The Exchanges

Q Can I ask you, like, that's obviously a mistake that one regrets not paying up for, clearly. When you think about decisions that you've made that you regret, what stands to mind as the biggest?

A When you're small as a company, or what I found when we were small as a company, the mistakes are mistakes of commission. Like, you do something stupid that didn't make sense, or you invested time in something that ultimately was a waste of time. I think when we get larger, most of the mistakes I've made are of omission, you know, not doing something That we should have done. And most of the opportunities or biggest mistakes we've made are not going hard enough against about new opportunities. You know, we built, we're about four billion dollar business, like revenue wise, a value to 40 to fifty billion dollars, you know, today in 20, 23. But, you know, we had a competitor to GitHub, like, that we built, um, you know, called Bitbucket. We had a competitor to Slack that we built. And in both cases, um, I'd argue we had as good a product. In, in many cases, I think against Slack, we had a better product. But we didn't invest enough behind these new opportunities, and so my biggest mistakes are being in the right place in the right time, but not betting hard enough behind, you know, the opportunities that we've had in front of us.

AI assessment note: “my biggest mistakes are being in the right place in the right time, but not betting hard enough”

Q How does that make you change go forward? Do you invest more aggressively than in everything? Like, how does that change your mindset moving forward?

A Investment has to come from somewhere, and so the hard part is you got to starve something else to invest in the new thing. And we've started a program, we call it Point A, and, uh, where we incubate new products inside Atlassian. And those new products, we've got one called Atlas, which is about OKRs and projects. Um, we've got one called Compass, which is about really a developer portal that basically tracks everything developers do these days in components and microservices. And here on the list, we've, you know, created like four or five of these things. And, uh, we've just made sure that we've invested sufficiently behind these new areas such that You know, in five years time, we're not sitting here saying we created a category and someone else stole it from us. Um, we've created these amazing categories and we're investing heavily behind them.

AI assessment note: “starve something else to invest in the new thing”

Q remain full remote. When I spoke to Mike, he said the biggest risk decisions that have been a success have been made by Scott, not by me. When you reflect on, I thought it was very humble of him, but when you reflect on like the biggest risky decisions that you've made that have worked out, which one is the biggest for you and what did you learn from that?

A There's a couple of ones that we've made that are risky. I think Team Anywhere is obviously Huge one because, you know, it's not always a one-way door, but like we would burn a whole bunch of, you know, employee trust if we changed that now. We've got about half our employees don't leave near an office. So like it's pretty close to a one-way door decision as you can make. And, uh, we made that relatively quickly. And so that was one. Look, another decision we made was to shut down Stride, which was our competitor to Slack. That was a product that we had been, you know, operating the market for multiple years. And, uh, Um, if I could share some of the lessons of things that we, you know, made mistakes on, we acquired this product, it was growing really fast, it was used by us, it was used by devs, and then it shared, you know, went through the entire company, and there's a couple of things that I would do, have done differently with that. Um, one is that, uh, Stride was two dollars a month per customer, like, which is cheap, like, enterprise software is two dollars a month, a user a month, that's incredible, but Slack was free and 10 dollars a month. And free is a lot cheaper than two dollars a month, even though on average, Slack made more, more dollars from us because they eventually converted people. And so, you know, the freemium model basically, um, you know, can win over t…

AI assessment note: “Team Anywhere is obviously Huge one because, you know, it's not always a one-way door”

Q Was it a tough decision? Because there's a lot of sunk cost fallacy there. Acquisition, team.

