Like a 21st Century Lennon and McCartney, Jobs and Wozniak, or Rogers and Astaire, it’s impossible to separate Scott Farquhar and Mike Cannon-Brookes as one heart and mind at the core of Atlassian’s success. The $US4.4 billion float of the Sydney-based collaboration software group on Wall Street was the most successful tech IPO of 2015. The company’s currently valued at more than $US6 billion.
Atlassian has raised the bar for what success in Australian technology looks like, from sharing the internal insight for running the 300 teams Atlassian has working on the company’s collaboration tools, to its pledge to invest 1% of the company in philanthropic ventures, and its five values, which include “Open company: no bullshit”, and “Don’t #@!% the customer”.
Their company is all about helping teams to work more effectively together, with its products including JIRA, now a global standard for technology project management, and HipChat, a team communication tool. This week, the company announced it will be making HipChat available for Amazon’s Echo family of intelligent speakers. It will be the first chat app on the platform and adds a new dynamic to workplace chat applications: you no longer need to be looking at a screen to communicate.
Farquhar and Cannon-Brookes were an obvious 1 and 2 for Business Insider’s inaugural list of The Coolest 100 People in Australian Tech. They took some time to talk to us recently on how they work together, who their business heroes are, and the future of teamwork in a globalised world.
The following transcript of our conversations, starting with Mike Cannon-Brookes, has been lightly edited for length and clarity.
Business Insider: You’ve been working together for more than a decade. How has relationship that evolved over time?
Mike Cannon-Brookes: Like any relationship, it goes through ups and downs. Obviously we’ve had a lot more ups than downs and it revolves around trust and openness and honesty. We’re both pretty thick-skinned so the honesty is pretty high, which is good. We learn pretty quickly as a pair. We spend a lot less time hanging out now than we used to, just through virtue of having kids and various other things, [so there’s less time together] outside of the office that we hang out, but we still do.
BI: How often do you communicate? And what’s your chosen line of communication?
MCB: We’d be in touch by chat multiple times an hour. There’s a high frequency of communications even when we’re overseas we make sure that the high frequency of communication is maintained… Obviously we share a little complex of meeting rooms here. We have desks next to each other and our EAs sit next to each other so the spontaneous bumping into each other time is high during the day – by design.
BI: A lot of partnerships where there’s two people, they kind of have complementary skills. You have the cliché good cop, bad cop kind of relationship; are there complementary characteristics of you both that you think helps make the partnership successful?
MCB: He’s probably the better one to ask about all the stats and figures. I’ve always said that I think the advantage we have is we have heavily overlapping but not completely intersecting sets of skills. Whether that’s 60% or 80% I don’t know, there’s some significant overlaps so we don’t have massive disagreements about things because we’re completely on opposite poles, if that makes sense.
At the same time, while we can do each other’s jobs and have both at different times run the whole business so we both have the breadth of experience and skill necessary to do it, we still have different viewpoints that add value over time.
If we’re 100% the same person then you’d only need one, not two. It’s that blend just when the two, I find it hard to describe it. It’s sort of like 60% overlapping. If you’re 100% overlapped, you’d only need one person. If you’re 0% overlapped, you’d have a lot of tension.
BI: One of the things about the success you’ve achieved is that a lot of people look to you guys for your guidance and opinions on a range of things. But I wanted to ask who your beacons are – who are the people that you look up to?
MCB: Sure. I’ve always looked to Jeff Bezos in quite some detail. The way Amazon’s grown and changed is phenomenal. He’s both misunderstood and I think under-appreciated in terms of the genius of what they’ve done there culturally and all sorts of different aspects. Intuit [founder Scott] Cook specifically – Intuit is interesting because they’re a huge success as a company but at the same time, they’ve been around multiple decades in tech which is extremely rare. They’ve beaten off Microsoft in the 80s and they were pretty much the only company to do that so if you look at it from the abstract nature of things, surviving three decades in tech, or more, is pretty incredible. You need to have a culture of reinvention and a culture of creation and you need to also have solid values and employees that are with you for the long term.
BI: What about at a personal level – are there any sort of people that you look at in terms of their personal philosophy, with their relationships with other people?
