Atlassian: The boys who built a $1b company in the cloud
Their company sells $100m worth of software a year in 130 countries around the world, but has no sales staff.
Now Atlassian – a billion-dollar business built by two Sydney friends in an apartment and then an office above a sex shop 10 years ago – is widely tipped to be the first Australian tech startup to go public during the current boom.
Mike Cannon-Brookes and Scott Farquhar, both 32, have seen their business grow at a rate of 47 per cent a year since 2007. Atlassian products are used by millions of people in over 20,000 corporations around the world, including the majority of the Fortune 500.
The world, they say, is becoming software, and Atlassian’s tools are helping companies adapt.
“There’s more lines of code in a Ford [car] than Facebook and Twitter combined,” Cannon-Brookes said.
Atlassian – featured in Digital Dreamers Episode 5 – makes several software development and collaboration tools.
Their headquarters – and half of their 500 staff – is in Sydney, but they also have offices in San Francisco, Amsterdam, Gdansk in Poland, Porto Alegre in Brazil and Kuala Lumpur in Malaysia.
In 2010 Atlassian received a $60 million investment from US venture capital firm Accel, kicking off a wave of investments by Americans in Australian technology start-ups.
Their major innovation was hosting and delivering software via the web or “cloud”, allowing them to offer more elegant and powerful solutions at a fraction of the price of competitors.
“They recognised very early on that on the web you could sell and you could target large corporations by pricing your product at a level where an engineer could just put it on their credit card and not have to get approval to buy it,” said Larry Marshall, the Australian managing director of US venture capital firm Southern Cross Venture Partners.
“I think they started at less than $3000 was the price back then, and very quickly engineers started to use the product, loved it, they could make the buying decision themselves and buy it all through the web so you had this … very rapid acceptance and growth of revenue.
“Without the web you couldn’t have done that, you’d have to be knocking on doors and selling product.”
Unlike many tech startups, Atlassian was able to generate revenue right away and only raised capital much later. This made it easy to keep the company headquartered in Australia.
“A lot of the new startups you see nowadays, they’re looking to raise cash a lot quicker and most of the capital and cash is in the United States,” said Cannon-Brookes.
“What we lack is that gap between $100,000 and $10 million; we don’t have any really good strong funds or investment pools going into that gap at the moment. If we can solve that it gives us a good curve to grow businesses the whole way up.”
Atlassian sees being an Australian company as a competitive advantage because there is less competition for talented engineers here. But they still cast a wide net for employees, recently driving a bus around Europe looking to hire 15 engineers in 15 days (over 1000 people applied).
good news story..there is money to be made on the internet..just get the right ideas and go for it..fast..i think there is a stack of money to be made in apps as well..