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This marks the beginning of the end of developer tools as a VC business play.
It’s simply impossible to make money selling to developers (in almost all scenarios)
After their disastrous license change and the reasons for it I figure their biggest Exit Plan would include being acquired. I made a couple of Option calls based on this. Monday could be good.
Earlier quoted context omitted.
It’s simply impossible to make money selling to developers (in almost all scenarios)
Jetbrains seems to do OK. I pay for my subscription out of pocket.
The reason selling devtools is hard is there's generally no established budget to sell into. I already have budget for various things - a vendor comes to me and tries to sell their product/tool/saas I'm looking what I can move around to afford it. If yours does a better job of something I'm already paying for, then it's the easiest sell of them all. Eg why most companies have moved off of Pagerduty.
If the tool is small enough $/user I can probably afford it without too much trouble or approval - budgets have some padding and there's always some wiggle room, something to deprecate etc.
Unfortunately, Hashicorp like some other devtools companies was too proud and only wanted to sell Terraform to large Enterprise ($100k/yr). I'd have been happy to give them $/dev/mth but that was never an option. GitLab is similar. Their pricing is either free or insane with little middle ground. I pleaded with a sales rep - I'm happy to stay on the free features but give you some money for "support" but they wouldn't take my money. Utter madness of a business model to turn down money.
To justify Terraform Enterprise ($100k/yr) I would need to get new budget. This could take a year. I need to get internal buy-in which takes time but there's no way to show the business the productivity gains until I'm using it. Catch 22.
What Hashicorp should have done is a near free version. Get people comfortable with running Terraform on the cloud and out of awful CI pipelines, then upsell features as their customers naturally grow (concurrency/security/training etc).
Having had paid customers would have given Hashicorp a mechanism to be able to listen to and get feedback on how their tools were actually being used and the pain points businesses had.
Thankfully we now have OpenTofu and the likes of Spacelift et al.
What a missed opportunity.
Earlier quoted context omitted.
It’s simply impossible to make money selling to developers (in almost all scenarios)
Is Stripe a Dev tool ? What about all of AWS ? I guess the statement should be its impossible to make money selling replicable IP
Devtools are about developer efficiency etc.