MSRP (manufacturer’s suggested retail price) or something like that. That particular
relationship, before Lotus completely acquired Iris, lasted long enough
that I thought that maybe this model would work.
I later talked to people that were involved, and they said, “Oh my God, the
tensions were unbelievable. It was a nightmare.” Lotus had to acquire them.
So the next thing we looked at was selling Fog Creek to some other company
that we thought could take us to market. We went through the whole song
and dance and negotiations with the company that we thought would acquire us
and had the cash to take us to market. It didn’t work because we were prima
donnas with inflated opinions of our own worth. In other words, they made an
offer for about $4 million, and we thought we were worth about $12 million.
We understood why they thought we were worth $4 million. That’s what we
would have said in their position, too. But, we really thought that we were going
to go a lot further.
Lo and behold, the company that didn’t acquire us did acquire another
company of some friends of mine in the same scenario. They were developing
software, and they were hoping that this acquiring company would be able to go
to market with the software. And the acquiring company actually proved that
they did not have the ability to go to market with the software products, so that
was a flop. I think if we had gone that particular route, we would have disappeared,
pretty much, and the products would have disappeared, and Fog Creek
would have been no more.
So the mistake I made was in thinking that I had a sales and marketing
problem, you know, because everybody said, “Where’s your salesman? Where’s
your marketing department? How is anybody going to buy your software?”
In the early years, we thought, “Let’s get people to link to us on their websites,
and we’ll pay them a little bit of money if they sell our software.” When we
had a consulting business; there was this little thing up on our web page saying,
“Help us find some consulting clients and we’ll give you $5,000”—which I
thought would get people’s attention. Everybody that had any kind of business
experience said, “No. This looks like you’re desperate and it’s a bribe. Take it
down from here.” The only person who ever even bit at that slightly was someone
who was going to hire us anyway, or thought that his firm should hire us,
and was trying to get what would have amounted to an illegal kickback.
So it was just a completely goofy thing that we did. But then we took it further.

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• MSRP (manufacturer’s suggested