Consider a cake shop owner in a small town in Siberia. He sells the best cake around. Whenever someone wants a treat after dinner they stroll down to the cake shop and get a nice big slice of cake. But along comes a new treat: ice cream. Our cake shop owner ridicules his neighbor for starting an ice cream stand, saying no one will buy it because it’s cold. This is Siberia, after all. But rather than running an oven all the time, she can just keep her ice cream outside in the freezing cold, so it sells for less. Suddenly a whole bunch of people who could never afford cake are stopping at the ice cream stand after both lunch and dinner. It’s cheap, it tastes good, and the teenagers are having contests to see how much they can eat before passing out from brain freeze. It seems the whole town is there, and some of the cake shop customers start getting ice cream just because they want to hang out with their friends at the ice cream stand. All of a sudden the neighbor is rolling in the dough and she wants to buy out the cake shop since they have a great location.
Now suppose the owner of the cake shop recognizes that lots of his customers will like the ice cream (even in Siberia) because it’s so much cheaper. So he sets up an ice cream stand and hires his neighbor to start selling it as fast as possible. He notices that some of his regular cake shop customers are going to the ice cream stand instead, because it’s cheaper. So cake sales are down a little. Rather than shutting down the ice cream stand though, he brings it into the cake shop, adds a special “cake” flavored ice cream, and becomes the town hero. Not only has he saved his business, but he’s also been able to meet the dessert needs of more of his fellow townspeople. Cake is selling even better than before, ice cream is selling even better than that, and the cake-fanatics and ice cream groupies all get to hang out together.
Clayton Christensen’s talk at this year’s Business of Software was all about how companies disrupt, and are disrupted by, other companies. In building a product, you (or those who came before you) made decisions that are really hard to change after the fact. That’s fine; those “stakes in the ground” are what made the product successful. But it also limits the viable lifetime of the product. At some point disruption happens.
Larger Market + Lower Price + Different Measure
Professor Christensen pointed out that disruption occurs when a company solves a given problem for a larger audience at a lower price point with a different measuring stick for comparing value. Companies that successfully avoid being disrupted are usually able to do so only by disrupting themselves. Few companies are able to pull that trick off, and it typically involves having a different team or business unit set up in order to avoid all the baggage that the last-generation products carry with them.
What does this have to do with Fog Creek? Well, I’ll admit that I was a little skeptical when Fog Creek launched Trello. My worries pretty much lined up with those outlined in this post from a FogBugz customer. Though it’s taken some time, I’m starting to see how important it is for Fog Creek to prepare for the disruption of its flagship product, FogBugz. By doing so, we can make sure FogBugz will keep solving our customers problems and keep making us money.
Trello fits the model for disrupting Fogbugz. It solves the problem of planning the work on a project for a larger audience than just software companies, at a lower price point than a FogBugz or a Jira, with a different measuring stick: putting Trello and FogBugz next to each other on a feature comparison chart doesn’t make any sense.
Trello’s target market is much larger than that of FogBugz. Where FogBugz targeted software development teams with features like bug tracking, automated crash reporting, and evidence-based scheduling, Trello can provide value to any group of two or more people working together on something that can be broken down into steps. Even though any group of people could use FogBugz to do the same thing, using FogBugz doesn’t really make sense when you’re in HR doing hiring, or in law working through cases, or in a studio vetting country bands. Using Trello does.
Additionally, Trello has a lower price point: free. Everything currently offered by Trello is free, and will remain so going forward. Yes, there will probably be value-added features and services that Fog Creek will charge for at some point. Compared to free, though, FogBugz is expensive at $25 per user per month. When you just want something simple to plan your wedding, that doesn’t make any sense. But if you’re managing software projects for reasonably complex products, then FogBugz easily adds that much value, and our customers make that clear by coming back again and again.
Trello also has a different measuring stick. And that’s the real reason it will eventually overtake FogBugz, even for software projects. Or rather, it will take over some of the roles that FogBugz fills in a software development company. We already use it here at Fog Creek to manage our work at a coarse-grained level. It provides a potentially public view into product development, which is cool to see.
