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How to build the next Trello and sell it for $425M or more (medium.com/disruptivehq)
164 points by ideaoverload on Jan 25, 2017 | hide | past | favorite | 73 comments

I really wish people would stop abusing the term "disruptive innovation" in ways it was never meant to be used. Making a product that's overly complicated, beyond what the market is demanding, is just bad management. It doesn't require any disruptive innovation to correct for this - making something that better matches your customers' needs is bread-and-butter business management, which every competent company is already doing.

The whole point of disruptive innovation is to build something which most customers do not want, with the bet that due to technology/market trends, market demand will grow exponentially in the future. Unlike the above, this is a real dilemma because if you're an established successful company, it's hard to justify pouring energy and resources into something for which the demand doesn't exist. If you're building something to meet a market demand that already exists, that's not disruptive innovation, that's just innovation, period. It's something people have been doing for millennia, and there's no dilemma here.

Sorry for sounding like an angry old man. It just annoys me when I see specific terms with specific meanings get bastardized into meaningless buzz words.

I would add that the disruptive innovation also cannibalizes your existing market business in addition to being something that customers do not want now but will want in the future. If you build something that customers do not want now but will want in the future and it does NOT impact your existing business, that's also just regular old innovation.

Indeed, and an obvious example is Apple cannibalizing the demand for it's personal computing systems, by offering mobile devices that nearly replace and obviate key features offered by personal computers.

Had somebody else beaten them to the punch, they'd have suffered from the same disruption, AND lost business.

Because they were early, and had the muscle to withstand the temporary discomfort of being ahead of their time, they could land ahead of schedule and wait for everyone to catch up. At which point they were able to guide a massive avalanche in their favor.

It's not a requirement that the cannibalized market should be held by the disruptor. The market that gets destroyed doesn't have to be your own, but 'tis better to be the disruptor than the disrupted.

Part of the problem is that Prof. Christensen used the word disruption to name his theory. It's a common word, and has partial overlap with the process he describes. As a result, some people mean what he did when they say "disruptive innovation" and other people just mean an innovation that can disrupt someone or something. That said, if he had named it something else, it may not have been as popular or widely referenced...

See also Paul Graham and 'startup'.

I think Amazon was able to sustain growth, being innovative and keep the current customers. They were able to predict the future, customer needs and at the same time not to screw old customers.

Amazon did sacrifice their customer base for growth. They integrated 3rd party sellers without demanding similar levels of quality. So, now their customers buy some grey market and a lot of flat out defective and counterfeit goods.

Buying a cheap USB charger can risk not only whatever your charging but also a house fire. This stuff is dangerous and quickly ruining Amazon's brand.

Hmm. I don't think I can get behind the idea that Trello "disrupted" Atlassian, and certainly not that it would have killed them (no more than Medium killed WordPress...). At most, it may have killed Jira, but Trello seems to capture a slightly different market. Could there be a slimmed version of Jira that could fit in place of Trello? Sure, but I don't think Atlassian would have gone that route (thus the acquisition, right?). Then, when their big product paid off, they bought the sub market as well.

Re:integration, I also think he shortchanges Atlassian. I like Atlassian, so I'm biased, sure, but I think that they could successfully integrate without "killing" Trello. Time will tell on that, I suppose. Also, to say that "Android isn't incorporated into Google" just doesn't seem right. It's also completely different. Google acquired Android, which is a mobile platform, where they're a web company. Atlassian and Trello both offer web based services, and in this case even the same type of product.

One way to look at this is that companies go upmarket from a firm base of downmarket customers. There's a lot of uncertainty in upmarket enterprise sales: the engagements can involve RFPs or bakeoffs and involve dogfights that incumbents can lose to upstarts. A company can do really well in the high-end markets without ever having a stable, defensible customer base in it.

So if Trello grows to the point where it seriously threatens Jira's downmarket base, Atlassian has two problems: first, that Trello is sapping their downmarket revenue, but second, that Trello then has a beachhead from which to start attacking their high-end prospects as well.

"Killing Atlassian" is surely easier said than done, and probably hyperbolic. But buying Trello to prevent the emergence of a credible competitor to them across all their important markets? That sounds like a pretty plausible explanation for the valuation.

I'm a little skeptical, though, if only because I think Trello has a lot more potential than Jira (and of Jira's value proposition in the abstract). I think Atlassian just bought the next Microsoft Excel.

>seems to capture a slightly different market.

Yes. Trello is great for non-technical and/or non-JIRA users. It's great UX means you can throw almost any user at it.

It's so simple that people can abuse it to fulfill a variety of needs.

