Developer tools: why it’s hard to build a big business

A few weeks ago, Atlassian went public. Not only are they the most successful public developer tool company, they’re the only public developer company. Github will likely be public soon too, but there aren’t many others waiting in the wings.

Here’s why it’s hard to build a big business focused on developer tools:

  • The open source model works really well for developer tools. This is because 1) open source works best when developers are their own customers and 2) developers working on open source developer tools receive a tremendous amount of social recognition, the true business model of open source.
  • Developers like writing their own tools and hate paying for things that they think they can build themselves, even when the cost to build far exceeds the cost to buy. Because developers *can* write their own tools, this makes them hypercritical of cost and inflexibility.
  • Developer tools end up being heavily subsidized by other business lines. Apple, Google and Microsoft spend hundreds of millions of dollars a year to create tools for their developer ecosystems. This makes it difficult to create an independent business unless your tool bridges these ecosystems in way that independent players aren’t inclined to do. The web was an opportunity to do this, and I’m still surprised a big business wasn’t created here (someone really should write a case study on Mozilla.)

How could you build a large independent developer tools business, starting in 2016? Here are two ideas:

  • Build tools for a specific set of developers who don’t have the skills to build the tools they need. E.g., target new developers or people who code for only part of their jobs.
  • Build a network of modules whose interdependence creates exceptional value, far beyond what could be developed individually off the platform. I think we’re only at the beginning of networked code.

There’s a lot more to write here: on why open source infrastructure is a better business than developer tools, on what happened with the web’s developer tools, and on the future of mobile development.

Developer tools are the final frontier of cognitive augmentation tools so I love thinking about and investing in them. In fact, I almost started a dev tool company once. But that’s a story for another time.

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