
Why Trello Failed to Build a $1B Business - andygcook
https://producthabits.com/why-trello-failed-to-build-a-1-billion-business
======
sixdimensional
As far as I recall (and I've been a Trello user nearly since it was released),
it wasn't necessarily Fog Creek's intention to build a huge monetized business
out of Trello.

In fact, at some point, users started to get anxious that Trello was free and
actually WANTED to throw money at the company. I suppose part of that was the
perception that if you're paying for it, it will be more likely to survive and
won't go away? This was what spurred Trello to create an offering of something
(via Trello Gold) - simply so people could pay for something they liked and
feel good about themselves, and get something in return.

Actually, I don't know this for sure, but I think they genuinely built Trello
because it was a tool that they really felt should exist, and wanted to make
it work as inexpensively as they could and support as many as they could,
while staying permanently free. I think Trello was an experiment for them, one
which succeeded at gaining the huge userbase with a simple tool (which I
believe was their goal).

Once the realization that the huge userbase itself was valuable, it was
inevitable that someone would buy it out. Atlassian wanted to be associated
with that huge userbase, to help with Jira... maybe or maybe not to actually
bring Trello into the fold with their existing products.

In any case, Trello is a huge accomplishment, before the buyout, and as a
business, even moreso afterwards. I was thinking about building (and actually
working on) something like Trello before it existed, but I didn't necessarily
think the world needed something so simple. I would have been quite happy with
this result!!! They made an absolute ton of users (self included) very happy
with the results of their labor, and now they have a wonderful reward from it.

Trello did not fail to build a $1B+ business. Trello succeeded at building a
$425M business through good faith and hard work. Bravo.

~~~
wslh
I don't buy that narrative since Trello received $ 10M in funding [1] and you
must convince investors to put that sum of money.

[1]
[https://www.crunchbase.com/organization/trello#/entity](https://www.crunchbase.com/organization/trello#/entity)

~~~
RockyMcNuts
wait, WHAT?

if the investors got 16% of the company they got $80m, a ~8x return in 3
years.

And more likely they did better. Twitter did a series C, raised $17.4m at
$104m valuation, and it was a pretty hot company to give up a bit less than
17%.

A great venture fund gets a unicorn, a legendary one gets two. A 1/2 unicorn
that maybe returned most if not the entire fund is a great outcome. If 50% of
the investments did that well it's a top-tier fund.

People are a little demanding if only decacorns are seen as wins. It's like
expecting your team to win the World Series every year.

------
squeaky-clean
"Let me tell you how you to build a $1B business. I've never done it, but take
my word that I know how to do it better than someone who sold a half a billion
dollar business."

Like really, if your advice is useful, why hasn't the author built a $1B
business? It seems like they missed the point that Trello became giant for
what is essentially networked sticky-notes, were they even trying to become a
$1B Business?

Next week: Why Trello Failed To Be the First Company On The Moon (spoiler
alert, they weren't trying to do that).

~~~
rhizome
Yeah, "failed" in the article title is a really douchey move.

~~~
danmaz74
"How I didn't fail reaching the front page of HN using a clickbait title"

------
stefco_
There are some interesting points in this article, but I can't help but feel
that the author takes the final value of hundreds of millions of dollars as a
given. As a resut, there are several recommendations in this article that I
can easily see having led to a _lower_ valuation!

> Trello could have created a stickier business product by making sure that it
> was so deeply integrated with other tools, teams couldn’t rip it out.

But if they had focused on having even more integrations, maybe they wouldn't
have been able to focus on creating simple features with broad appeal, or
creating a snappy app, or they would have had to spend more money and pivot
away from a robust free product.

All of these things would have hurt the user base by ruining one of Trello's
main value propositions: _it is free and simple._ I never would think about
learning to use Asana for a personal project, but Trello is an easy sell to
teammates for small/medium businesses and personal projects. It is even easy
for one-person teams. If Trello wasn't _free and easy_ , then they would just
be another Asana competitor, and I can imagine them fizzling with no buyout,
let alone an IPO.

I think this sort of business case analysis can be useful, but even in
hindsight, the consequences of various decisions are far from obvious.

------
rco8786
What is this article, I can't. In what world do we live in where we paint a
$425m exit in a bad light?

