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The Cost of Developers

stratechery.com

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Re: The Cost of Developers

#91

Post by cbzbc »

compcoffee wrote: post #76
icedchai wrote: post #48

Earlier quoted context omitted.

1) Equity isn't debt. 2) Profits? You must be kidding. Take a look at some SaaS companies that have gone public in the last 5 years. Few are profitable. It's all about growth of revenue. The profits are way down the line.

> Few are profitable. It's all about growth of revenue. The profits are way down the line. We are officially well on our way to 1999 bubble territory! Nothing matters but revenue growth, even if you're selling dollars for 50 cents.

.. yeah but we make it up on volume!

Re: The Cost of Developers

#92

Post by pjc50 »

SideburnsOfDoom wrote: post #59

MS paid $7.5 Billion for Github, along with its 28 Million users - it's in the first paragraph of the announcement (1) That's around $268 per Github user. Now MS could have probably made a site comparable to Github for 0.1% of that cost - e.g. revive codeplex, pump a few million into the design, backend, git support and user interactions. But it wouldn't have 28M users. That's what they're paying for. That's the hard…

They did, it was called Visual Studio Team Services.

https://blogs.msdn.microsoft.com/devops/2018/06/04/vsts-gith...

Re: The Cost of Developers

#93

Post by dagaci »

evilmushroom wrote: post #81
clbrook wrote: post #24

Earlier quoted context omitted.

Xamarin

I have literally had a mobile team threaten to quit if we adopted Xamarin after they built a small app in it lol.

Xamarin can be pretty tough if you don't have a good appreciation of Xcode, iOS and UWP development and tooling, and underlying differences.

Re: The Cost of Developers

#94

Post by icedchai »

alter_eco123 wrote: post #69
icedchai wrote: post #48

Earlier quoted context omitted.

1) Equity isn't debt. 2) Profits? You must be kidding. Take a look at some SaaS companies that have gone public in the last 5 years. Few are profitable. It's all about growth of revenue. The profits are way down the line.

> Take a look at some SaaS companies that have gone public in the last 5 years. Few are profitable. It's all about growth of revenue. Who's kidding? I doubt you genuinely believe we've reached a new paradigm where bankruptcy is no longer a thing.

Correct. I don’t believe most of these businesses are viable long term. But that hasn’t kept me from profiting on the stocks...

Re: The Cost of Developers

#95

Post by icedchai »

compcoffee wrote: post #76
icedchai wrote: post #48

Earlier quoted context omitted.

1) Equity isn't debt. 2) Profits? You must be kidding. Take a look at some SaaS companies that have gone public in the last 5 years. Few are profitable. It's all about growth of revenue. The profits are way down the line.

> Few are profitable. It's all about growth of revenue. The profits are way down the line. We are officially well on our way to 1999 bubble territory! Nothing matters but revenue growth, even if you're selling dollars for 50 cents.

I remember 1999. We’re not there yet. Let me know when the pets.com socket puppet shows up.

Re: The Cost of Developers

#96

Post by dalbasal »

heydenberk wrote: post #22

> the App Store dramatically lowered the barriers to entry for developers Is there any platform with higher barriers to entry than the App Store? iOS development requires a proprietary toolchain only available on Apple hardware, programming languages hardly used elsewhere, not to mention the $99/year developer fee and the litany of vague and arbitrarily enforced rules and content guidelines for App Store release.

Barriers are things that prevent you from doing stuff. To start a bank, you need billions, a reputation and friends in the industry and central bank approval. Even a whip smart billionaire would struggle.

Getting into the app store requires £1k of hardware, enough programming chops to learn a new language and the sort of bureaucratic hurdles you might encounter signing up to a cable tv contract. If you don't have the chops you can hire them.

Apple do control the whole system via a tight bottleneck, but barriers aren't high. The web is lower still, but that's about the lowest barrier to entry for anything.

Re: The Cost of Developers

#97

Post by dalbasal »

jasode wrote: post #90
dalbasal wrote: post #67

Earlier quoted context omitted.

