AIB Featured Business Atlassian
Atlassian is big news in the Australian tech sector. Founded in 2002 by friends Scott Farquhar and Mike Cannon-Brookes, the company has gone from its boot-strapping days in a garage to a public listing debut at a huge $8 billion in December 2015. It’s the biggest tech company in Australia, and its founders are each worth around $2 billion Australian dollars.
Farquhar and Cannon-Brookes met at the University of NSW, where they were both studying Science and Information Technology. Inspired by one another and the possibilities in the start-up world, they dropped out of university and took a risk on their own venture. The year was 2002, the duo were 22 years old, and the company took its first breaths in a garage. Initial financing consisted of $10,000 raised by the founders on credit cards. For the first three years, any profits made went straight back into the company, while Farquhar and Cannon-Brookes lived off university scholarship money of $300 a week. Back then, Australia wasn’t on the radar for Silicon Valley, and there weren’t any local venture capitalists willing to invest in a technology product.=
That forced Atlassian to make money right from the beginning. It did so with the release of its first product, the issue-management software Jira. In 2003, it launched Confluence, a content collaboration tool. Despite relying only on Google AdWords and word of mouth to spread the news about its products, Atlassian had an immediate high uptake, and by 2004, two years after the duo began, it had two thousand paying customers. Atlassian were amongst the first companies to harness the power of the Cloud, which allowed them to deliver their products at the fraction of the price their competitors were setting. In 2012, Pando reported that Atlassian had recorded 40 straight quarters of growth, an unbroken growth record since its inception.
Today, Atlassian software is used by all of the world’s top ten software companies, including Microsoft and Oracle, as well as seven of the ten biggest companies in the world, Shell amongst them. It devotes 1% of its revenue to philanthropy, and devotes significant money and effort to creating a great working culture for its staff. Farquhar and Cannon-Brookes are also very conscious that they compete with US companies for the best and brightest in technology staff. In an attempt to counter the Australian brain drain phenomenon, they devote serious time and energy to creating an amazing culture.
“Transparency on steroids” is the term Atlassian uses to describe its work culture. Staff are expected to share their work on the company’s internal wiki, so that everyone can see what their peers are up to and provide feedback where appropriate. It’s a practice that some find nerve wracking, but which the founders believe contributes to a model of ongoing improvement and accountability within teams. Atlassian also encourages staff to work on their own projects, with ‘ShipIt’ days once a quarter when staff do their own thing and then present it to the group. The idea is enticing, and the results have been mutually beneficial, with some ShipIt projects being adopted into the company’s own structures.
There is no sales team within Atlassian. In keeping with its transparency ethos, all pricing and product information is easily accessible on its website, and no discounts or sales cycles are offered. That means that potential customers can see what they need to know without waiting for a sales spiel, and they can trust that the price of the product is the real price, and not a mark-up waiting for a deal. Purchasing is also simple, and installation is quick and painless. Overall, the effect is of a company which is laser-focused on the products, and those products are selling themselves.
With this kind of consistent success in a country not known for its startup culture, it’s little wonder that Cannon-Brookes and Farquhar are held in such high esteem. The duo return the favour, desperately working to avoid moving Atlassian offshore. They are advocates for the fostering of IT skills in primary schools, with an emphasis on encouraging girls and women into the industry and looking to overseas models for inspiration. Far from guarding their patch, Atlassian sees competition within Australia as healthy. “There’s not a critical mass here”, Farquhar says, which makes overseas talent reluctant to move to Australia because, if one job doesn’t work out, there are no other options. “Intellectual property and building the education of our citizens is a renewable resource and I think that’s where we should be investing.” Both Farquhar and Cannon-Brookes devote their own time to building the Australian tech industry, through small venture capital fund Blackbird Ventures, and seed funding and mentoring firm Startmate. Farquhar lectures to MBA students, and Cannon-Brookes is an adjunct professor at the University of NSW.
With three children each and an enormously successful company, one might wonder how the Atlassian duo find time to devote to advocacy and mentoring on top. The answer lies in their passion for giving back to the industry. As Farquhar explains to Business Review Weekly: “I get enjoyment from seeing people succeed”.
This article was written by Tanya Ashworth-Keppel on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources were used to compile this article: Business Insider, Forbes, Pando, Business Review Weekly and Sydney Morning Herald.
Image credit: Sydney Morning Herald