> They built their servers on top of Node and used MongoDB to store data so
> that the web app would load really fast.

I stopped reading here.

~~~
fiatjaf
Trello is actually slow, because of that backend stack, I imagine. I thought
the author was going to point to that.

~~~
xiaoma
Not at all. Trello is quite snappy and back when I first started using it in
2013, it was remarkably so compared to all other similar tools I'd seen.

------
d--b
Interesting, but I can't help thinking that this was fairly obvious, am I the
only one? It already blows my mind that it is that big already. The app is a
todo list with several columns. Todo lists don't make billion dollar
businesses... and yeah, SMBs are fine with actual post-its!

~~~
devopsproject
Kanban boards have existed since the 50s. The "magic" of trello was the
instant updates. It was a perfect example of software eating the world.

~~~
debacle
The trello UI is also great. If you don't need the back-end features of
something like Jira, trello's limited functionality greatly reduced the
friction to tracking your activities.

~~~
vidarh
That they were bought by Atlassian fills me with dread because of precedents
set by their other products. I use Trello (and pay for it) exactly because I
don't want anything like Jira.

~~~
danmaz74
Hopefully they are smart enough to keep the products differentiated.
Otherwise, a Trello clone will surely arise.

~~~
vidarh
There is at least one, but I don't know whether it's any good. I'm a bit
tempted to write one, partially because I have a thing about self hosting my
data, but also because I _love_ the overall idea and design of Trello, but I'd
love it to be more extensible/flexible/hackable.

E.g. being able to make layout changes(have lists that span columns for
example, or cards that show more of their information on the cover). Or more
flexibility in colour changes/background, or ability to style cards.

~~~
mehaveaccount
Checkout selfhosted.reddit.com there are a lot of self hosted Trello clones
already

~~~
vidarh
I'm not surprised... Thanks for the suggestion.

------
dgudkov
The idea of pricing a product like Trello should be taxing the added value it
creates. What can indicate added value in Trello? Not emoji stickers, for
sure. It's the number of cards and lists. If a user creates many cards/lists
s/he clearly sees added value of the product. Trello should've limited the
number of lists or cards in the free edition and charge a fee for an unlimited
edition. Those users who don't see much value in Trello won't use many
lists/cards anyway.

We've been using Trello as the main tool for project/product management for
years and quite happy with it. I would gladly pay a reasonable monthly fee for
it, but they didn't even try to charge me. I feel like it could've been a
bigger business.

~~~
jshmrsn
The integrations/powerups are an easy sell for me. Especially github
integration.

------
moomin
While we're talking counterfactuals, how about the scenario where Trello
chased that $1B dream, lost focus on what users liked about the product and
ended up as an acqui-hire.

Which, I'll point out, is an extremely common scenario. The guys behind Trello
stuck to their vision of the product and made an obscene amount of money. Good
for them.

------
williamstein
I wish the author of such posts would start with a disclaimer about whether or
not they have ever built a "$1B+ business". I did some quick searches, and it
looks like the author in this case has tried several times (but I guess not
yet come close).

~~~
jacquesm
It would be more interest to read too, why 'I' failed to make a $1B+ business
might have some useful lessons in it, whereas whether Trello failed at
anything at all depends to a high degree on what they were trying to
accomplish. By any measure (except, perhaps the author's) Trello is a huge
success.

------
beat
Not a billion dollar business yet != failed to build a billion dollar
business.

How do you keep scaling the revenue? Get bigger customers. Where do you get
those big deep-pockets customers? The enterprise. How do you sell to big
enterprise? With a big enterprise salesforce.

Ok. With that, you can either build your own enterprise sales machine (which
takes years), or you can sell out to someone who already has one. Like, say,
Atlassian.

~~~
nikcub
There are plenty of companies who have scaled their revenue beyond this point
without an enterprise salesforce - Trello's acquirer is one of them

Its not a hard rule that to reach beyond $x you need to become an enterprise

~~~
user5994461
Google had no enterprise sales for a decade. They did fine.

