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 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.
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)
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.
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)
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.
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'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.
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.
I could go on, but don't want to get too down, but it can be a very hard market.
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.
If we're just listing frameworks that help build real-time systems, Pusher would be another example.
Doesn't have this page on it:
But currently... it's pretty insecure.
EDIT: apparently Flotype pivoted from Now.js to something very different from what Meteor and the rest of the gang do.
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.
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).
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?
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.
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.
Although, thats what Google paid for Android.