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Building an Open Core Company: Interview with GitLab's CEO
- grabcocque 10y agoGitlab are not an open source company. Their primary revenue generation stream is proprietary software.
- FatalBaboon 10y agoCare to elaborate? Isn't their primary source of revenue gitlab(-ee) which is open source?
- agibsonccc 10y agoOpen "core". There are a lot of open source companies (including mine) that have proprietary addons they sell. Open source companies can't scale on consulting revenue. It's fine for a lifestyle business but not a business you're trying to scale. The other way to do is via the hosted service route (which might not work depending on the vertical you're in..) There's all sorts of trade offs to running an open source company or even just open sourcing code. Eg: the bigger companies do it for hiring purposes. Devs do it to get hired or learn something. The companies themselves have to survive somehow, and the incentives will vary depending on the vertical and goals of the company.
- chrisseaton 10y ago'lifestyle business' is very patronising. Do you think all companies that can't scale massively such as consultancies are lifestyle businesses? What about something like Deloitte or KPMG? Are they just there as part of the lifestyle of the founders?
- secfirstmd 10y agoI think the point is that pure open source tools often don't allow the founder(s)/maintainers to really grow out the company to large scale. They can continue to have a good lifestyle from the revenue they get for their open source tools and associated consulting but actually it's very hard to create enough surplus revenue to grow the business. Consulting on open source projects is very person/salary heavy. I think it's a fair point to make...
- agibsonccc 10y agoSure - and there's nothing wrong with that. Look at patio11 before he started starfighter. You could call it "bootstrapped business". Those companies still take a long time to build. To be fair - most of these businesses still rely on hiring lots of personnel. A software company by definition scales better than a consulting company. If the goal indeed is to scale with SAAS like margins then you are going to need a different model than consulting. That being said, we work with a lot of consulting companies (I even used to run one) called systems integrators. They make good money for their families and are pretty well off. Many of them are also subsidaries of very large conglomerates (Samsung SDS, LG CNS, SK C&C in korea for example) Those kinds of businesses don't need VC and shouldn't take it. I didn't mean it to be patronizing per se it's just different goals.
- vonmoltke 10y ago> Sure - and there's nothing wrong with that. Yes there is: you are forcing a false dichotomy on the business world. "Businesses that 'scale'[1]" vs. "businesses that don't" is not a very useful classification, no matter what you call them. [1] Whatever that means; this has become one of those terms that means whatever the reader/author wants it ti mean.
- marcosdumay 10y agoWhat? Some business scale, some don't. Consulting services are around the extreme of "non-scaling" business (the most extreme being specialized consulting), while licensing software is at the "scaling" extreme. There are lots and lots of thing in between.
- vonmoltke 10y ago> There are lots and lots of thing in between. That's my point. "Scaling" is, well, a scale. It isn't a binary (scale || !scale).
- agibsonccc 10y agohttp://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html Anyways - FWIW I'm definitely biased. I'm a cofounder of a venture backed YC startup. Scale here typically means: software you can infinitely copy vs people who get tired. Personnel cost more than software. Does that make sense?
- squeaky-clean 10y ago> Do you think all companies that can't scale massively such as consultancies are lifestyle businesses? This is the term I've always heard for it. It's not insulting. Deloitte or KPMG aren't really... scale. They're huge, but that's not the same as scale. In 2015 Facebook made around the same amount of revenue as them, with like 5% of the employees. And they still have a ton of room to double their userbase, expand into new markets.... What would it take for one of those firms to double their revenue? If they had twice as many customers, could they handle it overnight?
- zanny 10y agoWasn't aware Red Hat was a lifestyle business. That is a pretty big lifestyle with the billions of revenue.
- agibsonccc 10y agoRed hat sells updates to their software + packaging. Horton also does this. They also sell apps on top of their platform. My point is: their model isn't just consulting. Cloudera is open core for their hadoop distro. Mesosphere tried closed source with DC/OS and it didn't quite work for them, but they also don't sell consulting. Docker as a business is also trying to monetize via NON consulting ways. These companies' goals are all to scale bigger though. Something to keep in mind though - red hat is a rounding error compared to say: microsoft. A lot of open source investors are looking for an open core model now. As I described there's different ways to go about it. We chose open core for ourselves though.
