Mattermost is the newest open source remote company to join the Top 100 Y Combinator companies list

Mattermost joins GitLab in YC Top 100 as newest open source, remote company

Ian Tien
Ian Tien
Oct 4 · 6 min read

Open source Slack-alternative now a thing, apparently

Mattermost ranks #58 among Top 100 Y Combinator companies after raising a $50M Series B and $20M Series A in one year.

We were thrilled to hear that Mattermost is now among the top 3% of the 2000 companies Y Combinator has funded. That said, what’s most exciting for us is being the newest open source, remote company to make the list, following in the footsteps of GitLab who ranked #14 this year. That means there are now two YC companies in the Top 100 who pay people to make open source software while working from home. Could this be a trend? In 10 years, what percentage of software companies will be open source and remote?

I hope a lot more of the world gets to work this way. At Mattermost we love what we do— open sourcing our work in Golang, React and React Native, making our customers enormously successful, and getting things done from wherever we are in the world. We love using Mattermost software to collaborate, to do more with fewer meetings, and to co-build our products with over 1000 contributors across our open source projects.

While we don’t have daily commutes, at least once a year we travel for meetups with our colleagues, customers and open source community. Annually we hold “MatterCon” as a grand meetup bringing everyone together. In 2018, we flew to Lisbon, Portugal. In 2019, we brought our company, contributors and customers to Punta Cana, Dominican Republic:

So that’s half the story, people working from home, being comfortable, excited and immensely productive. The other half of the story is the business — the open source business.

What is an open source business?

How does Mattermost make money building software that’s free?

We use the same business model as GitLab — buyer-based open core. “Buyer-based” means we have multiple offerings that address the needs of different buyers. “Open core” means our core offering is open source.

In our case, the open source offering is Mattermost Team Edition and it’s an open source Slack-alternative for developers — a self-managed messaging collaboration platform that works with hundreds of mainstream and custom integrations to tools like GitLab, GitHub, Jira, and Jenkins. It’s available for free as a single Linux binary under MIT license.

Our paid offering is a closed source messaging collaboration product called Mattermost Enterprise Edition offering everything in the open source version plus advanced compliance features for IT buyers who can purchase with credit card, through partners, or through a purchase order with us.

Here’s how our open and commercial version works:

Open Source Slack-alternative for developers

Developers in high trust environments love having an open source Slack-alternative: All the core features of Slack including keyboard shortcuts, compatibility with Slack integrations over webhooks, import of Slack workspaces — even import of Slack theme colors. Every open source Mattermost server can support hundreds of Slack-compatible teams and every month over 10,000 servers are downloaded.

Our primary use case is developers needing messaging collaboration in high trust environments, often invisible to the internet: high security operations centers, in Red Forests, cloud automation teams, in InfoSec and rapid response organizations separated from their constituencies, etc. For our core audience we are the perfect way to streamline processes, increase automation, and reduce email by 5–10x for internal communication.

As Mattermost spreads, the goodhearted developer who set up Mattermost realizes they’re supporting a dozen or more other teams and it’s time to call in IT to centrally manage the system.

IT looks at the Mattermost product page and finds — as they would expect — all the advanced IT compliance features they want are in the paid, Enterprise Edition built for IT, and not in the open source version built for developers.

So begins the journey of the IT buyer:

High trust Slack-alternative for privacy-conscious enterprises

Because our open source Slack-alternative is self-managed a lot of foundational privacy and security is available through just the deployment model — and that’s enough for small development teams.

When it comes to larger enterprise deployments, what IT wants is advanced compliance features: SAML SSO to centrally administer authorization and authentication, AD/LDAP integration to provision, de-provision and sync user metadata, eDiscovery integration, admin-friendly high availability support and other benefits our enterprise customers have guided us to build.

The paid Mattermost Enterprise Edition was design for these enterprise IT buyers. The product smoothly upgrades from the open source edition and, just like GitLab, licenses can be purchased and deployed on a per user per year basis via license key and annual subscription.

That’s a buyer-based open core model; that’s how we’re accelerating our open core business, and it’s worked out pretty well so far.

So if you’re interested in working from home building amazing open source software in Golang, React and React Native at a Top 100 YC company, and making users and customers super successful, come check out our open roles at https://mattermost.com/careers/

Questions? Please reply in the comments below.

Here’s some frequently asked questions:

How do you compete against Microsoft Teams?

Microsoft Teams is positioned as a high trust messenger bundled with Office365. Why would people pay for Mattermost when they can use Microsoft Teams without added cost?

Here’s the two most common reasons:

  1. Users choose Mattermost over Microsoft Teams for user experience

Mattermost offers the same IRC-like experience used in Slack (~10m users today) and Discord (~56m users) that many technical people and younger people prefer, and usage spreads “bottoms-up” largely in developer and IT organizations. The Microsoft Teams experience (~13m users today) is more like Yammer, and focused on general users in “tops-down” change management programs offering pre-integration with other Microsoft products.

Both user experiences have their fans and audiences. When both solutions run together we most often see Microsoft Teams as the enterprise-wide solution — especially for companies outside of technology — and Mattermost as a solution for developers and IT, or in business units.

2. IT teams choose Mattermost for privacy and data sovereignty

Because Mattermost Enterprise Edition is self-managed it offers a level of privacy akin to Skype for Business or Lync, which is needed by enterprises who are sensitive to broad subpoenas and IP liability.

For example, we often hear the concern that the U.S. government is not allowing Microsoft to inform its customers when using availability keys as a backdoor to “sneak and peak” a customer’s confidential data stored in Microsoft Teams and Office365. Privacy concerns with vendor-hosted systems are increasing as the U.K. begins to ban end-to-end encryption in consumer applications and enter into an agreement with the U.S. to share data on citizens.

In these cases, Mattermost is often deployed along side of Microsoft Teams, very often in developer and IT teams, or in specific business units who need a user experience more compatible with technologists and younger staff (especially those who use Discord and Slack outside of work), while Microsoft Teams rolls out as a general-purpose enterprise-wide solution with heavy integration to Office365.

What about Slack?

Our customers are typically in high trust, privacy-conscious enterprises so we don’t see Slack in our accounts nearly as often as Microsoft Teams. For general users there’s not much difference between the user experience in Mattermost and Slack. For developers in high security environments, Mattermost wins in deployment options, accelerating workflows (ease of integrating legacy applications via webhooks within a private network), speeding incident response, and simplifying communication among technical teams. More importantly we have a community of customers, advocates, staff, plus over 1000 people who have contributed to Mattermost open source projects who are accelerating the entry of open source into the messaging collaboration market.

In Slack’s S-1 they estimate our market opportunity at around $30B, which is more than enough room for Mattermost, Slack and Microsoft Teams to serve the different market segments.

More questions? Please leave a comment below, or contact us if you‘d like to learn more about our Enterprise Edition products.

Ian Tien

Written by

Ian Tien

CEO/co-founder of Mattermost. Building a high trust community to make the world safer and more productive.

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