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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 th

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.

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.