I guess it's time to move away code from github. Now a VC has insights into all private repositories ... a VC that possibly is funding competition.
Github Raises $100 Million
201–210 of 230 posts
Re: Github Raises $100 Million
#202I can't help but think that this investment marks the Pets.com point in this investment cycle. GitHub is essentially a web interface to a single open-source DVCS. The switching costs to using another DVCS such as Mercurial (which I personally prefer) or another Git hosting provider are minimal. There are no barriers to entry since Git is and always will be free. There are very few network effect benefits to using Git…
I completely disagree with this.
There is no WAY that anybody ever loved Pets.com the way that I love GitHub.
And I'm not the only one! Not by a long shot.
Re: Github Raises $100 Million
#203Earlier quoted context omitted.
You're right -- let me reword -- nothing that he wrote is true except for the first half of the third paragraph.
> GitHub is essentially a web interface to a single open-source DVCS. Maybe I'm missing something, but does GitHub support something other than Git? > The switching costs to using another [...] Git hosting provider are minimal. $ git clone git://github.com/jbarham/stathat-line-counter.git $ cd stathat-line-counter/ $ git remote add bitbucket ssh://git@bitbucket.org/jbarham/stathat-line-counter.git $ git push -u bitbu…
GitHub recently announced Subversion bridging:
https://github.com/blog/1178-collaborating-on-github-with-su...
Re: Github Raises $100 Million
#204I can't help but think that this investment marks the Pets.com point in this investment cycle. GitHub is essentially a web interface to a single open-source DVCS. The switching costs to using another DVCS such as Mercurial (which I personally prefer) or another Git hosting provider are minimal. There are no barriers to entry since Git is and always will be free. There are very few network effect benefits to using Git…
Your argument is contradictory. If they only need to beat those 2%, they are not under pressure to deliver spectacular returns .
According to the article the valuation is $750m, that means they probably purchased 12.5% for $100m. To generate a 2% return on $100m @ 12.5% implies $16m of distributable profits. Assuming 40% of GitHub is net profit (a generous estimate), this implies $40m in revenue.
That represents 476k 'micro' subscribers in one year, 277k 'small' subscribers, 151k 'medium' subscribers. Cheapest business plan (bronze) would require 133k; most expensive (platinum) would require 16.7k subscriptions. Github announced 1 million users on 21 September 2011. I can't find any details about current #s or the % of paying users.
Remember that all these numbers double if GitHub only has 20% net profit (bear in mind this would be 2.5% higher than the insurance industry, which is an extraordinarily predictable and profitable industry, and oil/gas, the most profitable industry, sits at 25%).
So while not 'spectacular' it's not at all obvious whether they can generate the sales required to generate the return necessary, and the optimistic attitude of people posting here without any numbers to support their conclusions is a bit disturbing (not a reflection on parent's comment, but in general).
Looking at the numbers I'll make the following observations:
- the total market size of potential GitHub users has a fairly low limit (somewhere in the 10s of millions I would guess)
- GitHub has some popularist advantages but ultimately competes on price as far as I can tell (I've started moving to Bitbucket because I see no point in paying for something I can get for free, and the recent hack shows GitHub doesn't offer better security AFAIT); as soon as they gain a larger market share there's no reason to believe competitors won't want in on the action, and as GP points out, switching repository hosts is really easy
- while it looks like they'll be able to generate that 2% return over the next few years I'm struggling to see them generating a much more interesting return based on the numbers I'm looking at
- I have a feeling people are confusing feelings of "GitHub is cool and I like it" for implying that "GitHub should do well as a profit generating business for its investors"; they are also probably fantasizing about having $100m invested in their own startups and taking criticism as personal attacks on this 'plan'
Re: Github Raises $100 Million
#205Earlier quoted context omitted.
I do not follow this logic. They have enormously succeeded from the moment of Github's inception to this point. Does it not make sense to invest in them if they believe they can utilize new capital to expand their platform? In any case the money believes in them. And they are already vetted.
They've never been a capital-intensive business, so it doesn't make great sense to invest substantial sums. Its more likely to change the business to one focused on maximizing profit, rather than improve the product. Try the analogy where a startup is like a band (I'm not the first to use this). After the band sells out, do you expect better music? As the cliche goes, their artistic integrity is compromised, the memb…
If anything, innovation on their product is going to speed up with the funding, then slow down because they hire a ton of engineers who need to be ramped. Then they will plateau.
