And what that means is, yeah, either they keep burning $$$ every month and selling more of the control to VCs to feed the war chest until they maybe buy 2nd place, find an acquirer (and with that much ever-increasing VC control, a likely push), or yeah, layoffs will happen. Gitlab is extra interesting because their definition of innovation is biting off even more surface area (e.g., CI), and therefore even more burn.
Keep in mind.. all this says zero about how nice the product quality is or how friendly the people are. But just in the same way you don't get mad at what happens if you stick your hand in a lawn mower (https://www.youtube.com/watch?v=-zRN7XLCRhc&t=34m7s) ... there are financial forces at play from being a high-spending bottom feeder that are hard to escape. Possible, and I wish them luck, but that's a real bet.
AFAIK, Github went for growth. Gitlab went for cash flow. Gitlab is profitable and, imo, their product is comprehensively superior to Github.
>Keep in mind.. all this says zero about how nice the product quality is or how friendly the people are.
Then don't use the term bottom feeder since that means the people are making a shitty product with no ethics to really innovate. It says the people are shameful hacks and the quality of the product is bad.
In reality Gitlab is a better product and the people involved should be proud of their work.
I don't think their official statements match that? They say their fundraising approach is 2yr runway, which is only 6mo longer than the advice for a regular VC-backed startup, and they've been raising increasing amounts ~annually.
Based on that, having 275+ employees, and their stated IPO targets, I ran the numbers recently. My guess was their costs are ~$40M year (admirable: I expected way higher but they focus on non-US hires and pay only 50% percentile in _local_ markets: super low!). Likewise, their stated IPO and growth targets make me guess they make ~$20M/yr. So two different reasons to believe they're burning... ~$20M/yr. The positive thing for them, which they're not public about but I'd guess, is while they're probably growing OK in regular accounts (hard competition vs bitbucket, github, etc.), they're probably Super Great on retention + internal expansion, so net negative churn, compounding factors, etc. I think they _can_ stop hiring and let revenue catch up, though other forces take hold then: so it does look like they're on the classic growth-over-control VC treadmill (despite saying they're not), and will keep ceding control to VCs.
I think you may be correct and my information was out of date. According to the strategy documents that Gitlab publishes they seem to have changed direction towards growth via SaaS:
"""
During phase 2 there is a natural inclination to focus only on on-premises since we make all our money there. Having GitHub focus on SaaS instead of on-premises gave us a great opportunity to achieve phase 1. But GitHub was not wrong, they were early. When everyone was focused on video on demand Netflix focused on shipping DVD's by mail. Not because it was the future but because it was the biggest market. The biggest mistake they could have made was to stick with DVDs. Instead they leveraged the revenue generated with the DVDs to build the best video on demand service.
"""
The term bottom feeder refers to going after the "leftovers" that premium market leaders leave on the table: lower-paying, more demanding (e.g., requires open source), higher acquisition cost (closeted international markets), etc. Good B2B companies often raise prices as they deliver more value and build brand trust, and as they establish the market, bottom feeders will pop up and spot the missing chunks. However, they are forced to play catchup in terms of features and with less $ (or a LOT of VC $). Says nothing about being nice, smart, and high quality, just the market & financial pressures.
No label is ever 100% accurate, but a lot of that dynamic has played out here pretty clearly..
And what that means is, yeah, either they keep burning $$$ every month and selling more of the control to VCs to feed the war chest until they maybe buy 2nd place, find an acquirer (and with that much ever-increasing VC control, a likely push), or yeah, layoffs will happen. Gitlab is extra interesting because their definition of innovation is biting off even more surface area (e.g., CI), and therefore even more burn.
Keep in mind.. all this says zero about how nice the product quality is or how friendly the people are. But just in the same way you don't get mad at what happens if you stick your hand in a lawn mower (https://www.youtube.com/watch?v=-zRN7XLCRhc&t=34m7s) ... there are financial forces at play from being a high-spending bottom feeder that are hard to escape. Possible, and I wish them luck, but that's a real bet.