Atlassian's Astounding Ascendency

Scaling to a $3.7B SaaS powerhouse from Jira to Loom in the Product-Led way!

Nov 15, 2023

"The best way to predict the future is to create it." — Mike Cannon-Brookes, co-founder of Atlassian.

Hi Everyone,

I'm Arpita, the latest addition to the Growthstore family, bringing you some fresh insights from our space. So, I'm chatting with our founders, Ramesh and Sri, and they throw this challenge at me—dive into the growth stories of big SaaS players and write about them.

Now, here's the fun part. I get back home, start thinking about which company to pick from Ramesh's list, and, well, it's like deciding your go-to pizza topping. No biggie. I glance at the list, casually numbering them—one, two, three... you get the drift.

Cut to a coffee shop scene, where, I must say, the caffeine vibes☕️, led me to overhear tech enthusiasts deep in conversation about Atlassian. What piqued my interest? Well, they were casually dropping the bombshell that Atlassian has a presence on not one but two planets—yes, the actual planets, including our neighboring red one, Mars. Intriguing, right? And guess what? Atlassian was right there on Ramesh's list.

So, inspired by this coffee shop chat and my eavesdropping abilities 😏, I've dug into Atlassian's story. This blog isn't just about their success—it's about how they were an inspiration for many companies, including Highperformr.ai in venturing down the Product Led Growth path.

Ever wondered how your favorite apps and tools came to be? You know, the ones that help you work smarter, collaborate better, and make life a little easier? Well, that’s the whole point behind our growth stories series!

These stories that we are gonna narrate are like your backstage pass to the journeys of some amazing companies. We're talking about the big names like Atlassian, Calendly, HubSpot, Notion, and Grammarly — the superheroes of the tech world.

So, first up on my list, Atlassian it is.

Let's dive in.

A company rooted in Sydney that believes in the power of teamwork, Atlassian boasts over 10,000 employees spread across 13 countries, assisting more than 260,000 customers worldwide. That's a significant display of teamwork, isn't it? Plus, being based in Australia and catering to the largest software market—the USA—is undeniably cool and can be considered some serious business, right?

Adding to this inspiration, Atlassian’s success story has become a source of motivation for many Indian companies, actively contributing to the vision of making India the SaaS capital of the world.

But it's not just about the numbers; it's about the heart too. Atlassian has donated a whopping $132 million to support communities, and they've created a hub where creative minds have developed over 6,000 apps. Oh, and here's something fascinating — as mentioned earlier, their software is actually on other planets! Yes, Mars is that other planet.

NASA's Jet Propulsion Laboratory (JPL) relies on Atlassian products to create software for planning space missions and analyzing data from satellites and Mars rovers.

Now, as I kick off my research, the first thing I wanted to learn is: "Atlassian – what's up with that name?" Well, it's a cool mashup inspired by Greek mythology, blending the mighty Atlas, the guy who held up the heavens, with a dash of tech brilliance. Clever, right?

So, no fancy jargon, just real stories told in a way everyone can understand. Ready?

Atlassian’s 5 point playbook

1. Masters in product-centric growth

Atlassian's secret lies in building products so fantastic that people couldn't help but talk about them. Their self-service model, user-friendly pricing, and reliance on product advocates instead of a traditional sales team kept their growth consistent. By empowering users to help themselves, Atlassian found a cost-effective path to scaling up.

2. Early launches and agile adaptation

Against the norm, Atlassian rolled out Confluence, their second product, in just their second year, even with the success of their first, Jira. This move taught them vital lessons in cross-merchandising, pricing, and customer needs. Atlassian's ability to adapt, even divesting HipChat to Slack, shows their dedication to market demands over internal preferences.

3. Product-led growth with Partner-led growth

Rather than building a massive in-house sales team, Atlassian relied on a network of channel partners to reach enterprise customers. This approach allowed them to provide personalized support to big companies without the complexity of managing a vast internal sales team.

4. Land and expand

Atlassian's strategy? Focus on self-service and adopt a "land and expand" approach. Even large enterprises often started small with Atlassian, spending less than $1,000 a month for about 10 to 20 users. With this Atlassian embraced the path of gradually expanding its services. By delaying a direct enterprise push, they concentrated on strengthening their cloud services for long-term sustainability before targeting larger clients.

