Trello generates $4m in annual revenue, Atlassian earnings report indicates
zdnet.com
zdnet.com
Revenue machines generate $1mil / employee: companies like Google, Facebook, Microsoft, etc.
Startups in growth mode can plausibly run around $100k with the excuse that they're spending cash ahead of revenue. Efficient startups with great revenue growth can do $200k-$400k.
If you're much below $100k, you should have something you're planning to monetize later. It seems that Trello is focused on getting users now and turning on an aggressive pricing model later.
Employees = 1760 (page 43)
Revenue = 457 Million (page 48)
Revenue per employee ≈ 260k
We wanted to pay for Trello, we tried paying for Trello, we even explicitly asked how can we give you money, but the only option was to get stickers and smileys as premium pro features. So $4m sounds not a bit surprising.
A sane valuation is 2x-10x revenue, so their bet is that this quickly can be turned into something that generates $30m a year. You could think about this as incremental to a business with $400mm a year in revenue: are there enough people using Trello that, with a few points of integration, could be convinced to switch to Atlassian products? You'd "only" need to add 10% to your growth for this year to feel like this is worth it.
Realistically, this is probably more of a strategic play. Atlassian wants to own the development workflow, and Trello is one of only a couple players in this space that are entrenched enough to be attractive. If you assume the market for dev tools is $100b (think total value of Github's market + Slack's market + StatusPage's + ...), buying a dominant market share in one of ~10 major products for half a billion isn't crazy. As Trello-type tools move from "a good way to interact with the business" to "crucial for all development teams", this may just be a way to keep themselves from dying. Success is merely being a player in this space.
"Unfortunately you’re not in the market you think you’re in – you’re in the market your users think you’re in. And our users clearly thought of us as an open-source developer tools company, because that’s what we really were. Which turned out to be very unfortunate, because the open-source developer tools market is one of the worst markets one could possibly end up in. Thousands of people used RethinkDB, often in business contexts, but most were willing to pay less for the lifetime of usage than the price of a single Starbucks coffee (which is to say, they weren’t willing to pay anything at all).
"This wasn’t because the product was so good people didn’t need to pay for support, or because developers don’t control budgets, or because of failure of capitalism. The answer is basic microeconomics. Developers love building developer tools, often for free. So while there is massive demand, the supply vastly outstrips it. This drives the number of alternatives up, and the prices down to zero.
"To see how this plays out for other companies consider MongoDB (valued at roughly $1.6B with ~700 employees), and Docker (valued at roughly $1B with ~300 employees). Both companies completely dominate in their respective markets. Two very rough rules of thumb for private growth stage technology companies is that valuations are a 10x multiple of annual revenue, and that revenue per employee is around $200K/year. Which means that MongoDB’s annual revenue is around $140-$160M, and Docker’s annual revenue is around $60-$100M.
"That looks pretty good, until you look at dominant B2B technology companies in markets that aren’t developer tools. Companies like SalesForce, or Palantir, or Box (which faces stiff competition). All of a sudden MongoDB and Docker start looking tiny."
[1] http://www.defstartup.org/2017/01/18/why-rethinkdb-failed.ht...
On the other hand, workflow tools, especially if hosted, do really well and get to charge money. Jira, Github, New Relic, PagerDuty, and if you stretch it far enough, AWS do a rocking business selling to developers, because (imho) they are tied to the business process of delivering a product, not the developer need to build things.
The market for selling to developers is huge, because the market for things created by developers is huge and developers are expensive to hire. You can't sell just anything because of the supply problems cited above, and I think Trello's user base is the big story here that RethinkDB didn't have.
It's interesting to consider that PagerDuty is a developer product that can be successfully monetized whereas RethinkDB isn't. This runs counter to developers' own assumptions about what are the "hard" (and therefore presumed valuable) problems.
Maybe a rule of thumb: If you can come up with a developer product that solves a need but is not technically interesting for developers themselves to build, you might have a winner.
Last year I tried to do my first Android app, a Trello widget and found the functionality of the REST API lacking too, and there was no way to use the Trello credentials from their own app not interface with it well. After some exchanges with their dev team I basically gave up.
I appreciate HN has policies around editorialization but it seems titles that better tell the story HNers would be interested in are changed to more opaque ones on a frequent basis. (Admittedly I'd have dropped the "only".)
It's not up to the submitter to decide what readers might find interesting, especially when doing so misrepresents what the content actually is. It's not fair to mislead readers with a title about Trello when the article is primarily about Atlassian.
But all is not lost: if there's a particular tidbit that the submitter has found interesting, the perfect place to bring that up is in the comment thread.
I considered it policy because it has changed. Up until about two years ago, it was okay to provide context in titles as long as they weren't "over-editorialized" - I believe this word was actually used in the guidelines document.
And titles are subservient to the content they aim to represent, and need to do so as accurately as possible.
Titles are an unavoidable and valuable gateway to content because a reader's decision to read rests upon them.
For 2 hours today there was an item just titled "Joxa" on the front page that meant nothing. It was basically clickbait because HN junkies like me had to click on it to work out what it meant. You've since edited it, yet I frequently see titles here being edited the other way.
It's not fair to mislead readers with a title about Trello when the article is primarily about Atlassian.
What is the best, HN-friendly approach to highlighting more interesting "background" stories, such as this? Would it have been for someone to write their own blog post quoting the original story? This sort of thing has sometimes been shot down here as "blogspam" (although I'm fine with it).