Earlier quoted context omitted.
We were doing “velocity” at a startup using a rack of index cards. Software is not strictly necessary when everyone is in the same room.
PT's concept of velocity isn't just tracking a number. It is tracking what work will get done within a period of time based on the average amount of work done previously. It allowed PM's to actually estimate when a feature would be completed and how adding or removing stories (or people!) would impact future feature deadlines. Initial velocity was meaningless and only developed over time as an average value of a team…
The concept comes from Extreme Programming. Software implementations came later. I think Pivotal Tracker does something useful, but you need a larger team for it to matter.
Here are some photographs of the team room: