are primarily in Marketing/Sales. The bigger issue is a decrease in product quality, a (perceived) slower pace for innovating/improving than their competitors (GitLab) and all the internal culture/team struggles. Having changes in your key positions, 2 out of 4 founders leaving, CEO change, etc. - that's all far more dangerous. A good leadership team can control the burn and reduce it if necessary. A good leadership team sets the right culture.

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

#503

Post by Ntrails »

bartread wrote: post #447
flukus wrote: post #384

Earlier quoted context omitted.

Opalgate: https://github.com/opal/opal/issues/941 TLDR: Some possibly transphobic person said something on the internet that got traced back to his github account. Some person not connected to the project complains and get's transphobic person removed from github. Github hires complainer to "improve diversity". That and a couple of other things like their code of conduct have indicated that github wants to be the PC…

Whoa. I didn't know about that either. I'm not going to comment on the content or arguments because, pretty much whatever one says, is going to result in a flamewar. What I do find unsettling is the fallout, including GitHub's behaviour. I like GitHub as a product, and I use it all the time, but it seems at least moderately prudent to migrate repositories to Gitlab (or somewhere else) and keep them up to date, if onl…

> psychopathy isn't so much a disorder as a spectrum on which we all sit

I think you're getting a bit off in terms of perspective here. There's a huge difference between [words on a page] and [Human being I'm talking to]. I might well say something that makes someone on the internet cry, I might laugh and post pubbietears.jpg if they said my comment had made them cry.

If I saw someone crying in close proximity it's likely I'd stop and ask if they were ok (albeit i would also feel very uncomfortable and undecided on said course of action in case it's imposition).

I'm being artificially extreme but it's certainly true that empathy in most people will be more pronounced for a physical person than an online username (who, lets face it, may or may not be representing their reality).

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

#504

Post by moritzplassnig »

sorbits wrote: post #350
moritzplassnig wrote: post #265

Earlier quoted context omitted.

GitHub is a $100M ARR revenue company that is probably (2 VC rounds where they had a lot of leverage) still controlled by the founders. They are in a healthy state right now, regardless of the high burn compared to most VC-backed companies. They certainly made a lot of mistakes, had changes in the leadership team and are successful despite that not because of it, but I don't see them dying anytime soon. $60M burn ove…

> If they continue to grow which seems to be the case, they will be break-even long before they run out of money What are you basing that on? The article says that in 2015 they had revenue of $95 million and lost $27 million. For the first 3 quarters of 2016 the article says they “surpassed last year’s revenue […] with $98 million”, but also that they lost $66 million in that same period. So while revenue doubled, th…

It's a bit tricky because the Bloomberg article states different numbers. It's unclear what they mean with revenue (ARR? Recognized Revenue?).

But, let's take some of those numbers: $25M in Sep'14 (subscription revenue annualized => ARR), $95M in Sep'16 ("revenue" - let's assume it's ARR; recognized revenue would be even better) - that's very impressive growth.

If that continues slowly, let's say they went from $25M to $70M, then growth slowed and they grew to $95M and can get to $120M by the end of next year and grow from there - that's a lot of additional revenue to offset the burn.

Burning $88M per year ($66M in 9 months) after getting $250M from investors + probably a large credit line - even if they don't grow at all, don't reduce cost, that's cash for 3 years.

If they reduce their costs (let's say by $15M), make $25M more in revenue, then it's a $40M lower burn ($48M), and they would still have plenty of the $250M in the bank (+ credit line + what they had before they raised the round).

I'm not saying it's easy or that they are doing phenomenally well. I'm just saying that they can get it under control relatively easily compared to other companies that have high burn rates.

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

#505

Post by dang »

doktrin wrote: post #395
dang wrote: post #57

Earlier quoted context omitted.

To "request clarification" about that is, in fact, "nuts", because (a) it's off topic and worse, and (b) it guarantees a flamewar. Please stop.

Why am I the only one being asked to "stop"? I didn't open this can of worms, and I'm seeing a literal few pages and multiple threads of back and forth from others on this very topic.

You're not the only one being asked to stop. It's good that you didn't open the can of worms, but bad that you fed them. In terms of troll effects, that's not a lot better.

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

#506

Post by tome »

rumcajz wrote: post #445
hyperbovine wrote: post #419

Earlier quoted context omitted.

