ATLASSIAN - coined from the greek god ATLAS who according to greek mythology is a symbol of endurance and bravery. Atlassian lived up to its name by being a silent player in the IT and services industry. Silent in the sense that very few people know about the company itself, however, its products are being used by major corporations, and smaller businesses aren't left out as well. Valued at over $30 billion, the question is, how did Atlassian become so successful and what can we learn from their success story?

Quick facts

1. Atlassian was funded with a credit card debt of $10,000
2. The company applies an unusual business model.
3. It uses a “non-traditional” marketing strategy that keeps expenses low while driving up sales. 
4. It has a culture that values teamwork

Keep reading to know more about this and the lessons you can learn from Atlassian’s 20 years of success. 

How did Atlassian get started?

Where are two tech heads likely going to meet to come up with a groundbreaking idea for a successful startup? In college. 

Mike Cannon-Brookes and Scott Farquhar co-founders and now co-CEOs of Atlassian met at the University of South Wales, Sydney. Together the duo founded the tech company Atlassian in 2002. Atlassian is a SaaS company with a unique business model and marketing structure that defied the norm in the industry. Mike and Scott funded this ambitious dream with a credit card debt of $10,000. This is within the average amount of capital needed to start a small business. 

But the catch here is that most entrepreneurs wouldn't opt for credit card debt as their first choice to fund their company. However, in 2002, the startup industry was barely known and funding options were less than none. Still, the decision to debt finance their startup reinforces the notion that Mike and Scott were onto something different and you will see this in their business model as well as a marketing strategy. 

What does Atlassian do?

With a degree in business information technology, Atlassian co-founders Mike and Scott decided to create tools that help professionals get work done easily. Atlassian owns over 5000 products that span several industries. The company emphasizes the importance of teamwork which is evident in its first and perhaps most successful tool, Jira. Although it was originally intended to be used to track bugs and address other internal issues in software development, Jira has since been modified for use in most project management use cases. 

Speaking on the success of Jira, the co-founders recalled waking up one morning after Jira was put up for sale on the website, only to see that it had been purchased by an unexpected customer, America Airlines. Ever since then, the company has grown at a steady pace becoming Australia’s first tech billionaire company. Looking at  Atlassian’s story, these three things can be attributed to the company’s success; its unusual business model, market strategy, and values. 

Atlassian Business Model and market strategy

In an industry where most businesses have nearly identical business models, Atlassian is the exemption. This is not a coincidence, it was intentionally done. According to the company, the co-founders embraced authenticity, stating that; 

“...they didn't know what kind of company Atlassian was going to be, but they knew exactly what it shouldn't be—an environment where they had to conform rather than be who they authentically are”

To this end, Atlassian took a business model that stands out from its competition in the industry. Rather than create software for a particular industry, Atlassian makes tools for different segments of the industry. For instance, most SaaS companies will service clients in either banking, manufacturing, finance, or retail. But Atlassian tools can be used across the board by businesses in any niche. A typical jack of all trades, except, in this case, they have mastered their craft well. 

Jira for instance can be used in software development, and it is also a very good tool for project management. At the center of the Atlassian business model is the “Team”, so they build software that enhances collaboration amongst team members while still delivering incredible value. By having a business model that caters to the needs of clients across several industries as well as different segments of industry all at once, Atlassian has amassed over 200,000 customers that include both small and large organizations. 

The majority of these customers were not sold on the products via the usual marketing channels Atlassian is said to have spent only a fraction of what similar companies spend on marketing alone. How did they achieve this? By using a bottom-up approach. 

Most companies create a product (known as an MVP), send it out to the market, gather the user’s feedback and use that to improve the product. They spend a lot of money which sometimes goes into hiring sales agents to help them bring the product to the market. We can not look down on this approach because it works. But it also costs a lot and in some cases, the turnover is not as expected and the company runs on a loss. 

Atlassian uses a different and somewhat unorthodox approach. They didn't rely heavily on running paid ads or expensive marketing campaigns. Instead, they depended on the most effective yet often overlooked marketing strategy which is “word of mouth”. In essence, they let the product sell itself. Here is a brief statistics on how effective word of mouth is in marketing;

1. 90% of people trust a recommended brand even from strangers
2. 88% of people trust a brand recommended by a friend or family member
3. Word of mouth comes first in the top 5 ways to recommend a business followed by Facebook, Google, and Twitter. 
4. 26% of people will lose trust in a brand of a family member who had a bad experience, and;
5. 21% of people will not trust a brand with a negative reputation. (Source: Semrush)

Having said that, here are the lessons you can learn from Atlassian’s 20 years of success. 

