Atlassian is known for keeping software developers and operations people organized. The company, with approximately 10,000 employees and 250,000 customers, has focused on collaboration and information management tools that track bugs, customer complaints, documentation, and source code.
Atlassian CRO Cameron Deatsch discussed the organization’s origins and the product-led growth success story of this $2.8 billion company.
Karen Walker: Atlassian just had its 20th anniversary. Can you describe the model, how it came to be, and what makes it different?
Cameron Deatsch: The company was founded in 2002 by Mike Cannon-Brookes and Scott Farquhar, our co-CEOs. They were software engineers in Sydney, Australia. At that time, their goal was simply not to wear a suit to work. They didn’t want to take corporate jobs. That’s why they created the company.
They took out $10,000 on credit cards and bootstrapped Atlassian. They created a product called Jira, which is still our flagship product. They were building software to track issues for their software development. They were looking for ways to unleash the power of teams working on software development.
They began by looking online for tools they needed to complete their work. They realized that it was nearly impossible to get access to the software. You could go to IBM’s website but couldn’t download software.
SaaS had yet to develop. Walls existed between the users and solutions. So, they were forced to say, “Let’s just get our tools online and make sure people have access to them.”
They posted online and realized they had to have a significant market if they were going to sell products online. They said, “Hey, we have to think globally from Day One.” They started doing some Google search engine stuff early in 2002 to get that distribution.
They believed they should make the software so inexpensive and easy to use that people would download it, try it and buy it.
Within six to 12 months, they got a check in the mail for $10,000 from a major US airline. So, they doubled down.
The business evolved from there. It was a self-serve, direct flywheel, bottoms-up business. We didn’t hire our first commission seller until 2014. That was 12 years after the company was created. We built it as a great online experience. That is still the core of our business today, supported by a large channel. (A channel is a pathway through which customers can raise requests in service projects, such as a portal.)
We did have solution partners. We’ve grown, and now we are a multi-billion- dollar company. We’re not getting $10,000 from those airlines anymore; it’s more like $10 million.
Today, Jira is still one of the most popular issues trackers used for IT and software project management.
For example, by using Jira, collaboration is made easier when people can break the big ideas into manageable chunks across teams with user stories, issues and tasks.
Software teams that embrace agile project management methodologies increase their development speed, expand collaboration, and foster the ability to respond better to market trends.
Walker: I know you also make great use of channel partners and alliances. Can you talk about those relationships and how they work in your model?
Deatsch: We have over 700 solution partners worldwide. Many of these have been with us since 2004 or 2005. If you think about the early days, customers asked, “Atlassian, we want you to do a demo.” Or “Hey, Atlassian, can you do currency for us?” Or “Atlassian, can you respond to this RFP?”
As we have grown, many of our partners have grown into million-dollar revenue businesses like large SASs. In addition, as we’ve gotten bigger and our customers have gotten bigger, we’ve also started to partner with global system integrators like Accenture.
The first question I ask every customer is, “Do you have a partner engaged?” If they say, “No,” I ask, “Why not? Let’s get a partner in.” We encourage our customers, especially our enterprise customers, to have at least some relationship with our solution partner.
Walker: How has your sales process evolved, and how does that relate to your ability to innovate?
Deatsch: We run all our sales and marketing expenses at about 15 to 16% as a percentage of revenue, which allows us to invest about 35% to 40% of our revenue in R&D.
It allows us to focus on our self-serve model. The best value proposition I have for a customer is to say that you get something more for every dollar you spend on Atlassian. Our goal with pricing is to get out of the customer’s way, to make it as easy as possible to get up and running with their software without hassle or drawn-out sales processes. Point, click, buy and use.
You’re spending half of that money on engineering products to get a better experience, not on sales and marketing. That becomes this virtuous loop, but it also forces us to be highly disciplined about growing our business. We’ve always been patient and diligent with our growth.
Walker: Let’s talk about teamwork. I love your company’s mission, which is unleashing the potential of every team.
What are some ways that you are helping your clients do this in today’s economy and environment?
Deatsch: There are two significant trends in the market that every company is dealing with right now. The first is the digital transformation trend.
People are using technology to transform how they deliver value to their customers. It’s been a constant journey ever since software was created, but it’s become even more accelerated over the last few years. The other huge change that we see is cultural transformation.
Many businesses have become fully remote, many have gone hybrid and many have come back to the office. The reality is that we’re going to work differently than we all did before.
One of the things that made Atlassian’s product so powerful is that we become that source of truth and that bridge between your software development teams. We’re trying to ship new capabilities to evolve your business and deliver customer value.