- sytse 10y agoAt GitLab we considered to charge for the packaging (our Omnibus packages and the package server). We decided to go for a GitLab version that was 100% open source and easy to install and a GitLab version that was closed source, contained additional features and was equally easy to install. Apart from RedHat few companies have been able to make the packaging work as a business model from a financial perspective. Hortonworks shows it is hard to make money with packaging alone http://www.infoworld.com/article/2854359/hadoop/why-hortonworks-cant-sustain-a-billion-dollar-unicorn-valuation.html http://www.infoworld.com/article/2854359/hadoop/why-hortonwo...
- agibsonccc 10y agoI agree completely. We have pretty similar business models after all ;). We've been going upstream selling a "distro" usually with other stuff bundled in.
- troydavis 10y agoCould you cite any other example(s)? If not, that Red Hat is the outlier (1 company in 20 years) seems to strengthen the prior commenter's point.
- abetusk 10y agoAFAIK, the enterprise edition (EE) used to be open source but is now closed [1]. There is an open source "community edition" which has many of the features of the enterprise edition, including self hosting, but lacks others [2]. While I find it unfortunate that GitLab doesn't have it's enterprise edition open sourced, I think they have enough goodwill in the community so that I'm not that angry about it. I would really be interested in hearing from the GitLab folk whether they think making their enterprise edition open source would really hurt their income and if they have any plans on eventually releasing their enterprise edition as open source (again). TLDR; GitLab has an open core business model. [1] https://en.wikipedia.org/wiki/GitLab#History https://en.wikipedia.org/wiki/GitLab#History [2] https://about.gitlab.com/features/ https://about.gitlab.com/features/
- vdfs 10y agoI thought the EE was open source: https://gitlab.com/gitlab-org/gitlab-ee https://gitlab.com/gitlab-org/gitlab-ee
- abetusk 10y agoFrom the LICENSE file [1] to your link: ... This software and associated documentation files (the "Software") may only be used if you (and any entity that you represent) have agreed to, and are in compliance with, the GitLab Subscription Terms of Service, available at https://about.gitlab.com/terms/#subscription (the “EE Terms”), and otherwise have a valid GitLab Enterprise Edition subscription for the correct number of user seats. ... [1] https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE
- detaro 10y agoyou can look at the source, but it is not "open source": https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE https://gitlab.com/gitlab-org/gitlab-ee/blob/master/LICENSE
- Siecje 10y ago
- superuser2 10y agoGitLab EE is not open source as far as I can tell. GitLab CE is, but it has fewer features. It's a freemium model. Unlike RedHat, GitLab actually sells software (that you can't trivially get some other way) and not just support/integration services.
- sytse 10y agoGitLab EE is proprietary.
- mrmondo 10y agoI'm willing to bet they contribute more open source code, more often and more transparently than anything nearly as successful and extensive.
- grabcocque 10y agoHere's the open source definition: https://opensource.org/osd-annotated https://opensource.org/osd-annotated Gitlab EE, which is how Gitlab makes its money, comes nowhere close to meeting that. It's pretty much straight up corporate dishonesty to pretend to be an open source company when you're following a proprietary software model to make money. You're no more an "Open Source Company" than Apple or Microsoft, who also have some open source projects separate from their main revenue streams.
- skj 10y agoI'll point out that merely being the first to claim "opensource.org" does not allow one to define what the word means for the community at large.
- danieldk 10y agoFour your (historical) interest, the OSI people (opensource.org) invented the term 'open source': https://web.archive.org/web/20060924132022/http://www.opensource.org/docs/history.php https://web.archive.org/web/20060924132022/http://www.openso... 'Free software' was considered to be too scary for businesses and the rest is history. So, in other words, yes they have a say in this. The made the label with the associated definition.
- bisby 10y agoCreating a phrase does not mean you get to define how the community uses it. The guy who invented gif doesn't really seem to get much say in it's pronunciation. In America, almost all people call tissues "Kleenex" regardless of brand. In the UK, I hear all vacuums are called "Hoovers" regardless. People can use a specific brand "Open source" to mean generically all software with source code available. Languages evolve and while opensource.org may have originated the term, common use dictates that the definition of "open source" isn't as strict as the original definition.