I agree with one caveat, I don't think it's the amount of money. I think it's valuations, and methods of funding/valuing companies. Zuck still owns 30% of fb, after (I assume) cashing out some shares. Early execs/investors would probably own 75% or more of the company if you exclude shares sold/cashed out (as opposed to dilution). This is because that FB never had to raise serious^ money. Put another way, it does not…

>This is because that FB never had to raise serious^ money. Put another way, it does not cost money to make a FB. Even considering your footnote about market cap, it was actually very expensive to run Facebook. Facebook started in 2004 and didn't turn a profit until 2009. For more than 5 years, they were burning investors' cash on infrastructure. They quickly burned through the 2005 $12.5 million investment from Acce…

Did all of that go into running FB? No cash outs for early employees/investors?

In any case, that is still a small portion of their eventual market cap (2%). Also, they had it. It was cheap money. Why not spend it. If they didn't have it, they may have had to create a revenue stream or control costs a little. Running for years before considering revenue or cost control is a luxury.

When you're cashed up, you get spendy.

But, point taken. It's all matter of degrees. It did cost something to make FB. It just wasn't much compared to most companies its size.

Re: The Cost of Developers

#98

Post by alter_eco123 »

icedchai wrote: post #94
alter_eco123 wrote: post #69

Earlier quoted context omitted.

> Take a look at some SaaS companies that have gone public in the last 5 years. Few are profitable. It's all about growth of revenue. Who's kidding? I doubt you genuinely believe we've reached a new paradigm where bankruptcy is no longer a thing.

Correct. I don’t believe most of these businesses are viable long term. But that hasn’t kept me from profiting on the stocks...

Good for you.

But you were ostensibly addressing the idea of making it as an independent company - not whether and when revenues and profits might suddenly matter again.

Re: The Cost of Developers

#99

Post by hoorayimhelping »

rsp1984 wrote: post #13

There are times when I really like the thoughtful analysis on Stratechery and there are other times when I think it's a complete pile of detached-from-reality horsesh!t. Today is of the 2nd kind. What it also has is a potentially fatal weakness: no platform with user-based leverage. Sorry, what? Windows still has > 90% market share on desktop. If that isn't "user-based leverage" I don't know what is. This, by the way…

>Sorry, what? Windows still has > 90% market share on desktop. If that isn't "user-based leverage" I don't know what is.

I thought that was addressed with this line:

>Windows remains an important platform in the enterprise and for gaming (although Steam, much to Microsoft’s chagrin, takes a good amount of the platform profit there), but the company has no platform presence in mobile, and is in second place in the cloud.

The 90% of users are largely enterprise (who don't go out and buy software on a whim) and Steam customers. Anecdotal, but the only reason I still have a personal Windows machine is to access my huge Steam library. I think a lot of gamers are in a similar situation. If my entire library worked on another platform (and all my preferred hardware), I would have very little reason to stay on Windows.

Re: The Cost of Developers

#100

Post by pythonaut_16 »

jasode wrote: post #65
jillesvangurp wrote: post #28

Earlier quoted context omitted.

Correct, github sold out to investors, which then owned them, which then sold them out to get an exit when it turned out the company was in no shape for an IPO which is the only reasonable other exit if you are looking for a 10x ROI on a company that burned through hundreds of millions. Investors were in this for a huge exit and they just got it. In fairness, MS bought a valuable social network of essentially the ent…

>, github sold out to investors, >Investors were in this for a huge exit I think these excerpts from your comment and also DHH's "VCs need their pound of flesh" are not helpful for readers on how to analyze the situation. They (maybe unintentionally) taint the discussion. Github is an entity owned by human beings. The founders included Chris Wanstrath, Tom Preston-Werner, PJ Hyett, and Scott Chacon. Therefore, emphas…

From the standpoint of an end user (which is all of the people complaining about Microsoft acquiring Github) VCs and their money are the bad guys, because the dynamics of their investment is what causes the acquisitions which change the service in ways that I (the end user) do not like.

Not saying they're right or wrong (I think at the very least it's a limited point of view) but that's the argument being made.

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