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Why Trello Failed to Build a $1B Business

193 points by andygcook 10y ago

colinramsay 10y ago
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?
- tedunangst 10y ago
  It's all about the commas.
  - cmalpeli 10y ago
    tres commas :)
    - mercurysmessage 10y ago
      Ah yes, my favourite tequila ;)
    - dep_b 10y ago
      Never mind they would use dots to indicate thousands in Latin America
- ganfortran 10y ago
  This is called alternative facts :P
- rrdharan 10y ago
  In fairness to the author there is this text in the conclusion: > Hindsight, of course, is 20/20. While I’ve spent most of this post talking about Trello’s missed opportunity, we shouldn’t forget that building a SaaS business that’s worth over $10M, let alone one that’s worth $425M, is a huge accomplishment. Ignoring the ROI question for Trello investors/employees, I think it's fair to portray Trello as a "failure" if the goal is to build a large self-sustaining independent business, especially if it's true that they "had to sell" rather than stay independent.
  - notahacker 10y ago
    The flip side is that if you regard them as having built "a feature not a product" (as discussed in the article) and having started at a time when developing real-time shared card dragging/dropping was a relatively technically difficult problem and since been copied by every competing service and plenty of OS library demos, a $425m exit is seriously impressive...
- untilHellbanned 10y ago
  IMHO you're missing the point. Sure many of us want to get rich, but probably more of us want to built a profitable, sticky long-term business. The article makes it clear that they didn't succeed as well as they could've in building a business. Getting somebody to buy you doesn't mean you created a business. The benchmarking of business achievement gets even murkier considering the notoriety of Trello's CEO, Joel Spolsky. It's the same issue as with Path's $100M or Slide's $200M exits, which also featured prominent CEO's with products of dubious business value. RE: Trello, e.g., see the part in the post about "Trello's value proposition". Their $5/month Gold plan was really poorly thought out. Many other areas, again as articulated in the article, we're also not well thought out in terms of building a sustainable, profitable business. Signups != locked in, paying, happy customers. > The 2013 blog post that announced the launch of Trello Gold highlighted three main reasons users should pay $5/month for Trello: > Customizable board backgrounds > 250-megabyte attachments for each card in Trello (vs. 10 megabytes on the free plan) > Stickers and custom emoji
- btian 10y ago
  His next article - "Why Google failed to build a $1T+ business"
- jasode 10y ago
  >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-when-it-was-spun-out-from-Fog-Creek https://www.quora.com/At-what-valuation-did-Trello-raise-10M... [3] http://vator.tv/news/2012-06-17-index-ventures-raises-442m-early-stage-fund http://vator.tv/news/2012-06-17-index-ventures-raises-442m-e...
  - kbenson 10y ago
    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.
- elchief 10y ago
  Unicorns are so 2016. It's all about the decacorns now
- rokhayakebe 10y ago
  "Why Trello Failed to Build a $1B+ Business" != "Why Trello Failed"
- draw_down 10y ago
  You make it sound like just a tech-press delusion. VCs invest in businesses because they want them to grow big; they don't invest in lifestyle businesses. This is a systemic thing, don't portray it as a fever dream of some far-gone tech writer.
devopsproject 10y ago
I look forward to the followup article: Why Trello Failed to Build a $1T+ Business.
- rhizome 10y ago
  "Why Star Wars is a terrible documentary."
d--b 10y ago
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!
- gist 10y ago
  > SMBs are fine with actual post-its! I've tried many things (including Trello) and even bought a dedicated laser printer and wrote a small shell routine so I could print 3x5 cards to keep on my physical desk. By force of habit and ease of use nothing so far has topped post it notes (other than printed 3x5s or hand written 3x5's) for keeping track of things that I need to keep on top of.
  - hermitcrab 10y ago
    Have you tried http://www.hyperplan.com http://www.hyperplan.com? It is a rather different take on post-it note planning and desktop-based.
    - rhizome 10y ago
      Masonry is nice and all, but like a lot of taskplan implementations it suffers from signal overload. Rows, columns, color coding, icon/sticker coding, text...
    - gist 10y ago
      Took a look. But honestly I think the biggest issue I have is that I have literally hundreds of things that I need to do and nowhere near enough time to do most of them. So making lists and moving etc. just doesn't work for me. Hence the most important things are on my mind and those things get the special 'desktop' (physical) treatment. I kind of suspect that I am not alone here. Might be because I handle a wide array of tasks which are hard to prioritize by a scheduling system which just allows you to organize that isn't the issue the way I work.
- _pmf_ 10y ago
jbreckmckye 10y ago
Because it is a trivial todo app?
- dgudkov 10y ago
  Nothing at this scale is trivial.
- rhizome 10y ago
  It is and it isn't. Simple is hard.
scandox 10y ago
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.
unit91 10y ago
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.
rco8786 10y ago
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 10y ago
  Trello is actually slow, because of that backend stack, I imagine. I thought the author was going to point to that.
  - xiaoma 10y ago
    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.
  - blowski 10y ago
    Do you have any data to back that up? I rarely hear people saying Trello slow, usually the opposite.
