Hacker News and SaaS

An interesting thing happened on Hacker News yesterday that highlights some complexities around innovation and compensation in today’s world.

Someone posted a link to visitor.js, which is a hosted piece of JavaScript that gives details on your visitor (like which city they’re in, date of last visit, etc.).  The creators set it up as a paid service.  You’d have to pay at least $10 per month to use it.

Within hours, someone posted a free open source version of visitor.js.

However you feel about this emotionally, here are two facts I believe to be true:

  • The creation of the open source version of visitor.js is good for the industry as a whole.  It’s yet another tool that developers everywhere can use and repurpose however they see fit.
  • The open source version makes it harder for the people behind the original visitor.js to make money from their efforts.  Hacker News has provided a disincentive for their innovation.

The economics of software are funny.  If you build a service that’s really deep so no one can easily copy it (like Twilio), you can survive.  If you build a site that accumulates millions of users, no one can easily take them away from you even if they replicate your product.

But if you do something that’s kind of cool, like visitor.js, you’ve added value to the ecosystem of technical tools, but… you don’t get compensated for this value

This dynamic creates a world where independent developers are increasingly effective at building things, but making money from what we build is more difficult.

19 thoughts on “Hacker News and SaaS

  1. Not every piece of technological innovation is economically a value add. This, I think, is the primary disconnect with hacker types when the found a startup — you need to put more time into your bizdev than your tech, to make sure that you have some important business decisions architected properly. (Eg, barrier to entry)

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  2. There is nothing in visitors.js that you cannot build yourself in a couple of hours. I was quite surprised that they asked money for delivering a .js file :)

  3. Certainly this is frustrating for the visitor.js crew. That said – I doubt their ambitions will be quashed. My best guess is a) they’ll crank out something even more ambitious and b) many of their customers will never know about the open source version and they’ll derive revenue from the tool just because it’s easy to use.

  4. The original author can be compensated, by making the service he provides (hosting, control panel, whatever) worth the money asked vs the free version – which doesn’t seem to be the case.

  5. HN has provided a disincentive for the WRONG method of innovation when you are talking about tools built for developers. Closed source is bad practice when you are building infrastructure software, I mean compare ASP.NET to Ruby on Rails, enough said. This is analogous in your Twilio example to if Twilio charged $5 for wrapper libraries. Within a week open source versions would flood GitHub and I’d venture to guess their quality would be orders of magnitude superior. This question is not one about the survival of developers. If you are going to build a product for developers, open source it. Otherwise, focus your energy and make your living by “wow”-ing everyday customers with elegant solutions to their many problems.

    • Is this a tool for developers? If it’s about understanding your visitors, it’s a tool for online marketers (who may or may not be developers… but in most businesses, not)… and those are people who are definitely willing to pay for this sort of value.

      To me, it seems like an asshole move to take something one person or one team worked on… and copy it. I don’t care if you *can* copy it; the question is whether you should.

      Why do that and then give it away? Because the copy-cats hated the idea of someone earning a buck on something? Is this a jealousy thing? It doesn’t seem very fair.

      Developers, instead of spending your time copying someone else’s idea to give it away free and undermine the value of the service and the skills required to make it… why not lend your services to some other startup out there that would kill to have you work with them? If all you want is a hobby project or to prove you can do what other programmers can, hell, there are a million marketers with ideas that would LOVE to work with you!

  6. One of the things we hope http://TipTheWeb.org/ will be good for is offering a way for creators of open source tools and useful web services to get money from the people who use what they’ve published, especially for things that would be harder to build a full business around, but which still have significant value to people…

  7. If you look at what actually gets ranked up or down on HN, it has very little to do with how deep or accomplished the code is. Primarily they’re interested in something that amuses them for about five seconds.

    HN does something else, which you didn’t really touch on. Its users act like a momentary upranking constitutes a viral success; they come back and write about it the next month in hope of another hit. Then they conflate that with actual success; which of course it isn’t. HN’s gift, if you like, is to make kids think that karma, and being on the front page of HN for three hours, is a decent substitute for making a lot of money off their weekend startup; because they knew they weren’t gonna make money with it anyway, at least this way it looks like they didn’t just drop out. I’ve been on that ride. You can pay for the full version if you didn’t get enough and you want to be pistol-whipped by Paul Graham for a couple months, but the only thing you’ll learn is yeah, your idea probably sucked or you wouldn’t have been flogging it on HN in the first place. Because it feels so good to know, if you can’t succeed in business, at least the geeks liked it.

    You want to do something and put it out there for free, great. Hopefully there’s a good reason for it. Hopefully you’re planning on turning that into something on your resume, or leveraging what you wrote later on. Or you’re doing it for the good of the world. But don’t do it for goddamn HN’s approval, and certainly don’t put a commercial product out there that they can tear down. That’s just lazy, as other posters have pointed out.

    HN is not representative of the end-user, nor is it representative of a middleware market. In fact, while there are a good number of grizzled old coders hanging around there acting more important to the world than they are (not the least of whom owns the website) the only demographic they seem to represent at large are disgruntled, unemployed 23-year-olds, desperately looking for something to do other than work at Starbucks.

    Viable startups will live. Couple hundred lines of code will be stolen. And people at HN will keep being self-righteous assholes, because that’s why they’re there in the first place; they make it a point of pride to be “troll-free” but in fact they’re basically a collection of trolls who were rejected from reddit.

    And yeah, I read it and post there occasionally, but it’s not worth confusing with reality.

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  8. I understand your point, but soon or later it would have been done (assuming it wasn’t done before this week.)

    Hacker News may just have speed-ed it up or publicized a visitor.js clone, just as any other outlet. As soon as you become mainstream enough…

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