Joel Spolsky founded Fog Creek Software with his
friend Michael Pryor in 2000. They didn’t have a
specific product in mind, but were motivated to start
the kind of software company where they would want
to work—one where programmers were the stars.
Around the same time, Spolsky began writing
Joel on Software—now one of the most widely read
programming blogs—to share his thoughts about
software development, management, business, and
the Internet. Joel on Software was one of the first
examples of a now common (though rarely achievable)
strategy for...

anti-Microsoft. So that was one small thing I was going to change.
A larger thing was that they were developing this product. They had this
idea; they got the consulting and they got the product—which was the ArsDigita
Community System that they were developing alongside it. The theory was that
the product they created would support the consulting, and the consulting
would support the product.
But they thought the product needed to be open source, and we thought,
“That’s nice, but consulting is a business where your revenue is just a multiple
...

is growing, they will hire a few consultants to help them grow a little bit
more rapidly. When they’re shrinking, they’ll instantly fire all consultants. If the
market is even going down by 0.002 percent instead of growing—which it did,
because there was a sort of dot-com nuclear winter—then the first people to go
will be the consultants. So the consulting business completely collapsed, and
every company in that space more or less collapsed. The ones that remained—
Razorfish, Scient, Viant, whatever—all sort of conglomerated into one
company with about 120 people, and...

3 months.” Then the next month they would say, “Looks like the sales cycle is
up to about 4 months.” Nobody was ever saying, “We’re never going to hire you.
Go away.” But that was the reality.
Joel Spolsky 347
So for most of the firms—ArsDigita, Razorfish, Scient, iXL, MarchFirst—
they didn’t even understand that the market was gone and it was not coming
back, and therefore they continued to pay consultants their salaries while they
had nothing to do. And that caused them to hemorrhage money until most of
them closed....

4 months while we realized there was not going to be any money for them. That
would have been a dangerous situation.
Livingston: So people were buying FogBugz. Was there another turning point
for you then? Because I know you never took any outside investment.
Spolsky: We never took any investments. I put in probably $50,000 of my own
money—mainly to cover people’s salaries, when we didn’t have clients. There
was a fairly long period of time where I went without salary because I had my
own savings. (Michael had less savings, and...