With funding comes expectations. Github has never had to answer to anyone but their community and customers (and their board, but the board had no real monetary stake in the company outside of stock). Now A16Z has some control over their operations. Not sure what their terms were in the deal, but investment and board members change how a company operates.
Hope for good things and more elaborate octocats
Re: Github Raises $100 Million
#206I have to imagine that a chunk of that money is to provide liquidity to the founders, which they very much deserve. I don't really see how this is a bad thing. They were very much profitable, and were likely able to dictate the terms of the deal. Also, the money came from one of the most, if not THE most, reputable and respected VC firms.
"I don't really see how this is a bad thing." They were independent and profitable company. Now they are virtally deep in debt. Everything they do now will be focused on one thing only - how to pay back that debt. They have people on board who's only goal is to get that loan back in multiples. Every decision from now on will be waged against the question "will it pay back the loan". Independency is lost, now we have…
I think you're not talking about GitHub. Because I see A company which started from zero, revolutionized SCS, socialized coding. Makes a lot of cash, not from advertisement, but from an actual useful product. A Product that people love to use. I think A16Z is a very clever firm that invested in a very solid product.
GitHub has 102 employees. Which means they're already paying around $10M wage in a year and they're profitable. I bet they're at least making $20M per year right now. They're going after the enterprise market which would make them much much more cash.
Do the math. Is it really hard to pay that money back in a company like this ? Is AirBnB, Dropbox, Evernote in trouble ?
Github is not troubled.
Re: Github Raises $100 Million
#207I can't help but think that this investment marks the Pets.com point in this investment cycle. GitHub is essentially a web interface to a single open-source DVCS. The switching costs to using another DVCS such as Mercurial (which I personally prefer) or another Git hosting provider are minimal. There are no barriers to entry since Git is and always will be free. There are very few network effect benefits to using Git…
GitHub is essentially a web interface to a single open-source DVCS
I don't think GitHub is popular because it's just a web front-end over a DVCS.
I'm basically a mercurial user. Use it for work. Used it for all my personal projects. The commands and workflow seem much cleaner and make much more sense to me than git's. I switched to git for personal projects soley because of GitHub.
Partly because it has a very good user experience and is snappy (bitbucket is slow in comparison) but mostly because that's where everyone else is.
I'd go as far as to say that GitHub has done more for git than git has done for GitHub.
Re: Github Raises $100 Million
#208I hope this doesn't mean everyone now gets free private repos but now with ads served up.
Re: Github Raises $100 Million
#209Earlier quoted context omitted.
You're right -- let me reword -- nothing that he wrote is true except for the first half of the third paragraph.
> GitHub is essentially a web interface to a single open-source DVCS. Maybe I'm missing something, but does GitHub support something other than Git? > The switching costs to using another [...] Git hosting provider are minimal. $ git clone git://github.com/jbarham/stathat-line-counter.git $ cd stathat-line-counter/ $ git remote add bitbucket ssh://git@bitbucket.org/jbarham/stathat-line-counter.git $ git push -u bitbu…
> GitHub is essentially a web interface to a single open-source DVCS.
Maybe I'm missing something, but does GitHub support something other than Git?
The wrong part of that sentence is the word essentially.
GitHub is essentially a social/collaboration app for people who spin code.
The fact that it uses the git distributed version control system is an implementation detail.
The essence of GitHub is in the network of people who use it and how easy it is to do so. Not in the fact that its a (really really) good front-end to a particular tool.
Re: Github Raises $100 Million
#210Earlier quoted context omitted.
> With 0 dollars, a couple of guys built something amazing. I can't wait to see what they can do with 100 million. Since substantial funding wasn't a contribution to their first success, nor apparently even their goal, there's no reason to expect that throwing money at them would lead to something even more amazing.
Except that virtually every big company that we admire has successfully used the cash that they've raised to build awesome things that they otherwise couldn't have afforded without considerable risk or years of building up a war chest. Cash is a tool. Disciplined companies CAN use cash intelligently.
"Cash is a tool. Disciplined companies CAN use cash intelligently."
'nuff said!