Business Insider spoke to Atlassian co-founder Mike Cannon-Brookes this week to understand how he sees Australia’s tech sector. It covered a lot of ground, from mental health and education to renewable energy and government policy.
The interview came off the back of the possibility the Australian Technology Park would be sold off and Sydney would lose one of its only dedicated tech hubs.
Cannon-Brookes, an adjunct professor of computer science at the University of New South Wales, is a passionate, ballsy exec with strong opinions, so Business Insider has decided to publish the transcript from the interview because it makes for interesting reading. It’s been slightly edited for clarity and length.
Business Insider: Let’s talk about the idea that tech execs like yourself would have to step in to save spaces like the Australian Technology Park in Sydney and that it’s up to you guys to build a tech industry. Do you think the government is showing a lack of leadership when it comes to economic transition and supporting new industry?
Mike Cannon-Brookes: We’ve met a whole series of folks from the government at all levels and I actually genuinely think they’re trying to do the right thing, they’re trying to work out how to do it and how to make sense.
At a high level, they’re genuinely concerned about how to get more “knowledge worker jobs”, for want of a better term, in the economy.
They realise that that’s got to be a growing sector and we’ve got to compete for those knowledge worker jobs with all sorts of other places and they’re trying to work out how we do that and how we put in place programs to do all of that sort of thing.
Part of our pitch to them when they come and ask about that is we don’t have – in Sydney, which is where the ATP came in in the first place – we don’t have a physical manifestation of any form of multilevel government commitment to the technology industry. By that I mean, I don’t think you just get a space and magic happens. What I do think is people gravitate to spaces as a manifestation of commitment.
For example, the manifestation of the Australian Technology Park, which is named gloriously but isn’t really, I don’t think anyone would actually tell you that that’s exactly what it is right now. It’s what it could be. But if it disappeared it would be a huge manifestation of it going backwards in terms of supporting the technology industry and future of knowledge workers and getting great, high-paying jobs in New South Wales.
It going away would be a very bad thing, in name and in everything else. Already the state that it is in, it’s probably not great. Already, people in the technology industry, they’re like , “Yeah, I’ve been there for an event or two but I’m not going to move there”.
We’ve gone to everybody and said why wouldn’t you move there? And they’re like ‘Well, there’s no life’.
So we’re like let’s put a plan together to go fix that. So that’s what we’ve been trying to do and have got a massive amount of support. In the last 72 hours there’s been a massive number of people who have come back and said “Man I’m in, I’ll move 100 people, 150 people”, so it’s been great.
There’s certainly huge interest in creating a location with density of technology teams and products. Everything from startups and incubators to venture capitalists to big, growth firms like ourselves to multinational outposts. A whole lot of multinationals have reached out to say ‘Hey I’d love to put our team in there close to everyone else’.
That would be great for the technology industry, and great for Sydney.
To the point that there’s various governments, from federal to state and even the City of Sydney who are trying to figure out what is the way to attract the technology industry: how do we grow that? How do we show our commitment to it?
When you show the cities and municipalities which are doing this well, like London, Berlin and New York, it’s a whole series of things. It’s not just about getting physical space, but a lot of it starts with a physical space as a key plant of that platform. Be it Roosevelt Island in New York, Silicon Roundabout or Shoreditch in London. Where they say, here’s the place we’re going to start at seed and spread around. Then we’ve got to come in with policies around employment or immigration or whatever it is.
It just seemed to me that it would be a huge shame if we lost that opportunity in Sydney.
BI: There’s a whole ecosystem around tech which goes with improving the economy, including education and taxation policy. When it comes to policy, what do you think needs to be done in Australia? If you were prime minister for a day…
MCB: If I was prime minister for a day a whole bunch of stuff would change, it’d be a big day.
Firstly, we need it to be a part of our brand as a city in Sydney, and as a country, which in Australia, it’s not.
That brand is important. When people think about Sydney, they think about beaches, the Opera House, tourism, they may think about sport or cricket but they don’t think about sophisticated business, they don’t think about technology.
I sit surrounded by gleaming, glass towers but it’s not part of the brand of Sydney. That is one thing that needs to change from a New South Wales and Sydney perspective.
That brand has to be backed up with action. I think one of the big problems, I think the biggest problem, is talent in the long term. It’s how do we keep it, how do we grow it and how do we import it?
Realistically, in the short term, it’s importing it and in the long term, it’s about growing it. It’s about more people doing technology degrees.
High school education, I would change immediately if I was prime minister for a day. It’s ludicrous. Don’t get me started on that.