~~~
beat
Completely different business model. Atlassian and Trello are much more
similar. Google was selling ads, not software.

~~~
user5994461
Trello and Google are SaaS, they sell a service, not software.

They made it so that one could register easily and use the service quickly,
without special training or any setup. That's how you grab tons of free users.

Atlassian is mostly shrink-wrap entreprisey software. They software with
expensive licenses that also require extensive installation and maintenance by
the client. They need a sale force.

~~~
beat
That "no training or setup, tons of free users" model? You can't sell into the
enterprise like that. And Trello can be very useful in the enterprise - into
an environment that doesn't really think twice about paying $1000/year/user.
Enterprise is a far more lucrative market than freemium. And if you need to
keep doubling your revenue on a regular basis, that's how you get it.

Don't let the SaaS thing fool you about sales. Salesforce is SaaS too, but
they're a lot more like Atlassian than Google, business-wise.

------
officelineback
I mean, I get what the guy is saying, but look at the text vs subtext here:

text is "here is advice to take a burgeoning company to the stratosphere" But
honestly, how many people in that position are going to read this blog post?
3? 10? If this was his true intention, he would have packaged this as some
kind of super premium offering that only well-connected VCs could read or
something.

subtext: "I'm really smart about what takes a company from success to HUUGE
SUCCESS." Is this guy trying to gain a rep in VC circles as a CEO of late
stage startups or something? What's his angle?

~~~
andrewprock
It feels like Trello was a HUUGE SUCCESS. Todo lists are notoriously hard, and
target a very thin demographic; people who are trying to plan and track
progress, i.e. middle managers or OCD contributors.

Reaching $N million instead of $2.4N million, where N > 200 doesn't really
feel like an obvious shortfall.

~~~
officelineback
I agree with you, and others in this thread have lauded Trello's success. But
the author of the page is angling for another interpretation, and I'm trying
to figure out what he hopes to get out of it.

~~~
rhizome
What do you think that interpretation is?

------
yokisan
"Because it's a todo app" is an obvious response to the title but the content
is interesting.

Trello Gold with emoji support and custom backgrounds was a weak proposition
and they could have moved into enterprise faster. Still, it's amazing they did
as well as they did.

Kanban boards and Chat apps are the new todo lists - ten a penny - which makes
people dismiss the notion of building a business around such a trivial
feature.

This is a mistake. Most of those apps are badly designed, meaning for those
looking to eke out a living rather than break $1 billion, there's still plenty
of opportunities.

For example, Diigo the highlighting app is relatively unknown but is a hit
with educators and so makes cash in a corner where few competitors are
looking. The top stopwatch on The Play Store makes over $400,000 with in-app
sales.

And Wunderlist sold for $125 million. And Todoist is profitable.

It's a big Internet out there.

------
JohnnyConatus
This article should be titled how an MBA could have ruined a wonderful
product. There is absolutely no way to maintain a useful horizontal product -
which is what Trello is, and what makes it so great - and to simultaneously
build a deep vertical product targeted at the enterprise. That is an entirely
different thing (which Atlassian has already built and it's called Jira...and
it's a rabbit hole of complexity out of the necessity to serve enterprise
customers.)

------
scandox
You know I started this thinking it was idiotic, based on the headline, and
it's actually quite interesting. I think it's totally the wrong way to look at
the Universe, but it's rational and well articulated.

------
joelthelion
"Failed"? Seriously?

Isn't selling a Kanban board for half a billion dollars amazing enough?

------
mtw
When did $425m exit turn out to be a failure?

I suppose the author built several multi billion dollar businesses?

By any metric, Trello is a huge success.

------
fiatjaf
Besides all the comments about his article being from a bizarro-world, it
should be noted that once Trello infrastructure was in place it was impossible
to move it.

Turning a todo-list app into "the single-source of truth for a company" would
require monstruous schema changes and changes in all the live updates thing
etc., and everything would be slower, heavier etc., all that and you couldn't
have known if that would catch up or if you would end up losing your users
that liked Trello just because it was a simple board thing. It would be better
to start a new app.

~~~
juststeve
did you work on trello, or is this speculation?

------
taytus
$450M... for a todo list. #perspective

~~~
sixdimensional
Seemingly simple things done well and actually used can be extremely valuable.

------
unit91
Immediate thought, unchanged by the content of the article: how many people
(a) know how to build a billion-dollar business, and (b) how to distill the
"failure" to reach the billion-dollar mark into simple talking points?
Something that big has so many moving parts and intangibles, I'd imagine a
rigorous analysis would be very difficult.

------
jbreckmckye
Because it is a trivial todo app?