JIRA's upside is its downside: greater specificity - joined at the hip with complexity.

The authors advice -

>Make something the mainstream market doesn’t want now, but will want later.

seems rather different from the thinking of the Trello team when they actually made Trello, as described by Joel Splosky:

>After ten years in management I still never knew what anyone was supposed to be working on. Once in a while I would walk around asking everyone what they were doing, and half the time, my reaction was “why the hell are you working on THAT?” So one of the teams started working on finding better ways to keep track of who was working on what. It had to be super simple and friction-free so that everyone would use it, but it had to be powerful, too.

>...led us to the idea that became Trello. Pretty soon we had four programmers and two summer interns working on it. We started dogfooding the product when it was only 700 lines of code, and even in that super-simple form, we found it incredibly useful.

So basically they built it to scratch their own itch, not as some disruptive masterplan.


I have a hard time believing anyone promising you success, instead of going on to get it themselves. Its exactly like selling Agile; mostly people who can barely build working products in the first place, but will happily teach you how to run your projects. Its "one weird trick" all over again with different demographics.

I firmly believe you need to dogfood your own product in order to fully understand its potential. How can you solve a problem you don't understand and what better way to understand a problem than to experience it first hand?

A product can be shiny and "awesome" all it wants; if it doesn't solve an actual problem, or isn't convenient enough to solve the problem, it just wont last.

He seems to be giving his strategy a go with his trello rip off like startup clever.do

Dunno how well - 470 views in 3 months on the demo vid https://www.youtube.com/watch?v=EKEL06gDIBw

That sounds more like marketing than actual history. We had four programmers and two summer interns working on it, is not what you do for an internal project at a small to mid sized company that's what you do when building something to sell.

"Pretty soon" meaning once they got excited about the product.

I think it was the same story for Fogbugz.

Trello will never hold a candle to Jira for users with complex needs. Trello is deliberately simple while Jira is deliberately complex. Also the screenshots comparing a Sprint board to a Kanban board is like comparing apples and oranges.

I work in enterprise, and our use case for JIRA is so utterly complex to meet all of the requirements / standards that I cannot even imagine how a migration to Trello would work.

I see this acquisition as both a) a smaller alternative to JIRA that is much easier to use (but fundamentally different) and b) a way to prevent Trello from growing into something bigger, more complex, and become a big competitor to Atlassian.

I use Trello with my fiancé to organize our wedding planning, house chores, and projects, but I cannot even imagine how awful it would be for my work's use case.

It is also a good marketing channel for Jira. If someone uses Trello and need something more complex the easy way is a board in Jira, perhaps make something which converts your board or 2 way sync. Marketing departments like Trello but would never use Jira. But after using Trello for a while they might be more comfortable using something more complex.

Yeah, that screenshot comparison is like comparing a basket of mixed apples at a market to a vast field of apple trees.

100% agree. I seriously question whether or not the author has ever used JIRA.

As a Software Developer, working with Jira is just a pain for me. I just don't like much about it, the less time I spend using it the happier I am. There dozens of views of the same information, but just different enough to get me lost. I have to admit, I did not buckle down to 'tame' the beast. It feels like hiking a steep hill on a rainy day.

Trello, on the other hand I introduced to some colleagues, and the simplicity and ease of use is very satisfying. Feels like surfing on the perfect wave.

> As a Software Developer, working with Jira is just a pain for me.

Said every software developer ever about every bug tracking/ticketing system ever.

> Trello, on the other hand I introduced to some colleagues, and the simplicity and ease of use is very satisfying.

Said about every new bug tracking/ticketing system ever. Until you need to do X, and we need to track Y, and Z needs to sign off before ...

The real problem is that most developers write shitty bug reports. The reason for all those annoying fields in the bug reporting system is that most developers won't include them without it.

There is a fine line between having a bug reporting system which is just sufficiently annoying enough to the end users to give just enough information to the people fixing the bugs.

> Said every software developer ever about every bug tracking/ticketing system ever.

Trello is not a pain for me to use. It would be for others, with different needs, but it's perfect for me.

> Until you need to do X, and we need to track Y, and Z needs to sign off before ...

For many people these don't necessarily get in the way. I've been using trello for a few years on some projects from start to launch, and a winding down of development. It doesn't get in my way, and the lack of features hasn't caused problems.

Sure, we could have gone with Jira just in case things got massively more complicated, but we were easily able to deal with the odd edge case by talking to each other, assigning cards or putting notes on them.

Jira can be configured into sthg unusable, Trello can't. But Jira can be configured to be nearly as simple as Trello, if not as much user-friendly.

