“I had to keep our acquisition plans hidden from the entire team. It was emotionally taxing”

With Trello, I wanted to build something international from the get-go’. That’s how Trello CEO and co-founder Michael Pryor started his session at The Next Web last Friday. The American entrepreneur talked about selling Trello to enterprise software company Atlassian, best known for its issue tracking system JIRA. Afterwards, I sat down with Pryor to talk about his experiences and learnings as an entrepreneur.

 

‘Navigation system’ for teams

Trello, the ‘visual collaboration tool’ with over 22 million users world-wide, was founded by Michael Pryor and Joel Spolsky — a spinoff of one of their earlier ventures, Fog Creek Software. “Trello is a product that grew very organically,” Pryor tells me. “My co-founder Joel and I had no clue what everyone was working on. We lacked a solid overview. We had our own bug tracking app, but that was way too low-level. When you employ over 40 people, it’s easy to lose track of everyone’s workload.”

 

“At first, I thought Trello was the dumbest idea ever”

Source: Fogcreek.com
Source: Fogcreek.com

They laid the groundwork for Trello during one of the company’s so-called ‘Creek Weeks’. “For an entire week, the employees get to ignore all of their daily responsibilities and focus on cultivating an idea,” Pryor explains. “The only condition is that you find one other person in the company who wants to work on your project with you. Ironically, the goal of that exercise is to figure out why your idea won’t work. That might sound pessimistic, but it allows us to fail fast and focus on ideas that will make it. Joel pitched the idea for Trello as a visual to-do list with a maximum of five tasks. My reaction? This is the dumbest idea ever (laughs). I was convinced that it was too simple and that no one would use it.

 

“We think of Trello as an enabler for better collaborations”

 

And yet, the plan for Trello was developed. Pryor explains how the product was inspired by Kanban boards, a system used primarily in agile software development to illustrate progress in ongoing projects. “A fine concept as is, but we wanted to broaden the scope beyond developers,” he admits. “So we decided to adopt certain elements of Kanban, like the post-it principle. People love it, but usually leave it at that.”
“Trello introduced the idea of making something that allowed people to work together successfully. That’s why we don’t see it as a standalone tool, but as an enabler for better collaborations. I think of it as a blueprint: it shows where teams are at the moment and what their end goal is. Compare it to a search and rescue mission, where you have myriad tools to communicate with your team, but you also need some type of navigation system to calculate the route towards your destination. That’s what Trello does for your company’s workload.”

Not to make money, but to make an impact

At first, we had little ambition to make a profit with our free project management application. ”We thought of it as a product we’d developed within Fog Creek Software, and we just assumed our user base would grow steadily,” Pryor nods. “We didn’t care about making money at that point – We were focusing on making an impact. We could easily do that with the profits of Fog Creek Software.”
Trello only became an official spinoff, with its own entity, in 2014, after Google discontinued the free Google Reader. Pryor officially became CEO and immediately faced a number of issues. “I remember very well that people felt like free products were unreliable,” he admits. “That there would be a time when every single free product would disappear. We noticed that Trello users had the same concerns, so we wanted to prove ourselves, because the last thing we wanted was to discourage potential users from registering. That’s when we started integrating paying features like admin roles. Not the best strategy to start earning money. I knew that then and I know it now (laughs).”

“Our strategy? The more value our users get from the free version of Trello, the quicker they’ll turn into paying customers”

Pryor is more convinced about the enterprise model for larger customers. “We never have to convince companies to implement Trello,” he continues. “Plenty of individual users are already using our tool to organize their own workload. We use that as a stepping stone to position Trello as a tool to collaborate even more efficiently through paid features. Think of things like single sign-on and priority support when anything goes haywire. We didn’t want to limit the basic features, e.g. a limit of five cards for free users. Our strategy was and still is: The more value our users get from the free version of Trello, the quicker they’ll turn into paying customers.”

About the Trello acquisition

In early 2017, Trello announced its acquisition by tech company Atlassian. Approximately 100 Trello employees were merged with 1,800 Atlassians. Trello was in talks for a new investment round when Mike Cannon-Brookes requested a meeting with Pryor. “I felt that he was interested in a possible acquisition,” grins the latter. “I was curious, so I agreed to meet him. It was not until later that I realized that he’d flown all the way from Sydney to have lunch here in New York. But what truly stuck with me, is that our meeting wasn’t about numbers, which is what I’d expected. We talked about our visions and what we could build together.

“I had mixed feelings when I signed off on the acquisition”

Though Pryor stays mum when I ask about previous acquisition offers, there’s a big chance that he’s received a couple in the past. So why Atlassian? “The first conversations were about the people in the company, the driving force behind every technology,” Pryor recalls. “Trello’s philosophy and mission proved to match those of Atlassian. Atlassian wants to give teams a chance to collaborate better and to reach their full potential. That’s what convinced me that we could grow even faster through this acquisition. And yet I had mixed feelings signing off on the deal. As an entrepreneur, I was suddenly going to have a ‘boss’ and I wondered how that was going to turn out. But not a lot has changed: I still do what I want to do. Apart from the fact that I’m not at liberty to disclose certain metrics, because I’m working at a public company.”

In an ironic twist, the acquisition proved to be a bitter pill to swallow on a human level. “Our acquisition did indeed prove to be quite challenging when it came to the people,” Pryor confirms. “I had to keep our acquisition plans hidden from the team for a long time, while we have a very open and transparent culture. You can’t underestimate how that affects you emotionally. I was also worried about the way the identity of the Atlassian employees would match ours.

Source: The Next Web

Because when two companies merge, a cultural conundrum emerges. Thankfully, I could rely on my experiences at Stack Overflow (Editor’s Note: a product by Stack Exchange, another Fog Creek spinoff) and Trello to know what wouldn’t work. At one time, we had the idea to pit the Stack Overflow and Fog Creek Software employees against each other in a game of Assassin’s Creed (laughs loudly). Never again! When I announced the news to the team in January, most people were surprised. They had to leave behind a startup for a star player. For them, it was an emotional rollercoaster. I did emphasize that a lot would change, but that even more would stay the same.

When I ask the entrepreneur whether he has any pointers for other startups or scaleups, he responds without hesitation. “Try to centralize all of your documentation,” he says confidently. “Oh, and maybe the most important thing of all: never allow an exit or an acquisition to become your primary goal. The big boys will come to you once they learn that you solve a fundamental problem. That should be your biggest focus.”