5. Principled persistence

Atlassian stuck to their principles, even if it meant losing a few customers. Not many companies refuse price negotiations if that means losing customers. Do they? This commitment to first-principles thinking set Atlassian apart, creating a unique company culture centered on innovation, adaptability, and customer satisfaction.

These innovative strategies not only set Atlassian apart but also form the core of their thriving and unique company culture.

What’s a story without its heroes!

Every story, no matter how insignificant, needs its heroes. Atlassian’s story is far from being insignificant. In that case, how can we do this without talking about the heroes.

In the heart of Atlassian's narrative, two extraordinary souls emerge: Mike Cannon-Brookes and Scott Farquhar.

(Left: Scott Farquhar; Right: Mike Cannon-Brookes)

Born to global banking executive parents, Mike Cannon might be just like a typical Sydney dad, working in IT, but with a net worth exceeding $30 billion, striving to change the world.

Scott Farquhar embodies the quintessential entrepreneur spirit. Hailing from a humble working-class family in Western Sydney, his fascination with computers sparked at an early age when his parents gifted him a second-hand computer. At the time, computer programming was task #2 for him. His first task was to make the computer work and that took about a year.

Their worlds collided in 1998 when Mike and Scott found themselves in the same scholarship course.

Mike sent an email pitch to a number of folks in the university and his email read: “Before you all take grad jobs, do you want to do something crazy and try our own thing?”.

Scott was the only one who replied, keeping it simple with a "I'm in."

This is how they got together. Both of them had no interest in taking up IT jobs and this got them closer. With audacity and a mere $10,000 from credit cards, they bootstrapped Atlassian, determined to make their mark. Their goals were modest yet profound: no suits and an annual income exceeding 48,500 Australian Dollars -USD 35,000 a sum comparable to what their peers were offered by prestigious banks and accounting firms.

Their aim was clear: Just sell one software item every week, and that would be enough for them to get by.

Drawing a parallel

What makes this story even more intriguing is the interesting link I see with our own founders, Ramesh and Sri. Let me draw the lines for you. Sri, much like Mike, played a pivotal role in building a business from the ground up at Freshworks. He was instrumental in building the sales and marketing business unit, while Ramesh partnered with him for demand generation for the company.

The connection deepens when Sri, seemingly out of the blue, asks:
”Hey Ramesh, would you be interested in partnering with me to create a $100 million company?”

And guess what?
Ramesh, like Scott, simply said 'Yes.'

Do you see the resonance here?

And that’s how Highperformr.ai came into existence.

Now, back to our Atlassian heroes...

Talking about organizational dynamics, I must say, division of labor is not just about expertise but also about finding joy in what you do. In this context, Engineering, product, and design found their direct connection to Mike. On the other side, Scott takes charge of legal, human resources, finance, sales, marketing, and customer support – playfully referring to himself as the "sort of the grandparents." So, Mike handles the challenges and pressures while Scott brings a touch of wisdom and experience.

As I was learning about their approach to responsibilities, I discovered a philosophy that goes beyond mere skill sets. According to Mike, it's crucial to have individuals who not only excel in their tasks but also find satisfaction in them. This can help avoid situations where someone is skilled but dislikes the job or vice versa.

Moving on, let me share a fascinating tidbit about each of these founders because what's a story without intriguing details?

Mike’s Imposter Syndrome

This haunted Mike. He constantly faced doubts and fears, feeling out of his depth at times. But this very struggle became the catalyst for his success. He channeled his uncertainties into a force for good, propelling him toward greatness.

"The most successful people don’t question themselves, but they do heavily and regularly question their knowledge.” - Mike Cannon-Brookes.

Now, Scott's story is a classic tale of destiny's twist. Imagine missing a letter offering you a spot at a top military institution. Scott's life-changing "sliding doors" moment came when that letter arrived late. This made him choose university over military school. Fate intervened, guiding him to team up with Mike.

Atlassian's tale is like the ultimate adventure of chasing dreams, smashing norms, and rolling with life's crazy surprises. Starting from pretty average beginnings and ending up creating this massive tech kingdom, Mike and Scott basically show us that following your passion, having awesome friendships, and maybe catching a bit of luck can transform regular lives into something insanely awesome.