  - bitexploder 10y ago
    Anecdotally, Trello is the most performant large scale web app I use. From a user experience perspective it is freaky fast at updating other clients.
  - kdazzle 10y ago
    I'm with you, Trello was super slow for some larger projects that I used it with. I posted this in my own comment, but it makes sense here, too [1]. Not sure if the performance problems were related to the backend stack, though. My impression is that the api was just written really inefficiently. [1]: https://blog.fogcreek.com/we-spent-a-week-making-trello-boards-load-extremely-fast-heres-how-we-did-it/ https://blog.fogcreek.com/we-spent-a-week-making-trello-boar...
  - erre 10y ago
    To add to other people's anecdotal evidence, Trello is painfully slow for the board I use the most. Perhaps I over-use it - I have 27 lists, the longest of which has some 1500 cards. But it's slow to the point where Chrome asks if I want to kill the tab at least once every 2 days. It works fine for other boards, so I assume it wasn't built with so many lists+cards in mind. But the fact it, it can be slow, almost unusable, at least for certain use cases.
taytus 10y ago
$450M... for a todo list. #perspective
- sixdimensional 10y ago
  Seemingly simple things done well and actually used can be extremely valuable.
- Spivak 10y ago
  That's the point. The marginal value for each person isn't that large even when you account for the collaboration features. But when you build a product that can be everyone's todo list incredibly cheaply the value starts to accumulate. I mean Heinz sells bottled tomato paste. If pressed, it's probably isn't worth that much to each individual, but they're successful because it's cheap, available everywhere, of sufficient quality, and consistent.
fiatjaf 10y ago
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 10y ago
  did you work on trello, or is this speculation?
williamstein 10y ago
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 10y ago
  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.
yokisan 10y ago
"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.
sixdimensional 10y ago
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.
- guelo 10y ago
  That's ridiculous, every businesses wants to grow and make more money. In their ideal world I'm sure Trello's management would have preferred to buy Atlassian than the other way around. The article does a reasonable job with 20/20 hindsight at musing on how they might have achieved that.
  - graton 10y ago
    "every business"? I'm thinking of Craigslist, they don't seem that interested in making more money.
stefco_ 10y ago
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.
dgudkov 10y ago
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 10y ago
  The integrations/powerups are an easy sell for me. Especially github integration.
sethev 10y ago
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?
xiaoma 10y ago
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
moomin 10y ago
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.
bane 10y ago
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.
obiefernandez 10y ago
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.
dunk010 10y ago
This is basically clickbait. Pretty much all the comments have the same sentiment: $425M is a lot of money.
officelineback 10y ago
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 10y ago
  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 10y ago
    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 10y ago
      What do you think that interpretation is?
  - rhizome 10y ago
    Half a billion here, half a billion there, soon you're talking about real money.
beat 10y ago
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 10y ago
  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
  - beat 10y ago
    Atlassian didn't become a billion dollar company without an enterprise sales force. They just built one. Being acquired is definitely a shorter path.
  - user5994461 10y ago
    Google had no enterprise sales for a decade. They did fine.
    - beat 10y ago
      Completely different business model. Atlassian and Trello are much more similar. Google was selling ads, not software.
      - user5994461 10y ago
        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.
squeaky-clean 10y ago
"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 10y ago
  Yeah, "failed" in the article title is a really douchey move.
  - danmaz74 10y ago
    "How I didn't fail reaching the front page of HN using a clickbait title"
  - hobofan 10y ago
    "Why Facebook failed to do a $200 billion IPO"
  - mbesto 10y ago
    But clearly people are reading it. Welcome to clickbait.
djrogers 10y ago
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.
mtw 10y ago
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.
saool 10y ago
So, this is how you make it to the top of HN, with an outlandish clickbait-y claim. Good to know.
JohnnyConatus 10y ago
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.)
janwillemb 10y ago
Almost everyone in the world failed at building a $1B business.
joelthelion 10y ago
"Failed"? Seriously? Isn't selling a Kanban board for half a billion dollars amazing enough?
kondro 10y ago
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 10y ago
  What did you use after trello?
AngeloAnolin 10y ago
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.
kdazzle 10y ago
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-boards-load-extremely-fast-heres-how-we-did-it/ https://blog.fogcreek.com/we-spent-a-week-making-trello-boar...
ethank 10y ago
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.
kapauldo 10y ago
425M is a crime. Trello is a magnificent feature. It is a weekend project and should have been open sourced.

