Sorry, Prashant, you lost track of the plot of the story somewhere along the way.
(creator of FogBugz, here)
FogBugz won and Jira won, but they were playing different games.
I wanted to make software development better for programmers. When I started creating Fog Creek Software in 2000 programmers were treated like typists. They were not paid very well (my starting salary was $33,000). There was almost no thought around how software should be developed. Companies that scored high on the Joel Test were almost unheard of.
The LAST thing I wanted to do was make another tool of oppression for management to impose gantt charts and deadlines and strict rules about who has to sign off on things.
I set out to make software development better for programmers by blogging and by building a company that would be a great place to work.
In 2000 the only way to do that was to bootstrap it. With a team of four people we couldn't build anything complicated. We started with bug tracking software because at least we could touch one aspect of programmers' lives with our philosophy.
FogBugz was designed for smaller collegial teams of people that wanted to work together effectively and needed a clean and simple way to track issues using the smart workflows that small, professional teams like to use.
It was remarkably successful and profitable from 2000 to today. We've never stopped working on improving it, but we also have never abandoned the market of small collegial teams of smart people.
By contrast, Jira was designed as "Enterprise Software" with features to help managers impose specific workflows on teams. Selling Enterprise software is a lovely, profitable business and Atlassian has great success selling to large organizations who ignore FogBugz, but it's the opposite of what I wanted to do. Anyway Atlassian is going public with this enterprise software, good for them, I'm sure they're going to enjoy their well-earned private jets.
But FogBugz was the means, not the ends, and at Fog Creek our ambition was not to be the world's greatest bug tracker software company, it was to fix things for developers. So we kept plugging away at other ideas. Some of them were kinda dumb. Some were moderate successes.
Two of them, Stack Overflow and Trello, were huge hits and spun off into separate companies. Stack Overflow, thanks to Jeff Atwood's inspired leadership, has had more impact on making software development better for programmers than any bug tracker ever will. Trello has grown as popular in three years as Jira grew in 15 years.
Neither of them would have been possible if we didn't have the cash cow of steady FogBugz profits. That's what bootstrapping is, folks! You build one thing and use it to build a bigger thing.
In the meantime I think the world has figured out that programmers are writing the script for the future that everybody is going to live in, so conditions have gotten better. In big cities employers are falling over themselves to invent new ways to pamper and delight their programmer employees, with the massages and the sushis and the dog yoga. We programmers built ourselves hundreds of amazing tools, from github to npm to ci tools, build tools, IDEs, code refactorers, etc. etc. that make programming a million times better than it was in 2000, and bug tracking is just a slice of that pie and not a particularly important or interesting one.
But that said, FogBugz is still very popular and very profitable and thousands of teams use it every day, and we're still reinvesting those profits in making it better and in developing new products to make the world better for developers, and even though it doesn't support pointy-haired micro-managers and doesn't allow you to create a custom workflow requiring that a VP-or-higher sign off on bug reports, there are still small, collegial teams of smart developers who have figured out that this is how they want to work.
FogBugz 7.0 will include a long list of simple
improvements that will make life dramatically
easier for people trying to get things done,
especially when they want to do things just a wee
bit differently than we do here in the Land of the
Fog. Every little feature will be a delight for
somebody, especially that person who keeps
emailing us because he can't believe that the
feature he wants which is obviously only six lines
of code hasn't been implemented in FogBugz 1.0,
2.0, 3.0, 4.0, "4.5", or 6.0, and if we don't get
it soon he JUST MIGHT HAVE TO GO OVER TO THE
That reads like he's making fun of the idea that he's competing with Atlassian, not that he's existentially terrified of competing with Atlassian.
And now the plugins are gone :-( With the new GUI they do not work anymore. I was so excited when the plugins were released, it's a great SDK and we were quickly able to write two plugins that we really needed
I have at times used then-current versions of Fogbugz and JIRA over the past 15 years, and I remember the dichotomy pretty much like Joel lays it out.
I used Fogbugz on small teams, where we didn't have a dedicated person to do things like administer the bug tracker (and where the programmers chose their own issue tracker). When I saw JIRA, it would usually be because there were a lot of layers of management above the programming team (and a need for lots of reports and charts to go into presentation slides), or because the programmers were offshore and not known personally.
That is just one anecdata point, of course. But I think it was always pretty obvious that the two products had completely different philosophies -- and also that they still did compete to a good extent, because after all they are both issue trackers for software development (at least primarily; I guess JIRA also aspires to track issues building your airplane and whatnot).
If those were the only two bug trackers that existed, I myself would choose JIRA if I had somebody else to set up and run it, and Fobugz if I had to do it myself.
