Founders at Work.pdf

350 Founders at Work
month of any software product always is, if you do things perfectly. But at the
time, I just had no idea what to expect.
Livingston: Was there a time during that first year when you thought, “We’ve
lost our clients. Time to close up shop”?
Spolsky: We never thought we would close, because we had this theory that
Fog Creek would continue as long as Michael and I could eat and pay whatever
external obligations we had. There was no reason to completely and thoroughly
give up. And that’s pretty much what it got to. In the first year, I’d say revenues
off of FogBugz averaged like $10,000 or $15,000, and that was enough to live
on. It was growing at a reasonable rate—I remember literally every month it
would grow—at least 100 percent a year. And that gave us the confidence that
we could wait this out.
There was money coming in, and the amount of money coming in was going
up every month. So there was no reason to give up and go home. The theory
was that we would only give up when there wasn’t enough income even to pay
the minimum bills we had to pay. I think our monthly overhead was $5,000—
mostly rent, but also office supplies and T1 and that kind of stuff.
Livingston: It seems like you have a really unique corporate culture—one that
values hackers. Did you plan this from the start?
Spolsky: Absolutely. Remember, the original model was, “How can we become
a big consulting company and then build a software company inside a consulting
company?” The consulting company was a means to an end. It was to get
cash flow, so that you could build a real software company. And when you were
done, the theory was you’d still have these consultants, but software companies
often need consulting arms.
The basic economic model for us and ArsDigita and those kinds of companies
was that you could get a bright MIT grad or whatever and give them a
salary of $75,000 to $125,000 a year, depending on experience. That comes out
to, at most, $60 an hour, and the billing rate was $200 to 250 an hour for building
database-backed websites.
Livingston: Wow.
Spolsky: Yeah. Obviously it was just an arbitrage condition that all these startup
companies were trying to take advantage of.
The question is, how do you get the bright MIT grad to work for you and
not somebody else? What was astonishing at the time was that none of these
companies were making any effort whatsoever to make the work environment
pleasant and to treat the people that they were hiring with enough respect that
they would be able to attract people.
You would go into companies—there were a lot of them in New York:
Scient, for example—and they would have millions of desks crammed into the
most crowded room where they would pack people in like herrings and treat
them as interchangeable cogs. It was not a fun work environment. There was
not a lot of respect for the developers. There was not a lot of treating developers
well and making them feel like they were the hotshots in the organization.