Sourcegraph strategy

Long-term

Purpose

Our overall purpose is we want to make it so everyone can code. A world where everyone, not just ~0.1% of the world population, can code will see faster and more broadly beneficial technological progress. This page describes how we are going to achieve that goal, and the individual team and org strategies describe what we’re doing in each of our product teams.

Want to help us achieve these goals? We’re hiring!

Background

For thousands of years after writing was invented, most people remained illiterate. Universal literacy seemed unlikely. Is it really possible that every human would be capable of reading and writing? How would literacy benefit the average person? As we now know, every human is capable of and benefits immensely from literacy.

More recently, around 1976, just 0.2% of the world’s population used computers. Two tiny companies sought to make computing universal: Apple’s vision then was to create a “bicycle for the mind” in the form of a computer, and Microsoft wanted to put a computer “on every desk and in every home”. Though it seemed unlikely at the time, as we now know, everyone is capable of and benefits immensely from having a computer (or a phone).

Today, only about 0.1% of the world’s population can code. That tiny group has built software that runs the modern world and improves the lives of billions of people. Think of the possibilities if everyone was able to code. All around the world, more people would be able to solve problems and improve their lives by building software. We don’t know exactly what these billions of coders will create, but we know that this will bring faster and more broadly beneficial technological progress.

Values

Our values are the principles that help us execute on our strategy and build a high-performance team.

Medium-term

Principles

  • Sourcegraph is universal code search, not universal “everything” search. Any additional data types in our search need to be relevant to the software development workflow.
  • We want every developer, not just a specific niche audience, to use Sourcegraph.
    • We won’t adopt polarizing public stances that would divide our audience.
  • Our product should strive to be fundamentally privacy-respecting and secure. This means that users don’t need to trust us to verify that their data is private and secure.
  • Build on-ramps in our product to turn more people into frequent users, instead of building the product for infrequent users (which is a self-fulfilling prophecy).
  • We eventually want to be a platform that ties together all of the tools developers use.
    • Other developer tools are partners, not competitors.
    • This entails designing for extensibility in our product (and documenting it more thoroughly) as a first-order priority.
  • Sourcegraph provides greater value the larger a software team. We are building not just for individual developers, but for development teams. We believe software development is increasingly a multiplayer game.

Additionally, these are our product design principles.

Assumptions

  • Sufficiently good code search will be useful to every developer many times per day (on average). It may take a while to convert any specific person into a frequent code search power user, but it will happen eventually.
  • Code search that is exclusively for public/open-source code is not actually that useful because most people spend most of their time working on their organization’s internal code.
  • Any given developer will only pick one code search tool to use. Any given company will standardize on a single code search tool.
    • Therefore, to avoid fragmentation, Sourcegraph should be not only much better than the alternatives, but also not worse in any significant way.

Pricing

  • Trying Sourcegraph (to prove it works and is valuable) is free and (if you want) self-service.
  • If your organization is getting value from Sourcegraph with a lot of users, our pricing is designed so that we earn money from you. This lets us invest in improving our product.
  • All users at a given customer are on the same pricing tier. This is simpler than having users at different tiers and encourages us to build things that are broadly valuable.

Market Segmentation

We segment our customers into five discrete tiers to help define more nuanced value and ensure we’re providing specialized support to each tier. Using both estimated number of developers and real ARR in our tiers ensures that customers have the proper resources attached to make them successful at scale while also letting us ensure the health of our own business. Having a single market segmentation for all groups across Sourcegraph helps avoid confusion in cross-company discussions.

Our five customer tiers are:

Customer TierTier Criteria
Strategic10k+ devs OR $1m+ ARR
Large Enterprise3k - 10k devs OR $500k - $1m ARR
Small Enterprise1.5k - 3k devs OR $100k - $500k ARR
Mid-Market500 - 1.5k devs AND less than $100k ARR
Tech NurturedAny customer below 500 estimated devs

Ideal customer profile

We want Sourcegraph to be easy to adopt for every developer in the world. We’re pursuing a bottoms-up adoption strategy, driven by the Sourcegraph App.

Our Ideal Customer Profile (ICP), the company archetype that is the perfect fit for Sourcegraph, are companies from the Strategic segment. That’s because the largest companies in the world have so much code, developers, heterogenous codehosts that they benefit the most from Sourcegraph.

This year ()

Our strategy for is: iterate with existing customers first to grow ARR. (Last year’s strategy was about serving larger and smaller customers.)

note: at the start of we started with the strategy to “target 5 specific use cases for existing customers first to grow ARR.” in Q2FY23 we deprioritized use cases as a company-wide strategy. Click here for more context.

Let’s break that down:

Iterate with existing customers first

Product development will go faster, incur less risk, and yield a more compelling and valuable product by iterating with existing customers (who already use Sourcegraph and can give us more and better feedback), not new prospective customers.

Winning new customers is still very important, and we think this strategy will actually maximize new customer revenue. After all, what’s more compelling to a new customer: (a) a product that demonstrably meets your needs, as validated by other well-known customers, or (b) a product that requires custom work before it meets your needs? Of course it’s (a), and to achieve that, we need to work directly with our customer to continually increase the value of core workflows so that our existing customers get more value out of sourcegraph (and expand usage/revenue) faster.

Don’t think about this as “say no to building for prospects”. Instead, think “create and execute on such a compelling product roadmap that we can meet our revenue targets and win new customers without needing to build specifically for prospects”.

Grow ARR

ARR (annual recurring revenue) is the key metric for our business because:

  • ARR is a good proxy for the long-term value we create for customers.
  • Earning revenue (being customer-funded) is the only way to build a long-term, independent company.

Everyone here helps grow ARR (and if you don’t know how or have better ideas, speak up!). It’s subtler but just as important to help ensure ARR corresponds to long-term customer value through our culture, practices, and values.

Team strategy pages

Historical strategy

See ”Historical strategy” for explanations of changes in our strategy and older concepts.