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/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.
Services only makes sense from the perspective that you can make your software "stickier" by adding consulting to help with implementation and customer success.
This is reflected in the multiples that VCs and acquirers give software vs. services companies - high-growth software companies often command a 10-14x trailing 12 month revenue, while services are lucky to get 4-5x. It's just a less attractive business.
That makes no sense at all. No LP would be in favor of paying an "investment tax" which is not broadly paid yet is broadly used. LPs put money into venture firms for higher than average returns. What you describe would make the investor's job harder.
In the Valley (and on HN) the VCs are the BSDs of the money scene. But they need their customers (LPs) and if you go to any LP meetings you'll see that most of the money comes comes from the actual BSDs of PE, hedge funds and pension funds. And since VC is such a tiny part of the financial world, you'll see that the folks that represent the big LPs at those LP meetings are just kids on their first job after an MBA, or even between college and MBA: all they really care about is reporting good returns to their bosses.
Could you give examples on how that route, in your opinion, could look like?
The original Bloomberg article  frames more than decides on this assumption. In any case, it deserves more than a hand wave.
On one hand, every successful start-up pays for future revenues with prudent but present losses. On the other, "a lobby modeled after the White House’s Oval Office" doesn't sound like that.
20 months of runway if growth stops? That's it? Is that called "doing (much) better"?
But how much will they have to increase spending to achieve those projected revenue increases? It's a classic error to think that the current trend of revenue growth will continue but expense growth will stop.
My point is that "holding all other costs fixed" usually turns out to be a heroic assumption. More staff is needed to support the larger customer base, marginal sales become harder (i.e. more expensive), etc. Plus, as these revenue figures grow, a fixed churn rate becomes more expensive in absolutely dollars. So customer retention becomes more important, which means more sales resources, which means more money. And so on. And in the meantime competitors are cutting prices, so "fixed" revenues turn out to be not so fixed after all, even before factoring in churn.
Don't get me wrong - I'm not predicting that GitHub will fail. I just think the slog will be harder than this meta-analysis of Bloomberg's analysis suggests.
GitHub spent $27M. To "lose" $27M, they would have had to spent $122M, and subtract their $95M in revenue.
A CEO should know these terms like the back of their hand, and should be more precise with their terminology.
To be more accurate, according to their P&L, GitHub made $95M in recognized revenue and showed a net loss of $27M.