Weekly Links & Thoughts
GitHub, AI, and Backlash: A few highlights from the week of 6/27
Sometimes trends become so well-known, they are easy to underestimate. By 2009, the rise of smartphones and mobile was obvious. Yet it was still vastly underrated. Uber and Instagram raised seed rounds in 2010. Snapchat’s seed round wasn’t until 2012.
Three trends that are “obvious” yet are probably underrated are GitHub & open source software, AI, and tech backlash. This article caught my eye as representative of each:
GitHub & OSS
There wouldn’t be a backlash to Copilot if GitHub weren’t so dominant. Since Microsoft bought it for $7.5b in 2018, GitHub hasn’t received many big headlines. It notably missed out on the frothy private company valuations of the past few years. If you’re not a developer, you might not appreciate its ubiquity - it has over 66m users. A growing majority of the world's programmers are on the platform.
If it were an independent company, GitHub would likely be mentioned in the same class as the top SaaS businesses on the planet. The acquisition price tag seemed steep at the time, but the deal now looks like it will go into the M&A Hall of Fame.
Perhaps even more importantly, the open source software (OSS) ecosystem continues to grow rapidly. At present, OSS has vastly more usage than monetization. The history of the Internet suggests the monetization will catch up. I suspect we will see OSS steadily take share in the SaaS market for the next few decades.
AI
It’s also easy to overlook the slow-moving tidal wave of AI that’s seeping into our lives. Github’s CoPilot product has seen massive uptake: (TechCrunch)
GitHub says that 1.2 million people signed up during the preview period. Copilot is now suggesting 40% of newly written code, according to the company — up from 35% earlier this year.
I suspect few Copilot users think much about its reliance on AI. It fades into the background, just like Gmail’s AI-driven Smart Reply feature. A 2018 article in the WSJ said that 10% of responses in Gmail were from Smart Reply. The % is likely much higher today. We might not realize it, but AI is sending a lot of emails.
Moving forward, I expect most of the headlines about AI will be about its failures or potential threats, but that will obscure the reality that AI is becoming ingrained into our lives.
Tech Backlash
The Copilot product costs $10/month. If a user doesn’t want it, they don’t have to use it. Where’s the harm? According to critics, there is a lot of it.
I might be biased here as I have a hard time mustering outrage towards tech vendors who offer a free product that I use regularly. I’ve done about a bazillion Google searches over the years and never paid a cent for a single one. Same goes for Facebook.
That said, in the war for popular opinion, I wouldn’t underestimate the viral potential of backlash. Look at Facebook (Meta), with its stock price down 55% in the past year. Apple, Google, Microsoft have held up much better, but ought to realize they could be next.
Podcast recommendation of this week:
On the topic of open source software, this is a fascinating interview with JJ Jacks, one of the few VCs solely focused on OSS. (Console.dev podcast)
A few interesting reads from this week:
Coleman McCormick’s very underrated blog Res Extensa had a great post this week on execution. I love this point on the value of trust: (Rex Extensa)
A company is nothing but a network of relationships between people on a mission to create something. If those connections between people aren't founded in trust and a shared understanding of goals and objectives, the cost of coordination and control skyrockets.
The point on trust reminds me of a great blog post from Matrix Partners VC David Skok about how to sell by not selling. The key is appreciating the value of trust - it’s 100x easier to sell to someone when they trust you. This ties back to my minor obsession with the “growth hack” in SaaS of creating quality content and offering a valuable free tier. Giving away something of value with no expectation of anything in return is a wonderful way of creating trust, making sales a downhill motion.