GitHub Got Silly Rich. Next Step: 'Make More Awesome'

Tom Preston-Werner, chief executive officer and co-founder of GitHub Photograph by Jin Lee/Bloomberg

Four years into its journey as a company, GitHub remained something of an independent. The startup, which helps companies and developers build software, rebuffed the repeated advances of venture capitalists. Then, last July, GitHub flipped the bit and took $100 million from Andreessen Horowitz, gorging at the venture-capital trough like some kind of hideously large and famished money hog. (Yes, these things exist.)

Asked why GitHub would need so much money, Chief Executive Tom Preston-Werner replies with an answer that fits his laid-back persona: “To make more awesome.” It’s an unsatisfying response, but you can reasonably (sort of?) say such things when you’re the Grand Poobah of the software universe.

GitHub got its start as a type of productivity/collaboration service for open-source software developers. Someone would decide to create a new application and opt to put his code up on the GitHub website. Other people could then see the code and contribute to the project, and GitHub’s tools would document the changes, let the developers chat with each other, and make it easier for people to combine their various bits and pieces into a working whole. Similar things had existed for years; they just weren’t that good.

One reason Preston-Werner and his co-founders didn’t have to chase VC money is that they were making their own money immediately. Software developers were ready and willing to pay for good collaboration and project-management tools. “On the first day, we made maybe $1,000,” says Preston-Werner, a skinny, bearded fellow. “That becomes $1,000 every month because it’s recurring revenue. It was amazing.”

Today, GitHub lets developers working on open-source projects use its service for free. Individuals and companies wanting to use the GitHub tools in private must pay a monthly subscription for a cloud service that ranges from $7 to $200. And then there’s an Enterprise Plan for companies that want to take the GitHub software and run it in their own data centers for maximum control and security.

If you’re outside the software world, it may be hard to comprehend how important GitHub has become. Just about all the major Web companies—Google, Facebook, Netflix—have a presence on GitHub, where they share their open-source code with the public and give their internal engineers a place to work together. More mainstream companies have shown up to manage their software efforts. And individual developers have turned to GitHub as a way of showing off what they can do and enticing employers. About 60,000 new developers sign up for a GitHub account each week.

Some of the $100 million in funding has gone toward supporting the infrastructure needed to support this growth. GitHub stores its customers’ source code on its own data-center equipment and employs dozens of people to manage and advance these computing systems. It has customer-support employees and others that build new tools. GitHub also has a growing staff of salespeople, courting corporate customers.

As the acting high priest of software, GitHub naturally builds a lot of its own internal tools. “Our finance people should have their own developers to automate the things that finance people do,” says Preston-Werner. “People shouldn’t be responsible for what we call ‘s––– work.’ We prefer to solve repetitive sorts of jobs with technology.” As for why it builds so many internal tools, such as a company directory, rather than just buying them, Preston-Werner explains: “We demand that the products we use be excellent. All those other products suck.”

GitHub as a whole seems to feed off Preston-Werner’s brand of cocksure easygoingness. The company, for example, is playful in that it has several themed meeting rooms. I was talking to Preston-Werner in the Situation Room, which comes with big black chairs, a red phone, and flags. Another room has leather lounges and forbids the use of technology, another has pod-like seats and Jetsons overtones, and so on. There’s a station in the middle of the office with joysticks and a number of computer monitors bound together. This is the support zone where new employees are meant to solve issues and then hit a button on their game controllers to blast them away. There’s a full bar with dozens of bottles of booze and a wooden barrel of the company’s own Slow Merge whiskey. It all seems to say, “We’re nonchalant and playful—by design.”

A big chunk of the $100 million has been earmarked for more than additional salespeople and office hooch. GitHub plans to open its collaboration tools up beyond the software kingdom. The company has already seen designers, legal teams, and public relations pros using its technology. “It has not been optimized for those things yet, but it works for them,” says Preston-Werner. “Right now we’re optimized for software, but who knows?” He refuses to budge on exactly when GitHub for lawyers or chefs or city planners will emerge, instead remarking that those products will be ready when they’re ready.

What should be clear enough is that Andreessen Horowitz has identified GitHub as a crucial piece to its “software is eating the world” thesis. If software really is going to go out and conquer and retool just about every industry, then lots of people are going to need good tools to write and manage code for software-related projects. GitHub has without question come up with a methodology that appeals to developers, and if it’s able to carry this structure to other industries and more mainstream professionals, then the company will indeed be making plenty of awesome—and plenty of cash.