Here's to these accidental billionaires who didn't just dream big but still keep it real, rocking those everyday T-shirts and baseball caps just like the rest of us. 🍻

From Jira's Debut to a $3.70 Billion Triumph

Atlassian burst onto the scene in 2002, by introducing its star product, Jira. Jira? It’s like the Iron Man suit of issue-tracking software, empowering companies to combat bugs and navigate agile projects with superhero finesse.

In 2004, they released Confluence onto the world. Confluence? It's the perfect teamwork platform, letting users collaborate, share docs, and create content like a dream team.

With these killer products, Mike Cannon-Brookes and Scott Farquhar scooped up the Entrepreneur of the Year title in 2006. Oh, and how can we forget this: they were self-funded and profitable from day one, opting for a unique path while other companies were chasing investors and funding.

Now, here's where the magic really happened. Atlassian's genius move? Snatching up other cool products and weaving them seamlessly into their family. They didn't stop there—cue the venture capital moment in 2010, raising a whopping $80 million and acquiring Bitbucket, a code collaboration service.

(Image courtesy: atlassian.com)

They launched their official website, offering plug-ins galore for their products. Then came the big shift in 2014, a new name—Atlassian Corporation Plc—and a shiny office in London, while their heart remained in Sydney.

And then, 2015 marked a major milestone when they went public with a bang, making a splash on the NASDAQ stock exchange with a staggering market cap of $6.1 billion.

It didn't end there for Atlassian. They didn't just stop at Jira and Confluence. They spread their wings, acquiring gems like Trello for $579 million and OpsGenie for $411 million. And oh, they didn't miss a beat, grabbing Agilecraft, Code Barrel, Halp, Mindville, and even Chartio to enhance their toolkit. They haven't settled yet—recently, they acquired Loom for slightly shy of a billion dollars.

We feel the best way to sum up their journey to success is by talking about their revenue growth. Atlassian didn't just conquer the tech world—they also crushed it on the revenue front! Back in the day, before they went public in 2015, they were already making waves. In 2011, their revenue stood tall at $136 million. Come 2013, it jumped to $192 million, and by 2014, it soared to $287 million. But here's where it gets mind-blowing: in 2015, their revenue skyrocketed to a jaw-dropping $428 million.

Flash forward to 2022, Atlassian hit a whopping revenue of $3.18 billion, making 2021's $2.43 billion look like a warm-up. And if you're wondering about their latest financial reports, get this: their current revenue is a staggering $3.70 billion. That's not just growth; that's a revenue explosion, proving that Atlassian isn't just a tech giant—it's a financial powerhouse.

Atlassian’s bottoms-up revenue revolution

In a world dominated by tech giants like Microsoft, Oracle, and IBM, where traditional sales involve negotiations, long cycles, and exhaustive feature checklists, Atlassian stood apart. The organization boasts over 200,000+ customers, achieved without conforming to the conventional sales processes.

At the time of their IPO, Atlassian allocated only 19% of their revenue to sales and marketing, a fraction of what other companies of their stature spent. Instead of pumping massive amounts into sales, they honed a unique approach: a high-velocity, bottom-up distribution model cultivated meticulously over a decade.

Get the lowdown on Atlassian's current marketing and sales spending straight from the source - Cameron Deatsch, Chief Revenue Officer, Atlassian. He says: "We keep things easy, running sales and marketing at about 15 to 16% of revenue. That leaves us enough room to invest a solid 35% to 40% back into R&D, all while sticking to our self-serve approach."

Atlassian's journey began with a remarkable product, a solution so compelling that users couldn't help but talk about it. Their strategic insight lay in realizing that products could sell themselves when coupled with a great product, an enthusiastic user base, and seamless feedback loops between product, marketing, and users. This setup propelled their high-efficiency distribution flywheel, driving the company's growth.

(Image courtesy: intercom.com)

The modern B2B buyer behaves differently, armed with ample information about products and companies. Atlassian adapted to this shift by focusing on a low-touch sales model. Buyers, already well-informed, explore free trials and assess product value independently. Atlassian's strategy was to facilitate this exploration, ensuring buyers could swiftly realize the product's benefits without intrusive sales calls.