Technology education in primary and high school is going to be one of our biggest fails as a country in 20 years time if we don’t fix it and it may already be too late if we don’t move very fast.
If you look at what other countries are doing, we’re miles and miles behind and I think it’s as critical as maths or English to every single job that’s going to be done in the economy in 20 years time and education takes a long time to flow through.
In the short term, it’s about importing. The City of Sydney has a startup action plan. The plan, it’s ok. The problem is the council can only do so much, they don’t control education policy. Within the bounds of what they can do, they’ve tried to put that in the plan.
One of the things that’s interesting is if you look at the pages on London and Berlin, we should be ashamed of what we’re doing as a city and as a country. If you look at how many things England and London are doing to try and attract these sorts of jobs, it’s scary. It’s everything from education to importing of talent to promoting the startup sector. We’re miles away from all of that.
All the way through to having a physical manifestation of that commitment in terms of where people would go and having that, creating the density for the talent to bounce off each other.
BI: While I’m probably opening up a can of worms here, as a parent yourself, are you already teaching your kids to code?
MCB: Mine are a little bit young for that. They’re learning to spell their names, so it’s a little bit too soon.
But certainly, yeah, that sort of stuff is very important.
[There’s an] idea that we want to churn out programmers or that it’s about learning to code.
I think what Code.org does very well is explain to people that learning to code is a bit like understanding the insides of a technology system and that helps you understand so much about life and improving life in any job that you’re going to do.
We don’t teach people English because they’re all going to become poets. We teach them English because it’s important for communication and writing and everything else.
I think that’s what gets missed quite a lot.
My analogy is accounting is taught in so many different other degrees because the understanding of what a profit and loss is, what a balance sheet is, debits and credits and how that all works to go to the underpinning of businesses generally is really important. Whether you do law, whether you do commerce, whether you do computing. I think developers should do some accounting because it’s important for them to understand how business works so they can build better systems for it.
I think the same thing about technology education in terms of accountants should come out understanding technology nowadays. Lawyers should come out understanding technology. They do zero units of anything technical in their degree and I think that’s the biggest problem.
Technology is already the largest industry in the world, it passed finance about three years ago and it’s only opening up a bigger gap.
There are some estimates that 50% of jobs will be in or around the technology industry in 20 years time. 50% of jobs. We are so unprepared as a country and an economy for that world, it’s crazy. It’s going to take some change and some action which is what we’re trying to kick start.
BI: Is the federal government missing an opportunity?
MCB: I think the federal government has its head so deep in the sand that it couldn’t see the opportunity.
I don’t think they’re missing it, I think they’ve completely missed it and they’re determined to avoid it in some way, shape or form.
I don’t pretend to understand why. But they are determined to avoid it in any shape or form for I think, the huge detriment of the country in 10 or 20 years time.
The way that technology interacts with lives today, and that’s partly the cloud, that’s partly mobile, I hate the term, but these mega trends that are clearly pervading people’s lives.
Take an Uber now, we just think about it. It’s this fantastical service which I just pull out on our phones and just tap it and here comes a car, I get in and I get out of it. I don’t think about the massive amount of things that happen there and I certainly don’t think about all the profits which are going to California and not New South Wales from doing that. But it’s this truly fantastic product which couldn’t have existed 10 years ago.
That disruption is a time period and what I worry about for Australia, and survey after survey comes out and says in one survey we were technologically stalled, in another we just dropped down the latest startup index. As a country we’ve got to see it as a fundamental challenge to our standard of living for our kids in 20 years time – as a key piece of the economy and the jobs that we’re going to have.
If we’re not creating technology, not all of it, if we’re not creating 1% of technology, we’re not going to have 1% of the world’s economy.
There’s going to come to this problem where we’re purely consumers of technology. We’re downloading all of these great iPhone games and we’re riding in Ubers and we’re using the Internet and we’re Googling stuff and we’re all on Facebook. We’re entire consumers of technology and as a country we’re producing none of it, it will be very hard to maintain our economic standing and thus our standard of living.
I think that the federal government does not get that one iota. And if they do get it, they’re determined not to do anything about it.
Don’t get me started on energy.
BI: Google has released their solar project, Sunroof…
MCB: We should be embracing that. We’re in the top 10 sunniest countries in the world.
In four or five years time it will be cheaper to produce solar energy then any other form of energy. Cheaper. And we just can’t put those two things together to save our lives. It’s criminal.
