Founders at Work.pdf

348 Founders at Work
So for most of the firms—ArsDigita, Razorfish, Scient, iXL, MarchFirst—
they didn’t even understand that the market was gone and it was not coming
back, and therefore they continued to pay consultants their salaries while they
had nothing to do. And that caused them to hemorrhage money until most of
them closed.
We didn’t have enough consultants at that time. We hired a couple. But
since we always knew that we wanted to be a software company on the side,
around October or November we wrapped up FogBugz, which was an internal
bug-tracking application we had lying around, and started selling it. And lo and
behold, people started buying it.
Livingston: This was your own internal product?
Spolsky: Yeah. Basically that’s where all bug-tracking applications come from.
Every bug-tracking application in the world is some internal developer’s idea.
Livingston: Did you think, “Hey, we’ll build this for us and see if we like it?”
Spolsky: Yeah. We actually had three product ideas in mind, and FogBugz was
one of them. That was the easiest one and the one closest to being able to be
sold. The other two product ideas—one of them was CityDesk, which was kind
of a market failure, and the third one was something called Tintin, that we
never even wrote, let alone shipped.
We had this idea of a family of three applications that would work together
in various ways. FogBugz would provide workflow, Tintin was going to provide
a content management server, and CityDesk was going to be this content management
client. That was the long-term vision, and we started launching
FogBugz because we had it.
I think we started making $5,000 to $10,000 a month selling that. It was
enough to pay our expenses and live off of once we laid off the two consultants
we had hired. (They both immediately found jobs, so it was not really an issue.
One of them is now back as a full-time employee.) I guess we were kind of
lucky that we started late enough in the business cycle that we didn’t waste a lot
of cash discovering that there was never going to be a consulting market again.
Livingston: You were nimble enough to change your plan because you were
just getting started?
Spolsky: Yeah. We just lucked out. If we started a year earlier, we would have
had 37 consultants whose salaries we somehow would have had to pay for
4 months while we realized there was not going to be any money for them. That
would have been a dangerous situation.
Livingston: So people were buying FogBugz. Was there another turning point
for you then? Because I know you never took any outside investment.
Spolsky: We never took any investments. I put in probably $50,000 of my own
money—mainly to cover people’s salaries, when we didn’t have clients. There
was a fairly long period of time where I went without salary because I had my
own savings. (Michael had less savings, and he took out a little bit of salary.) And
we had some expenses, because during this entire period we had an office.