Well there's also no mention of the following and general goodwill Joel has accumulated over the years (mostly by being awesome, honest and also working hard on other products). Pretty sure he/his company could indeed build the next Trello by building a simpler X of something. People without that channel...that's going to be a tiny bit harder.

Yeah, step one to building the next Trello is be Joel Spolsky, or possibly 37Signals; failing that, be [otherwise] exceptionally good at marketing and generating goodwill. Because the reality is that "it's simpler to use, more general and has less bloat than the market leader" is not a unique selling point, it's something pretty much every new entrant into a market achieves by default. So you have to do a lot more than that for your KISS general productivity/collaboration app to stand out, particularly if starting from the significantly disadvantaged starting point of not being Joel Spolsky

The picture comparison of boards is a joke. Why would you show the Trello board view compared to a list of tickets in a sprint? The author must not know how to use Jira and create a Kanban board.

I actually prefer Trello over Jira but, I have to use Jira at work. Still I couldn't take this article seriously after seeing that picture comparison.

I feel like this comment literally makes the author's case for him.

Not really .. The boards are a very basic feature in Jira. It's like not knowing that there are drawing tools in PowerPoint :)

That's the whole Innovator's Dilemma argument: simplistic, minimal versions of the value propositions of larger products, produced by upstarts, have an uncanny way of stealing the entire market from incumbents. The key thing you said was "I actually prefer Trello over Jira".

The reason that happens is that the incumbent --- along with their most vocal customers! --- is blinded to what 80% of the market wants by the demands of the high-end 20% of the market. Yes, Trello hasn't duplicated the entire Jira product. But it might not need to to capture 80% of the revenue of the market.

Yes I prefer the simple Trello over Jira but, only for my own personal projects. Trello is completely useless where I work and, is in no way, disruptive to the Enterprise.

My point was that, if you can't figure out where a Kanban board is in Jira you should probably stick to Waterfall development. The author either didn't spend a few minutes looking at Jira or has no clue what the real difference between the two products are.

I highly doubt Trello would have replaced Jira at the pace the article suggests. Either Trello would become overly complex or Jira would adapt and become simpler and add even more needed features. I don't believe Atlassian bought Trello out of fear that Trello would innovate them out of market. That dilema just doesn't apply here IMO.

We experimented with Trello at our company before we bought into Jira, and the attempt fell flat on its face because of Trello simplicity. It's hard to describe the difference, but in a nutshell Jira was better at supporting collaboration, capturing knowledge, and supporting subtly different workflows that different teams required.

Based on that, it's kind of a neat move by Atlassian. Now they have an instant base of potential new Jira users. As these Trello customers grow and find out that their needs can no longer be met, now there is a clear upgrade path.

Presumably they will build some migration tools to make the upgrade seamless/convert the database of tickets. Or they could even build in cross-product integration so you can embed links to Jira tickets in Trello cards, or vice versa.

exactly, Atlassian bought the 'mini mills'

errr, that's the point, it's basic and simple, it doesn't support the same feature set, but, in many cases, you can get away without all the features.....

like when you can make powerpoints without ever needing to draw, in fact, not having drawing tools means you keep your things simpler and don't over complicate the essential thing you are doing.

it certainly won't suit everyone though, and for me, I went Jira -> Trello -> Youtrack and got a nice blend of things.

This article was well written and surprisingly did give a plausible reason why Trello grew and was later acquired.

Trello grew because it was very KISS. The features were so-so but everyone could use it easily. Atlassian just purchased the bottom segment of the project market, the segment that would never use JIRA in a million years because of it's complexity.

Yep, they're consolidating the market and becoming a bigger monopoly. At almost every company, and especially the large ones, JIRA is the "tool" that is used.

I keep wondering whatever happened to all the other tools out there because everyone in corporate life has consolidated on this big complex tool. Maybe all other project and task management tools were too open/open source? Didn't feel enterprise-y enough for managers?

youtrack is alive and well.

The basic breakdown of disruption was okay for someone unfamiliar with the idea, but the writing was horrible. It was littered with 1-3 sentence "paragraphs", bold text and exclamation points. And sentence fragments. And often a combination of multiple irritants!

To be honest it felt like it was written for people who aren't really comfortable with reading anything longer than a few sentences at a time.

Obviously I wouldn't look at this as a recipe for success, but the author does provide some pretty interesting insights. I do think that it is easy to look back at sparse events like acquisitions and try see patterns, whereas in fact there is a fair amount of luck, timing and personal connections involved in the acquisition game.

