4 months while...
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 he took out a little bit of salary.) And
we had some expenses, because during this entire period we had an office.
Although it was my grandmother’s apartment, we were paying rent, and we
were using it solely as an office. So we were paying, let’s say, below-market rent
for a below-market-quality office space.
Livingston:Was it in Manhattan?
Spolsky: Yeah, it was a brownstone in Manhattan. Two floors, with a garden out
back. It was quite a pleasant place to go work. Nobody was living in there, but it
had a kitchen.
So we shipped another product, CityDesk. There are all kinds of reasons
why it was not a successful product. We misinterpreted some things, and that
product was not a big hit. But FogBugz just kept growing and growing and
growing. Every time we did a new release, we would double our sales. We just
sort of sat there and watched this little geometric growth occur—which has
been happening in the last 5 years to this day. This application is getting bigger
and bigger and selling more and more copies every month.
We had to raise the price a couple of times. We didn’t have to, but raising
the price actually increased the number of units that we sold. I guess because it
looked more legitimate with the more realistic price.
Livingston: If people have to pay more, they take the product more seriously?
Spolsky: Definitely. There was a five-user license that was like $199, and that
just feels like shareware, practically. But today, when you say that a ten-user
license is $999, it starts to feel like a more substantial product. In that market, it
still is actually a good deal. But you really have to have a price point that conveys
what you think the product positioning should be. Many people will judge
where your product fits in the market based on its price.
So we increased the price a couple of times, and both times it increased the
number of units we sold. We launched new versions, kept adding more and
more features. It’s become this gigantic monster. It’s also a whole customer
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