7 ms·

How We’re Building a Business to Last

154 points by orangechairs 10y ago

lclarkmichalek 10y ago
Do you envision features moving from CCL to APL? For instance, should the database ecosystem change such that everyone and their mother are offering row level geo partitioning in OSS databases, would it be likely that that feature would become APL licensed?
- rmnoon 10y ago
  He covers that in the post. TL;DR yes.
- bdarnell 10y ago
  (Cockroach Labs CTO here) We don't really anticipate making a lot of changes like this, but yes, it's possible that as the product and market evolve we may change our minds and relicense some CCL features as APL. Of course, we wouldn't move in the other direction - once something has been released under the Apache license it will stay that way.
hendzen 10y ago
It looks like you are trying to replicate the MongoDB Inc. business model (regardless of major differences in the actual product being offered). MongoDB offers a commercial version of their product with enterprise features (encryption at rest, LDAP auth, etc) and support - MongoDB Enterprise. Additionally they also offer managed, cloud hosted MongoDB deployments - MongoDB Atlas. Over the last few years the valuation of MongoDB, Inc. has been slashed by institutional investors such as Fidelity and BlackRock. While they haven't had mass layoffs or some other negative corporate event, they have clearly had some difficulty making their (and apparently your) business model work. Do you agree that this is a fair comparison? And what do you makes CockroachLabs more likely to succeed with this business model than MongoDB?
- beachstartup 10y ago
  the mongodb model can make plenty of money for the company management and employees. what it probably won't do is make plenty of money for investors.
- hnkimb3558 10y ago
  (Post author here) I'm not incredibly familiar with the ins and outs of MongoDB Inc's business model, but I agree with your assessment. They certainly seem to have embraced both of the OSS business models I described in the post as viable alternatives. We are going to start with just one, and there's still a huge amount on our plate. MongoDB Inc did have its valuation reduced by some institutional investors. Hard to say whether that was premature or what the impetus was behind their decision. MongoDB is an incredibly well-adopted product that has gotten considerably more capable over the years. I would argue they've had good success with this business model, as building a $1.6B business is a huge accomplishment whether you've got an OSS business model or not. It would be fair to ask whether they've done the balancing act as well as they might have. They've certainly knocked OSS adoption out of the park. On the other hand, I've heard anecdotally that they waited a long time before introducing enterprise features. Regardless, I view MongoDB Inc. as a big - and still growing - success, and consider much of what they've accomplished to be worthy of emulation.
  - hobofan 10y ago
    > (Post author here) I'm not incredibly familiar with the ins and outs of MongoDB Inc's business model, but I agree with your assessment. "I don't know much about one of our signifcant competitors' business model." doesn't sound like something you would want to hear from someone just announcing their business model.
    - grenoire 10y ago
      I don't think that's a fair interpretation of 'not incredibly familiar.'
      - 10y ago
pg_is_a_butt 10y ago
news flash: cockroaches die all the time. you're all idiots.
sciurus 10y ago
> In 2017, any product whose core capabilities cannot scale without requiring a commercial license is probably setting the bar too low. Is this a dig at InfluxDB for removing clustering from their open source version?
- user5994461 10y ago
  InfluxDB never had clustering in any version. They announced that when they'd have clustering, if they ever do, it will only be in a paid edition. That's open for another debate entirely: Advertising and promoting features that don't exist and won't in any near future.
sply 10y ago
This can be seen as a kind of response to concerns about the survival of other open source databases raised after closing RethinkDB and its recent postmortem https://news.ycombinator.com/item?id=13421608 https://news.ycombinator.com/item?id=13421608
filereaper 10y ago
I'm really looking forward to the 1.0 release of CockroachDB. S3 and GCS were mentioned as configurable storage sinks, are there plans to release with Azure Blob as well?
- mjibson 10y ago
  Yes, Azure blobs will be supported. (I'm a dev here and just finished that feature.)
coffeemug 10y ago
