The archive · Developer & Business Tools · Financial decision · 2007–2010
GitHub bet developers would pay for private repos — bootstrapped, profitable by 2010
Weekend project turned business: free public hosting, paid private repos — hundreds of thousands of users, no outside funding, by August 2010.
GitHub
What the business is
GitHub is web-based source code hosting for git and Subversion — 'Wikipedia for programmers' — where public repositories are free, private ones are paid, alongside git training and open-source sponsorship.
Starting capital：A domain, a cheap Slicehost server, some stock art, and a few hundred dollars for the legal entity; the founders supported themselves with consulting and full-time jobs while the business ramped.
How it started
At a sports bar after a local programming meetup in late 2007, Tom Preston-Werner pitched Chris Wanstrath his idea for a git hosting site — 'a git hub.' They met on Saturdays to build it, and once the basics were in place they used GitHub daily at Chris's day job, a startup he had cofounded with PJ Hyett, which showed them what was missing. Tom had learned at Gravatar that giving away a resource-intensive service was a losing proposition, so from the start they knew hosting costs had to be recovered.
What happened
The free public beta immediately took off, and soon people were emailing to ask how they could pay for private repositories. PJ Hyett became a cofounder, the three stopped working on their startup, and they launched officially on April 10, 2008 with unlimited free public repositories and paid private ones. They started with a domain, a cheap Slicehost slice and stock art, plus a few hundred dollars for the legal entity; Chris and PJ consulted and Tom worked full time, and they scaled their own paychecks month by month only when revenue goals were hit. Tom Preston-Werner turned down a Microsoft offer — salary plus $300,000 over three years after Powerset's acquisition — to go full time. An early partnership traded free Engine Yard hosting for publicity, and the business grew without any outside funding.
How it ended up
By August 2010 GitHub was profitable and still had taken no venture capital. The Q&A reported hundreds of thousands of users, tens of thousands of paying customers and almost a million repositories, with thousands more added each day — in just over two years since launch — and 37signals ran the profile in a series for companies with $1MM+ in revenues that did not take VC.
Background
GitHub began in late 2007 as a weekend project between Tom Preston-Werner and Chris Wanstrath, who loved git but had no acceptable way to share code with others. They built the site on Saturdays, and once the basics worked they started using it every day at Chris's day job, a startup he had cofounded with PJ Hyett — a constant, real-world test of what was missing.
The free public beta for friends took off immediately. People began using it for business code, and soon users were emailing to ask how they could pay for private repositories. The founders realized GitHub could be more than a way to recoup server costs: PJ Hyett joined as a cofounder, and the company launched officially on April 10, 2008, keeping unlimited public repositories free and charging for private ones — 'charge the people asking to be charged.'
The company was financed almost entirely out of pocket: a domain, a cheap Slicehost slice, stock art and a few hundred dollars for the legal entity. Chris and PJ consulted to pay bills while Tom worked full time, and all three scaled their paychecks month by month only when revenue goals were hit. Tom Preston-Werner turned down a Microsoft retention offer of salary plus $300,000 to go full time on GitHub, and an early partnership gave GitHub free Engine Yard hosting in exchange for publicity.
By August 2010 the bet had paid off: GitHub was profitable with no outside funding, hundreds of thousands of users, tens of thousands of paying customers and almost a million repositories, adding thousands more each day. 37signals profiled the company in its 'Bootstrapped, Profitable, & Proud' series, and the founders argued that shipping early, listening to customers and ignoring conventional advice had been the real advantages all along.
What has to be true
- The founders were their own first users at a paying job, so the product gap — no acceptable way to share git repositories — was firsthand and constant.
- Gravatar had taught Tom Preston-Werner that giving away a resource-intensive service was a losing proposition, which pushed GitHub toward charging from the start.
- Customers asked to pay before pricing existed, so the freemium split between free public and paid private repositories was demand-led rather than invented.
- Tying founders' salaries to monthly revenue targets forced profitability before hiring and spending could scale, which is how the company avoided venture capital.
What can be applied
Let free users set the price: GitHub kept public code free, charged only for private hosting, and tied salaries to revenue — proof a developer tool can bootstrap on willingness to pay.
Aftermath
As of 2010-08-03 GitHub was still bootstrapped and profitable: no outside funding, hundreds of thousands of users, tens of thousands of paying customers and almost a million repositories, with thousands of new repositories added daily. The three founders ran a distributed company with no managers out of a small San Francisco office, and 37signals' profile placed GitHub in its 'Bootstrapped, Profitable & Proud' series for companies with $1MM+ in revenue that did not take VC. This record covers the company's founding and its bootstrapped growth to that point.
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