A Not only had we acquired it, we'd also then rewritten it from scratch, like on our platform, and so we'd done a full rewrite. It ended up not being a hard decision because the way I looked at it was, you know, could I look my staff in the face and say that the next five years of their life was going to be the biggest impact to humanity working on this product? And I could look that stuff in the eye and say that, you know, hey, working on Hitchat Stride, which is the rewritten product, Is going to have the biggest impact on the world. Actually, I could repurpose you and move you into other products that have gotten new ideas that we've got, you know, blue oceans, like, uh, to borrow a phrase from the book, we know we're not competing head to head against, uh, you know, uh, two, two players out there. And so in the end, like, you know, deciding to shut down that product, we had a couple hundred people working on it. Um, it was hard because a lot of people had poured their light, you know, heart and soul into it. We sold it to Slack, but in the end it was easy because I could look at the staff and say, No, you're going to have a bigger impact on the world doing something else.

AI assessment note: “It ended up not being a hard decision because the way I looked at it”

Q Can I ask you, like, that's obviously a mistake that one regrets not paying up for, clearly. When you think about decisions that you've made that you regret, what stands to mind as the biggest?

A When you're small as a company, or what I found when we were small as a company, the mistakes are mistakes of commission. Like, you do something stupid that didn't make sense, or you invested time in something that ultimately was a waste of time. I think when we get larger, most of the mistakes I've made are of omission, you know, not doing something That we should have done. And most of the opportunities or biggest mistakes we've made are not going hard enough against about new opportunities. You know, we built, we're about four billion dollar business, like revenue wise, a value to 40 to fifty billion dollars, you know, today in 20, 23. But, you know, we had a competitor to GitHub, like, that we built, um, you know, called Bitbucket. We had a competitor to Slack that we built. And in both cases, um, I'd argue we had as good a product. In, in many cases, I think against Slack, we had a better product. But we didn't invest enough behind these new opportunities, and so my biggest mistakes are being in the right place in the right time, but not betting hard enough behind, you know, the opportunities that we've had in front of us.

AI assessment note: “my biggest mistakes are being in the right place in the right time, but not betting”

Q Do you think your pathway would still be possible today, given the abundance of funding that we have today, even in a tougher economic time?

A I think it depends on what you're going after and the niche or niches Americans say, uh, that you're going after, because if there are thousands of other companies or dozens of other companies going after the same customer that you are, And they've raised 10 times, a hundred times, like, more money than you have. They're gonna be able to solve their customers' needs a lot quicker than you are. But there are many markets, like, ah, that go after very, very small, like, niche software. Constellation Software is a public company out there that does a lot of this, where they literally invest in, ah, you know, reservation systems for dog kennels or something, right? Like, very niche stuff, and in those situations, I do think you can bootstrap businesses. Uh, you know, still today, because there is not much competition there.

AI assessment note: “in those situations, I do think you can bootstrap businesses. Uh, you know, still today”

Q How does that make you change go forward? Do you invest more aggressively than in everything? Like, how does that change your mindset moving forward?

A Investment has to come from somewhere, and so the hard part is you got to starve something else to invest in the new thing. And we've started a program, we call it Point A, and, uh, where we incubate new products inside Atlassian. And those new products, we've got one called Atlas, which is about OKRs and projects. Um, we've got one called Compass, which is about really a developer portal that basically tracks everything developers do these days in components and microservices. And here on the list, we've, you know, created like four or five of these things. And, uh, we've just made sure that we've invested sufficiently behind these new areas such that You know, in five years time, we're not sitting here saying we created a category and someone else stole it from us. Um, we've created these amazing categories and we're investing heavily behind them.

AI assessment note: “we've started a program, we call it Point A, and, uh, where we incubate”

Q Do you think the single biggest job of a CEO is resource allocation?

A I've got a, uh, an article basically, uh, that I bring up, uh, every couple of years and I'll put it in the show notes. Basically it's like the four things a CEO should do. And, um, one of them is, you know, effectively hire and fire the management team. Two is, uh, basically set the vision for the company. Three is set the culture for the company. And four is basically resource allocation, where you put the dollars and the bets. And those four things are the most important. And I go back to that article probably every single year to remind myself, look at my diary and say, how much of my time am I spending on those four areas? And so, yeah, resource allocation is one of those four.