MCB: Again, Bezos is great. He fundamentally believes that organizations are organic. That means there’s a lot of competition and a lot of creation and death going on at all times, and he structures things such as that happens. You think about an organism, it’s growing constantly in various uncontrolled ways, in various different forms. There has to be contracts between sales or systems, such that it works and it’s not just complete chaos. It’s balancing that chaos and structure that’s quite hard in a modern day business. Classically you have a hierarchical organization, [but that] doesn’t work very well in a fast moving organization. Industrial organization is built for factories and controlled, not built for speed.
Which leads me nicely onto your business and unlocking the potential of teams. What do you think are the really salient, persistent challenges for teams and how are you looking at tackling them over the coming years?
Well with teamwork, it’s a great area to focus on because it’s really hard and it’s not going away. I think about the nature of modern teams, again, the modern industrial workplace wasn’t really designed for teams. It was more designed for individual performance and machine performance and so we really have a structural problem there to try to get around. You see that in cross functional teams are more difficult than functional teams because you’ve got to cross functional boundaries, you’ve got different bosses, you get matrixes and it’s all really complicated. Obviously distribution and the nature of modern work is changing teamwork quite a bit. You need a lot more trust and distance to be inside teams and at the same time, people want things done faster which means teams have got to form quicker and this all creates a difficulty.
Teams by their very nature, then, now, in the future, communication is fundamentally the most difficult part and that’s not just talking to each other, that’s keeping people on the same page and having a shared sense of purpose about what we’re doing. You have a team because theoretically 5 people come together with different skills, to bring them and share them, but at the same time those 5 people bring 5 different viewpoints. That’s why you want 5 different people there, but at the same time, that’s why teamwork is difficult. Getting that to be harmonious is really hard.
BI: Have you got lines of development in what you’re doing that tries to address this for how future workplaces are going to look?
MCB: Yeah, certainly. HipChat’s a great example. Team based chat, messaging, collaboration tools, all the way through video which you can think of just high bandwidth chat, whereas is text is low bandwidth chat. That’s a modern phenomenon. That’s relatively recent in large-scale industrial workplaces. Certainly some products you can see that. You can see a lot of our product philosophies, the speed in which teams have to form and get on the same page. At the same time, some of the work we’re doing around not just tools but trying to change and explain processes and some of the things we do well. We have this “team health check” notion that has been very successful. It’s not a commercial product that we sell at all. It’s just something we’ve been doing internally for quite a while.
It has these 8 primary principals backed by some amount of research and lots of different scientific forums. It’s distilled down into a simple process that we use on a lot of our teams. We’ve run hundreds of hundreds and hundreds of them now and we published it at Summit last year and it got a great reaction. It’s the understanding of getting deep into a topical area, we developed processes or recipes or guides to make teams be a little bit more effective. It’s not necessarily about tools. We can sell all the collaboration tools in the world. If you don’t have a collaborative team, you don’t really know what you’re trying to do, we don’t solve that problem for you.
Trying to provide some help on processes and tips and tricks to make teams effective is something that we’re doing more and more of as we expose some of the cultural things that we do internally that our customers in the broader world seem to really be enjoying and so we started to get some more of that out.
BI: You’ve talked a lot about the creating the right environment to grow a successful, broad and deep technology sector. There’s just so much involved in that, whether it’s capital, skills, training, or tax arrangements or whatever it is. If you had a magic wand, what would be the one thing that you would change?
MCB: There’s a good lot of things when you’re talking about tech, in terms of skills and importing more skills and growing skills is all very important. I do sometimes wonder – if the Australian business climate is tricky because of our market size, then competition is not a natural state necessarily. Maybe I would say more competition would breed tougher, bigger businesses and more innovative businesses in Australia. Having got into a bunch of other sectors in recent years past, one thing that America has, for example, is probably far more competition in a lot of different areas and that forces them to be innovative, and by virtue that builds an innovative culture. It’s more a guesstimate but I think that might help Australia. Lowering the cost of living, I don’t know how you do that but if I had a magic wand I’d lower the cost of living in Australia. That’s very hard to do.
It’s a successful country with a successful economy, which is why the cost of living is high because people want to move there. It’s a high-demand problem. It’s a very hard issue to solve…. But I do think it holds us back.
BI: One last question. What’s the best piece of advice you’ve ever been given?