"There was almost no thought around how software should be developed."
Really, Joel? So all the various software methodologies of the seventies and eighties, all the CASE tools of the nineties, Extreme Programming etc etc etc - all of this does somehow not count as "thought on how software should be developed"?!
If you think the software methodologies of Olden Times did not consider the role of people in the software development process you are mistaken.
They might seem archaic (and even wrong) when we look at them today, but still: smart people put a lot of thought into the methods, they were hotly debated among professionals, books were written, and consultants made money teaching and preaching them.
There have always been people who thought about how to make software development better, but there were far fewer of them, both in software and in management. Relative to what we have now, I think it's absolutely fair to say that there was almost no thought about it.
Even ten years ago I was convincing my co-workers and manager that we should be able to run our build without human intervention; today I would not believe you if you told me your team had that problem, let alone that people disagreed it was a problem.
wow, $33,000 15 years ago? That really puts a spin on me making $36,000 6 months ago, working in 4 languages and 2 platforms to build a really complicated SPA web app and mac flash content player system. Glad I got out of that job!
From my own personal experience, things weren't bad in the late 90s up to the point of the .com crash. Starting salaries in valley were $45k-$55k. There was a lot of competition for strong candidates, and working conditions were pretty decent. I do commend Spolsky for providing good working conditions in a market like NYC where the current trend seems to be to jam as many people in a space as possible.
"When I started creating Fog Creek Software in 2000 programmers were treated like typists. They were not paid very well (my starting salary was $33,000)."
OK someone has to call bullshit on this. I started as a lowly software engineer straight out of school at the same time. I started at 70K (east cost, not NY). You lost me right at the beginning there and any desire I might have had to go through your wall of text evaporated immediately.
That sentence construction certainly implied otherwise. Even disregarding the part about starting salaries, the implication that programmers were treated as "typists" circa year 2000 is preposterous. This is around the height of the first dot.com boom and tales of extravagant programmer salaries was already legend. Starting his argument with such a patently absurd claim just discredits everything else he says later on.
it is over 100 degrees outside, the world is round.
so does that mean if you don't agree with me that it's hot out where i live at this point in time and space that you don't agree that the world is round?
opportunity is different for different people in different places at different times. No need to be so flippant because he relayed his experience with you.
starting salary of 70k is pretty darn lucky without experience, many developers started out much lower than that and they still do. The point is the corporate attitude towards developers has changed greatly since 2000; from my view point i agree completely.
try starting out making 18k a year and then come post how much you feel valued.
I don't know why people keep doing this startup every two months. Every two months somebody tries it and then discovers why it doesn't work.
For almost all the smaller buildings in New York (non-professionally managed), which is where you see these middlemen brokers:
* The brokers are given an exclusive by the landlords because the landlords are not professionals and often not in New York City. They don't want to do any work, they want the brokers to do the work of listing the apartment, showing the apartment, and checking the qualifications of the tenant.
* The landlord has to give the broker an exclusive otherwise the broker won't do the work, because the broker needs to get paid.
* Although the broker fee (normally 15% of first year rent) seems expensive and even extortionate to the typical fresh college grad renting their first apartment, the brokers as a whole are not making very much money, because they have to do an awful lot of work to get the exclusives (marketing themselves to landlords, so to speak) and an awful lot of work to coordinate keys, show apartments, etc. It is easy to see this because there is massive turnover in the broker business and almost all of the rental brokers you see in New York charging "extortionate" fees are, for the most part, broke.
* Which is why they seem so slimy: they're kinda desperate.
* A ton of apartments in New York are still under some form of rent control, especially the cheap ones in small buildings that kids want. That means that the maximum rent is set by law. So even if a tenant MIGHT be willing to pay a higher rent if they didn't have to pay the brokerage fee, they can't. The landlord of a $1800 rent stabilized apartment is going to get $1800/month whether they use a broker or not. So for this landlord, the broker is paid for by the tenant, and might as well be free. Considering how much work they do, and how much they charge, zero, it's a great deal for the landlord.
So every time one of these fresh-eyed college grads shows up in New York, decides that the rental brokers are making bank and need to be disintermediated, and writes an App that will Connect the Landlord Directly to the Tenant, no landlords sign up for it. The bottom line is that the brokerage function is not ripe for disruption because, slimy as it seems, there's just not that much money being made.
Great points -- once upon a time my co-founder came up with an interesting theory that the rental brokerage industry is a NET LOSS for the brokers, and the only reason it works is attrition.
