Founder of GitHub's message to entrepreneurs: Open source and frugality are essential, survival is the key to success.

2023-05-24 11:11

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Original Title: "GitHub Founder's Message to Entrepreneurs: Remember to Exercise Restraint, Survival is a Necessary Condition for Success"

Original Author: Chris Wanstrath, GitHub Co-Founder

Translation: Peng SUN, Foresight News

Editor's note: While compiling GitHub founder Chris Wanstrath's entrepreneurial history, what came to mind for me was Max Weber's "The Protestant Ethic and the Spirit of Capitalism," one of the greatest thinkers of the 20th century. GitHub's entrepreneurial history embodies the universal ascetic ethic and spirit of capitalism: moderation, earning money through reasonable means, everything is calculable, avoiding unnecessary expenses, and investing profits in reproduction. Of course, the secret to GitHub's success is also focusing on building products that users love and keeping them on their platform.

GitHub is the world's largest online open-source code hosting service platform, which began development on October 1, 2007 and launched a test version in February 2008. In the first few years, GitHub's revenue steadily increased, with approximately $1 million in the first year, $3 million in the second year, and $9 million in the third year. Overall, before GitHub completed a $100 million financing from a16z with a valuation of $750 million in 2012, GitHub was profitable almost every month. The only month that did not make a profit was "Red October," when we hired Kyle Aster and Ryan Tomayko. This was a bet we made at the time, and it later paid off tremendously.

In fact, it is not easy to keep a self-sufficient startup profitable. So, how did we do it?

First of all, when the company was just starting out, we as founders only took very little salary. If GitHub's monthly income grew enough, we would give the founders more money. In the end, it took us more than a year to receive full salary. During this period, we lived on savings.

Next is commercial transactions. Initially, we collaborated with Engine Yard and placed Engine Yard's logo in the footer of our website to provide its customers with free GitHub accounts. As part of the business partnership, they provided us with free hosting. After parting ways with Engine Yard, around October 2009, we began a similar partnership with Rackspace. For nearly three years, the footer of GitHub had the phrase "Powered by dedicated servers and cloud computing support from Rackspace." Some say that there are no ads on GitHub, but that is not entirely accurate, perhaps a well-intentioned lie. In fact, from the web page snapshots saved by the Internet Archive, it can be seen that until July to August 2012, the GitHub website had ads for Engine Yard and Rackspace.

Internet Archive: April 3, 2009, official website of GitHub.

Internet Archive: October 26, 2010, GitHub official website.

Thirdly, we are very familiar with our financial situation. We not only calculate annual and monthly income, but also track details such as daily, hourly, and even secondly income, as well as cancellations, refunds, and registrations. Every morning, I log into our bank account and copy the balance into a shared spreadsheet. The founder regularly discusses financial issues in our chat room and at regular face-to-face meetings. We only hire new employees or make purchases within our financial means. We are very cautious in our use of funds and never overspend.

Fourthly, reinvest the profits back into the company's business. When we earn profits, the money does not go into our pockets, but is used to make T-shirts, attend meetings, create marketing materials, and so on. All the money we earn is directly used to develop GitHub.

Fifth, seek multiple sources of revenue related to the GitHub website. For example, we can make money from our merchandise store, sell git training services, have a paid job listing website, and even try technology conferences like CodeConf and PyCodeConf. It has been proven that organizing such conferences is difficult and expensive, but also very interesting.

Number six, try to reach as many customers as possible. For us, this means adapting to different environments and expanding our customer base, which is reflected in our products.

In June 2009, GitHub released the first version of GitHub Enterprise, GitHub:FI, just one year after the launch of GitHub.

In June 2010, GitHub Organizations/Teams was launched.

In June 2011, GitHub for Mac was released.

In May 2012, GitHub for Windows was released.

As I said in my 2010 interview about entrepreneurship, profitability, and pride, "Before (and even after) you make a profit, you need to pay attention to every expense." This interview can be found at https://signalvnoise.com/posts/2486-bootstrapped-profitable-proud-github.

However, our most important task is to fully immerse ourselves in the product. There is no better marketing approach than loving your product and wanting to share it with others. Our daily lives are filled with advertisements, so recommendations from friends are as precious as gold. The purpose of GitHub Desktop is to help these recommendations quickly convert into active users. We believe they are the gateway to entering Git and GitHub, and can help people gradually adapt to this new way of working.

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In summary, what have we achieved? Ultimately, it boils down to three points: frugal consumption, cost reduction, and building products that users love and retaining them.