What makes you say they're proven or unproven? They've each got hundreds of users and I can say that they each have at least one paying customer (my company).
Oh, the sarcasm! Perhaps if you'd actually watched the talk before commenting on it, you'd have gotten the point and wouldn't be so unknowingly ironic. ;)
Tell me right now that the talk establishes that GitHub and Lighthouse are financially successful (cash flow positive after investment) and I will:
* Apologize
* Watch the video
I don't think I'm going to have to do either.
The point I'm trying to make is, just because geeks love something (like, inexplicably, GitHub) doesn't mean it's necessarily a financial success. Also: hundreds of end-users? A tiny customer base.
It doesn't really matter much to me if you watch the video or not. I did want to take the opportunity, however, to give you a taste of your own medicine after this incident: http://news.ycombinator.com/item?id=135296. ;)
All that aside, the whole point of the talk was that one can live very well off one's web application even if it's only moderately successful. I think the example he gave was 2,000 small business users at $40/month ~= $1,000,000/year in gross revenue. Or 400 users at the same rate if you don't mind only grossing $200,000 a year.
His argument was that you don't need to stress about investors, 12-hour days, and viral loops as long as you're willing to "settle" for a pleasant, financially viable, and capital efficient business with a niche of users who really appreciate your approach to solving their problems. That's the irony of making fun of an app in this thread for only having several hundred users.
You probably would enjoy the video; I certainly did.
(Incidentally, GitHub and Lighthouse didn't require massive capital investments [1] and I'm pretty sure that they're hosted "for free" on Engine Yard. Having a few hundred users would practically guarantee that they're cashflow positive.)
You're probably right about all of this. I'm obviously in DHH's camp: after several VC-funded startups, including an abortive attempt to weasel VC for our current venture, we're bootstrapping and aiming to build what we want, not what VC's tell us they want.
It's the orthodoxy that gets me. "You can't cite DHH's speech without watching it in its entirety! You can't talk to your team about DHH without everyone sitting down and watching it! What would PG think?" And yet, at the same time, we're willing to toss around totally unsubstantiated factoids about the success of brand new Rails apps as proof of a business model.
There's a big difference between courting small businesses (which is what DHH was talking about) and courting individual consumers (who are preconditioned not to spend money on webapps). Depending on the sector, people won't even use your app unless you charge for it.