RethinkDB [ex-]founder here. The problem wasn't that we (and presumably others) didn't plan for open-core/cloud. We did, but there are structural problems in the market that prevent this from working. Open-core didn't work because the space is so crowded with high-quality options that you have to give away enormous amount of functionality for free to get adoption. Given how complex distributed database products are, by the time you get to building a commercial edition you're many years in and very short on cash. Cloud didn't work because AWS/GCloud have enormous moats of pricing and brand recognition. They drive margins down to epsilon, and if your product sees meaningful adoption in the industry they launch their own service and take all your customers.
- sply 10y ago
  > if your product sees meaningful adoption in the industry they launch their own service and take all your customers Yes, very similar to Windows, Android etc, when owners of the platform learn which product goes well, and then make it themselves.
  - rmnoon 10y ago
    In almost this exact space: https://aws.amazon.com/elasticsearch-service/ https://aws.amazon.com/elasticsearch-service/
- jdoliner 10y ago
  Do you think there's something different that Cockroach could do? Or do you think that the database market as it exists today leaves them without a path to building a lasting business? Personally I believe that latter. I don't see how they're going to get people to pay for Cockroach with all the options that are already out there. I think they might have an even more difficulty than RethinkDB did because their interface is SQL which means that migrating to things like Postgres or RDS is a lot easier.
  - rmnoon 10y ago
    On your last point at least being a proper SQL database makes the switching costs _into_ Cockroach lower, too.
sytse 10y ago
Great direction, I think they it on the head. If I would have to give suggestions they would be: 1. CockroachDB Community License (CCL) might sound like a Community Edition, and that normally refers to the open source version instead of the proprietary one. 2. It is hard to quantify the difference between a startup and an established company. We put the difference for GitLab at 100 people that can potentially use our software. 3. I see the CTO commenting here https://news.ycombinator.com/item?id=13438863 https://news.ycombinator.com/item?id=13438863 that they will never move features from open source to the CCL Maybe they can consider publishing a set of promises to the community. We did that at about.gitlab.com/about/#stewardship
inconclusive 10y ago
> So what doesn’t a startup need to succeed, but an established company would consider an important requirement. > The first is a fully-distributed, incremental capability for quickly and consistently backing up and restoring large databases using configurable storage sinks (e.g. S3 or GCS). The same functionality, but non-distributed, will be available for free to all users. I appreciate that you're trying to write a good database and build a business, but what do you mean by "startup"? If a database can't guarantee it can make backups, why would a startup attempt to use it in the first place?
- bdarnell 10y ago
  (Cockroach Labs CTO here) This could have been worded more clearly in the post. There will be two versions of backup functionality: a basic implementation for free (Apache license) and a faster distributed and incremental implementation as a paid feature (CCL). It's like the difference between mysqldump and an InnoDB-aware backup tool.
  - haimez 10y ago
    Sounds like crippleware for a distributed database. If you can't incrementally back it up, you can't really afford to run it in production in a cluster that has a large dataset. If you don't have a large dataset, you don't need cockroach db (first law of distributed objects, etc). Maybe you'd be better off designing features for clients with specific requirements and very deep pockets.
    - elcritch 10y ago
      Not necessarily, even small datasets can benefit from a distributed database. Configuring a HA database setup for any of the open source DB's requires a lot of work. For a startup, a small cluster can provide HA, redundancy, and ease of scalability should the need arise.
      - haimez 10y ago
        No one cares about the difference between 99.9 and 99.999 reliability at the DB layer and then adopts a new open source DB to solve that problem. Especially when that exciting, new, experimental database cripples your ability to back it up. Hilarious.
kmicklas 10y ago
What about AGPL?
mikekchar 10y ago
From the chapter by Michael Tiemann in Open Sources: "At first I tried to make my argument the way that Stallman made his: on the merits. I would explain how freedom to share would lead to greater innovation at lower cost, greater economies of scale through more open standards, etc., and people would universally respond "It's a great idea, but it will never work, because nobody is going to pay money for free software." After two years of polishing my rhetoric, refining my arguments, and delivering my messages to people who paid for me to fly all over the world, I never got farther than "It's a great idea, but . . .," when I had my second insight: if everybody thinks it's a great idea, it probably is, and if nobody thinks it will work, I'll have no competition!" I still find it interesting how many people dismiss Cygnus's business model out of hand when entering the open source market. (Cygnus was acquired by Red Hat for $600 million and Michael Tiemann is still VP of Open Source development IIRC) What is interesting to me is that I've never heard of anyone else even trying it. No successes. No failures. As Michael Tiemann said, no competition. And Red Hat enjoys that competitive advantage even today. I highly recommend reading that chapter for an alternative view on how to approach open source development.