(Atlassian’s distribution flywheel Image Courtesy: intercom.com)

Definition of product-led growth as I see it:

Unlike companies that focus on selling and guiding buyers through a sales process, product-led companies do things differently. They give buyers direct access to the product so they can experience its benefits firsthand. When users see how valuable the product is, upgrading to a paid plan just makes sense.

This worked for them because, they took one of their first-principles— “don’t f**k the customer” way too seriously.

However, Atlassian's low-touch model doesn't equate to zero interaction. They maintain a balance, offering assistance to complex, large-scale enterprise customers while allowing self-service for others. Their transparent pricing model further streamlines the process, removing cost-related friction points. Unlike many competitors, Atlassian displays pricing openly, ensuring customers can quickly make informed decisions.

“Our customers don’t want to call a salesperson if they don’t have to, they’d much rather be able to find the answers on the website.” - Scott Farquar.

On the other hand, this approach isn't a universal solution. Atlassian's success story is unique to their market and product offerings. We must always bear in mind that there is no one-size-fits-all solution.

What’s a growth journey without AI?

Atlassian Intelligence: Enhancing Atlassian Products with AI Capabilities

Atlassian has been at the forefront of leveraging machine learning to enhance user experiences across its products. Utilizing AI technologies from OpenAI, Atlassian Intelligence has become an integral part of the Atlassian Cloud products, transforming the way teams collaborate and work efficiently.

One of the key innovations introduced by Atlassian Intelligence is the creation of a virtual team member. It's here to make your work life easier and more efficient. Think of it as that super-smart colleague who always has the answers.

First things first, it understands how teams collaborate. By learning from millions of teams, Atlassian Intelligence gets how service-based and project-based work operates. It uses this knowledge to help your team get things done faster.

The AI-driven virtual teammate, embedded within collaboration tools like Slack and Microsoft Teams, acts as a 24/7 support buddy, answering questions, summarizing activities, and even adapting its tone to suit the situation.

Ever stumbled over company jargon or acronyms? Atlassian Intelligence has a handy dictionary to explain it all. Plus, it understands your questions, whether you're asking about company policies or specific tasks. No tech jargon confusion here!

And guess what? It's multilingual, so language is never a barrier.

This feature set is currently in the early access phase, promising a future where AI-driven collaboration becomes an integral part of every team's workflow.

Speaking of AI, have you explored the 40 microapps that Highperformr.ai has built from the ground up?

Check out Highperformr Tools

Atlassian's latest move!

Meet Loom, your new video teammate!

Big news! Atlassian is joining forces with Loom, a video messaging platform, in a significant $975 million deal. Imagine having a virtual teammate that helps you communicate more effectively, especially in a world where remote work is the norm. Atlassian sees the potential in Loom's 25 million customers and 5 million monthly video conversations.

Atlassian's co-CEO, Mike Cannon-Brookes believes that asynchronous video is the future of team collaboration. With this acquisition, they're betting big on the hybrid and remote work trend. However, opinions are divided – a survey of 1,300 global CEOs revealed that 64% anticipate a full return to the office within the next three years. Yet, Atlassian and Loom are betting on a different future.

What's your take? Will hybrid work continue to shape the future? Atlassian believes so, and with Loom on board, they're ready to revolutionize how teams collaborate!

The PLG way for Highperformr.AI

When it comes to tech giants, Atlassian is famed for its well-executed product-led growth (PLG) strategy. Highperformr.ai is treading a similar path, aiming to blend PLG with the fluency of AI to facilitate businesses in establishing a stronger social presence. Their mission is clear: to assist businesses be socially present at a higher frequency, streamlining social connections, enabling companies to forge a strong social CRM and, ultimately, drive lead generation. Because, in the end, businesses aspire to generate revenue, and the social route is the way forward!

That’s it, folks! I hope you enjoyed reading my first essay at Growthstore.xyz. Personally, I have learned a lot about Atlassian, the PLG Flywheel, and am eagerly anticipating seeing this flywheel take shape at highperformr.ai. So, join me as I keep you updated on all that’s happening around me.

Until next time! 👋