- deleted 10y ago[deleted]
- Sylos 10y ago> [Without telemetry] Do you have to rely on users asking for features then? How does telemetry affect that? I can see that you would maybe prioritize work on improving different features depending on what gets used most or what crashes most, but how should telemetry help you decide what features to include?
- sytse 10y agoTwo examples: 1. You might find that some parts are more heavily used than you thought (for example the wiki) and you prioritize making them better. 2. You find that many people use CI and not many use CD so you add features to make the transition easier.
- paxcoder 10y agoIn the interest of objectivity, I'd change the title to read "Open Core" instead of "Open Source"
- sytse 10y agoInteresting, I never considered called us an open core business, but I agree it is more accurate and edited the blog post in https://gitlab.com/gitlab-com/www-gitlab-com/commit/e333cc93b17df60ce8f7948896ddf3b714d8ec1d https://gitlab.com/gitlab-com/www-gitlab-com/commit/e333cc93...
- sytse 10y agoI'm considering this blog post https://gitlab.com/gitlab-com/blog-posts/issues/226 https://gitlab.com/gitlab-com/blog-posts/issues/226 to set the record straight, what do you think?
- sytse 10y agoI just published it https://about.gitlab.com/2016/07/20/gitlab-is-open-core-github-is-closed-source/ https://about.gitlab.com/2016/07/20/gitlab-is-open-core-gith...
- quadrangle 10y agoAnd this is why GitLab stands out among all others. There's the no-compromises hardcore folks (more power to them/us!), and then there's the obnoxious whatever-for-business folks who don't care about community or ethics or feedback really. GitLab is amazing in just actually listening. Look at this, they went and took the suggestion and care more about honesty and transparency than in the short-term short-sighted impact of insisting their initial wording was right… this is typical of this company that really does listen. Bravo
- sytse 10y agoThanks quadrangle for your supportive comment! After reading part of the book 'domain driven design' I'm very keen on ensuring all wording is unambiguous, and the suggestion to call it open core was spot on. I added the open core business model to https://about.gitlab.com/about/#stewardship https://about.gitlab.com/about/#stewardship too in https://gitlab.com/gitlab-com/www-gitlab-com/commit/f81934f7c596632856495c30fb975698ce0bfd73 https://gitlab.com/gitlab-com/www-gitlab-com/commit/f81934f7...
- iamcreasy 10y agoI was excited to read how open source philosophy is ingrained into Gitlab and how it helps them grow but the article rather skims over it.
- sytse 10y agoThis blog post was a writeup of Jason asking me questions because of personal interest. I would be happy to do a 1 hour skype call with you if you promise to write it up afterwards. Please email marketing at our company domain if you're interested. Please link to this comment in your email.
- willow9886 10y agoIn the article Sid mentions that "according to research, by 2019 80 cents of every dollar spent on software will go to on premises or single tenant software." Does anyone know which research he's quoting?
- nzoschke 10y agoI'd love to know the source too. But this matches what I am seeing right now as well as predicting for the future. SaaS is a powerful distribution model but IaaS has gotten so good that it's in many ways easier to run many small things than one big thing. And when you run many small things huge benefits arise: * security and isolation. Single tenant by default. * control. Upgrade when it's convenient for your company, not your provider. * Cost efficiency. Freemium SaaS requires burning VC cash. Open source + self serve demo doesn't * customization. Set your own feature flags or add your own patches to fit the software to your business Everything is cyclical. I think "install this software on your [cloud] computer" is going to be a big trend again.
- willow9886 10y agoWell said. We're also seeing greater demand now for our on premise FOSS software than ever before in the last 7 years.
- tomschlick 10y agoYup, this is why at work we have our multi-tenant SaaS using a different database for each tenant. That way if they want to split to self/dedicated-cloud hosting later down the road we can move them without any hassle. Edit: I describe our thought process here if it's useful to anyone else: https://tomschlick.com/2015/11/29/lessons-from-building-multi-tenant-apps-part-1-databases https://tomschlick.com/2015/11/29/lessons-from-building-mult...