- webmaven 10y ago
  > I still find it interesting how many people dismiss Cygnus's business model out of hand when entering the open source market. […] What is interesting to me is that I've never heard of anyone else even trying it. Well, as I understand it, part of the reason is that contrary to their origin story, Cygnus didn't really follow the "Cygnus Business Model" either, and anyone trying similar tactics since then has had to deal with much greater visibility.
RichardHeart 10y ago
What's wrong with actually charging money for what you make? I think the over open sourcing of things leads to a tragedy of the commons whereby no one can profit enough to afford a marketing budget. Or if they can afford one, its 100x smaller than anyone else in the space that "charges" and is closed not open.
pbarnes_1 10y ago
These are famous last words. You can't predict any of this.
agibsonccc 10y ago
Disclaimer: I am outside the database market (we view it all as just "storage") We are a similar play (open core, etc) I commented in the rethink thread as well. A few lessons on the business model we ran in to: 1. Cloud is commodity/experimental. It could be the future though and there's no reason not to have an offering at least. We are launching a partnership with microsoft on azure to experiment with cloud for their hadoop offering. We found it was bring your own license and very similar to on prem. It seems like a no brainer to at least try this. 2. We are on prem first. Enterprise customers need "pay to blame" kind of like insurance. We have closed source features we license. Support is secondary and comes only with a license. 3. Bundling and minimum purchasing is key. You need to validate a customer has a budget. 1 thing that I notice database companies don't cover which kind of surprises me (that cloudera,red hat, etc do) is training and the "services swamp" 1 way to qualify customers and increase run way is a "small" amount of support you charge a high rate which in turn drives licensing revenue on top. A lot of the companies that have actually stood the test of time started like this. Where we deviate: 1. Building a horizontal platform but focus on 1 product at a time. In our case, we have a generic platform we can license for teams that just need "something better". We focus on a use case such as fraud/network intrusion/money laundering and sell that. This is very similar to the oracle model. "Bundle a database with the app" 2. Any services we end up doing we put aside to turn in to a product down the road. In our case, we observe and learn the patterns and reapply those as "templates". In our case we accumulate expertise, make a bit of money, and monetize later. Many SAAS companies in our space keep the customer data because they need to build better models. I'm not quite sure what the analog in the database market here is. We just keep the "lessons learned". The key here will be scaling that. In our case, we do that by focusing on 1 vertical use case and owning that. We also minimize engineering time on the platform. In short: We have a dual licensing model where we have an "app" that's easy to sell in the market, get paid to explore the market (while focusing on/prioritizing 1 use case for more scalable revenue, and for teams that just need a better platform, we can just offer that and make some fairly passive licensing revenue. 1 other neat anecdote: for all the people raving on HN about what google's doing with AI, the problems people had 50 years ago are still the same ones people pay for today. The database market maybe similar, it might not be bad to learn from your predecessors but maybe just update the business model a bit (eg: cloud offerings,..) At the end of the day people pay for use cases over everything else. Think about the reason they are about HA not "HA is cool, they obviously want to pay for that"
mendant 10y ago
If they really want to actually make money with a database, they would implement binary compatibility with Oracle's SQL dialect, Oracle stored procedure language, and its OCI binary protocol for programming from C. There are plenty of big customers locked into Oracle. If you gave them a backwards compatible but scalable database for half the price, they would happily cut their costs in half, and make cockroachlabs very rich. And then Oracle would offer to buy your company.

