From Bootstrap to $60m. What I’ve learnt
Atlassian has been a successful software bootstrap, right up until we took $60m funding from Accel Partners in July 2010. Scott packs some of what he’s learnt about running a software company into thirty minutes. You’ll hear about how to pick a business model, how to get free marketing, how we hired 32 people in 6 months, and how we built a workplace that has won numerous HR awards.
Bio – Scott Farquhar is the Co-Founder and CEO of Atlassian, an innovative, award-winning enterprise software company. Atlassian produces tools that help technical and business teams collaborate, plan projects and build software. Based in Australia, Atlassian currently has over 17,000 enterprise customers around the globe and has been named one of the “Fastest Growing Companies” by both Deloitte and BRW Magazine.
Scott was awarded the ‘Australian IT Professional of the Year’ in 2004. In 2006 Scott was the youngest person to ever be awarded ‘Australian Entrepreneur of the Year’ by Ernst & Young.
Lessons learned in taking a company from boot strapped startup to $60 million funding from Accel in 8 years.
Start with two founders. Startups are hard work and you need to share the lows – and the highs. For Scott, discovering the company had been hacked while he was on honeymoon in Africa was one of the lows. Three months later they raised $60 million from Accel.
Share the company 50:50 at the outset.
You need a business model. Duh! The Freemium model was a very novel concept for a business model in 2002 when they started. Note! SaaS is not a business model – it is a delivery model.
They evolved their model as they had no money for a sales team, needed to sell itself so had to be cheap,were based in Sydney so had to have web presence as Sydney is at the arse end of nowhere globally.
Use your own product. Atlassian uses its own system – bug tracking and all – publicly. One competitor actually took their top ten questions and used them in their own marketing – only downside.
Measure everything. Sales by country, profit, revenue, everything. Switch your data logs on even if you don’t have the analytical capabilities yet. The data will be useful when you do.
Always be Closing Marketing. Be loud and unique. Always sponsor the beer at conferences. Sponsoring the beer means other speakers talk about you. MUCH cheaper than taking a booth.
Ship something tangible – Atlassian send custom T-shirts to their best customers. Some customers actually buy a better version of the software JUST to get a t-shirt.
Make everything into a campaign – hiring people is as much an opportunity to run a marketing campaign as a marketing campaign. Atlassian pays internal referrals a $ 10,000 bounty to recruit staff, external people get paid $ 2,000. Only let recruiters send them 4 candidates or they wouldn’t do any more business with them.
Market to your employees. relentlessly.
Your first idea will fail.
- Odeo -> Blogger.
- Genie -> Yammer.
- Traf-O-Data -> Microsoft.
- Orion Support -> Atlassian.
Think long term. We want to be around in 50 years time.
Have a non-bull shitty and understandable mission. Atlassian Misson:
“To create useful products people lust after.”
Know when to switch gears. Startups need to be really scrappy. At our first conference in San Fransisco we stayed in a $48 room and put three people in it. Scott found it really hard to upgrade to bigger spends – broadband, travel (there is cost to time) etc etc.
Generalists move to being specialists. Developers are not always the best managers. Technology people aren’t necessarily the best customer support people.
Know when to let people know. No university course teaches you. You have to trust your gut feeling. Often the rest of the team won’t back you up initially.
Build somewhere that you want to work. If you are creating something that you want to last for 50 years, you need to be in a place that you want to be. You have to invest in your culture.
Top Grading process lets you find out two things you need to know about people:
- Are they going to find their feet wherever you put them in the company?
- Are they passionate about your business.
Share your values and make them explicit. If people buy into your values, they are likely to be the right people for the business.
Give Experiences. Never ever give money as rewards. Give experiences as people will remember them and they will build your team.