> I wouldn't look at this as a recipe for success

I think it is a recipe for success, but that doesn't mean it's easy. You can't just find a successful product that's overly complex and remove a bunch of features and succeed. You need to spend time understanding the market and the customers, figure out the sweet spot to aim for and then what features are actually necessary for that sweet spot and then ruthlessly say no to everything else. Many products have multiple sweet spots in the market and an up-market product can obscure the fact that there's another, more down-market product opportunity. Identifying that opportunity and then executing well is a pretty sure recipe for success, but it's really hard to do.

The people who should take heed of this advice are those who are less creative and visionary but are disciplined and skilled enough to build a quality product. There will always be product opportunities for people who can see 5-10 years out and either predict the future or lead people to their vision of the future. But that's not most people and there's no shame in admitting that. For those of us not in that visionary group, the strategy presented here is a pretty good alternative.

This article is making the obvious comparison, but it falls down on the slightest inspection because Trello and JIRA aren't really even in the same space. Yes, Trello can substitute for JIRA if your needs are simple, and yes JIRA has boards to meet different kinds of planning workflows, but the actual overlap of usages is pretty small.

What made Trello successful is that it is an incredibly simple SPA that never wavered in its vision. The minute Trello designers try to go down the road of meeting the needs of a ticketing system then the magic and broad utility of Trello will be poisoned.

There's probably some truth to the claim that Trello was eating some of the low-end of JIRA's market, but it would never credibly kill Atlassian, at least not without branching out into a lot of other products first.

The acquisition makes a lot more sense to me in the portfolio building aspect, Trello can satisfy a very wide array of business needs that go well beyond traditional dev tools. I put it more in the category of Dropbox Paper—simple, modern, real-time-collaboration-based, mobile-friendly tools with a very strong essential vision leading to extremely broad utility.

For anyone interested in reading more about this, Clayton Christensen covers this area in The Innovators Dilemma.


With SaaS, there's almost always room for better. Better to the value of $435m plus? Depends. But enough potential returns to make it worth the effort if you're able and willing.

Another thing Trello had going for it was a decent brand. It didn't (and doesn't) feel project management-y.

Ooh, nice colors. Aww, taco the mascot. And look, not 100 bells and whistles. This initial conditioning is super-valuable. I had the exact same feeling moving from Google docs to Quip (mentioned in the article).

Choosing to add more feeling instead of more features has benefits.

What if we all did this and got hundreds of millions of dollars! Think of the inflation! ;)

So much BS in this article but let's start with these 3: 1) "Products based on disruptive technologies are typically cheaper, simpler, smaller, and more convenient to use." How many more benefits can he put in that sentence? He's basically saying disruptive tech is typically cheaper or better. 2) "Make something the mainstream market doesn’t want now, but will want later." Trying to predict the future is just betting on luck. 3) That random functionality vs time graph. What is 200 Functionality?

Bonus: "If you want to get ideas for your $400 million startup, subscribe to my newsletter."

Since this article is basically a straightforward blog-sized recap of Clayton Christensen's _Innovator's Dilemma_, which is one of the more important business books in technology, it seems unlikely to me that the whole piece is "BS".

> Trying to predict the future is just betting on luck.

I don't agree. Lots of people "invent" things well before they are mainstream products. Invent in the sense that they see the problem they want to solve and know what would solve it, usually the issue is they don't have the expertise to build a product.

In that way, predicting the future is easy. If you sat 100 people down and asked them to invent (read: conceptualize) 30 products, I'm sure you'd end up with a decent number of ideas that will be worth billions in a decade or two when somebody builds them.

Building the future is hard the hard part.

not sure if the takeaway is

- no way to improve a software product without increasing cost and complexity

- no way to protect your franchise with e.g., a lower cost entry-level product, market segmentation, a simplified freemium, etc.

- so the incumbent always has to buy up upstarts that threaten it

(which anyway you can't do once the market prices in that the upstart is going to kill you)

overall the blog post seems a bit cargo cult-y ... if there are lazy incumbents with overpriced, bloated products, yeah, you're doing God's work by disrupting them. But it's sometimes harder than it looks. Don't spend your $425m just yet.

The article makes some excellent points. However I'm not sure I understand how acquiring Trello would save JIRA.

First off, I'm not sure that JIRA is in need of saving. IMHO it has grown to become a very bloated product which very few people really know how to use. If I were to pick a tool for project management, I wouldn't consider JIRA for one second. On the other hand, they have a fine game going in the enterprise segment. Enterprises value a bloated feature set because they pay up big money and because Bob in purchasing needs something semi-substantial to justify the high cost. Besides, Bob won't be using the product anyway.

