TIPS FROM THE VERY TOP: What every business can learn from Atlassian's success

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Atlassian is Australia’s biggest tech success story.

Founders Mike Cannon-Brookes and Scott Farquhar have become the unofficial ambassadors for Australia’s bourgeoning tech scene after creating Atlassian on a credit card with a $10,000 limit back in 2002.

The software company, responsible for project management tool JIRA and team communication app HipChat — used by NASA and tech giants such as eBay and Twitter — has been on an incredible trajectory over the past 13 years, growing from a two-man team to more than 1,000 people worldwide.

In September, details of a long-awaited listing on the US stock exchange started to firm up, in what would be the biggest ever IPO for an Australian technology business, with an estimated valuation of $4.3 billion.

Since humble beginnings in a garage to leading the startup wave in Australia, here are the crucial lessons to take from Atlassian’s innovative business model, unparalleled work culture and ethos.

Great things can come from small beginnings

In 2002, university scholarship dropouts Cannon-Brookes and Farquhar decided to build a software company in a garage, with a team of enthusiastic university mates, spending most of their initial $10,000 credit card debt on PCs.

In the first two years, both founders paid themselves $15,000 each.

“It was basically survival mode,” Farquhar recalled, but they continued knowing that they didn’t want to be another guy in a suit having to “put up with big company bulls**t”.

The end result?

The company received its first capital injection of $60 million from Accel Partners in 2010 and is now heading towards a US listing that could be double the size of accounting software business MYOB’s $AU2 billion float on the ASX.

Having a clear mission

Atlassian set out to be a very different kind of software company.

When they drafted its first mission statement, it was not so much about the products, but the type of company they wanted it to be.

The duo built their business on the values of “no bulls**t” and “don’t f*** the customer” and live by the ethos: Be the change you seek.

To date, it’s still the most important value for Farquhar as it propels Atlassians’ team to remain innovative and motivated to improve its products and services.

“When we would go to lunch with friends who had joined all these other companies, the biggest problem we found was that they thought their managers were idiots in some ways,” he said.

“More than that, they had no mechanism to make a change. They always felt that they weren’t empowered and I said to Mike, ‘Shit, I hope no one ever leaves Atlassian and goes to their lunchtimes and bitches about how they can’t get stuff done’.”

The importance of having a co-founder and partner

Atlassian co-founder Scott Farquhar.

Cannon-Brookes and Farquhar met while studying business information technology and information systems through the co-op program at the University of New South Wales.

Both say their success would not have been possible without the help of the other.

“First thing is, I think you should start with two founders,” Farquhar said at the Business of Software conference in 2010.

“I couldn’t imagine running Atlassian without my co-founder Mike, and all the successful companies are doing it.

“A lot of my favourite companies have two co-founders, and the reason for that is that running a company is like a roller coaster ride. You’ve got incredible highs and incredible lows and they’re often separated by the case of a few days.”

Over the years, the duo — each worth $1.1 billion — have learned to work effectively as co-CEOs with Cannon-Brookes heading the product management, strategy, sales and marketing side, while Farquhar oversees the engineering and operational side of the business.

“We have different personalities and strengths that complement each other. Mike favours chaos, I favour structure. Most companies need a bit of both,” says Farquhar.

Be strategic about scaling

Atlassian’s growth has been strategic and deliberate.

According to research, “premature scaling” — where businesses try to grow faster than demand for the product allows — is one of the largest pitfalls and dangers for startups.

In its early years, the bootstrapped company was courted by many investors but remained lean before finally accepting $60 million from Accel Partners, the largest investment in a software company the US venture fund has seen during that time.

That focus saw Atlassian remain cash positive for 13 years straight, despite not having a sales team.

“You’re managing managers who manage managers who manage people doing important things,” Cannon-Brookes said. “The biggest challenge has definitely been scaling ourselves and the biggest surprise is that we’ve managed to.

“Fundamentally, when the business scales at the rate of products or customers or whatever, the team you have at 100 people is not the team you have at 800 people, and not the team you have at 8,000 people.”

The need to fight for talent

Atlassian co-founders Mike Cannon Brookes and Scott Farqhuar. Photo: Supplied

Atlassian is currently a 1100-person multinational with around 8% of its total workforce on secondment, responsible for operations in Amsterdam, San Francisco and its newest offices in Austin.

The company’s exponential growth and continued success is the result of a clear international hiring strategy and innovative human resources practices.

“I think it’s important to be attractive and fight for talent – especially in our field. We need the best minds to work for us to make amazing products that compete on the world market. We do what it takes to attract, nurture and retain those incredibly talented people,” said Cannon-Brookes.

Farquhar, put its even more bluntly in his terms: “I want to ruin employees so they never want to work anywhere else. I want them to rue the day they left Atlassian.”

The company primarily sources its senior talent — developers, product mangers and designers with five to 10 years of experience — from Silicon Valley and Europe given Australia’s current skills mix hasn’t adjusted to a growing, agile economy.

Last year, Atlassian embarked on a global recruitment drive to fill more than 100 places by June 2015, and plans to double the size of the company every 18 months.

It’s a strategic move considering the shortage of senior software engineers in Australia leaving the tech company to poach talent from wealthy rivals such as Silicon Valley and Amsterdam.

Building a great work culture

Atlassian co-founder Mike Cannon-Brookes at the Sydstart conference in Sydney, 2014. Photo: Freelancer.com / Sydstart

Atlassian consistently ranks as one of the best places to work in Australia taking out the top spot on the 2015 BRW Best Place to Work list, two years in a row.

But its enviable workplace and famed “no bulls**t” culture has turned heads in the tech industry, with some even going so far as to say that its workplace rivals Google.

Along with regular team-building days there are social events such as quiz nights, mini-golf and sumo-wrestling.

Earlier this year, the company celebrated its success by organising a party of epic proportions, with the entire Sydney team building a huge city of cardboard box fortresses.

While Cannon-Brookes and Farquhar are hands-on, Atlassian has been known to have an “even structure” with employees calling the founders “the boys”.

“We have an open-plan [office] and always have had an open door policy,” said the duo’s executive assistant Ruth Kapea.

“It’s an even structure. The boys will wander the floor; if I don’t stick something in Mike’s diary, he often goes down and hangs out with his team.”

Staying competitive

In September news emerged that Atlassian was planning for a huge US IPO. The decision was seen by some Australian investors and start-up industry observers as a blow to Australia’s tech sector.

Cannon-Brookes responded by saying such claims were “total bulls**t” and that an IPO in the US would enable Atlassian to grow given the maturity of Wall Street.

“I think we need to lose a little bit of our parochialism about that (listing in the US), I don’t understand at all why that’s bad for Australia. I think that’s ­really good for Australia,” he said.

“We are passionate and dedicated to improving the Australian industry, it’s a huge priority for us as a company… We spend a huge amount of time on that and it’s an essential part of our company.”

Floating offshore, rather than via a reverse listing as so many smaller tech players in Australia have done, has long been seen as the preferred option for the tech giant, especially given there were only 69 software and services companies listed on the ASX as of mid-Jan.

The decision follows Prime Minister Malcolm Turnbull’s push for innovation in making Australia globally competitive and will hope to see Atlassian move beyond being just a big fish in a very small pond.

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