154 points by orangechairs 10y ago

Do you envision features moving from CCL to APL? For instance, should the database ecosystem change such that everyone and their mother are offering row level geo partitioning in OSS databases, would it be likely that that feature would become APL licensed?

rmnoon 10y ago
He covers that in the post. TL;DR yes.
bdarnell 10y ago
(Cockroach Labs CTO here) We don't really anticipate making a lot of changes like this, but yes, it's possible that as the product and market evolve we may change our minds and relicense some CCL features as APL. Of course, we wouldn't move in the other direction - once something has been released under the Apache license it will stay that way.

hendzen 10y ago

It looks like you are trying to replicate the MongoDB Inc. business model (regardless of major differences in the actual product being offered). MongoDB offers a commercial version of their product with enterprise features (encryption at rest, LDAP auth, etc) and support - MongoDB Enterprise. Additionally they also offer managed, cloud hosted MongoDB deployments - MongoDB Atlas. Over the last few years the valuation of MongoDB, Inc. has been slashed by institutional investors such as Fidelity and BlackRock. While they haven't had mass layoffs or some other negative corporate event, they have clearly had some difficulty making their (and apparently your) business model work. Do you agree that this is a fair comparison? And what do you makes CockroachLabs more likely to succeed with this business model than MongoDB?

beachstartup 10y ago
the mongodb model can make plenty of money for the company management and employees. what it probably won't do is make plenty of money for investors.
hnkimb3558 10y ago
(Post author here) I'm not incredibly familiar with the ins and outs of MongoDB Inc's business model, but I agree with your assessment. They certainly seem to have embraced both of the OSS business models I described in the post as viable alternatives. We are going to start with just one, and there's still a huge amount on our plate. MongoDB Inc did have its valuation reduced by some institutional investors. Hard to say whether that was premature or what the impetus was behind their decision. MongoDB is an incredibly well-adopted product that has gotten considerably more capable over the years. I would argue they've had good success with this business model, as building a $1.6B business is a huge accomplishment whether you've got an OSS business model or not. It would be fair to ask whether they've done the balancing act as well as they might have. They've certainly knocked OSS adoption out of the park. On the other hand, I've heard anecdotally that they waited a long time before introducing enterprise features. Regardless, I view MongoDB Inc. as a big - and still growing - success, and consider much of what they've accomplished to be worthy of emulation.
- hobofan 10y ago
  > (Post author here) I'm not incredibly familiar with the ins and outs of MongoDB Inc's business model, but I agree with your assessment. "I don't know much about one of our signifcant competitors' business model." doesn't sound like something you would want to hear from someone just announcing their business model.
  - grenoire 10y ago
    I don't think that's a fair interpretation of 'not incredibly familiar.'
    - 10y ago

pg_is_a_butt 10y ago

news flash: cockroaches die all the time. you're all idiots.

sciurus 10y ago

> In 2017, any product whose core capabilities cannot scale without requiring a commercial license is probably setting the bar too low. Is this a dig at InfluxDB for removing clustering from their open source version?

user5994461 10y ago
InfluxDB never had clustering in any version. They announced that when they'd have clustering, if they ever do, it will only be in a paid edition. That's open for another debate entirely: Advertising and promoting features that don't exist and won't in any near future.

sply 10y ago

This can be seen as a kind of response to concerns about the survival of other open source databases raised after closing RethinkDB and its recent postmortem https://news.ycombinator.com/item?id=13421608 https://news.ycombinator.com/item?id=13421608

filereaper 10y ago

I'm really looking forward to the 1.0 release of CockroachDB. S3 and GCS were mentioned as configurable storage sinks, are there plans to release with Azure Blob as well?

mjibson 10y ago
Yes, Azure blobs will be supported. (I'm a dev here and just finished that feature.)