- agibsonccc 10y agoOn prem is the only option for us. Developers don't want to pay (and I don't blame them as a dev) but the people who DO want to pay want everything behind the firewall still. Hybrid cloud is sort of being looked at but the rest of the world is still happy being on prem. Certain workloads have to be behind the firewall. That being said, docker and the like is making this easier.
- NickBusey 10y agoLot's of griping in here about whether or not GitLab is really 'open source'. Typical HN vitriol. I think GitLab is doing fantastic work pushing forward open source philosophies with real world execution. They're putting a lot of their money where their mouth is. Hell, you can clone their ENTIRE corporate website. On top of that, the product they offer (yes, their free, Open Source community edition) is _fantastic_ and continues to improve with each release. I am constantly impressed with how this company operates, and am always trying to roll in more of that to my own company (their Handbook for example is fantastic.)
- vhdjdjvhdhd 10y agoWhy is it that the top comment of every debate on HN is without fail something along the lines of "I'm shocked at the negativity here..."? This cliche is beginning to get a little worn.
- nitrogen 10y agoYou likely know that HN doesn't sort in chronological order, so the negativity probably gets downvoted to the bottom while the complaint remains at the top. It would be nice if we could skip this whole multi-layered meta discussion in the first place, of course.
- scrollaway 10y agoI agree, but it's also especially shocking anyone would be negative about Gitlab. Take it from an adamant free software user, contributor and advocate: "Free software purism" is counter-productive and it's honestly disgusting anyone would wag their finger at Gitlab, possibly the most open source example of a real world company out there (yeah, I'd even put them above Red Hat). They have been a model to follow, an extremely inspiring one at that. Maybe I'm wrong and it's exclusively HN's top paragons of virtue raising their eyebrows? Those that have evolved beyond mortal needs such as money to spend on food and rent, and would be ready to pledge their own possessions to Gitlab Inc (or at the very least, donate to the EFF: https://supporters.eff.org/donate/ https://supporters.eff.org/donate/).
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- mrmondo 10y agoHands down the best open source community with a commercial offering I've ever dealt with. The company really clearly gives a $&@"! about what people feel is right and wrong with the product components and has always heard me out - even if people disagreed with me (god forbid I might be wrong about something!). I truly have grown to love GitLab and the team that develops and supports it, it's probably the fastest moving OSS project I've ever seen, and every release is clearly getting better (although there are some UI changes recently that bug me, but that might just be me). Thank you yet again everyone involved with gitlab and it's varying components (especially gitlab-CI) both internally within the company and those contributing either code or conversations from around the world. Gitlab has enabled us @infoxchange to move faster than ever before, with a low TCO and a responsive support team. I salute you!
- sytse 10y agoThanks, I return your salute. It is great to know that GitLab is contributing to your not-for-profit with its 'technology for social justice' mission. We also heard from other people that the navigation redesign is not ideal. I think the big picture change is welcome but some things are taking too many clicks. But we would love more feedback with examples. The thinking behind our navigation redesign is detailed in https://about.gitlab.com/2016/06/06/navigation-redesign/ https://about.gitlab.com/2016/06/06/navigation-redesign/ Please comment on that blog post (or create an issue) with what we can improve. Thanks for your kind words, we'll keep shipping!
- pritianka 10y agoI've been impressed with the GitLab founder in every interaction I've had with him. He treats people well and makes an effort to connect with every dev/person interested in his product. He's building a great culture.
- sytse 10y agoThanks, I'm humbled by your comment. I hope to make it more clear that this is a team effort and I'm a spokesperson.
- vonnik 10y ago> Open source is wind in your back. So true. Open source lets small engineering teams punch above their weight. Thousands of extra eye balls on the code for QA make it so much better. And the project-user feedback loop is fast.
- sytse 10y agoFor sure we think we're punching above our weight. We're less than 100 people and are competing with multi-billion dollar companies likes GitHub. Some other benefits of our open core model: 1. Remote only is the default way of working, allowing us to hire great people around the world. 2. Our open core model attracts great people, it is rare to have no recruiting problem for engineering. 3. Our technical interview is adding a feature to GitLab, ensuring we test exactly the skills we need when you join.
- agibsonccc 10y ago(vonnik's cofounder here) We don't have a careers page on purpose. Right now the best hires either come from very strong referrals or fall in to our lap via the oss community. People who ask us about hiring: we just tell them to join the oss community. It saves us a lot of time.
