3 ms·

I think you are wrong. Not having a moat is a business model and a competitive advantage, and one which works well. As a customer, it gives me confidence that,

I think you are wrong. Not having a moat is a business model and a competitive advantage, and one which works well. As a customer, it gives me confidence that, if gitlab (or any similar company) screws up, I can host it myself. I go for open source precisely due to the lack of a moat. That's what most open models rely on. 1) Hosted services are cheaper than running it myself, once I include staff time, so by default, I will go to the source vendor. 2) Even if there's a cheaper alternative, I'll gladly pay e.g. 50% more to go to the organization which wrote / maintains the product. Many companies just aren't that price-sensitive. If you pay $200k for a SWE, is saving $100/year worth it to go for gitlabknockoff.com instead of gitlab.com? Most big organizations wouldn't. The risk only comes in if gitlabknockoff was AWS, Azure, or GCP, which we're still learning what to do about. 3) There is a shallow moat in the forms of things like brand recognition, canonical URLs, etc. If you're comfortable with e.g. a <100% profit margin, open models do just fine. Open models just mean you can't have a 10,000% markup or do an Oracle-style milking of customers. As a customer, that's why I pick open models. Open models also mean I'm not SOL if you go out-of-business. The friction comes in with a lot of hybrid models. Most things between open and proprietary don't work well. Datadog + gitlab are on opposite sides of this divide, and I don't see that working well.

999900000999 2y ago
>. If you pay $200k for a SWE, is saving $100/year worth it to go for gitlabknockoff.com instead of gitlab.com? Arguably Gitlab sounds like a GitHub knockoff, although it's actually more expensive. No moat plus a clear dominant competitor. Now it's possibly Gitlab could still be a smaller player, but they'd probably have to accept a much lower valuation and trim costs.
- frognumber 2y ago
  I think the key bug in gitlab is exactly that: out-of-control costs. One of the key things about moatless models is you do need to keep costs under control. Gitlab has 2,268 employees. That's probably an order-of-magnitude more than they need. With 226.8 employees, they would be wildly profitable. Now, once you take on employees, it's very, very hard to shrink. It takes a lot of disciplines not to overgrow workforce. So I'm not suggesting layoffs or anything specific to fix it. Regarding costs: Gitlab is $29/month. Github is $21/month (or $4/month). * If you're spending $200k on an employee, is it really worth saving $300 or whatever per year on tooling? Any difference in productivity will far overwhelm that. * If a devops employee runs $200k per year, are you going to "host your own" to "save" a few grand? Much of the market simply doesn't care about pennies, and bottom-feeders aren't super-profitable in either case. Bottom-feeders can be important from a network effects perspective, but for profit, going for the high-margin makes a lot of sense. Honestly, I have no idea how I'd value gitlab; that's another story. But all else being equal, I'll pick open-source over proprietary. That is a competitive advantage over github.
  - nikau 2y ago
    > Gitlab has 2,268 employees. That's probably an order-of-magnitude more than they need The state of their long open issue tickets suggest otherwise.
    - Aeolun 2y ago
      Speed goes down as org size increases. We just delivered a one page form with 10-20 people in a month, and it was an almost impossible achievement.
    - merb 2y ago
      The features they put out are not really that great anymore and most issues are about the core product and not the thing they want to sell you like, duo.
    - frognumber 2y ago
      1975 called. They'd like to loan you their copy of the Mythical Man-Month. So to be clear: If all of those were SWEs, that would be 2,268 people to introduce bugs, and roughly 2.5M potential social links / interactions (and communications overhead). The issue queue is what results. Most projects are best done by about 2-10 person teams. That's about where you can maintain architectural coherence. Beyond 20, architectural coherence becomes impossible.
      - 999900000999 2y ago
        So would the perfect GitHub/GitLab competitor be a 20 person team of highly paid engineers ( 400K USD straight cash comp) with outsourced marketing and HR ? I actually think most companies, particularly when VCs are pumping them full of capital, overhire. I guess this is to signal to the market we're doing cool things...
        frognumber 2y ago
        From a purely "winning in the market" perspective, I think there-abouts. For optimal, I might go up a little bit more, since there are multiple products, but not a lot more. Some of the CI/CD stuff is pretty disconnected from the core product. There are very, very strong individual pressures to overhire. "I managed a 500-person team" sounds a lot better on a resume or otherwise than "I managed a 5-person team" (even if the 5-person team did more). I also wouldn't go all cash. I'd do the normal $150-$200k cash, and the rest in equity. I'd be very, very generous with equity. There are also time pressures, whereas many things take time to build. 5 people x 4 years >> 20 people x 1 year, at least if kept productive (which is sometimes hard with longer timelines)
- cdelsolar 2y ago
  What’s a moat ?
  - seanhunter 2y ago
    A moat was a defensive ditch (often filled with water) built around medieval castles to make them harder to attack[1]. In the context of a company, when people talk about a moat they usually mean some unique feature or structural advantage that allows a company to maintain a competitive edge over time, makes it harder for a competitor to usurp the company's market position or steal their customers etc.[2] So here a moat means "what does gitlab have that makes it harder for someone else to launch a git hosting thing and devs/companies/whoever just ship over to it?" To which the answer is clearly "not very much" given that github exists and does a very similar thing. [1] https://medievalbritain.com/type/medieval-life/architecture/parts-of-a-medieval-castle-the-moat/ https://medievalbritain.com/type/medieval-life/architecture/... [2] https://www.investopedia.com/ask/answers/05/economicmoat.asp https://www.investopedia.com/ask/answers/05/economicmoat.asp
    - netcoyote 2y ago
      Thank you for your informative answer. I’m glad that there are folks like you who help make this internet community a better place.
      - cdelsolar 2y ago
        I agree, thank you!
Aeolun 2y ago
> Most big organizations wouldn't. Difference being that by not using Gitlab you are saving $1200/year per engineer of course. If you instead go with Github you get more or less the same feature set for only $240/year.
gsaslis 2y ago
> The risk only comes in if gitlabknockoff was AWS, Azure, or GCP, which we're still learning what to do about. Exactly! It really makes me wonder how GitLab thinks Datadog can help them defend against this risk. Then again, they're not open source - just open core.

