Is Github in crisis?

It seems like Github started with a flat structure, and then stuck with that for far too long. That seems to be a recurring trend in the tech industry, where a lot of software developers have an almost ideological commitment to the idea of unstructured businesses. But history teaches us that as a business grows larger, it needs to structure itself. Github is now struggling to do so.

Now Wanstrath is on a mission to overhaul Github, with full support from the venture capitalists who backed the company.

About a year ago, he also phased out the company’s old meritocratic structure where no one had managers and installed a hierarchy, complete with middle managers. Many of the old-school employees were less than pleased, people told us. Suddenly one of their peers was their boss. And the grumblings began.

One person told us Wanstrath “is trying to keep everyone happy by not making the hard decisions necessary of leaders.” He’s been described to us as someone who “hides in conference rooms” and who is being influenced by an inner circle.

This person tells us that GitHub’s top lawyer, Julio Avalos, “has amassed great power” in the company since Wanstrath took over. Avalos joined GitHub in 2012 from Yelp, according to his LinkedIn profile. In October he was appointed to chief business officer, as which he runs corporate-administration functions like legal, HR, and finance.

However, we understand that Wanstrath’s current top leadership team, some of whom have been with the company for less than a year, do not feel that way about him.

One person close to the company told us that Wanstrath, has a “soft-spoken style, is extremely thoughtful, and a very good listener, listening to perspectives across company. When he makes a decision, he’s direct, open and rational about it.”

We also understand that Wanstrath is working extremely closely with Andreessen Horowitz’s Peter Levine and Sequoia’s Jim Goetz, talking with one or both of them almost daily. These are two of the industry’s most respected VC investors.

One person familiar with Wanstrath’s relationship with these VCs told us they are “thrilled” with him and with the changes he’s been making at the company.

“Chris wanted to change leadership structure and he made a set of changes. You’re going to see a bunch of announcements where new folks are joining,” this person said.

“With the benefit of experience, 2-3 years, it’s very similar to a set of anecdotes about Facebook, where Sean Parker took off and Gideon Yu, and Owen Van Natta and there’s all this drama. And hello? It’s a hypergrowth company and it’s a normal upgrade cycle,” the person said.

This person says that it’s not a knock against the execs who left, but “at times you need a different group of people, when you reach 400, 500 or 1,000 employees.”

The person added: “There was a remote culture and very little hierarchical structure which worked wonderfully when they were 30 and 50 people, but at 500, it doesn’t work. Chris has decided that the leadership team needs to be in the building and managing, so remote is not an option for senior executives.”