12 Lessons from 20 years of success

This year, Atlassian celebrated its 20 years anniversary, and to commemorate it, the company shared insights on its journey so far and we took the liberty to pick out some of the best;

1. Be quick to acknowledge when you have made a wrong decision

All through your entrepreneurial journey, you will have to make thousands of decisions. Some will be easy to make while others will not be so easy. In the same way, you will make some very good decisions and some bad ones as well. The lesson here is not to get stuck in a bad decision. Acknowledge it quickly and make a U-turn. Don’t be caught in the sunk cost effect. Doing so will only cost you more. 

2. Innovation takes time - Be patient

There is no overnight success even for the likes of Atlassian. Reflecting on their journey so far, the company said, “to say it was a wild ride will be a massive understatement”. The statement paints a vivid picture of the ups and downs it must have taken to get to where they are now. 

3. Have meaningful values 

According to the company, your values reflect what you are not what you wish you were. In essence, your organization’s values should not be an aspiration, but a reflection of what the company stands for at any given time. In their own words “Culture changes but values don’t”.

4. Invest in your customers

Do you take time to understand your customers or do you just assume their needs? Building a meaningful relationship with your user base will go a long way to earning their loyalty. To do this you can either create a community of your user base or support one if it already exists. Atlassian did so many years ago and today they have a thriving community with over 4 million members. 

5. Don’t sell out just to get funded

Agreed, it can be difficult to get funded, but that does not mean you have to sell out. Doing so might seem like the best decision in the short term but you are likely going to have regrets as time goes on. Why? Every founder has a dream of what they want their company to be. Sometimes, this may not align with the ideas that your investors have and they will be friction. In that case, a founder has two options, agree with their investors and get funded, or hold unto their dreams and keep searching for other investors who share their point of view. What Atlassian proved is that if you hold out long enough, you will eventually meet the right investors. 

6. If you need to make changes, then do it at once

Making changes can be painful but there is no way around it. Both the customers and the company suffers slightly. The customers may not appreciate the change (which is a normal reaction) and this may cost the company to lose money. But effecting a change instantly is always better than holding out. There is never going to be a perfect moment to make changes. So if you have to do it, then do it at once. It could take time but your customers will eventually come around. 

7. Rapid growth comes at a price

Every entrepreneur wishes to see their company grow. This is a good thing but remember, there is no gain without pain. The cost of rapid growth varies from one company to another but the employees always bear the brunt of it. It is not uncommon for employees in a startup to take on several roles. As the company grows, the workload increases as well. Some people are not cut out for this so be ready to see employee turnover rise, but the situation also reveals those who are capable of handling the growing needs of the company. 

8. Invest in company culture

Culture can make or ruin your company. It all comes down to how you treat your customers, what are those behaviors that are acceptable? What are your company’s values? How do you show gratitude to your employees? A lot goes into building a good culture that will thrive but one thing is certain, you will get more out of it. 

9. Have a compelling mission 

A mission acts as a North Star. It guides the affairs of the company both internally and externally. A compelling mission will not only serve as a brand name but will also attract those who agree with it. These could be an investor, an employee, or a customer. There is a sort of unifying theme that mission statements create and this will set you apart from the competition. 

10. Be transparent

This is not a word you hear so often but being transparent can work in your favor. Yes, many entrepreneurs fear a backlash from either their investors, customers, or employees if they were to be so transparent in all their dealings. But while it may seem logical to hold back some information, doing so will increase the odds against you if such information were to come out eventually. You can save yourself and the entire company the shame of being upfront about all you do. It builds trust and loyalty even in the face of uncertainty. 

11. Put the company’s culture, mission and values first

It takes years to build a house but not so long to bring it down. With one decision, you can tear apart everything you have built. Why would you want to do this? Perhaps not intentionally, but many companies have failed because they failed to put their values, mission, and culture first before anything else. The people are the bedrock of the company and losing the trust of your investors, employees, or customers because of a deal (no matter how good it may be) will eventually cost you more in the long run. 

12. Act swiftly

You don’t want to have a big idea that never saw the light of the day simply because you were too late to act. This is why you must act swiftly. Worst case scenario, the idea never picks up momentum and fails (big deal), and you move on to the next one. In the best-case scenario, the idea does pick up steam and becomes the next big thing in the industry. Either way, you have more to lose by simply delaying taking action when you should have done so. 

Conclusion

The world of startups may seem daunting but that doesn’t mean there aren't successful startups out there. All it takes is knowing how they did it and applying a similar principle. What worked out for Atlassian might not work out for you, but you’d agree that the bare-bone lessons mentioned above will apply to any industry or company.