I know we’ve got a lot of coal and that’s wonderful but we’re going to run out of coal soon enough. Either we’re going to stop digging it out of the ground or it’s going to become something that nobody wants because it’s more expensive.
When it becomes more expensive to put a coal power plant together then it does to put solar panels, we’re going to stop selling as much coal as we do pretty quickly. We should be at the forefront of solar. UNSW has one of the best photovotayics schools in the world and we can’t seem to turn that into economic gains for the country.
It’s very sad.
BI: The one thing that Australia, and New South Wales in particular, is very good at is financial services. We’ve got some of the strongest banks in the world and what we’re starting to see now is this growth of fintech.
I know you’re an investor in Tyro. What’s your take on what’s happening in fintech at the moment? How do you see all of this playing out?
MCB: Fintech is great for Australia. I think we do have a very strong banking strain of the economy. I would argue we have too strong a banking strain for the economy which is why fintech should be so important to us.
The cost of banking in Australia is the largest in the OECD. The cost of banking services to every single member of our population is higher then any other country, I believe, in the world and it’s by a significant margin.
In terms of our reliance on banking and financial services, it’s a huge export market for us and that’s great. And I think fintech is a natural thing, with Tyro’s tech hub, Stone & Chalk’s tech hub, we’ve got a bunch of fintech startups and a bunch of people trying to do stuff, that is a potential area where we could take some world excellence.
But then it’s up to the government and the RBA to enable that to grow. Banking is a very difficult area because there’s obvious consumer protections and various things that need to be there. Risk management and those sorts of things, when you get that in the wrong direction, people get really hurt so you’ve got to be very careful about how you go about that.
But it’s certainly an area where…we should play on some of those strengths, certainly.
BI: With Google, Apple, PayPal and Australia’s big four banks all looking at getting in on the fintech space, is it going to be possible for a small company to break through? What does that look like?
MCB: I have to believe it’s possible for small companies to break through. I think the big banks are well aware of the potential disruptions to themselves and that’s great. And how one deals with those disruptions is where life gets interesting.
Do you break and try and disrupt yourself with technology which traditionally large companies are not very good at or do you go to regulation and regulators to try and suppress that innovation or do the innovators take over the kingdom? It’s probably some combination of all of the above. Obviously in finance the regulations are very necessary because of the impact to people’s lives. If you lost your savings because of some app you were using on your phone went rogue, that’s not cool. Those are important but then again, as a country, we’ve got to make sure we have the right regime to allow that innovation to flourish. It’s about appropriate risks.
BI: I’d now like to ask you about your views on a few big tech companies. With Twitter’s user growth slowing and execs admitting there are problems with the product, what do you think of Twitter at the moment?
MCB: It’s a very challenging thing. I always think of Twitter at a high level. Put against Facebook, they must feel bad but in reality they’ve done really well.
They’ve got a multibillion dollar revenue run rate. Take that out, say it’s a 10-year old company and everyone would say it’s one of the most amazing companies in the world. Put it next to Facebook and suddenly it feels bad.
The tech press is notorious for these sorts of comparisons so I’m sure that with Twitter as a service, I would agree with Jack that as a product it probably hasn’t gone in the right direction, so it hasn’t been able to mature.
Facebook has been very aggressive maturing its product so it’s been able to grow by continuing to make decisions. This is the hardest part about product philosophy generally … you need to annoy some users to improve the world for other users and potential new users. It’s a very difficult thing to do continually and I think Twitter can do that more. What they really have which is important is the real-time nature of the connections.
It’s always been more public than Facebook which is good for some and bad for others. The challenge is clearly that a lot of people don’t understand why they would use Twitter, why they would tweet stuff, it doesn’t make sense to them. They understand why they would share a baby picture on Facebook, they don’t understand why you would just randomly yell to the world about something.
Some people get it, some people don’t. It’s a complicated product, it’s a challenging business problem for them to solve, there’s no doubt about that. But they’ve built something pretty great that I don’t think they get credit for.
It could be greater. It’s a difficult thing for the tech press because they’re the ones who understand it so they’re like, ‘Why don’t you guys get it together?’
The tech press love Twitter because they get real-time headlines of stuff and they can tweet things and read curated feeds of everybody and can process large amounts of information. It’s easy for them and they get it. That’s not your everyday person and I think that’s the challenge that Twitter has. Periscope is leveraging the real time and I think that makes a lot of sense. But how do they go from here is challenging. I wish them the best of luck.
BI: What’s your take on Google’s massive reorganisation?
MCB: Ballsy, I love it. It’s super ballsy.