More formally, if you assign a reasonable hourly wage for a real estate agent, say $25 an hour, then the sum of all agents working each year plus their business expenses exceeds the sum of all commissions collected each year! The lost time is wasted on unqualified tenants, competing over the few qualified tenants, negative ROI marketing (featuring on NYTimes.com or posting bad photos), etc.
If you believe in the net loss theory, then all the startups that always pitch "broker services a la carte" are doomed to fail. That is, brokers offer some bundle of services and a startup tries to unbundle and charge a fair price per line item. That thinking treats brokers as commodities when we can see clearly that great brokers earn 10x a mediocre broker, suggesting there is probably some skill.
If you want to help, post this patent application to askpatents.com and get some feedback on prior art published there that a patent examiner can find.
This wouldn't be the first time Uber has tried to patent something obvious (http://patents.stackexchange.com/questions/5900/mobile-taxi-...) and I'm sure that they will keep whacking away at bad patents until one slips through. There's very little cost to them to file, and if they are lucky enough to get a bad patent accepted, I'm sure they'll be delighted to use it to block competition.
Some info on what constitutes Prior Art for those interested in participating on Ask Patents
Prior art is any evidence that your invention is already known. Prior art does not need to exist physically or be commercially available. It is enough that someone, somewhere, sometime previously has described or shown or made something that contains a use of technology that is very similar to your invention.
That's good but SE is a federation of sites, so it's an unfair comparison.
From the start I've always thought that the biggest danger to SO/SE wasn't failure, you guys are smart enough to see and recover from outright failure. Instead it's reaching a level of success far below what you're capable of.
It seems to me that SO/SE spent a lot of work innovating in the early days but once they found their comfort zone they've stopped innovating. They are good sites for their intended purpose but how much of the original vision has been abandoned? I remember back when you and Jeff were talking about taking over the way all online discussion happened. Nothing like that is even remotely possible with the way StackExchange is today.
To be bluntly honest I think you guys are just lucky that most of the ambitious and competent folks in the industry don't view discussion as "sexy" so you don't have as much ompetition as you would otherwise (quora is practically a joke). But realistically it's just a matter of time until SE will be out innovated.
"I remember back when you and Jeff were talking about taking over the way all online discussion happened." - not quite right. The problem in hand was that good Q&A was buried in discussion forum type apps.
The whole point of SO from the beginning was to build a Q&A site for programmers that didn't suffer from the shortcomings of using apps such as phpBB etc, where threads get hijacked and pages upon pages of extraneous discussion and arguments take place making it difficult to find and answer to a specific problem.
I'm not totally sure about that, if for the sole reason that SO/SE has such a huge volume of answered questions already. Unless they make those answers harder to access, I think there will always be a contingent of people who'll need them.
However, I do hope that we get an even better discussion platform than the ones we have now. I really look forward to even cooler products in the future.
The only business models I want to work on any more have some mass-market component that is absolutely free, and a niche companion product that makes money off of the exhaust fumes of the mass-market component.
The last two businesses I started are Stack Overflow, which is free, where the careers business on the side makes money on the small fraction of Stack Overflow users who are looking to get better jobs, and Trello, which is free, but the business of providing administrative tools to large organizations using Trello can sustain the whole business.
This is more than just "freemium" or "advertising-supported." Freemium and Ad-supported business models are special cases of this general model. The real insight is that the free product has a chance to reach an enormous audience which provides distribution/advertising/marketing making it trivial to go to market with your paid product.
What Marco is reporting here is that the old-fashioned "make something and get people to pay for it" business is much harder to pull off and likely to always be left in the dust by someone making the same thing for free, getting 100x the user base, and getting 1% of them to pay for some value added feature.
Demonstratively, you are right, as you have shown with Stack Overflow and Trello. But, I think it will take a while for developer mindset to adapt to this new idea. While in reality it may be more difficult to execute on the "old-fashioned" model, in concept it seems much easier to approach. I build something, and then people pay me for it, simple. The new model of I build something, give it away for free, and then come up with a way to make money from a niche part of that seems like a huge risk to take, especially for someone who has not had the previous successes that you have had (using the old-fashioned model) and so doesn't have the same reputation, connections, and capital to support their new venture.
Agreed, it's completely unintuitive to a lot of software developers. I run a revenue API company for app developers to help them monetize free apps, and in three years, of all the paid app developers I've spoken with, exactly zero have initially believed me that free App Store apps can generate revenue to even approach the revenue they think they'll capture with a for-pay app. They don't realize that the avalanche of free apps is going to crush them like a Mack truck.
Common sense, creator's optimism, and B-school economics all suggest that paid beats free, I get it. But, sh-t's changed. Chris Anderson wrote Free: The Future of a Radical Price five YEARS ago, but I wish more creators and developers on HN took the ideas described there to heart.
