Bootstrapped, Profitable, & Proud: GitHub
Published in 2010, this chronicle by @fogus details the mechanics of building a profitable, self-funded business without venture backing.
Core Principles for Independent Builders:
Charging customers from day one acts as the ultimate filter for building software that solves genuine, high-urgency problems.
Keeping fixed overhead low and leveraging lean infrastructure allows founders to stay alive until market tailwinds kick in.
Small, repetitive improvements in customer retention and conversion rates yield massive returns over multi-year horizons.
Community Debate Themes:
The community focused on B2B customer acquisition channels, cold email vs SEO distribution, and balancing full-time employment with side-project development.
CATEGORY Bootstrapping & MRR →
HISTORICAL ERA Web 2.0 Genesis (2007–2013)
COMMUNITY SCORE 238 points
TOTAL DISCUSSIONS 27 comments
The most salient point to me was the fact that github was not initially conceived of as a business, but as a tool the founders desired for the betterment of their own day to day. And not only that, but github was quickly adopted in the founders' workplaces at the time, giving them time to focus on it and refine it without giving up an income. Dogfooding is a common theme in startups and it's worth noting that 37signals' Basecamp product was, as I understand it, built with the a very similar purpose. Initially it was a tool for them to help manage their own projects first and something they could charge for second, built under similar conditions where they already had a business designing client websites, providing them an income.
A lot of times I dream up projects I think of as potential startups but often have to ask myself, "Would I actually use this product?" If the answer is ever even a hint of "no" I tend to suspect that I could not dedicate myself to the project wholeheartedly enough to back a business. I wonder if this is a meaningful metric and if dogfooding is really such a powerful motivator.
This is an interesting observation:
The first year or so of the company reminded me a lot of the awkward teenage phase of self-discovery. GitHub the company had sort of sprung up from this side project, so we never had any big vision or dream or aspirations. We just wanted to work on something cool. I’d love to say that’s all you need, but we’ve learned there’s more: you need to have a vision and a philosophy. Everyone (all the founders, at least) need to be on the same page. The hard part is finding that page.
Do we make web apps, or just do source control? What do we pay our employees? Should we speak at conferences? How do we approach customer support?
I don't hear many people talking about the value of a company vision and philosophy. I occasionally hear people talk about company culture, but usually in an abstract way.
All to often, people seem to associate "not taking venture capital" with being a "lifestyle business".
GitHub is an interesting business. Like EngineYard or any other tool oriented startup, its potential is not the same as a broad consumer internet business (like Facebook or Google).
But I don't think Github will be a "lifestyle" business. It already isn't.
I don't think Paul Graham has a problem with this. But it seems like a lot of his followers do / might.
I think there's an important distinction here that is missed and I'm not sure how to bring it up. (Last week I asked about doing a startup outside the US, because the US is not an option for US, and one person presumed we were doing a "lifestyle business" because we expressed costs as one of our concerns.)
That was worth reading just for this bit:
"We generally ignore the advice/opinions of others as a rule. GitHub is the company of the compelling argument – every decision needs to stand on its own merit. That someone successful (or unsuccessful) tried something before might matter in a discussion, but what matters more is how the idea itself applies to the situation."
One thing Tom had learned at his previous venture, Gravatar, was that offering a resource intensive service for free was a losing proposition.
Is anyone else wary about the continued existence of gravatar? Even though it was bought out by Automattic, I think it might shut down in the future because it is resource intensive and hard to monetize.