Find me another company that’s worth $440 billion – well, there aren’t many of those full stop – that does that sort of a massive reorganisation in that space is pretty incredible and I don’t pretend to understand the reasons behind it necessarily, but I’m certainly watching it.
Whenever you see those big companies take risks and innovate, push and continue to change at speed, that’s really, really, really hard to do.
Facebook and Google, they’re both doing a very good job at that and that’s incredibly difficult. I think it’s wonderful that they’re tackling some of these big problems. I think I’m confused as the rest of the world as to how it all fits together or why it all fits together.
To be honest, if you’re an investor and you’re backing Larry and crew to come up with some crazy stuff that will change the world, as long as you understand that’s what you’re backing…
I think what they’ve done with Alphabet probably makes it a bit clearer that it’s a fantastic business that’s a money-printing machine for search and you’ve got all this other crazy stuff that may or may not be money-printing machines in the future, from self-driving cars to mosquito curing malaria to life extension or what ever else. All this crazy stuff is in a big box and you are investing in those boxes and now it’s a bit clearer that that’s what you’re investing in and I think they got a big bump in the market.
The bull case is now people really understand all the things that they’ve got in those boxes.
Why they split things out is really interesting and what they put inside Google, like Android, and what they put outside Google, like Nest. The bull case is people understand that now and have prescribed it more value which is why it went up.
The bear case is that they believe that all that other stuff is going to get spun off into separate companies. You’ll have to ask a financial analyst which of those two cases is more likely to happen.
But I give them huge credit to be ballsy enough to make those changes because that’s got to be hard – the bigger the company is the harder it is to do that sort of stuff. It’s one of the advantages of having founders still in control and be able to make those decisions and focus on the long term, not the short term. There’s definitely lessons in there.
BI: Are you taking inspiration from that at Atlassian at the moment?
MCB: We’ll make sure we’ll keep making ballsy decisions and focus on the long term, no the short term. We’ve always been very long-term focused and we’ll make sure that we’ll keep doing that.
BI: Mental health in the tech space is something we’ve been looking at. Talk to me a bit more about that subject. Why do you think it’s important to have an open conversation about mental health in the industry? You’re at the top of your game. You’ve been through the highs and the lows of building out a tech company; what have you seen along your journey?
MCB: I think it’s a big issue. I’ve seen a lot of things. It’s not something I pretend to understand but I acknowledge at a high level that it’s a huge problem and it’s a problem that people don’t like to think about. Which is always a dangerous thing because when people run into that problem, (they) are even less likely to talk about it share their experiences with everyone else.
Whenever you see a startup founder write about the dark times they’ve been through and how hard it was and everything else, I think the value of that to other startup founders is that they realise they’re not alone in this. The more we don’t talk about it, the more it’s seen as something shameful or something bad. Those people become even more isolated and that leads to very bad outcomes, potentially.
I do think it’s a big issue and something we should be talking more about as an industry. I think one of the interesting things is the pace that we move at in technology, it can potentially, maybe, exacerbate the speed of change – the highs get higher and the lows get lower and it all happens faster and any sort of … it can pull things to extremes very quickly, which is a part of the danger.
I think the tech press, I don’t want to vilify them, but you read a hell of a lot about things that look glorious on the outside when in reality, on the inside, it’s a mess.
The tech PR machine wants to talk about fundraising and selling and IPOs. For a lot of people, companies grow and then they stall and then they grow and then they stall, then they shrink, then they grow and there’s days when you don’t know what you’re doing and days when you do know what you’re doing. It’s very easy to look at the press and if you’re in the industry then you read a lot of press. Where it looks like everybody else is kicking arse but me, but that might not actually be the case.
Having those conversations and generally understanding that it’s never quite as rosey as it seems. Even a lot of acquisitions that you read about are under duress and it’s a bad thing. But it’s a way to save face for a dying company, far from all of them , but definitely a lot of them. And then you read these press releases and it’s total bullshit. It’s a great outcome for everybody and all this sort of stuff and it’s not the case.
It’s a high pressure, difficult thing to do at times and if you combine that with being lonely and going through change, it can be a dangerous cocktail of emotions or feelings.
Even I don’t know how to talk about it, but I understand the problem.
Mental health is a difficult issue full stop. Obviously – and my sister is a psychologist – it’s a hard issue on a whole bunch of levels for people to talk about. In an industry, somehow tech makes that even harder for people and there can be some potentially bad outcomes.
BI: And finally, I know you are probably sick of this question but: Do you have a time frame you’re looking at to IPO?
I couldn’t tell you whether I did, even if I do.