Founders at Work.pdf

Joel Spolsky 353
I later talked to people that were involved, and they said, “Oh my God, the
tensions were unbelievable. It was a nightmare.” Lotus had to acquire them.
So the next thing we looked at was selling Fog Creek to some other company
that we thought could take us to market. We went through the whole song
and dance and negotiations with the company that we thought would acquire us
and had the cash to take us to market. It didn’t work because we were prima
donnas with inflated opinions of our own worth. In other words, they made an
offer for about $4 million, and we thought we were worth about $12 million.
We understood why they thought we were worth $4 million. That’s what we
would have said in their position, too. But, we really thought that we were going
to go a lot further.
Lo and behold, the company that didn’t acquire us did acquire another
company of some friends of mine in the same scenario. They were developing
software, and they were hoping that this acquiring company would be able to go
to market with the software. And the acquiring company actually proved that
they did not have the ability to go to market with the software products, so that
was a flop. I think if we had gone that particular route, we would have disappeared,
pretty much, and the products would have disappeared, and Fog Creek
would have been no more.
So the mistake I made was in thinking that I had a sales and marketing
problem, you know, because everybody said, “Where’s your salesman? Where’s
your marketing department? How is anybody going to buy your software?”
In the early years, we thought, “Let’s get people to link to us on their websites,
and we’ll pay them a little bit of money if they sell our software.” When we
had a consulting business; there was this little thing up on our web page saying,
“Help us find some consulting clients and we’ll give you $5,000”—which I
thought would get people’s attention. Everybody that had any kind of business
experience said, “No. This looks like you’re desperate and it’s a bribe. Take it
down from here.” The only person who ever even bit at that slightly was someone
who was going to hire us anyway, or thought that his firm should hire us,
and was trying to get what would have amounted to an illegal kickback.
So it was just a completely goofy thing that we did. But then we took it further.
We said, “Make hyperlinks to Fog Creek properties (or whatever) and if
people follow the hyperlinks and buy our software, we’ll give you a percentage—
15 to 25 percent.” It was an affiliate program, just like Amazon affiliates. That
actually did get us some sales, but we put a lot of work into developing that, and
the amount of sales it got us was negligible. The administration and development
overhead were just not worth doing, and we eventually shut it down
because I was sick of writing $19 checks every month. It was a complete waste
of time; it absorbed a lot of time very early on, critically.
A third example of this was when we said, “Let’s make some kind of coupon
system”—because we had this idea that we would send people an automatic
email when they visited our website that would tell them—and we had all these
crazy ideas like, “Buy our software within the next 72 hours and get 25 percent
off.” (That thing was actually a bot that we wrote years ago, and it still runs. If
you try CityDesk, which is our least popular product right now, you will get an