MCB: Do unto others as you’d want them to do to you. That’s what I tell my kids all the time, if you don’t like something being done to you, don’t do it to other people. It’s probably a pretty good piece of advice for humanity, generally. I think it applies in a business context and with customers and competitors and employees and all that sort of thing. Not so much being nice; it’s just being thoughtful and understanding the ramifications.
BI: Scott, how would you characterise your relationship with Mike these days and how has it changed?
Scott Farquhar: You hear stories of someone later in their stage of life partnering with someone who’s younger I always think that doesn’t work out because you not have to be pretty similar outlook and skills set but you also need to be in similar stages of life. Mike and I have gone through the similar stages of life together from university through starting Atlassian, and family and kids and other things. That’s been really important for us.
BI: Within the dynamic between the two of you, how would you describe the most important complementary or contrasting character traits?
SF: We have a lot of overlapping traits. We’ve both done every aspect of the business from cleaning the bins to setting product strategy. We’ve both done everything. I think that’s, sometimes that doesn’t get reported on in that sometimes one person does one thing and one person does the other. We’ve been really lucky to have two people can both run the whole business and I’m a member of [leadership institution Young Presidents’ Organisation] YPO and a lot of single founders I know who really struggle because they don’t have a peer that really understands the business top to bottom with them. I think most of my skills and Mike’s are overlapping, [in a way that] we can both run the whole business.
BI: With the success you’ve achieved, one of the realities is that a lot of people turn to you and look to you as examples. I wanted to ask you who your business heroes are, who inspires you, both at personal and business level?
SF: There’s two aspects I look for in a leader. One is people who have taken a very long term view of the world. I think Jeff Bezos at the moment is one that espouses taking a very very long-term look at where they can be and the place they can have in the world. So, long-term vision. The other thing I look for is someone that’s a great manager of people. Jeff Weiner from LinkedIn – no matter who you speak to, everyone says that he’s an amazing leader and people look to him. I feel that’s a huge trait as well that I look for.
BI: Your business has been built around unlocking the potential of teams and you’ve played a really big role in changing how teams in very large companies work around the world. What do you think are now some of the really salient challenges for teams in modern businesses? What’s the next big step?
SF: I think about teamwork as the next great frontier of things we need to solve as a species. The way I think about that is that if someone from a thousand years ago was born today, biologically there’s no difference. They wouldn’t look out of place, there would be nothing different about them. So why are we so much further advanced in society today than we were a thousand years ago or two thousand years ago? [What’s happened is] we’re way better at actually getting multiple people to work together than we were in the past. It started off with writing and other things so effectively you could boot more knowledge into people and shared things without having to physically tell stories.
These days, now it’s emails and other forms which help you get information around much faster. Really, the advances that have come in society have really come as a result of teamwork. That’s the problem that we solve at Atlassian is how do we get stuff out of people’s heads into someone else’s head in the most efficient way. In many ways that’s cultural. If you look at old ways of working, it’s very individualistic. People were not so open and transparent. I think that’s changing. Our tools encourage that, but [I also think] the younger generation coming in through the workplace are also much more transparent so that’s one of the blockers that’s going away over time.
The other one is that teams are more dynamic than they were previously.
If you think about 20 years ago when I did an internship – any one of my internships, but the stock exchange stands out – and the team I was in has been together for 6 or 7 years. They entire team had together, I think someone had only been there two years and they kind of “the new person”. That kind of team stability doesn’t happen these days because business moves a lot faster and we assemble and disassemble teams more than ever before. I think the challenge is how do we have the same [way of] getting information around to the right people where whole teams are forming and reforming. Eventually one day we’ll have brain to brain communication and we’ll have telepathy and we’ll have implants and be much more high bandwidth communication than we have today. Until we get to that and that’s probably – maybe not within our lifetime – but until we get to that, we have to stick with speech and text and other ways of communicating and that’s what Atlassian does is helps get that information broadly across the business in all the different forms.
BI: In the time that you’ve been building the company, I suppose one of the really big changes has been in the completion of globalisation and tighter integration of teams with people working in multiple locations around the world all at the same time. Do you think that process still has further to run and do you still see some cultural challenges with it?
