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Meteor (YC S11) gets $9M in funding (gigaom.com)
156 points by dko on May 31, 2012 | hide | past | web | favorite | 64 comments

Really awesome. What would be really cool to see is a demo and example code of an app that has authentication, and user-level permissions on the data. These "everyone in the world can update a global list" demos are getting pretty tiring.

I can't believe this. Really. Meteor is a bunch of open source projects glued together with some of their own libraries. Their package system which is out of npm is completely arbitrary.

Why not funding other good projects? There's plenty of better framework/libraries that are massively used by the community.

I'm, myself, leading a little node.js framework open source project with similar concepts and I'd never accept to be funded. This isn't a project, there's no revenue opportunities there, it's a tool!

Tools help to develop projects which then make a revenue...

Some investors have very poor judgement.

I really don't understand the negativity. They have an awesome team that's built an awesome product. No, it's not finished (hence the money to hire more engineers) and yes, there are competitors (competition proves market need).

I don't know much about how VCs structure their portfolios, but recognizing a need in the market and betting on a badass team seems like a pretty solid strategy to me.

As for me, I'm happy for them. I hope they succeed. I hope them and their investors make a ton of money and it encourages other teams to build more awesome products.

Some investors have very poor judgement, that's true, but Andreessen Horowitz is hardly one of them.

It's probably related to the hosting service they will most likely monetize on.

As brilliant a business model as Heroku has, trying to do the same with one specific and not-yet popular development language/library/framework seems really unlikely to work out in a way that will justify the 9 million investment. If VCs have this much capital to throw at projects like this, perhaps this is a sign that there would be a market for a startup that makes it easy for VCs to find startups with good potential and for startups to find funding more easily. Incubators are the only attempt I know of to solve this problem, but I'm sure there are larger scale solutions waiting to be thought of.

I disagree with your comment in 3 ways:

1) Great developer tools are difficult to build and valuable. If they are popular enough and the business execution is good enough, they can give birth to successful and potentially large businesses. A few examples: Springsource, JBoss, MySQL, Wily, MongoDB, Atlassian, New Relic, Github. Note the diversity of business models, eras and hype factor. VCs know this and are making informed - if risky - bets.

2) I'm not sure how you reached the conclusion that Heroku's business model is brilliant. To my knowledge they haven't published any revenue numbers, and they no longer operate as a standalone business.

3) Speaking from experience, I doubt they will end up making money by providing hosting. They are a developer tools company and if they are smart they will remain focused on the developer experience, and let partners worry about uptime, support, SLAs and other unsexy things like that. That doesn't make them any less interesting as a business.

(disclaimer: I work at a platform-as-a-service company)

1) I don't disagree that funding the development of powerful open source tools can have a very positive effect on the success of future businesses, but how does the investor in this tool's startup profit from said businesses? I assume the main way they intend to make money is through enough people and businesses paying Meteor to host their site, and I can't imagine that will be as successful as a host that supports a range of popular languages/libraries/frameworks instead of one that may or may not attain popularity.

2) I don't know anything about Heroku's revenue numbers, but the idea of their business model is a brilliant idea. Offer web startups free hosting until they get traffic (i.e. until they can afford to pay you), and then sell them good enough performance for that amount of traffic. It's essentially a financial abstraction on top of Amazon. Almost any idea that involves giving someone a free service that allows that someone to make enough money to then pay you (when they couldn't have before) is probably a really good idea.

Was it ever "officially" announced that Meteor was part of YC? I've followed the original launch post but can't remember that mentioned. (I looked back and didn't find anything either)

I find it interesting to see this project as well as Diaspora (S12) and LightTable (S12) be part of Y Combinator, since they're all companies built around open-source projects (IIRC). (with two of them who "started out" on Kickstarter)

I am pretty curious on how they are going to compete against other open source 'realtime web' solutions such as derby.js?

Especially since derby.js is distributed with npm and can be used in conjunction with the thousands of existing node.js libraries. Any node developer can integrate derby.js into his existing web app with a little effort and make it 'realtime'. With meteor, not so easily.

Not everyone who can run a node.js server wants to (raises hand).

Think about Mailgun: obviously I'm capable of running a mail server and parsing incoming mail. But they can do it better, at a price that's cheaper than my time, and give me high availability without my paying a sysadmin.

Its an easy sell.

I don't think that's a stellar analogy. Email is a very ancillary part of a web service's business while the data management, analytics, business logic, etc are the very core.

I used both and it seems you're right that staying within the node.js+npm ecosystem is hugely beneficial. I can treat my derby project just like any other node.js project which have made it much easier to push to platforms like Heroku... It was also a lot easier to get a REST API going with derby since it's so close to express and connect whereas I feel like meteor mostly hides the interfaces to node.js packages it uses

How much effort is "little effort", in dollars?