On the other hand, many self-funded businesses are doing quite well charging for services targeted to non-mass markets -- for example, SmugMug (for professional photographers), FreshBooks (for invoicing & accounting), 37 Signals (for team productivity), etc. Some of these businesses are essentially one-person operations -- e.g., AppointmentReminder.org.
I would include FogBugz in this list.
"Make something and get people to pay for it" seems to works well for many vertical/specialized markets, some of which are quite large.
n.b. I'm honored to be included in that august company, but just to avoid people getting the wrong impression, Appointment Reminder is quite a bit smaller than every product on that list.
With regards to the larger point: there are many, many ways to successfully take money from customers.
If you want to build a business mostly on the $20 to $50 per month low-touch SaaS model, you can do that, quite successfully. (ConstantContact, 37signals, SmugMug, etc)
If you want to build a business which addresses customers with low-to-medium touch sales and costs between $25 and $X,000 per month, you can do that.
If you want to build a business which dogfights for $75k to $250k a year enterprise deals, you can do that. (Welcome to the world of boring enterprise software, where there exists surprisingly little visibility since the relevant people don't blog so often, but it basically makes the world go round.)
If you want to do a hybrid low-touch model in the $20 to $50 space, mid-touch in the $X00 to $X,000 a month space, and high-touch in the Enterprise space, you can do that, too. (Some companies move there after discovering that the mathematics of the low-end model are a bit painful if you happen to hit constraints on e.g. market size.)
All of these are also apps for businesses, not casual entertainment for consumers. Also, they are mainly delivered via web, not Apple or Google app stores, which makes it possible to offer a time-limited free trial with no free plan.
I'd hypothesise that both of these are more important factors than being started in 2003 vs 2013.
For a freelancer, $100/month is a good deal if it allows you to get a few more billable hours per month. For a larger established business, $500/month is pocket change that nobody will even notice (and the customer who signs up isn't even spending their own money).
>What Marco is reporting here is that the old-fashioned "make something and get people to pay for it" business is much harder to pull off and likely to always be left in the dust by someone making the same thing for free, getting 100x the user base, and getting 1% of them to pay for some value added feature.
Joel, do you see bootstrapping as viable in your ideal market or does it become a VC only game?
Stack Overflow benefits from network effect, and in the "sharing economy" of people contributing their knowledge in exchange for "internet points". Thus, you do generate value (not necessarily monetarily) off of even free users, if they contribute to discussions.
(I can't speak to Trello as I haven't needed/used it)
I'd argue that the success of the IAP model used in the app stores is much more of a response to the lack of free trial versions, which is kind of like the drug pusher "the first hit is free" sales method...
I would go even further and say that this model is a special case of the more general advertising/marketing model of "Give Valuable Stuff Away For Free". As an example at a smaller scale, content marketing (in terms of blog posts, videos, pdfs, and other informational content ) is a great way for businesses to get eyeballs on their page and establish themselves as authority in a particular subject.
This even works on an individual level. I would say that contributing to open-source development on Github is a great way for individual developers to "Give Away Valuable Stuff" and in term become more visible and attractive to respected software businesses who may want to hire them (as full-time employees or freelancers).
That's the twitter/blog model for a lot of people. They give away really great content, build their brand, and then hold conferences/sell t-shirts, etc...
The only challenge with that is you have to be really skilled/gifted to get traction in a very noisy environment.
The other challenge with something like "consulting" - is that you don't get a lot of opportunity to scale - you are limited by the number of hours a day you can work (as opposed to conferences, where you are limited to the size of the venues you can book/fill)
>The other challenge with something like "consulting" - is that you don't get a lot of opportunity to scale - you are limited by the number of hours a day you can work (as opposed to conferences, where you are limited to the size of the venues you can book/fill)
Ideally, you do both. One fills in the gaps for the other depending on the cycle of product/service you are in.
I did what you outlined in the first paragraph in a niche market. I have huge foothold, though it took me 4-5 years to get here, and there's a lot of upward mobility to still be had.
I travel a lot during the fall/winter for conferences and large group projects, and do a lot of consulting during the spring/summer. That tends to be how my industry cycles.
IMO, you want to have a broad service offering behind a veil of a major product. For example: Giving talks and conferences is my main product, fueled by a book/DVD set. Profit margins are highest there and scale well. However, this just doesn't work for certain segments of the population, so doing high-priced consulting to pay the light bills is always good - or my current strategy: Doing consulting for a discounted rate while taping the conference for later use in products.