193 points by andygcook 10y ago

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?

tedunangst 10y ago
It's all about the commas.
- cmalpeli 10y ago
  tres commas :)
  - mercurysmessage 10y ago
    Ah yes, my favourite tequila ;)
  - dep_b 10y ago
    Never mind they would use dots to indicate thousands in Latin America
ganfortran 10y ago
This is called alternative facts :P
rrdharan 10y ago
In fairness to the author there is this text in the conclusion: > Hindsight, of course, is 20/20. While I’ve spent most of this post talking about Trello’s missed opportunity, we shouldn’t forget that building a SaaS business that’s worth over $10M, let alone one that’s worth $425M, is a huge accomplishment. Ignoring the ROI question for Trello investors/employees, I think it's fair to portray Trello as a "failure" if the goal is to build a large self-sustaining independent business, especially if it's true that they "had to sell" rather than stay independent.
- notahacker 10y ago
  The flip side is that if you regard them as having built "a feature not a product" (as discussed in the article) and having started at a time when developing real-time shared card dragging/dropping was a relatively technically difficult problem and since been copied by every competing service and plenty of OS library demos, a $425m exit is seriously impressive...
untilHellbanned 10y ago
IMHO you're missing the point. Sure many of us want to get rich, but probably more of us want to built a profitable, sticky long-term business. The article makes it clear that they didn't succeed as well as they could've in building a business. Getting somebody to buy you doesn't mean you created a business. The benchmarking of business achievement gets even murkier considering the notoriety of Trello's CEO, Joel Spolsky. It's the same issue as with Path's $100M or Slide's $200M exits, which also featured prominent CEO's with products of dubious business value. RE: Trello, e.g., see the part in the post about "Trello's value proposition". Their $5/month Gold plan was really poorly thought out. Many other areas, again as articulated in the article, we're also not well thought out in terms of building a sustainable, profitable business. Signups != locked in, paying, happy customers. > The 2013 blog post that announced the launch of Trello Gold highlighted three main reasons users should pay $5/month for Trello: > Customizable board backgrounds > 250-megabyte attachments for each card in Trello (vs. 10 megabytes on the free plan) > Stickers and custom emoji
btian 10y ago
His next article - "Why Google failed to build a $1T+ business"
jasode 10y ago
>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-when-it-was-spun-out-from-Fog-Creek https://www.quora.com/At-what-valuation-did-Trello-raise-10M... [3] http://vator.tv/news/2012-06-17-index-ventures-raises-442m-early-stage-fund http://vator.tv/news/2012-06-17-index-ventures-raises-442m-e...
- kbenson 10y ago
  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.
elchief 10y ago
Unicorns are so 2016. It's all about the decacorns now
rokhayakebe 10y ago
"Why Trello Failed to Build a $1B+ Business" != "Why Trello Failed"
draw_down 10y ago
You make it sound like just a tech-press delusion. VCs invest in businesses because they want them to grow big; they don't invest in lifestyle businesses. This is a systemic thing, don't portray it as a fever dream of some far-gone tech writer.

devopsproject 10y ago

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

rhizome 10y ago
"Why Star Wars is a terrible documentary."

d--b 10y ago

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!

gist 10y ago
> SMBs are fine with actual post-its! I've tried many things (including Trello) and even bought a dedicated laser printer and wrote a small shell routine so I could print 3x5 cards to keep on my physical desk. By force of habit and ease of use nothing so far has topped post it notes (other than printed 3x5s or hand written 3x5's) for keeping track of things that I need to keep on top of.
- hermitcrab 10y ago
  Have you tried http://www.hyperplan.com http://www.hyperplan.com? It is a rather different take on post-it note planning and desktop-based.
  - rhizome 10y ago
    Masonry is nice and all, but like a lot of taskplan implementations it suffers from signal overload. Rows, columns, color coding, icon/sticker coding, text...
  - gist 10y ago
    Took a look. But honestly I think the biggest issue I have is that I have literally hundreds of things that I need to do and nowhere near enough time to do most of them. So making lists and moving etc. just doesn't work for me. Hence the most important things are on my mind and those things get the special 'desktop' (physical) treatment. I kind of suspect that I am not alone here. Might be because I handle a wide array of tasks which are hard to prioritize by a scheduling system which just allows you to organize that isn't the issue the way I work.
_pmf_ 10y ago

jbreckmckye 10y ago

Because it is a trivial todo app?