My point is that it will take lesser resources (that includes time, HR and yes of course, $$) to use derby.js instead of meteor due to the former being part of the well-established node ecosytem.

I've always been interested in building developer tools, I did it at the beginning of my career, 4 years ago, but I've always thought it was a "bad market", a "small one", "there's no money in it".

I've been, secretly, working on a tool while working at a startup and bootstrapping my own startup (my hours are 8am to 4-5am), for the past couple of months, but it has always been kind of a disappointment when I try to think on how to create a business out of it. With these investments - Meteor, 10gen, and the Github rumor - I, definitely feel more encouraged :-)

The plan is always bootstrap - of course - since I don't have a track record, I'm not a ex-facebook employee, nor went to a top CS school.

Since, I'm not from the valley, or any tech hub by that chance, I haven't been able to understand the "industry". I think I get it now, it doesn't matter what you make (money) and the fools that ask "What's the monetization strategy?", you just need to create something very cool that you and other people find useful. I might be wrong but that's my observation.

"you just need to create something very cool that you and other people find useful."

No. You need to convince investors that whatever you have is "cool" and "useful", even if it burns money.

Derby is cool. Express is cool. Knockout is cool. There are so many cool, free, open-source libraries. It has become crystal clear that getting investment is about being on the inside, having a hip website, and valley celebrities saying good things about you.

Not to mention the allstars behind Meteor itself. http://meteor.com/about/people

Thanks for that comment, it expresses exactly how I'm feeling towards this. This is stupid and pointless. Instead of developing a framework I should be designing a beautiful website, fuck features, it's gotta be good looking!

With no track record, that's more difficult.

There is no money in developer tools. Maybe libraries, but add on tools, no. First, your market is way smaller than "people". Second: 1. Nobody believes they need your tool. 2. They will convince themselves they can do better in a weekend. Third, your customers will be total assholes, because every tiny bug is something "that never would have happened if you had any quality controls at all." Fourth, the people who will use and benefit from your tool and the people with budgets are generally totally separate, which may have major marketing/sales implications.

I could go on, but don't want to get too down, but it can be a very hard market.

Parse, Meteor, and Firebase are all YC companies and all of them are working on this.

Heroku (YC08) has been around longer than #22 (http://ycombinator.com/ideas.html), but pg's item on fundable ideas might hint at some of his vision regarding abstracted platforms:

Don't make it feel like a database. That frightens people. The question to ask is: how much can I let people do without defining structure? You want the database equivalent of a language that makes its easy to keep data in linked lists.

I realize that Derby also helps build real-time applications, but I haven't heard anything about Derby being in YC. Has there been a public announcement that they are?

If we're just listing frameworks that help build real-time systems, Pusher would be another example.

My bad...missed that it was YC companies.

And Simperium

Why do they need 9 million, really? That's about 10 programmers for 5 years, with a competitive salary and benefits, plus office costs.

To employ 10 programmers for 5 years with a competitive salary and benefits in an office of some sort?

Yes, to develop a tool which will get no revenue after? This is completely pointless.

Red hat/ MySQL etc model I guess.

It's more likely to be the offer-hosted-version model rather than the Redhat/MySQL model.

Vc Money represents a seal of approval. The externalities are far more important in this case.

mktg, mktg, mktg

#1 issue is security #2 issue is this:


Doesn't have this page on it:


Out of all these "real-time" JS frameworks, to me, Meteor seems the most promising. Looking forward to how it evolves. Congrats and good luck to the team.

Speaking about meteor, can someone tell me if there is any way to protect the database from the user fiddling with a javascript console? In all screencasts they show how powerful it is by changing the DB with some mongodb-like commands on Chrome Developer JS Console, well, I don't want my users doing that. Anyone knows better?

I asked the same question on #meteor. Apparently security is coming in the next 2 months.

But currently... it's pretty insecure.

Maybe I'm being overly pessemistic, but projects that don't start with security as one of their primary design goals tend to not have the best security track records. Security isn't really something you can trivially bolt on at a later date.

I'm also wondering this, there's a lot of that kind of clientside frameworks lately and I've been wondering the same about them all...

Between Meteor and 10gen (which makes MongoDB, which Meteor uses heavily), $50M was just invested. If both companies use their money wisely this could pack a powerful punch!

Didn't even know that Meteor was a YC company. Does anyone know what their original product was?

Hmmm, security model is vaporware and VCs are deciding that we (developers) will really love this library before anyone is even using it.

I understand, that YC have no choice, but to invest in competing startups, simply because the large number of startups being accepted in Y-Combinator. They backing many Realtime Messaging companies, such as Firebase, Meteor, Flotype/Now.js, Simperium, Parse, etc.

EDIT: apparently Flotype pivoted from Now.js to something very different from what Meteor and the rest of the gang do.