The kicker is that this plays really really well with established companies. Pretend you're hypothetically a Cisco Routers consultancy. Parachuting into a random company and solving their Cisco Routers problems requires a very experienced consultant, both in terms of technical mastery and in terms of soft skills like interfacing well with clients' technical staff, dealing with political problems where you have imperfect background of who the key players/concerns are, and generic client relations.
Presenting about Cisco Routers (after the presentation has been substantially pre-written) and talking about them intelligently in response to audience questions requires a more limited, and far less expensive, skill-set.
This allows operating consultancies to do training offerings using more junior staff than they use for their consulting offerings, but to sell them at rates and quantities pegged to their consulting reputation rather than at the rate/quantity suggested by the person who will be tasked with delivery. And customers will often be quite thrilled, because training existing employees is often far, far cheaper than hiring pre-existing experts on the open market.
(There exist many other ways to do it. Pure-play training companies exist, for example, and there are companies which focus on synchronous online training, asynchronous online training, hybridized models, etc etc.)
Totally doable. People are very willing to pay for personal training as a supplement to a video course. I've done this before, except I also charged (much less) for the non-hands-on part, but the far more expensive 2 hours of one on one training sold out first.
Another interesting example in this area is Michael Hartl with http://ruby.railstutorial.org/ which is now perhaps the most popular Rails tutorial out there. You can read it all online for free but he makes very good money selling the PDF and screencasts of it.
Hmm. My course is on Udemy (i didn't want to create my own platform). I've got over 1.5hrs of video content, worksheets, examples, quizzes and live workshops. I'm struggling to quantify the right amount to charge for it.
Because most buildings have a large footprint, and only the offices on the parameter have windows. I am typing from a windowless, interior, private office. It is pretty depressing, but I prefer it to open space (which I could easily get here). Others, of course, like the person we are replying to, would feel differently.
If you think about it, that analogy doesn't really work. The rooms that guests stay in are almost all along the outside because guests are paying customers. The janitor's storage rooms, room service kitchens, elevator shafts, mechanical access corridors and other such workspaces are located on the inside in the less valuable parts of the building. Not every room has an outside window - only the rooms for VIP's, which is oddly similar to the situation in most office buildings.
A bit of a tangent, but this is the reason why there are no real high-rise buildings in Europe (The tallest building in the EU is only 1004 ft high). There are laws that determine the minimum amount of natural light an office should have. Since taller buildings have a larger footprint, at some point the interior offices no longer get the required amount of natural light, meaning they can no longer be used as a work-area, thus making the building uneconomical.
This doesn't make sense or I am missing something. If you find a floorplan and it has enough light, and then repeat it upwards, won't every floor have similar amounts of light? In that way high-rises are a GREAT way to have many people working in a single large building with everyone seeing light.
Yes, but higher buildings require a larger footprint. You cannot build a spire the height of the Burj Khalifa (828 m or 2,717 ft) with a floorplan that offers natural light everywhere all the way from the bottom to the top floors.
I'm starting to think it's a cultural thing. Why do you and other people think that not having natural light is depressing? When I see people from US or some other countries talking about lighting, they seem to almost worship natural light.
I'm living in Sweden, and at least in the northern parts some people do get clinically depressed during the very long and dark winters. Maybe if you live in e.g. India, southern Europe or Australia, you have enough sun to never really miss it. But when sunlight is scarce, it definitely affect you.
But also not something you need to buy. We're working very hard to make sure everybody understands that Trello is free and will always be free.
With that, we have to make money to support the development and servers. Our ultimate goal is that the 1% of people who get the most value out of Trello will pay us, and that will collectively bring in enough money to pay for the whole operation.
The people getting the most value out of Trello are organizations, and super-fans.
The organizations pay us by buying Trello Business Class (https://trello.com/business-class), which gets them advanced administrative features that organizations like to have.
The super-fans are people who really just want a way of showing their love for Trello and supporting the company, and that's who Trello Gold is for. They show us some love by either (a) paying us or (b) referring friends to Trello, and in exchange we give them some cute stickers and board backgrounds and a little crown thing on your avatar so they can show all their friends how cool they are.
We actually thought of calling it "Trello Fan Club."
Either way, the long term goal remains to keep Trello 100% free, but still have a way where the 1% of people who get the most value out of it can pay us. For those 1% it's an easy sell. There are people running their businesses on Trello and they've told us that if we sold a brown paper bag called Trello Brown Paper Bag they would buy it, just to support the software they love and make sure it has a future.
Why is the idiom of offering it for free (100% that is) and then look out for supporting the development? How can you honestly do both?
Instead, place it for 14 day trial, offer the entire thing cheaper by 99% (leave 1% fan club away), and support both the causes sufficiently.