I agree, let me take a stab at starting the conversation.
First of all, huge respect to Slava for this writeup. Having your startup fail is hard and it is not the time you want to blog about it. RethinkDB going broke was a sad thing to see for me, I can't imagine how it felt for him.
I think the analysis of the two root causes (hard market, focus on the wrong metrics) is accurate. It is very sad to see that in the end correctness doesn't win the day, not even for databases.
Since I run a startup too I can't help but apply his criteria to GitLab.
3. A use case => we're making GitLab an integrated tool with a broad scope https://about.gitlab.com/direction/#scope A good way to develop software from idea to production.
I hope the above list doesn't come across as pretentious. I welcome pushback and the opportunity to talk more about the OP.
I think the OP premise that it is hard to make money in the cloud is accurate. We're spending hundreds of thousands of dollars to make GitLab.com run and revenue takes a long time to grow. Selling on-premises software products has higher margins than a service.
BTW I appreciate the shoutout to GitLab as one of the five exceptions that are doing well in the open source developer market.
I'll attempt to add to this. I might be stating things that are a bit controversial here.
1 thing we are always transparent with users about is how our business model works. 1 of my favorite videos on the internet about this is [1]. We are very much based on closed source for making revenue. This has actually helped with our community a lot.
We are basically focused on closed source solutions for specific verticals. The only way to get clients to pay is to make something more efficient or don't open source/core it. For open source companies there is always a trade off of community vs customers. You have to find a hard line and stick to it.
Community is great, but most of those people won't want to pay you. You can try to convert them, but that takes a lot of time and isn't the best path to market.
We strive to provide a great base line experience to our users, but a few of the things we have found in practice that helps:
1. Features have customer names on them
2. There's a mass of community interest in a specific feature
You have to be careful about where time is spent.
It's very easy to mistake "users" for "customers".
I wish slava and co the best of luck and really appreciate their post mortem. 1 thing we've learned as an infra company is "be as close to the app as possible". In our case the bulk of what we focus on is banking/telco anomaly detection.
It's a straight forward revenue making product that can benefit from deep learning. The great thing is we can grow in to other use cases later on if we find something else interesting to work on.
Even seen this backfire at many commercial companies. Adding whatever features a company is willing to pay for will often pull a product in multiple, incompatible directions.
I'll give you that. In my case, a lot of what we do is look for numbers and how well it fits our main application area.
You definitely have a valid point here though.
That actually goes hand in hand with "users look like customers". Also: "Not every customer is a good customer."
First of all, huge respect to Slava for this writeup. Having your startup fail is hard and it is not the time you want to blog about it. RethinkDB going broke was a sad thing to see for me, I can't imagine how it felt for him.
I think the analysis of the two root causes (hard market, focus on the wrong metrics) is accurate. It is very sad to see that in the end correctness doesn't win the day, not even for databases.
Since I run a startup too I can't help but apply his criteria to GitLab.
Good metrics to focus on:
1. Timely arrival => we try to ship great features every month on the 22nd, something that both our users https://twitter.com/PragTob/statuses/767777202045915136 and the parody account likely run by our competitors employees agree on https://twitter.com/gitlabceohere/status/768440048802947073
2. Palpable speed => we're doing OK on self hosted, really bad on GitLab.com (fixes are in https://gitlab.com/gitlab-com/infrastructure/issues/947 ). If you look beyond latency but to workflow we're doing great in integrating various parts of the process https://about.gitlab.com/2016/11/14/idea-to-production/
3. A use case => we're making GitLab an integrated tool with a broad scope https://about.gitlab.com/direction/#scope A good way to develop software from idea to production.
I hope the above list doesn't come across as pretentious. I welcome pushback and the opportunity to talk more about the OP.
I think the OP premise that it is hard to make money in the cloud is accurate. We're spending hundreds of thousands of dollars to make GitLab.com run and revenue takes a long time to grow. Selling on-premises software products has higher margins than a service.
BTW I appreciate the shoutout to GitLab as one of the five exceptions that are doing well in the open source developer market.