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As brilliant a business model as Heroku has, trying to do the same with one specific and not-yet popular development language/library/framework seems really unl

by dsrguru 14y ago

As brilliant a business model as Heroku has, trying to do the same with one specific and not-yet popular development language/library/framework seems really unlikely to work out in a way that will justify the 9 million investment. If VCs have this much capital to throw at projects like this, perhaps this is a sign that there would be a market for a startup that makes it easy for VCs to find startups with good potential and for startups to find funding more easily. Incubators are the only attempt I know of to solve this problem, but I'm sure there are larger scale solutions waiting to be thought of.

shykes 14y ago
I disagree with your comment in 3 ways: 1) Great developer tools are difficult to build and valuable. If they are popular enough and the business execution is good enough, they can give birth to successful and potentially large businesses. A few examples: Springsource, JBoss, MySQL, Wily, MongoDB, Atlassian, New Relic, Github. Note the diversity of business models, eras and hype factor. VCs know this and are making informed - if risky - bets. 2) I'm not sure how you reached the conclusion that Heroku's business model is brilliant. To my knowledge they haven't published any revenue numbers, and they no longer operate as a standalone business. 3) Speaking from experience, I doubt they will end up making money by providing hosting. They are a developer tools company and if they are smart they will remain focused on the developer experience, and let partners worry about uptime, support, SLAs and other unsexy things like that. That doesn't make them any less interesting as a business. (disclaimer: I work at a platform-as-a-service company)
- dsrguru 14y ago
  1) I don't disagree that funding the development of powerful open source tools can have a very positive effect on the success of future businesses, but how does the investor in this tool's startup profit from said businesses? I assume the main way they intend to make money is through enough people and businesses paying Meteor to host their site, and I can't imagine that will be as successful as a host that supports a range of popular languages/libraries/frameworks instead of one that may or may not attain popularity. 2) I don't know anything about Heroku's revenue numbers, but the idea of their business model is a brilliant idea. Offer web startups free hosting until they get traffic (i.e. until they can afford to pay you), and then sell them good enough performance for that amount of traffic. It's essentially a financial abstraction on top of Amazon. Almost any idea that involves giving someone a free service that allows that someone to make enough money to then pay you (when they couldn't have before) is probably a really good idea.

by dsrguru 14y ago

shykes 14y ago

I disagree with your comment in 3 ways: 1) Great developer tools are difficult to build and valuable. If they are popular enough and the business execution is good enough, they can give birth to successful and potentially large businesses. A few examples: Springsource, JBoss, MySQL, Wily, MongoDB, Atlassian, New Relic, Github. Note the diversity of business models, eras and hype factor. VCs know this and are making informed - if risky - bets. 2) I'm not sure how you reached the conclusion that Heroku's business model is brilliant. To my knowledge they haven't published any revenue numbers, and they no longer operate as a standalone business. 3) Speaking from experience, I doubt they will end up making money by providing hosting. They are a developer tools company and if they are smart they will remain focused on the developer experience, and let partners worry about uptime, support, SLAs and other unsexy things like that. That doesn't make them any less interesting as a business. (disclaimer: I work at a platform-as-a-service company)

dsrguru 14y ago
1) I don't disagree that funding the development of powerful open source tools can have a very positive effect on the success of future businesses, but how does the investor in this tool's startup profit from said businesses? I assume the main way they intend to make money is through enough people and businesses paying Meteor to host their site, and I can't imagine that will be as successful as a host that supports a range of popular languages/libraries/frameworks instead of one that may or may not attain popularity. 2) I don't know anything about Heroku's revenue numbers, but the idea of their business model is a brilliant idea. Offer web startups free hosting until they get traffic (i.e. until they can afford to pay you), and then sell them good enough performance for that amount of traffic. It's essentially a financial abstraction on top of Amazon. Almost any idea that involves giving someone a free service that allows that someone to make enough money to then pay you (when they couldn't have before) is probably a really good idea.