coffeemug 10y ago

RethinkDB [ex-]founder here. The problem wasn't that we (and presumably others) didn't plan for open-core/cloud. We did, but there are structural problems in the market that prevent this from working. Open-core didn't work because the space is so crowded with high-quality options that you have to give away enormous amount of functionality for free to get adoption. Given how complex distributed database products are, by the time you get to building a commercial edition you're many years in and very short on cash. Cloud didn't work because AWS/GCloud have enormous moats of pricing and brand recognition. They drive margins down to epsilon, and if your product sees meaningful adoption in the industry they launch their own service and take all your customers.

sply 10y ago
> if your product sees meaningful adoption in the industry they launch their own service and take all your customers Yes, very similar to Windows, Android etc, when owners of the platform learn which product goes well, and then make it themselves.
- rmnoon 10y ago
  In almost this exact space: https://aws.amazon.com/elasticsearch-service/ https://aws.amazon.com/elasticsearch-service/
jdoliner 10y ago
Do you think there's something different that Cockroach could do? Or do you think that the database market as it exists today leaves them without a path to building a lasting business? Personally I believe that latter. I don't see how they're going to get people to pay for Cockroach with all the options that are already out there. I think they might have an even more difficulty than RethinkDB did because their interface is SQL which means that migrating to things like Postgres or RDS is a lot easier.
- rmnoon 10y ago
  On your last point at least being a proper SQL database makes the switching costs _into_ Cockroach lower, too.

sytse 10y ago

Great direction, I think they it on the head. If I would have to give suggestions they would be: 1. CockroachDB Community License (CCL) might sound like a Community Edition, and that normally refers to the open source version instead of the proprietary one. 2. It is hard to quantify the difference between a startup and an established company. We put the difference for GitLab at 100 people that can potentially use our software. 3. I see the CTO commenting here https://news.ycombinator.com/item?id=13438863 https://news.ycombinator.com/item?id=13438863 that they will never move features from open source to the CCL Maybe they can consider publishing a set of promises to the community. We did that at about.gitlab.com/about/#stewardship

inconclusive 10y ago

> So what doesn’t a startup need to succeed, but an established company would consider an important requirement. > The first is a fully-distributed, incremental capability for quickly and consistently backing up and restoring large databases using configurable storage sinks (e.g. S3 or GCS). The same functionality, but non-distributed, will be available for free to all users. I appreciate that you're trying to write a good database and build a business, but what do you mean by "startup"? If a database can't guarantee it can make backups, why would a startup attempt to use it in the first place?

bdarnell 10y ago
(Cockroach Labs CTO here) This could have been worded more clearly in the post. There will be two versions of backup functionality: a basic implementation for free (Apache license) and a faster distributed and incremental implementation as a paid feature (CCL). It's like the difference between mysqldump and an InnoDB-aware backup tool.
- haimez 10y ago
  Sounds like crippleware for a distributed database. If you can't incrementally back it up, you can't really afford to run it in production in a cluster that has a large dataset. If you don't have a large dataset, you don't need cockroach db (first law of distributed objects, etc). Maybe you'd be better off designing features for clients with specific requirements and very deep pockets.
  - elcritch 10y ago
    Not necessarily, even small datasets can benefit from a distributed database. Configuring a HA database setup for any of the open source DB's requires a lot of work. For a startup, a small cluster can provide HA, redundancy, and ease of scalability should the need arise.
    - haimez 10y ago
      No one cares about the difference between 99.9 and 99.999 reliability at the DB layer and then adopts a new open source DB to solve that problem. Especially when that exciting, new, experimental database cripples your ability to back it up. Hilarious.

kmicklas 10y ago

What about AGPL?