That's not as big an issue when there are network effects -- look at Craigslist. Plus, what killer feature is bitbucket going to add at this point to make everyone want to switch? They're practically the same product. All the major innovation happened years ago.

Clickable code view would be nice, e.g: http://lxr.linux.no/linux+v4.9/kernel/async.c

This would be wonderful.

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

#507

Post by godmodus »

rauljara wrote: post #483
godmodus wrote: post #452

Earlier quoted context omitted.

i wonder how Linus would have responded, and if linux were to be born today, considering's Linus' abrasive tongue, would survive. some of these people have a point - their small minority though is pretty rabid and off point. i've never seen "RESPECT ME!" ever not backfire, on any scale and for any group. it'll be interesting how we will resolve this kind of emergent social angst - before too much of our future falls…

i've never seen "RESPECT ME!" ever not backfire, on any scale and for any group. Perhaps you mean something different than what I'm understanding you to have said, but demanding respect seams like it was a key part of women's suffrage, the American civil rights movement, and the more recent push for marriage equality [1]. It is true that there are still plenty of people who do not respect those groups, but they curre…

I agree that I respect the suffragettes and even some of what FEMEN even does.

But what I meant is the "REAPECT ME" that leads to being "tolerated" rather than it being earned respect.

Should I take from this that what is being done today is likened to what suffragettes did back in the days of first wave feminism?

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

#508

Post by rexreed »

lmm wrote: post #472
rexreed wrote: post #388

Earlier quoted context omitted.

but is throwing all this money at a company who clearly doesn't know how to effectively deploy it to grab that land (those expenditures are ridiculous) the best way to do it?

Well if they thought another company had better odds than GitHub they'd fund that company instead. GitHub has got to where they are at the moment so they must be doing something right, and startups are dead by default - VCs expect startups to be doing at least some things that defy the established wisdom.

The question is not who or if to fund, but how much. My question has to do with the sheer quantities of investment in Github and the obvious inefficiency and excess in that capital. They could have funded Github half as much, perhaps even less with an equal result in a "land grab" if that's what they really want. So I sense here something else is at play. There must be some investment metrics around invested capital and the sheer quantities of which that have something to do with valuations and expectations and nothing to do with how much capital the company really needs. Imagine you only need $20m and someone gives you $100m because the VCs say because the VCs say that's how much capital they need to deploy. What do you do with that "Extra" $80m? You waste it, that's what. Seems very inefficient, so there must be some other ends here.

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

#509

Post by lmm »

rexreed wrote: post #508
lmm wrote: post #472

Earlier quoted context omitted.

Well if they thought another company had better odds than GitHub they'd fund that company instead. GitHub has got to where they are at the moment so they must be doing something right, and startups are dead by default - VCs expect startups to be doing at least some things that defy the established wisdom.

The question is not who or if to fund, but how much. My question has to do with the sheer quantities of investment in Github and the obvious inefficiency and excess in that capital. They could have funded Github half as much, perhaps even less with an equal result in a "land grab" if that's what they really want. So I sense here something else is at play. There must be some investment metrics around invested capital…

The question of how much to fund by is the same as the question of whether to fund. As a VC you have to trust the companies you fund to spend your money wisely and give them a long leash, letting them spend their money on things you think are stupid - otherwise you're not a VC at all, you're more like the R&D department of a large corporation (which could be a reasonable and profitable thing to be, but there's presumably a reason VC has grown so much and corporate R&D has shrunk).

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

#510

Post by dsacco »

Spooky23 wrote: post #501
dsacco wrote: post #263

Earlier quoted context omitted.

Clear and obvious to who? What makes you believe this is not a Dunning-Kruger effect on your part? Do the customers have the same special insight you do? Most importantly, is it more likely that you're not as well informed as you think you are, that you don't fully understand the competing priorities at play, or that the business is actually being stupid, as you say?

Thanks for the message board psychological analysis. In the example that I was loosely referring to, and are not at liberty to discuss in further detail, companies must pay to be qualified to bid on a specific type of business. Firms that license some specific information are far more likely (on the order of 50%) to successfully bid. This information is clearly disclosed to them when they get qualified. So they make…

Sorry, I don't mean to provide an armchair psychological insight here. I'm just trying to play devil's advocate. While in your specific case your position might be justified, I think there's value in pointing out that many misunderstandings about customer behavior are due to Dunning-Kruger on the part of people selling them things :)
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