Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why Trello Failed to Build a $1B Business

producthabits.com

Post reply on HN
Print view View original

41–50 of 120 posts

Re: Why Trello Failed to Build a $1B Business

#41

Post by wtvanhest »

jasode wrote: post #34
colinramsay wrote: post #2

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?

>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…

My understanding is that a 10x return is what most vcs consider successful. At the very least, this investment had a major positive attribution in their port returns and they likely list it in their materials to LPs as a success.

Re: Why Trello Failed to Build a $1B Business

#42

Post by bane »

Why? It's an enterprise software development tool without the ability to run it locally within the enterprise. Companies don't want to put corporate IP on remote servers as much as possible without very tight data protection guarantees. Trello didn't offer either one so many companies that could have benefited from Trello (and knew it) couldn't use it.

Re: Why Trello Failed to Build a $1B Business

#43

Post by st3v3r »

jasode wrote: post #34
colinramsay wrote: post #2

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?

>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…

So some VCs didn't get the crazy high returns they thought they would. So what? Calling Trello a failed outcome is still crazy.

There are far, far more metrics, and I'd say far more important metrics to decide whether a company is a success than the amount of VC returns.

Re: Why Trello Failed to Build a $1B Business

#44

Post by elchief »

colinramsay wrote: post #2

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?

Unicorns are so 2016. It's all about the decacorns now

Re: Why Trello Failed to Build a $1B Business

#45

Post by jasode »

kbenson wrote: post #40
jasode wrote: post #34

Earlier quoted context omitted.

>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…

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…

>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.

I put that last "failure" in scare quotes to soften the label a bit because in many ways, Trello is a success.

Nevertheless, the VC will frame it as a "failure" or "suboptimal outcome" because they use the framework of "opportunity cost" which means they missed the other startups they could have invested that 10 million in.

If the VC knows ahead of time that investing $10m startup in will return just 1000% in 2 years, they'd rather ignore Trello and find "another Facebook" that can return 20000%+[1]

[1] https://techcrunch.com/2010/11/22/accel-partners-fund-ix-fac...

Re: Why Trello Failed to Build a $1B Business

#46

Post by rokhayakebe »

colinramsay wrote: post #2

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?

"Why Trello Failed to Build a $1B+ Business" != "Why Trello Failed"

Re: Why Trello Failed to Build a $1B Business

#47

Post by draw_down »

colinramsay wrote: post #2

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?

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.

Re: Why Trello Failed to Build a $1B Business

#48

Post by jshmrsn »

dgudkov wrote: post #33

The idea of pricing a product like Trello should be taxing the added value it creates. What can indicate added value in Trello? Not emoji stickers, for sure. It's the number of cards and lists. If a user creates many cards/lists s/he clearly sees added value of the product. Trello should've limited the number of lists or cards in the free edition and charge a fee for an unlimited edition. Those users who don't see mu…

The integrations/powerups are an easy sell for me. Especially github integration.

Re: Why Trello Failed to Build a $1B Business

#49

Post by kbenson »

jasode wrote: post #45
kbenson wrote: post #40

Earlier quoted context omitted.

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…

>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. I put that last "failure" in scare quotes to soften the label a bit because in many ways, Trello is a success. Nevertheless, the VC will frame it as a "failure" or "suboptimal outcome" because they use the framework of "opportunity cost" which means they missed the other start…

> Nevertheless, the VC will frame it as a "failure" or "suboptimal outcome"

Sure, but that's in the context of the fund, not the company. It's meant to be consumed by people dealing with the fund in some way.

> If the VC knows ahead of time that investing $10m startup in will return just 1000% in 2 years, they'd rather ignore Trello and find "another Facebook" that can return 20000%+

No, any fund that knows they will get a 1000% return will definitely invest. The assumption will be that those dollars would have gone to one of the bad investments, because since the vast majority of dollars do, they're likely right. That investment will help the fund, because it doesn't it can be one large return, or a few slightly less large but still great returns. Not every fund that makes money does so because of a single great investment.

Re: Why Trello Failed to Build a $1B Business

#50

Post by jasode »

st3v3r wrote: post #43
jasode wrote: post #34

Earlier quoted context omitted.

>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…

So some VCs didn't get the crazy high returns they thought they would. So what? Calling Trello a failed outcome is still crazy. There are far, far more metrics, and I'd say far more important metrics to decide whether a company is a success than the amount of VC returns.

>Calling Trello a failed outcome is still crazy.

Please read my previous comment charitably as I deliberately wrote about Trello using the "investment perspective" for discussion purposes only. It wasn't rendering absolutist judgement that Trello was a failed company.

>So some VCs didn't get the crazy high returns

That's only looking at one side. The other side is J Spolsky who accepted the $10m. To do that, he had to believe Trello would grow beyond $1 billion and convince outside investors of that same vision. If a founder makes a decision to accept VC money, he has redefined the threshold of what success/failure will be. The math makes that unavoidable.

Post reply on HN