999900000999 2y ago

>. If you pay $200k for a SWE, is saving $100/year worth it to go for gitlabknockoff.com instead of gitlab.com? Arguably Gitlab sounds like a GitHub knockoff, although it's actually more expensive. No moat plus a clear dominant competitor. Now it's possibly Gitlab could still be a smaller player, but they'd probably have to accept a much lower valuation and trim costs.

frognumber 2y ago
I think the key bug in gitlab is exactly that: out-of-control costs. One of the key things about moatless models is you do need to keep costs under control. Gitlab has 2,268 employees. That's probably an order-of-magnitude more than they need. With 226.8 employees, they would be wildly profitable. Now, once you take on employees, it's very, very hard to shrink. It takes a lot of disciplines not to overgrow workforce. So I'm not suggesting layoffs or anything specific to fix it. Regarding costs: Gitlab is $29/month. Github is $21/month (or $4/month). * If you're spending $200k on an employee, is it really worth saving $300 or whatever per year on tooling? Any difference in productivity will far overwhelm that. * If a devops employee runs $200k per year, are you going to "host your own" to "save" a few grand? Much of the market simply doesn't care about pennies, and bottom-feeders aren't super-profitable in either case. Bottom-feeders can be important from a network effects perspective, but for profit, going for the high-margin makes a lot of sense. Honestly, I have no idea how I'd value gitlab; that's another story. But all else being equal, I'll pick open-source over proprietary. That is a competitive advantage over github.
- nikau 2y ago
  > Gitlab has 2,268 employees. That's probably an order-of-magnitude more than they need The state of their long open issue tickets suggest otherwise.
  - Aeolun 2y ago
    Speed goes down as org size increases. We just delivered a one page form with 10-20 people in a month, and it was an almost impossible achievement.
  - merb 2y ago
    The features they put out are not really that great anymore and most issues are about the core product and not the thing they want to sell you like, duo.
  - frognumber 2y ago
    1975 called. They'd like to loan you their copy of the Mythical Man-Month. So to be clear: If all of those were SWEs, that would be 2,268 people to introduce bugs, and roughly 2.5M potential social links / interactions (and communications overhead). The issue queue is what results. Most projects are best done by about 2-10 person teams. That's about where you can maintain architectural coherence. Beyond 20, architectural coherence becomes impossible.
    - 999900000999 2y ago
      So would the perfect GitHub/GitLab competitor be a 20 person team of highly paid engineers ( 400K USD straight cash comp) with outsourced marketing and HR ? I actually think most companies, particularly when VCs are pumping them full of capital, overhire. I guess this is to signal to the market we're doing cool things...
      - frognumber 2y ago
        From a purely "winning in the market" perspective, I think there-abouts. For optimal, I might go up a little bit more, since there are multiple products, but not a lot more. Some of the CI/CD stuff is pretty disconnected from the core product. There are very, very strong individual pressures to overhire. "I managed a 500-person team" sounds a lot better on a resume or otherwise than "I managed a 5-person team" (even if the 5-person team did more). I also wouldn't go all cash. I'd do the normal $150-$200k cash, and the rest in equity. I'd be very, very generous with equity. There are also time pressures, whereas many things take time to build. 5 people x 4 years >> 20 people x 1 year, at least if kept productive (which is sometimes hard with longer timelines)
cdelsolar 2y ago
What’s a moat ?
- seanhunter 2y ago
  A moat was a defensive ditch (often filled with water) built around medieval castles to make them harder to attack[1]. In the context of a company, when people talk about a moat they usually mean some unique feature or structural advantage that allows a company to maintain a competitive edge over time, makes it harder for a competitor to usurp the company's market position or steal their customers etc.[2] So here a moat means "what does gitlab have that makes it harder for someone else to launch a git hosting thing and devs/companies/whoever just ship over to it?" To which the answer is clearly "not very much" given that github exists and does a very similar thing. [1] https://medievalbritain.com/type/medieval-life/architecture/parts-of-a-medieval-castle-the-moat/ https://medievalbritain.com/type/medieval-life/architecture/... [2] https://www.investopedia.com/ask/answers/05/economicmoat.asp https://www.investopedia.com/ask/answers/05/economicmoat.asp
  - netcoyote 2y ago
    Thank you for your informative answer. I’m glad that there are folks like you who help make this internet community a better place.
    - cdelsolar 2y ago
      I agree, thank you!

Aeolun 2y ago

> Most big organizations wouldn't. Difference being that by not using Gitlab you are saving $1200/year per engineer of course. If you instead go with Github you get more or less the same feature set for only $240/year.

gsaslis 2y ago

> The risk only comes in if gitlabknockoff was AWS, Azure, or GCP, which we're still learning what to do about. Exactly! It really makes me wonder how GitLab thinks Datadog can help them defend against this risk. Then again, they're not open source - just open core.