Take a client like Sony Music Publishing. Sony has this vast catalog, and they’re always adding to it. They have individual publishing rights and must manage that entire process of gathering the catalog, updating it, and ensuring that all producers are being compensated correctly. They handle all of that within Atlassian products today.
We also have companies that use our products with a team of ten. Our software is free for up to ten users.
Walker: I’ve read that Atlassian has a Team Anywhere policy, an intentional approach to distributed work. How has it impacted the company’s productivity and growth?
Deatsch: Being headquartered in Sydney, Australia, makes us naturally a distributed company. Sydney is still our major headquarters, but we have offices in San Francisco, Boston, Austin, New York, Turkey, and worldwide. We used to be very office focused. Before Covid, we acquired a company called Trello. It is a web-based, kanban-style, list-making application. There are tens of millions of users on the Trello platform.
Now we were still very office focused, but we had remote teams. With Trello, we knew how to work with them very early on in the Covid adventure.
We said that we will embrace remote as a primary way to work, which would improve our ability to recruit more. We can recruit farther away from offices and more regions, countries, states, you name it. If recruiting brings us more talent, we will offer more flexibility in employing people.
In the end, that is going to make our employees happier. We had to create a whole program behind working remotely, and we dedicated teams to thinking about how we collaborate. What are our new rituals? What are our new routines?
How do we budget for that travel? Because we still wanted people to get together. Do we want them to be working the whole time or do we want them to do what we call “intentional togetherness?” We ensure that a good portion of their time is spent building social bonds. You used to get that in the office.
To do this, we must think of time zones, core teams and time halos to make sure that we have enough overlap to reach everyone worldwide.
We were determined to get it right. We are using a very Atlassian approach. We will continue to iterate and iterate it as we try to develop these new rituals and rules.
Walker: What’s next for Atlassian from a big-picture standpoint? Where are you going?
Deatsch: I was around the 500th employee at the company. We have over 10,000 employees today, so we continue to grow, even in this period of macroeconomic uncertainty.
We see downturns as an opportunity to invest and expand our market share. We think of the world in these big markets: software development, agile and DevOps, IT service management and broader work management collaboration capabilities.
Multi-billion-dollar opportunities with hundreds of millions of users exist in each of these markets. We are investing in all of those.
Walker: Let’s talk a bit about you. The culture you’ve described at Atlassian is a state of constant inquiry. How have curiosity and continuous learning helped you on your leadership journey?
Deatsch: In my ten years at Atlassian, I’ve had six different jobs, from go-to-market to sales to marketing. I’ve been head of Server Business, head of Growth, and head of Customer Advocates.
When you enter each of these roles, you start with a blank slate. You can learn, read and just coach your teams, but you also pick up a ton from the teams that you start hiring.
Deatsch: You learn a lot by asking your intelligent co-workers questions. Making big decisions requires lots of questions and lots of research. Then, when you do decide (and no decision is perfect), at least you’re doing it with an awareness of the options available.
Walker: Are there other leadership lessons you’ve learned along the way?
Deatsch: I have found that when you’re a 500-person startup, you can operate, communicate and collaborate in a certain way.
But in a 10,000-person organization, you must continue to evolve how you communicate. how you operate and how you show up. Your broadcast becomes bigger and bigger. Things can go awry, if you’re not crystal clear in your communications.
You must own your mistakes and then explain the context of decisions and directions. You must bring people along for that journey and demonstrate genuineness so that people trust you.
One of the biggest things I’ve learned as a leader is to ask myself, “Do you have the right team?”
Every so often you need to step back and ask, “Is this the right team for what we need going forward? Can I be brave enough to change it if it’s not?” And that’s hard.
Walker: I love this idea of being brave. Also, you’re talking about how your team works and how you want it to work. The team members must trust each other. They must assume each other’s good intentions. That’s one of the things that gets lost when we are remote.
Walker: One last question for you. The tagline for my business is up and to the right because that’s the spot on the two-by-two matrix where we always want to be. Was there a moment in your career when you knew that you’d be successful and when you were moving up and to the right?
Deatsch: I’ll quote my father, who said, “I’d rather be lucky than good.” I’ve been very fortunate along the way. I was lucky that I landed an internship at BEA 20 years ago, and the VP of my division became the president of Atlassian who hired me here. I’ve been lucky to be part of two companies that have gone public. How many software companies go public?
I can’t say there was any one moment in my career, but there have been a series of stages where I thought, “Oh wow, this is interesting.”
When I got that first internship, I was in San Francisco, at Sansome and Clay, on the 12th floor, looking out at Coit Tower. I sat down and said to myself, “I’ve made it. I’m a businessman.” When Atlassian invited me to join the executive team, that was another significant moment in my career. I’ve been extremely fortunate along the way.