I work at Flotype, and I'd like to clarify that. Flotype and Meteor are completely different.

We saw the need for something like Meteor two years ago and built NowJS, but we decided to move away from RPC over websockets (NowJS) last year and work on a new technology called Bridge. Data model syncing is done nicely in Meteor, but we decided to pursue a different problem with Bridge (more details in the coming months).

While the vision behind NowJS and the current vision behind Meteor might share similarities, Flotype the company and Meteor the company are working on very separate things.

whats the monetization strategy?

Clearly it starts by getting someone to write you a $9M check to develop your Javascript library (excuse me, "platform").

This gold rush is so depressingly familiar. But that's not to speak ill of Meteor-the-product, which looks pretty nifty (albeit not $9M of nifty).

I hate to be so negative but I have to agree. I know many people (including myself) who've already written libraries similar to Meteor (derby comes to mind).

This is ridiculous. Meteor hasn't even gotten any real adoption and it has no business model. Why create a business when you can just get investment on promises alone?

Meteor works a lot like Heroku, and that's the monetization strategy.

Currently you can push your Meteor apps to their servers and host/run them for free. But eventually they're going to charge, have add-on services, etc. Just like Heroku, but because these are the guys who built Meteor, it should be better.

It will be interesting to see if anyone else tries to host Meteor apps at all, Heroku/Salesforce should be watching closely.

So apps can't be hosted on one's own servers?

They can be, & you can deploy to Heroku too. http://docs.meteor.com/#deploying

You can deploy Meteor as a dotCloud service too: https://github.com/jpetazzo/meteor-on-dotcloud

Support and hosting?

Congrats Meteor. That's awesome!

Nice, that pure tech ventures get high fundings of well known VCs but thinking a little bit more about Meteor I come to following conclusion:

First, we do not really know the first payment/milestone, maybe it's just $1M.

Meteor itself is an amazing technology, very well marketed by obviously smart guys—their Marketing pitch few weeks ago was just awesome and far beyond any other new JS framework. And I understand that Meteor gets very positive feedback here on HN due to their great communication skills and YC affiliation

But it has severe drawbacks:

=> While employing Node as core they surprisingly ignore the well established npm package manager which is one of the best package managers around. This is bad and there's no excuse because it leads to fragmentation of the still young JS server-side landscape dominated by a lean and modular-driven Node which is just the smartest way to establish a real ecosystem—the one-size-fits-all approach is aged and that's Meteor. I assume they did their own package manager due to their upcoming business model (which will be introduced very far in the future if their ecosystem is once established), maybe they'll take license fees or demand support fees or whatever of everyone who wants to actively participate as contributor in the ecosystem. They couldn't do this with the npm. And by choosing this path the can lock out competing frameworks: if Meteor would just be a package in the npm ecosystem the opportunity costs of changing to other realtime frameworks in the npm world wouldn't be that high because changing the framework wouldn't mean changing the entire ecosystem.

=> As long client-side JS is delivered unprotected to the browser you will never have the one-code-base-or-name-space-covering-front-and-backend approach. This approach doesn't provide any security—client code could do any shit to the server side—and others who tried made great products too but couldn't get any traction (nowjs i.e.). You will need always to separate both. They promised to come up with solutions like authentification or signed data, but then we have again more communication overhead than we would have if just separated those layers. This drawback isn't as huge as the first one, it's a technical challenge and thus, I appreciate any efforts to solve this problem.

Meteor was at the beginning a great tech demo, now they want to get serious and I doubt (and hope) that they won't succeed. Mentioned drawbacks are the main reasons I won't use, support and even advise against Meteor (as much as I like these guys and YC but sorry). They do not seem to contribute in any way to a great and existing ecosystem called Node but using it as their core to build a new competing one with monetization reasons in mind and a severely flawed architecture. Now, they obviously need and will use the money for PR and paying/incentivizing devs building the ecosystem and this competition between ecosystems (pure Node/npm vs Meteor) which is basically about winning the best devs will lead to further fragmentation and at the end no large ecosystem could be established and server-side JS failed. No, thanks.

$9M, wow. Enough money to become the next Rails.

Rails didnt have the pressure to be a $45 million dollar company (investors expect a 5x return don't they?).

Although, thats what Google paid for Android.

$9M was the total raise, not the valuation. Presumably the exit would have to be much higher than $45M for a 5x multiple.

I don't have any information on the details of this deal but if it is a typical series A then that 9 million represents a 20-30% equity stake in the company. This means for a 10x return for investorss the company needs to grow in value to ~$360 million.

Rails was developed internally and later released open source. It's a completely different model and your statement is ignorant.

Congratulations, guys.

Congrats! Meteor this is awesome, glad this will help them move along faster. Right alongside the mongo funding this week.

Wow, pretty awesome that YC is getting great companies like this.

Congratulations indeed!

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