mikekchar 10y ago

From the chapter by Michael Tiemann in Open Sources: "At first I tried to make my argument the way that Stallman made his: on the merits. I would explain how freedom to share would lead to greater innovation at lower cost, greater economies of scale through more open standards, etc., and people would universally respond "It's a great idea, but it will never work, because nobody is going to pay money for free software." After two years of polishing my rhetoric, refining my arguments, and delivering my messages to people who paid for me to fly all over the world, I never got farther than "It's a great idea, but . . .," when I had my second insight: if everybody thinks it's a great idea, it probably is, and if nobody thinks it will work, I'll have no competition!" I still find it interesting how many people dismiss Cygnus's business model out of hand when entering the open source market. (Cygnus was acquired by Red Hat for $600 million and Michael Tiemann is still VP of Open Source development IIRC) What is interesting to me is that I've never heard of anyone else even trying it. No successes. No failures. As Michael Tiemann said, no competition. And Red Hat enjoys that competitive advantage even today. I highly recommend reading that chapter for an alternative view on how to approach open source development.

webmaven 10y ago
> I still find it interesting how many people dismiss Cygnus's business model out of hand when entering the open source market. […] What is interesting to me is that I've never heard of anyone else even trying it. Well, as I understand it, part of the reason is that contrary to their origin story, Cygnus didn't really follow the "Cygnus Business Model" either, and anyone trying similar tactics since then has had to deal with much greater visibility.

RichardHeart 10y ago

What's wrong with actually charging money for what you make? I think the over open sourcing of things leads to a tragedy of the commons whereby no one can profit enough to afford a marketing budget. Or if they can afford one, its 100x smaller than anyone else in the space that "charges" and is closed not open.

pbarnes_1 10y ago

These are famous last words. You can't predict any of this.

agibsonccc 10y ago

Disclaimer: I am outside the database market (we view it all as just "storage") We are a similar play (open core, etc) I commented in the rethink thread as well. A few lessons on the business model we ran in to: 1. Cloud is commodity/experimental. It could be the future though and there's no reason not to have an offering at least. We are launching a partnership with microsoft on azure to experiment with cloud for their hadoop offering. We found it was bring your own license and very similar to on prem. It seems like a no brainer to at least try this. 2. We are on prem first. Enterprise customers need "pay to blame" kind of like insurance. We have closed source features we license. Support is secondary and comes only with a license. 3. Bundling and minimum purchasing is key. You need to validate a customer has a budget. 1 thing that I notice database companies don't cover which kind of surprises me (that cloudera,red hat, etc do) is training and the "services swamp" 1 way to qualify customers and increase run way is a "small" amount of support you charge a high rate which in turn drives licensing revenue on top. A lot of the companies that have actually stood the test of time started like this. Where we deviate: 1. Building a horizontal platform but focus on 1 product at a time. In our case, we have a generic platform we can license for teams that just need "something better". We focus on a use case such as fraud/network intrusion/money laundering and sell that. This is very similar to the oracle model. "Bundle a database with the app" 2. Any services we end up doing we put aside to turn in to a product down the road. In our case, we observe and learn the patterns and reapply those as "templates". In our case we accumulate expertise, make a bit of money, and monetize later. Many SAAS companies in our space keep the customer data because they need to build better models. I'm not quite sure what the analog in the database market here is. We just keep the "lessons learned". The key here will be scaling that. In our case, we do that by focusing on 1 vertical use case and owning that. We also minimize engineering time on the platform. In short: We have a dual licensing model where we have an "app" that's easy to sell in the market, get paid to explore the market (while focusing on/prioritizing 1 use case for more scalable revenue, and for teams that just need a better platform, we can just offer that and make some fairly passive licensing revenue. 1 other neat anecdote: for all the people raving on HN about what google's doing with AI, the problems people had 50 years ago are still the same ones people pay for today. The database market maybe similar, it might not be bad to learn from your predecessors but maybe just update the business model a bit (eg: cloud offerings,..) At the end of the day people pay for use cases over everything else. Think about the reason they are about HA not "HA is cool, they obviously want to pay for that"

mendant 10y ago

If they really want to actually make money with a database, they would implement binary compatibility with Oracle's SQL dialect, Oracle stored procedure language, and its OCI binary protocol for programming from C. There are plenty of big customers locked into Oracle. If you gave them a backwards compatible but scalable database for half the price, they would happily cut their costs in half, and make cockroachlabs very rich. And then Oracle would offer to buy your company.