GitHub Is Doing Much Better Than Bloomberg Thinks

I read somewhere that VCs don&#x27;t mind burning cash at GitHub, because the fire helps power the greater Software ecosystem. If GitHub shuttered it doors, it would be like a bank closing. Something would fill the void, but the immediate shock would be hugely damaging.<p>Overall, GitHub should go the services route. Right now enterprises are footing the bill with private repositories and organizations. If they want to become positive by just jacking up the price, buyers are going to start shopping around, and GitLab looks better everyday. Services like setting up CI&#x2F;CD pipelines for enterprises could be highly lucrative, especially if they can be templated with internal tools. Most software (and SaaS) companies eventually arrive at the conclusion that they are better off selling the expertise on how to use their software than selling the software itself.

&gt; <i>Assuming GitHub calculates their ARR in a healthy and responsible manner, there is no issue with their burn rate since it will result in higher revenue</i><p>The original Bloomberg article [1] frames more than decides on this assumption. In any case, it deserves more than a hand wave.<p>On one hand, every successful start-up pays for future revenues with prudent but present losses. On the other, &quot;a lobby modeled after the White House’s Oval Office&quot; doesn&#x27;t sound like that.<p>[1] <a href="https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2016-12-15&#x2F;github-is-building-a-coder-s-paradise-it-s-not-coming-cheap" rel="nofollow">https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2016-12-15&#x2F;github-is...</a>

I read Thiel&#x27;s Zero To One recently and after reading it you can&#x27;t help but think these kind of critiques are shortsighted. A technology company&#x27;s worth is often a projection for what their value will be in 20 years. This is why tech startups can be expected to lose money for many years and still be valued highly.

&gt; Even if GitHub stops growing and doesn’t reduce the Marketing&#x2F;Sales costs, it would still have enough money in the bank for another 20 months<p>20 months of runway if growth stops? That&#x27;s it? Is that called &quot;doing (much) better&quot;?

Bottom line - Are they overvalued, and is this an apology for their bloated value, with promises of stellar growth in the future?

I hate how the author, a purported CEO, doesn&#x27;t know the difference between &quot;lost&quot; and &quot;spent&quot;. For example, &quot;That means that GitHub lost $27M while generating $95M in revenue.&quot;<p>GitHub <i>spent</i> $27M. To &quot;lose&quot; $27M, they would have had to spent $122M, and subtract their $95M in revenue.<p>A CEO should know these terms like the back of their hand, and should be more precise with their terminology.