The real key, though, is that Trello, like FogBugz, is opinionated–but it has very different opinions. Rather than seeing work on a project as a large set of small items that need to be tracked individually, it sees project work as a small set of somewhat larger tasks that fit into a bigger whole, a workflow defined by the team. If FogBugz tried to create some kind of dashboard view of your bugs to compete with Trello, you’d be so overwhelmed by minutia that you’d give up and walk away. No one wants that kind of view when they’re dealing with hundreds or thousands of individuals cases. But Trello redefines the way we see our project work and that fundamentally changes the game.
Wait a sec! I’m on the FogBugz team. What am I saying?! Am I just making a Steve Yegge “TMI” mistake by posting this publicly? Am I talking myself out of a job?
I don’t think so. And here’s why.
The same legacy that prevents it from winning in the larger Trello market gives it a competitive advantage in the market for software development teams. FogBugz will continue to make money, and it is still growing at a nice pace. It needs investment, but not the kind of investment that would attempt to turn it into Trello. Rather, the kind of investment that will take advantage of disrupting products like Trello while preserving it’s usefulness in the niche of software development teams.
And our customers, for the most part, aren’t going to jump ship for Trello anytime soon. Currently, Trello can replace only a very small part of what FogBugz provides. One customer pointed out that it cannot handle bulk editing, screenshot captures are painful, and categorization and search aren’t designed for the situation where you have lots of items. Additionally, FogBugz supports incoming and outgoing email, automated crash reports, and deep hierarchies of work. You can install it within your network and use it completely internally. It’s also got awesome source control integration with Kiln. These are all things that software development teams care about, often passionately. Trello, and other products like it, may eventually meet some of these needs, or integrate with other tools that do, but that will take time. Time that will allow FogBugz to further differentiate itself.
Besides, learning new ways of working is hard. Anecdote time! We spent some time over the last few months rethinking the UI for FogBugz. As the team lead, I made the call to focus on that, and did what I could to protect the team through the process. Unfortunately, when it was done, Joel pointed out that it wouldn’t fly with our customers. Why? Because we “moved the cheese” in too many ways. It would have required our customers to learn new ways of working, and human nature doesn’t like to do that. Though that does limit what we can do with FogBugz going forward, it also strengthens the ties that our current customers have with the product. They know where to click, which keyboard shortcuts to use, and they know what to expect. That helps them work faster, get in the flow, and keep the boss happy.
Finally, and related to the last point, FogBugz has an ecosystem of supporting technology around it. When our customers start using FogBugz and Kiln, they often integrate with a set of tools and technology. This is one reason it’s harder to innovate on those products, because our customers don’t just rely on not having to learn new ways of working, they also rely on their custom plugins not breaking, on their random Python scripts still working, and on third-party tools continuing to integrate well with FogBugz. Each of those is a barrier to entry – they make it harder for a competing product to win our customers away from us (yep, even if the competitor is made by us as well) because they also add value for the customer.
In short, for almost all of FogBugz existing customers, and most of the larger market of customers using a competing bug tracker, using Trello instead is not the right business decision. And within that market FogBugz can make sure that business decision doesn’t change by doing the right kinds of investment. Investment that will keep FogBugz relevant and growing into the future is core-competency investment, not more features or chasing faster competitors in a race decided by a radically different “finish line”.
And there are tons of things we can do in the core of FogBugz: reduce the complexity of the product both for our users and for our developers; make it faster; phase out old features that aren’t being used by anyone; fix the backlog of bugs; improve our up-time; integrate with Trello and other apps. That last point is probably the most salient. As Trello grows and becomes a better fit for certain kinds of project management work, FogBugz can increasingly integrate with and offload those areas to Trello. At the same time, it can target specific problems that software development teams face, and provide value by solving them well.
In the end our customers will be able to have their cake … and their ice cream too.