~~~
dgudkov
Nothing at this scale is trivial.

------
xiaoma
A couple of months ago there was another article about Trello here on HN that
basically held Trello up as a model of disruptive success:

[https://news.ycombinator.com/item?id=13485462](https://news.ycombinator.com/item?id=13485462)

------
obiefernandez
I LOVE Trello and was an early adopter. At one of my companies I even hacked
together some mission critical tools (KPI-related) that depended on Trello as
a front-end, with the reporting generated on a custom Rails backend.

When I moved to an "enterprise" company, I wanted to bring Trello with me, but
was immediately told NO because 1) we were already using JIRA and Asana, and a
third option was not desired and 2) Trello is (was) not "enterprise-grade"
meaning they didn't have sufficient security vetting or centralized user
provisioning (and more importantly--deprovisioning.) It was demoralizing and
stupid. RIP Trello.

------
ethank
I love Trello, but they never got enterprise sales down. SSO isn't federated,
and the ACL system is leaky (much like Google Drive).

It also is too religiously adherent to the card metaphor (understandable)
which works in most contexts but falls down in others where more traditional
tools (Jira, Github) shine. We use Trello for a ton, but not mainline work.

I use it as a contact manager, todo list manager, and we use it a lot for card
sorting/brainstorming and more "people" type stuff.

------
kondro
I love Trello and used it a lot (before we moved on to something different and
easier to understand for most people). However, even when it was important to
our business and we had around 12 users (I know, still relatively small) using
it, we never once felt and pressure to pay for the product.

Trello didn't build a $1B business because they never forced anyone to pay for
their product, even when they were extracting significant value from the
platform.

~~~
e2e4
What did you use after trello?

------
kdazzle
I definitely don't remember all of the cards loading in ~250ms. Maybe like 7
seconds [1]?

Either way, failing to hit $1bn doesnt sound like much of a failure where I
live outside the Valley. $400 some million is pretty respectable.

[1]: [https://blog.fogcreek.com/we-spent-a-week-making-trello-
boar...](https://blog.fogcreek.com/we-spent-a-week-making-trello-boards-load-
extremely-fast-heres-how-we-did-it/)

------
djrogers
I think one of the most obvious and glaring reasons is also one of the
simplest - my company uses Trello a fair bit, we have a lot of teams on it,
tracking a lot of stuff. _And we 've never once paid a dime for it._ Never
even been asked to pay for it. Brought us plenty of value, would have paid,
but we never hit a threshold where that was a thing. I don't even know where
that threshold is or if there is one.

------
sethev
Counterfactual history can be fun but it's highly speculative. That's true
even for well studied historical events - it's even more true for something
opaque like a private company's growth. What were Trello's main customer
acquisition channels? Without knowing that how can you hope to derive an
alternative history?

------
saool
So, this is how you make it to the top of HN, with an outlandish clickbait-y
claim. Good to know.

------
AngeloAnolin
Initial question that set me off upon reading the article is this: Was Trello
actually aiming to get $1B off of it? I know more money makes sense for them
and their investors, but the amount it already sold for is astounding to say
the least.

------
janwillemb
Almost everyone in the world failed at building a $1B business.

------
colinramsay
This is hilarious. Only in the bizarre world we live in could a half billion
sale be spun out into a failure to get a billion. Would a billion have
satisfied the author or would it have then needed to be two?

~~~
jasode
_> Only in the bizarre world we live in could a half billion sale be spun out
into a failure to get a billion._

I can't speak for the author but selling Trello "for only $425m" is a failed
outcome if the growth expectations was for it to become a massive $1 billion
business.

