Both Atlassian and FogCreek started off as bootstrapped businesses. However, Atlassian is clearly the winner even though it started long after Fogcreek. I have seen how Atlassian went from underdog to beating Fogbugz. Here are my thoughts on why it happened:

1. No open source license

Even the Atlassian founder acknowledged this in his Reddit AMA recently.

It was very easy to run into an install of Jira on large open source projects, especially before Github became big. It served as huge validation and you ended up already trying the product before you even started a formal 'trial' for your organization. (Not to mention it also boosted Atlassian's SEO).

Heck, even now, you can check out the public Jira accounts for Spring Framework or Apache projects.

Compare that to Fogbugz which still doesn't allow public and/or free open source accounts. In fact, to this date I have yet to see a Fogbugz installation that was not my own trial account.

When it comes to choose an issue tracker, will you choose the one you know is used by large projects and one you have already used or an unknown one?

2. Not a focused product

Fogbugz also tries to be a Wiki AND a Support help desk tool.

These are 2 large categories that deserve full blown products of their own. Hence Atlassian's Confluence and Zendesk/Intercom. (While Atlassian has Jira Service Desk, it is a much more recent product with a lot of resources behind it).

3. Wasabi

This was a huge blunder. Fogcreek invented their own language. This meant they couldn't use all of the ecosystem and amazing tooling around Java, which Atlassian was able to take advantage of. Not to mention they had to spend enormous resources maintaining their own compilers and editors, and of course all new hires had to be trained on Wasabi.

I'd bet this is one of the prime reasons why Fogbugz moved so slowly compared to Jira.

Splolsky has mentioned that the reason for sticking with it was that the time taken to rewrite Fogbugz would be unreasonable. This might indeed be correct and goes to show how technical decisions taken at the beginning of a project can severely impact it down the road.

4. No partner ecosystem

Being written in Wasabi meant that for a long time Fogbugz wasn't able to offer enough APIs for people to write plugins.

Atlassian, on the other hand, went all out on creating Jira as a platform. They even allowed people to download the full source code and managed to generate an ecosystem with tons and tons of plugins.

While most of these plugins didn't offer much in terms of functionality, for the person making a decision, it definitely helped to tip the scales in Jira's favor.

5. No real 'starter' license

Fogbugz's free license only allows 2 users, making it basically useless.

Jira's starter edition allows 10 users, making it actually usable as a starting tier. While they do charge a token $10 instead of Free, that is to keep non-serious users away and also established it as real 'paid' tier.

To compare, Fogbugz's 10 user edition currently costs $100/month.

A full order of magnitude costlier! At this much price difference, it is very, very tough for startups to chose Fogbugz over Jira at this tier.

6. Product too basic

Most of the above wouldn't matter if Fogbugz was leagues beyond Jira, product-wise. However, that was not the case.

Fogbugz did do a few things well though. It was super easy to create bugs. And it also supported hierarchical sub-tasks, something which Jira still doesn't fully support.

However, anything beyond the basics and you start seeing the holes in the features.

For example, the main form of navigation was through this bar at the top.

While it is a good general purpose way to create queries, it is too low level. I remember going mad trying to create queries using that bar in Fogbugz, for something that was only a click or two away in Jira. Not to mention the insane amount of context switching required. It felt like instead of a bug tracking product, I was using a 'visual sql query builder'.

Compare that to Jira:

Want to see what the current state of next milestone is, including how many open vs closed bugs? 2 clicks.

Want to see what activity has recently taken place? News feed on the project dashboard shows instantly.

I could go on and on.

While Jira also included a full custom query language (JQL) to create advanced queries, that was not the primary interface to the product.

7. Not acknowledging competition

Atlassian's website always had webpages comparing them to other bug trackers (including Fogbugz) and had good instructions on people wanting to switch. Nothing like this for Fogbugz.

Spolsky has frequently mentioned 'Ignore the competition'. Not sure if that works unless you are the market leader by a (very) wide margin. It certainly didn't for them.

Things that didnt matter###

1. Content marketing

Joel Spolsky's blog was possibly the most read blog out there. It is the perfect form of 'content marketing'. However this proves that marketing alone cannot solve all the other problems. Note that the above list does not mention Atlassian's marketing spend as a factor. If pure marketing was the only reason for success, Atlassian would never stand a chance to even get started, since Spolsky was huge back then.

The emphasis on testimonials and case studies on the Altassian website and the plethora of seo friendly public open-source licenses automatically did the job for them.

2. Sales Team

Neither companies had them.

Conclusion###

Atlassian is a fantastic, awe inspiring story of how a bootstrapped, late to market company became a unicorn. It is one of my favorite stories.