Trello, on the other hand, would be favored by different types of customers. Small projects, small companies. It offers low pricing, has a small sales department and a large customer base.

According to Joel Spolsky, in his "Camels and Rubber Duckies" blog post (https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...), there is usually no middle road. There is rarely a segment for a mid-range product with half the feature set of the enterprise product and a far higher price than the simple product.

Which begs the question: What does Atlassian hope to achieve?

1) create some unified product which will cater to both the garage startup and to Bob in purchasing? Good luck with that

2) turn off Trello? That's what Darth Vader would have done but there is a certain amount of negative publicity to using the death star ray

3) Make Trello rot, either by

3a) stopping funding of Trello and let it become slowly obsolete

3b) sprinkling with bloated features, such as JIRA integration or what have we

Probably 3b).

Anyway, move Trello too much off its current trajectory and boom, some new startup will pop up, offer an "Import Data from Trello" feature and do things right. Trello is pretty simple by design, and the APIs are open. There is really no customer lock-in. I think Atlassian is smart enough to know this.

No matter how good your JIRA-alternative is, persuading people to manage a project in a different way is exceptionally hard, and has very little to do with your tech. Project Management is seen as a science, and people don't like to deviate from known methodologies. My startup was in this space (managing projects, with a focus on requirements and change), and we failed because we underestimated how hard it would be to get customers to even try a different approach.

> Project Management is seen as a science, and people don't like to deviate from known methodologies.

It's treated more as a set of religious rituals justified by received wisdom (which, to be fair, gives even less flexibility for change than if it were viewed as a science, in which case practices would be based on systematically gathered evidence and change in response to new evidence, rather than changing mostly when people indoctrinated in a different tradition come to power in an organization.)

Actually yes, that does seem to be a more appropriate analogy. A lot of the time people follow a system without testing whether or not it's working.

It wouldn't of killed Jira, I've tried using trello as a replacement for Jira, it was sort of okish, but was kind of awkward. Then moved to Youtrack, and never looked back really, seemed to have a nice blend of trello and Jira

"I’m sure many of Altlassian’s employees don’t understand this decision. Because it makes no sense for them. In their minds, Trello is a shitty product compared to Jira."

everyone inside thats not a manager thinks jira is shit too

> Atlassian bought Trello for $425 million. Because Trello was on trajectory to kill Atlassian.

Please write complete sentences. Some people in the tech community seem to think that sentence fragments can replace clear, simple sentences.

As this is a comment on a grammar point of the submission article, directed at the author itself, it would likely be better as a comment on the article, which Medium supports.

I don't think the author used Jira. Stopped reading at "Trello created a cheaper, simpler, and smaller version of Jira."

I use Jira. Trello is a cheaper, simpler, and smaller version of Jira.

Sounds like you're using jira wrong.

I suppose you can encode anything onto index cards. This doesn't mean it's usable.

> Sounds like you're using jira wrong.

So are 90% of Jira's users. That's the point.

While that may be true, I doubt switching to Trello would improve anything if you're already on JIRA. You don't join JIRA for the kanban....

Jira used correctly will triumph over Trello used correctly any day of the week. But for the lazy with simple needs, sure use Trello.

> Jira used correctly will triumph over Trello used correctly any day of the week.

This is a beautifully expressed indictment of bad software. The tool defines what is correct, and users with a lower tolerance for effort, a lower investment in learning, different or more simple needs are incorrectly using it, or worse they are lazy.

I've seen this so often. A delivered piece of software is underused or used in a way the developers didn't intend, and it is their fault. Don't they know, if they used to software correctly it'd be awesome?

Or, put another way, our tool is the perfect solution for people who's needs are exactly what we thought they should be.

Hmm, I can definitely see that. JIRA can be the slowest, awkward, non-intuitive piece of crap web app out there.

Sounds like you've never used Target Process

Yeah dang, who would've ever thought that lazy people with simple needs was a big market?

I used Jira and I can say without a doubt that Trello created a cheaper, simpler and smaller version of Jira.

"Its product had less features. It was simple. And it was fucking cheap. It was disruptive!"

I feel this is the wrong way to describe Trello's success. i can build an app with a blank white space and charge $0 for it - that has less features and is very simple but it aint gonna sell for a million dollars.

So, what startup ideas can we create from this?

Same as always: take a complicated, expensive product, strip it down to an MVP, put it online for free with a SaaS price tag for premium features, and market it like hell.

so is Spolsky still blogging, or is he too busy counting his money?

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