How do we know that? Because Trello took $10 million in VC money in 2014.[1]
So we can just work backward from the $1 billion goal using basic math:

VC firm Index Ventures buys 25% ownership of Trello for $10 million.[2] They
manage several funds and I don't know which one they used to write that $10
million check but let's assume the money came from the 6th Fund of $442
million they raised in 2012.[3]

Over the 10-year life of that fund, they basically need to grow that $442
million into ~$3 billion. Since most startups in the fund will turn out to be
money losers, they need at least one of their investments in the portfolio to
become a $1 billion+ company. And keep in mind they only own 25% which means
that even if Trello sold for $1 billion, they'd only cash out their position
for $250 million. For Index Ventures to get to ~$3 billion, they need one or a
tiny handful of winners from their portfolio to return ~$10 billion! (Assuming
they take ~25% ownership in each startup and therefore cash out at ~2.5
billion.)

Yes, IndexVentures still gets ~$106 million (25% of $425m) from the sale to
Atlassian but as you can see from the math above, $106m hardly moves the
needle toward ~$3 billion. That's a $10 million opportunity cost that they
could have put into a different company in 2014.

So, if you're a financial analyst, or one of the Limted Partners in
IndexVentures fund, or possibly even J Spolsky, the failure to reach $1+
billion is indeed a "failure."

tldr: because of algebra, if a VC invests in a company, that means they expect
the startup to reach a multi-billion market cap.

[1]
[https://www.crunchbase.com/organization/trello#/entity](https://www.crunchbase.com/organization/trello#/entity)

[2] [https://www.quora.com/At-what-valuation-did-Trello-
raise-10M...](https://www.quora.com/At-what-valuation-did-Trello-
raise-10M-when-it-was-spun-out-from-Fog-Creek)

[3] [http://vator.tv/news/2012-06-17-index-ventures-
raises-442m-e...](http://vator.tv/news/2012-06-17-index-ventures-
raises-442m-early-stage-fund)

~~~
kbenson
That's only a failure on the VC overall _fund_ level, not the company or
investor level. _That investment_ is not a failure, even if the fund is. If
most the investments are money losers, but this one "only" paid out %1000,
it's still contributing towards making the fund pay out, even if it's not
doing well enough to account for the losing investments. You wouldn't classify
a stock that tripled in price over a few years as a failure, even if overall
your portfolio was a failure, and this is the same thing.

~~~
jasode
_> That's only a failure on the VC overall fund level, not the company or
investor level. That investment is not a failure, even if the fund is._

I put that last "failure" in scare quotes to soften the label a bit because in
many ways, Trello _is_ a success.

Nevertheless, the VC will frame it as a "failure" or "suboptimal outcome"
because they use the framework of "opportunity cost" which means they missed
the _other_ startups they could have invested that 10 million in.

If the VC knows ahead of time that investing $10m startup in will return just
1000% in 2 years, they'd rather ignore Trello and find "another Facebook" that
can return 20000%+[1]

[1] [https://techcrunch.com/2010/11/22/accel-partners-fund-ix-
fac...](https://techcrunch.com/2010/11/22/accel-partners-fund-ix-facebook-
extraordinary/)

~~~
kbenson
> Nevertheless, the VC will frame it as a "failure" or "suboptimal outcome"

Sure, but that's in the context of the fund, not the company. It's meant to be
consumed by people dealing with the fund in some way.

> If the VC knows ahead of time that investing $10m startup in will return
> just 1000% in 2 years, they'd rather ignore Trello and find "another
> Facebook" that can return 20000%+

No, any fund that _knows_ they will get a 1000% return will _definitely_
invest. The assumption will be that those dollars would have gone to one of
the bad investments, because since the vast majority of dollars do, they're
likely right. That investment will help the fund, because it doesn't it can be
one large return, or a few slightly less large but still great returns. Not
every fund that makes money does so because of a single great investment.

------
dunk010
This is basically clickbait. Pretty much all the comments have the same
sentiment: $425M is a _lot_ of money.

------
kapauldo
425M is a crime. Trello is a magnificent feature. It is a weekend project and
should have been open sourced.

------
devopsproject
I look forward to the followup article: Why Trello Failed to Build a $1T+
Business.

~~~
rhizome
"Why Star Wars is a terrible documentary."

------
bane
Why? It's an enterprise software development tool without the ability to run
it locally within the enterprise. Companies don't want to put corporate IP on
remote servers as much as possible without very tight data protection
guarantees. Trello didn't offer either one so many companies that could have
benefited from Trello (and knew it) couldn't use it.