SF: I think globalisation, I don’t think it’s finished until the world when everyone is paid the same wage in every country, the same standard of living. There’s always going to be a labour arbitrage across different places in the world. Therefore it’s worthwhile to look at moving work to another location because you can do it cheaper or better or get work [done] that people don’t want to do in the location you’re in. I think that’s going to play out over a long period of time. Culturally, whether you play cricket or baseball or soccer, it’s kind of less important than the way in which you collaborate. How open and transparent are you as a culture? Or as a company? How well do you work in your teams? How well do you share information? They’re the cultural things that make a big difference in globalization, not what food you eat or what dress do you wear. It’s also helped to break down those barriers and understand a way of working across the whole world, whereas with different tool sets and different places, you don’t have that reach. We’re one of the companies that’s helped enable it in some ways and benefited so much in other ways.
BI: Looking back at Australia – and I know you guys get asked about this all the time – but looking at growing a burgeoning and successful, broad and deep technology sector, if there was one thing that you could change about Australian business culture to help make that happen, what would it be?
SF: I think the biggest thing that needs to change is for people to realize how important technology is to the world. That’s the biggest thing that needs to happen. If you actually compare the public discourse from maybe three or four years ago through now, whether it is Turnbull versus the previous government or whether it’s Baird versus the previous government, the things that get written about in the papers in the finance section, mining through to other things. We had our bid for Australian Technology Park, we didn’t win but if there was a silver lining to that it’s that the public discourse around technology and the appreciation of how important it is, is vastly different from what it was five years ago and definitely from 15 years ago to when we started Atlassian.
SF: If people realize how important it is, then that’s the number one thing that can change. I’m sitting at Martin Place here and if you go up and down Martin Place, it’s still banks dominating the real estate in Sydney but slowly you can see startups creeping in. I can see a DropBox logo in a window of Martin Place. You’re slowly seeing startups creeping into different areas. The discourse needs to change, so that people realize how important it is, so we’re not [just] trying to dig things out of the ground anymore. I saw one figure that the number of people employed in mining is only about 220,000 people in all of Australia. Which means that startups and technology and software might even be greater than mining in terms of just raw employment.
The things after that that need to happen is we need to create a critical mass in Australia, particular Sydney. I think Sydney has a better opportunity of attracting people globally. Critical mass is no longer [about] funding. We actually have plenty of funding now. The government’s done – previous governments and this one – have done great things helping VCs with tax reductions and other things. The biggest issue is availability of talent. It’s a short term thing, that we need to import it. We need to make sure that Australia is the best place in the world if you’re graduating Stanford or graduating out of a technology university that Australia is a place that’s high on your list to come and work.
Longer term, that’s about education to make sure that we have a top tier education system. It’s not just teaching computers but it’s teaching people for a world where Google is at your fingertips every part of the day, so memorizing facts isn’t really an important part of the world anymore.
BI: On that first element – you’ve got graduates of top universities looking at where they might go and live and work. Is there anything Sydney in particular or Melbourne can do to be more competitive in that regard?
SF: I think there’s symbolic things that you can do, there’s some policy things that you can do. Symbolically, having Australian Technology Park being a burgeoning startup hub would have been great to attract people globally. People would say, “Hey, there’s this place in Sydney, have you heard of that? It’s great. All these cool things are happening there.” Symbolism is actually important over and above concrete things you can do. When you import talent from overseas – and believe me, we’re not taking any jobs away from people in Australia because we just can’t find the people in Australia – but in Sydney, when it’s 5 or 6,000 dollars after tax per child in public schools, even though you pay the same tax rate as every other person working – in fact it’s often more tax – it’s just a disincentive to come here.
BI: One last question. What’s the best piece of advice that you’ve ever been given?
SF: Maybe this is a lesson rather than advice, but when I was in primary school, they used to give these grades for effort and grades for results. My entire childhood academic career, I had been getting near top marks in both all the way through. Then my year sixth teacher actually gave me average for effort and top marks for results. She basically said I was phoning it in. I remember being absolutely crushed by that because when you’re an A-type personality, you always want to be good at everything. I remember sending my parents into the parent teacher thing to ask what was going on. She said I should really put more effort in. I ended up knuckling down and getting dux at that school. I guess the lesson was there’s a lot of potential that you can give. Try not to phone it in, in life.
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