- Akkuma 10y agoThis seems like it would preclude people who love what you are doing, but also love to do things after work that aren't around programming.
- agibsonccc 10y agoWe get referrals for other roles. But yeah: that's more or less on purpose.
- OJFord 10y agoThe interviewer asks if the community edition is a good funnel into the enterprise edition, but doesn't ask what I see as the converse; which I'd hoped for: "Does making the source available restrict pricing options, or completely lose would-be users - or would self-hosters never be customers anyway?" This has been bugging me and holding me off a project that I'd like to be open-source; I just can't help wondering what stops someone from thinking "well I'm just going to host your source code, and undercut you". I'm all for a competitive market - but not if I do all the work and we only compete on how to price it!
- sytse 10y agoGood question! Certainly the open source code limits how much you can charge for the product. I think that if there was no open source edition we could sell the Enterprise Edition for more than $39 per user per year. But of course there would be no Enterprise Edition without the open source edition! People have started hosting business based on GitLab CE and we encourage that. Most find out what we found out in 2013, it is much easier to generate revenue with software licenses than with SaaS products due to the different audiences (large vs. small organization).
- jogjayr 10y agoStupid question but couldn't you release it under a license that prohibits selling a hosted version of your software? It wouldn't pass the OSI test but would achieve some goals. Users could self-host if they don't want to pay you but no one can undercut you.
- sytse 10y agoWe're not worried about people offering a hosted version, actually we are spending a lot of many scaling GitLab.com to.meet the demand so it would help us. Most money can be made selling to large organizations that are running it internally.
- OJFord 10y agoThat's not a stupid question, it's a good answer :) I suppose I wouldn't expect to be able to (afford to) defend it, but I imagine being in breach of a licence would be deterrent enough for anyone looking to operate at anything but trivial (that is ignorable; not a threat) scale. Thanks.
- Siecje 10y agoAny chance GitLab will add Mercurial support?
- sytse 10y agoAlmost no chance, if anything we would add SVN support but I think that is already too much technical complexity. Consider using https://rhodecode.com/ https://rhodecode.com/
- Siecje 10y agoWhy SVN over Mercurial?
- sytse 10y agoThere are more people using SVN than Mercurial.
- Siecje 10y agoI saw somewhere else that you used Google trends to show how git was more popular than Mercurial. However you didn't consider "hg". Here is the trend for Mercurial vs SNV https://www.google.ca/trends/explore#q=svn%2C%20hg%2C%20Mercurial%2C%20subversion&cmpt=q&tz=Etc%2FGMT%2B4 https://www.google.ca/trends/explore#q=svn%2C%20hg%2C%20Merc...
- SEJeff 10y agoGitlab is great stuff, but as a business model for open source, I always considered open core as somewhat toxic. When your community is trying to add features in your commercial implementation, you're "competing with yourself", which in this context, is actually a bad thing. I saw it wreck havoc in the ZenOSS community years ago. David Neary does a most excellent post on why: https://blogs.gnome.org/bolsh/2010/07/19/rotten-to-the-open-core/ https://blogs.gnome.org/bolsh/2010/07/19/rotten-to-the-open-...
- reitanqild 10y agoSpent a lot of time with Zenoss and also found it sad. That said I thonk open core us possible and one of a few good business models that can work with open source. I hope and believe Gitlab can and will do much better as Gitlabs commercial offerings are way more reasonably priced IIRC. (Another brilliant example would be sandstorm who openly admit that all enterprise features are in there, explain where the one big if switch is, says it is not illegal but expect you to not do it if you can afford to pay for it. Again IIRC.)
- sytse 10y agoYes, we recognize we have to walk a fine line. In https://about.gitlab.com/about/#stewardship https://about.gitlab.com/about/#stewardship we detail our policy regarding this. It starts with "When someone contributes a feature to CE that is already in EE we have a hard decision to make. We hope that people focus on contributing features that are neither in CE nor EE. This way both edits benefit from a new feature and GitLab Inc. don't have to make a hard decision."
- eevilspock 10y agoCan you explain the "hard decision"? Is it that you have to choose between two implementations for the same or overlapping features, meaning someone's work gets thrown out? Or do you mean that you have to decide whether to reject the freely offered CE pull request because it undermines the value-add of EE?