dgudkov 10y ago
Nothing at this scale is trivial.
rhizome 10y ago
It is and it isn't. Simple is hard.

scandox 10y ago

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.

unit91 10y ago

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.

rco8786 10y ago

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 10y ago
Trello is actually slow, because of that backend stack, I imagine. I thought the author was going to point to that.
- xiaoma 10y ago
  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.
- blowski 10y ago
  Do you have any data to back that up? I rarely hear people saying Trello slow, usually the opposite.
- bitexploder 10y ago
  Anecdotally, Trello is the most performant large scale web app I use. From a user experience perspective it is freaky fast at updating other clients.
- kdazzle 10y ago
  I'm with you, Trello was super slow for some larger projects that I used it with. I posted this in my own comment, but it makes sense here, too [1]. Not sure if the performance problems were related to the backend stack, though. My impression is that the api was just written really inefficiently. [1]: https://blog.fogcreek.com/we-spent-a-week-making-trello-boards-load-extremely-fast-heres-how-we-did-it/ https://blog.fogcreek.com/we-spent-a-week-making-trello-boar...
- erre 10y ago
  To add to other people's anecdotal evidence, Trello is painfully slow for the board I use the most. Perhaps I over-use it - I have 27 lists, the longest of which has some 1500 cards. But it's slow to the point where Chrome asks if I want to kill the tab at least once every 2 days. It works fine for other boards, so I assume it wasn't built with so many lists+cards in mind. But the fact it, it can be slow, almost unusable, at least for certain use cases.

taytus 10y ago

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

sixdimensional 10y ago
Seemingly simple things done well and actually used can be extremely valuable.
Spivak 10y ago
That's the point. The marginal value for each person isn't that large even when you account for the collaboration features. But when you build a product that can be everyone's todo list incredibly cheaply the value starts to accumulate. I mean Heinz sells bottled tomato paste. If pressed, it's probably isn't worth that much to each individual, but they're successful because it's cheap, available everywhere, of sufficient quality, and consistent.

fiatjaf 10y ago

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 10y ago
did you work on trello, or is this speculation?

williamstein 10y ago

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 10y ago
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.

yokisan 10y ago

"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.

sixdimensional 10y ago

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.

guelo 10y ago
That's ridiculous, every businesses wants to grow and make more money. In their ideal world I'm sure Trello's management would have preferred to buy Atlassian than the other way around. The article does a reasonable job with 20/20 hindsight at musing on how they might have achieved that.
- graton 10y ago
  "every business"? I'm thinking of Craigslist, they don't seem that interested in making more money.

stefco_ 10y ago

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.

dgudkov 10y ago

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 10y ago
The integrations/powerups are an easy sell for me. Especially github integration.

sethev 10y ago

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?

xiaoma 10y ago

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

moomin 10y ago

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.

bane 10y ago

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.

obiefernandez 10y ago

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.

dunk010 10y ago

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

officelineback 10y ago

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 10y ago
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 10y ago
  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 10y ago
    What do you think that interpretation is?
- rhizome 10y ago
  Half a billion here, half a billion there, soon you're talking about real money.

beat 10y ago

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 10y ago
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
- beat 10y ago
  Atlassian didn't become a billion dollar company without an enterprise sales force. They just built one. Being acquired is definitely a shorter path.
- user5994461 10y ago
  Google had no enterprise sales for a decade. They did fine.
  - beat 10y ago
    Completely different business model. Atlassian and Trello are much more similar. Google was selling ads, not software.
    - user5994461 10y ago
      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.

squeaky-clean 10y ago

"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 10y ago
Yeah, "failed" in the article title is a really douchey move.
- danmaz74 10y ago
  "How I didn't fail reaching the front page of HN using a clickbait title"
- hobofan 10y ago
  "Why Facebook failed to do a $200 billion IPO"
- mbesto 10y ago
  But clearly people are reading it. Welcome to clickbait.

djrogers 10y ago

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.

mtw 10y ago

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.

saool 10y ago

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

JohnnyConatus 10y ago

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.)

janwillemb 10y ago

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

joelthelion 10y ago

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

kondro 10y ago

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 10y ago
What did you use after trello?

AngeloAnolin 10y ago

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.

kdazzle 10y ago

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

ethank 10y ago

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.

kapauldo 10y ago

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