Analyzing GitLab's YC Application - Building a GitHub Alternative to $13B Company
Company Overview
Progress at Application
Founder
Sid Sijbrandij
Co-founder & CEOBuilt recreational manned submarines before GitLab, previously founded U-Boat Worx
Full-time commitment to GitLab
Dmitriy Zaporozhets
Co-founder & Engineering FellowStarted GitLab in 2011 as an open source project
Full-time commitment to GitLab
Key Strengths
GitLab's application demonstrated exceptional product-market fit with proven traction, a clear understanding of the market opportunity, and a unique open-source approach to disrupting the version control space.
Application Deep Dive
What is your company going to make?
We're making open source software to collaborate on code. It started as 'run your own GitHub' that most users deploy on their own server(s). GitLab allows you to version control code including pull/merge requests, forking and public projects. It also includes project wikis and an issue tracker. Over 100k organizations use it including thousands of programmers. We also offer GitLab CI that allows you to test your code with a distributed set of workers.
Clear Value Proposition
Positions as complete solution for code collaboration with GitHub comparison for instant understanding
Traction Emphasis
Leads with impressive user metrics showing product validation
Where do you live now, and where would the company be based after YC?
The Netherlands, Ukraine (with employees in San Francisco), we don't know yet where will be based after YC
Global Team
Shows ability to operate with distributed team across multiple countries
Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together.
We created GitLab together and now over 100,000 organizations are using it. We also created GitLab CI and GitLab CI Runner together. This pair of programs allow organizations to distribute their code testing over a number of workers.
Proven Collaboration
Demonstrates successful history of building products together
How long have the founders known one another and how did you meet? Have any of the founders not met in person?
In 2011 Dmitriy started GitLab. We met in 2012 via email when Sytse started building GitLab.com. In 2013 we formally started a company together and went on team trips a few times since then.
Organic Partnership
Partnership evolved naturally from shared interest in the product
How far along are you?
Over 100,000 organizations are using GitLab. <Redacted>, Qualcomm, NASA, Nasdaq OMX and Interpol are paying customers. Over 600 people have contributed to it. It is the most popular open source version control software.
Enterprise Validation
Strong enterprise customer base and community contribution
If you've already started working on it, how long have you been working and how many lines of code have you written?
Since 2011, over 10,000 commits, see http://contributors.gitlab.com/
Development History
Long-term commitment with substantial codebase
How much revenue?
$1m annual Revenue Run Rate
Revenue Traction
Clear revenue metrics showing business model validation
What is your monthly growth rate?
About 60% in revenue each month.
Strong Growth
Impressive month-over-month revenue growth
Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you're making?
Dmitriy wanted a solution he could use at his previous job. All employees except our account managers (8-2=6) are software developers. We listen closely to the community via direct customer feedback, pull/merge requests, issues, twitter, mailinglists, chatrooms and the non GitLab B.V. employees on the GitLab core team.
Personal Pain Point
Solution born from founder's own needs with strong domain expertise
Community-Driven
Strong emphasis on community feedback and engagement
What's new about what you're making? What substitutes do people resort to because it doesn't exist yet?
We offer the a better way of collaborating on digital products (the feature branch workflow) to organizations that prefer to work on open source tools. Open source is interesting for large companies because they can inspect and modify the code. They also can and do contribute back changes that are important to them. Substitutes are closed source alternatives (GitHub Enterprise, Atlassian Stash) or less functional open source alternatives (Gitorious, Gogs).
Open Source Advantage
Clear differentiation through open source model and enterprise focus
Who are your competitors, and who might become competitors? Who do you fear most?
GitHub Enterprise and Atlassian Stash are our primary competitors. We fear Atlassian Stash most since the GitHub Enterprise offering is weak (black box VM that doesn't scale or cluster) and overpriced (4x more expensive than Stash or our standard subscription). We compete with Stash on usability, integration (no need to install Jira and Confluence separately), flexibility (you can inspect and adapt the source) and price.
Competitive Analysis
Detailed technical and pricing comparison with main competitors
What do you understand about your business that other companies in it just don't get?
An open source development process allows you to market your product for free. It also allows a good product market fit at a low cost. We believe that version control is infrastructure software and that open source is the natural model for this kind of software. But to create and grow a competitive open source offering you need to have a proprietary commercial version to generate scalable revenue, support income alone is not enough.
Open Source Strategy
Deep understanding of open source as both distribution and development strategy
How do or will you make money? How much could you make?
Mostly by selling subscriptions that entitle our customers to support and our proprietary GitLab Enterprise Edition. Our most sold subscription by revenue costs $49 per user per year. Most or our revenue comes from organizations with more than 100 paying users. Every company with a substantial number of developers needs software like ours. We already declined an acquisition offer from a competitor for $10M because we want to grow this into a large company.
Clear Revenue Model
Well-defined freemium model with enterprise focus
Growth Ambition
Declined acquisition shows confidence in larger opportunity
How will you get users?
Currently we get users through word of mouth (amplified by twitter). During our time at YC we would like to grow our marketing, our continuous integration product GitLab CI and our SaaS (GitLab.com). GitLab.com currently has only 15k monthly active users but we see a lot of possibilities to grow and differentiate it.
Growth Strategy
Multiple channels for user acquisition with focus on product-led growth
Please tell us something surprising or amusing that one of you has discovered.
Before GitLab Sytse has build recreational manned submarines from scratch, the company he started is currently the largest producer of them in the world and is called U-Boat Worx http://www.uboatworx.com/
Entrepreneurial Background
Shows prior successful venture in completely different field