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- mperham 10y agoGreat interview with a lot of good advice for anyone starting their own OSS-based business. Making EE "open source" (not "Open Source") is a brave move but I think anyone who's done this work before knows that having the source available for viewing doesn't really matter much to actual customers with money - a packaged solution with long-term support and legal compliance are their main concerns.
- sytse 10y agoThanks for the kind words Mike and thanks for Sidekiq, we use it extensively in GitLab. We decided to package GitLab Community Edition to make it very quick to install. So our open source users get the same easy installation and the same security updates and our Enterprise Edition customers. We find that large enterprises are interested in some of the features https://about.gitlab.com/features/#compare https://about.gitlab.com/features/#compare and not in any of the other things. Maybe the best example is a user if China with more than 6000 developers that decided to copy the code of some features over to the Community Edition. This is illegal if you don't have a subscription but I think it shows that the features do matter. Our policy is to put features that are more useful if you have more than 100 users in the Enterprise Edition https://about.gitlab.com/about/#stewardship https://about.gitlab.com/about/#stewardship
- eevilspock 10y agoThe true core of GitHub (and GitLab) is Git itself. So both are open core where it really matters. Because both GitHub's and GitLab's essential operations are all done over the Git core, neither code and code history hosted on either system are locked in. Where GitHub has slightly more lock-in and is less open than GitLab is its Issues system; One can only extract the data (via API) for import into an alternative system, whereas with GitLab you could run your own copy of the open source code (but you'd still have to do the data export-import as far as I can tell). (copied my comment from a duplicate thread)
- deleted 10y ago[deleted]
- rburhum 10y agoI was going to try it out after many months... and it is down :( https://twitter.com/gitlabstatus/status/755878196634087424 https://twitter.com/gitlabstatus/status/755878196634087424
- sytse 10y agoSorry about that. We're close to release day and while deploying an RC we got locking transaction for column update across the DB. Edit: it is back online
- Scarbutt 10y agoIs gitlab.com just a demo? I have always found it horrible slow and unstable.
- sytse 10y agoI agree it is too slow. We're working on improving it in https://gitlab.com/gitlab-com/operations/issues/42 https://gitlab.com/gitlab-com/operations/issues/42 (now down) This release contains improvements that made very long issues load in 2 seconds instead of 6.
- Scarbutt 10y agoMaybe this is a case where ruby is just not the right tool, how does github does it? honest questions: Is performance not that important for gitlab cause your revenue comes from self-hosted, where performance might be less of an issue because of lower load? Isn't gitlab highly concerned with a new company starting a similar product in a more efficient language implementation and eating your lunch? apologize if these questions sound a bit harsh, gitlab is doing great work and lots of users enjoy your product, I guess these is one of the perks for exposing yourself too much to the community ;)
- sytse 10y agoThis is not due to Ruby, both we and GitHub use that. We do offload some tasks to Go processes with GitLab workhorse to take advantage of multithreading. But therr are a few reasons GitLab.com is slow: 1. I didn't prioritize growing our infrastructure team after raising our A round, for a long time it was one person running GitLab.com. In the last couple of months I realized my error and now we're about 8 people and hiring. 2. We're shipping a lot of new features every month and we where not monitoring for performance regressions. We have better monitoring in place now. 3. GitLab.com runs on one file server. This release adds the capability to add multiple ones. We are also testing Ceph to make it completely distributed. 4. Some problems only occur at scale. GitLab.com is running GitLab Enterprise Edition with more than 500k accounts created. This causes problems that don't occur at 10k users. 5. Our monitoring infrastructure has been coarse. We're now using Prometheus to improve this.
- Myrmornis 10y agoLots of companies use Jira for issues and Github/Gitlab for code. It's a painful divide. Do Gitlab and/or Github have plans to rescue such companies from that situation?
- Snappy 10y agoTake a look at GitLab's plan for Issue Boards (https://gitlab.com/gitlab-org/gitlab-ce/issues/17907 https://gitlab.com/gitlab-org/gitlab-ce/issues/17907). It's not quite Jira, more like Trello, but a great step in solving modern issue management and planning.