How This Startup Made $10.5 Million in Revenue With Every Single Employee Working From Home
It’s a classic story: Tech company goes to Silicon Valley incubator, emerges with a plan, and grows explosively. The only exception is that few of GitLab’s employees actually live in the Bay Area.
GitLab co-founders Dmitriy Zaporozhets (left) and Sid Sijbrandij. CREDIT: Courtesy GitLab
The wall behind Sid Sijbrandij emanates a warm orange glow. Then, waves rush toward the shore at his back. The change in scenery isn't distracting, however. It's deliberate. The GitLab co-founder has a green screen in his office, which is also his home.
Every employee of the San Francisco-based startup, which offers tools for software developers, works from home. Three years ago, that was nine people. Today, GitLab's 350 employees across 45 countries use video calls and Slack chats to stay constantly connected. The dramatic expansion has been enabled by outsize investment--a $20 million fund raise in September landed it a $1 billion valuation. It has also been propelled by revenue growth that skyrocketed to nearly $10.5 million last year, up 6,213 percent from just over $165,000 in 2014--helping it notch No. 44 on this year's Inc. 5000 list of the fastest-growing companies in America.
That growth is also deliberate, Sijbrandij attests. For each step of creating computer code, from planning and writing to releasing it to the world, a plethora of apps exist to help streamline that process. GitLab aims to integrate all of those systems into one platform. The company offers free limited access for individual developers and paid full access for enterprise companies, promising a 200 percent increase in development processing speed.
The message for people who don't speak tech: Doubling your team's efficiency is almost like hiring a bunch of extra software developers, without having to make room in the payroll budget. In a world where everything happens online, the faster you can push code, the better.
Catnip for coders.
The platform's first version was created in 2011 by Dmitriy Zaporozhets, Gitlab's other co-founder and current CTO. He was a programmer at a Ukrainian consulting firm who wanted a better code-sharing platform for his company's 200 employees. The best options were deemed too expensive by management, so he built one himself.
Word of the free open-source tool spread quickly, thanks to a post on Hacker News, the website owned by startup incubator Y-Combinator. Other developers started adding to its code, including Sijbrandij, a Dutch entrepreneur living in the Netherlands.
In 2012, Sijbrandij sent Zaporozhets an email. "Hey, I'm going to start a company around GitLab," he recalls writing. "Thanks for making it. You're not going to get anything. Hope that's OK with you."
A year later, Zaporozhets quit his job and joined Sijbrandij full-time. They toiled away in their respective countries, officially launching the company in 2014, until the company was accepted to Y-Combinator in 2015. The San Francisco stint gave them a much-needed crash course in sales, marketing, finance, and recruiting. They internalized the incubator's famous insistence on launching products right away, no matter what state they're in, and using customer feedback to polish them. GitLab publishes a new feature the 22nd of every month, whether it's ready or not.
This past June, GitHub--one of the world's largest code-sharing platforms--sold to Microsoft for $7.5 billion. Some users bristled at the prospect of corporate control and fled to GitLab, which gained 200,000 code projects and a seven-fold increase in orders.
Sijbrandij hopes the awareness bump is ending a common assumption that the similarly named companies do the same thing. While they may have started out with near-identical offerings, Sijbrandij says his company has expanded its services widely since 2011. "[Our] scope is ten times bigger than GitHub," he says.
Remote but not Isolated.
While Zaporozhets was open with his code, he was initially cagey about his personal life--refusing even to turn on his webcam for meetings. Sijbrandij asked for a photo, and received one of Zaporozhets wearing gigantic, face-obscuring sunglasses.
That's changed, thanks to the company's insistence on transparency. GitLab meetings and presentations are uploaded to YouTube. Its employee handbook--over 1,000 pages long when printed--is publicly available online as a resource, so employees can get questions answered without waking up co-workers in a different time zone.
GitLab's remote employees traveled from across the globe for a summit in South Africa. CREDIT: Courtesy GitLab
The biggest advantage to an all-remote team is obvious: Your hiring pool is gigantic, and you don't need to convince top talent to move for you. GitLab's percentage of quality job applications is similar to other companies--its dramatic number of recent hires is due to how many applications it receives, 13,000 in the second quarter of 2018 alone.
On the other hand, maintaining a culture is really difficult. "To be honest, I was definitely a bit concerned," says Dave Munichiello, a general partner at Alphabet's venture capital arm, GV, which invested in GitLab in 2017. "What happens when the all-hands meeting isn't a bunch of folks hanging around the water cooler listening to the CEO articulate the vision and the mission?"
GitLab's leaders constantly think about it. Sijbrandij even hired away Netflix's vice president of talent, Barbie Brewer, to serve as chief people officer. Virtual coffee breaks, where employees talk about their lives outside GitLab, are built into everyone's schedules. Senior leaders hold office hours in video chat rooms that anyone can join. When GitLab meets its monthly goals, everyone gets a free dinner.
"What we've learned from GitLab," Munichiello says, "is that when you have a leadership team that's as committed to remote-only as they are, and as communicative and transparent as they are, and as insistent on documentation as they are, it can work."