AI assessment note: “And so, yeah, resource allocation is one of those four.”

Q I mean, that's one thing. The other thing is how you set up your teams. Something that's very unique about Atlassian also is the remote Work nature of it. Will that persist? How do you think about that? And what do you might talk about when you say about the team structure being remote?

A Early on in the pandemic, so I don't know, March, April of 2020 when the world was still kind of trying to work out what this, you know, new world would look like. Mike and I, um, you know, had both not been to the office for a month or two because we'd shut our offices down and we knew that COVID was going to go for multiple years. And we knew that during that time we wanted to keep hiring people, and if we did that, like, are we gonna hire people who were gonna work from home but have to live within 25 kilometers an office, 50 kilometers an office, 30 miles an office for your American listeners. We decided, no, we wanted to hire people, and given we had offices around the world, we had people in Australia, the UK, the US, Europe, we wanted to basically allow us to continue hiring, and so we made the decision that we would never require someone to come back into an office, which is probably not dissimilar to other people like out there who sort of made that decision by abdication, like that kind of ended up what's happening is, you know, during COVID people could work anywhere, they didn't stop it. But we were very deliberate about saying people, that is the path we're choosing, and we're, we're on a public record. So we had people who, you know, worked for ASEAN, people in New York where we didn't have an office, like would, you know, come, you know, work for us. People in, y…

AI assessment note: “we made the decision that we would never require someone to come back into an office”

Q funny. Every CEO I speak to says today, and they say this behind the scenes, we just see that actually in person is so much better. The engagements there, the collaborations there, the cultures there, and there's this real binary flip back. And so it's fascinating to hear yours. Is there anything that you know now about remote that you wish you'd known when you had Mike made that decision?

A So one thing we've been working on is we, we believe that you do need to get together as humans to build human contact and, you know, human connection. And we didn't do that during COVID. And so people, you know, take the COVID is what remote work was and Jill was terrible. We didn't get to see anyone. You're like, no, that that's great. Like, but you can still see people and work remotely. You just don't need to see them every single day. And so we've done some research now, which we'd known earlier that, uh, you know, when you get together, people together, we see our team connectivity boost by 30%. So we ask our staff, how connected do you feel to your team? How connected do you feel to the company? And then we get people together, what we call intentional togetherness. So, um, and, and then we ask them, how connected do you feel before and after? And it was just part of our normal monthly cadence and we cross-referenced that with in-office participation. And so the people who intentionally get them together get a 30% spike in connectedness to company and connectedness to team. Now, the interesting thing is if you look at it from a, an atrophy perspective, right? Like, like how long does it take to return to baseline? It's four to five months actually before that returns to the, to the baseline. And so if you actually say, okay, well, if you get together people like three, f…

AI assessment note: “we've done some research now, which we'd known earlier”

Q Was it a tough decision? Because there's a lot of sunk cost fallacy there. Acquisition, team.

A Not only had we acquired it, we'd also then rewritten it from scratch, like on our platform, and so we'd done a full rewrite. It ended up not being a hard decision because the way I looked at it was, you know, could I look my staff in the face and say that the next five years of their life was going to be the biggest impact to humanity working on this product? And I could look that stuff in the eye and say that, you know, hey, working on Hitchat Stride, which is the rewritten product, Is going to have the biggest impact on the world. Actually, I could repurpose you and move you into other products that have gotten new ideas that we've got, you know, blue oceans, like, uh, to borrow a phrase from the book, we know we're not competing head to head against, uh, you know, uh, two, two players out there. And so in the end, like, you know, deciding to shut down that product, we had a couple hundred people working on it. Um, it was hard because a lot of people had poured their light, you know, heart and soul into it. We sold it to Slack, but in the end it was easy because I could look at the staff and say, No, you're going to have a bigger impact on the world doing something else.

AI assessment note: “It ended up not being a hard decision because the way I looked at it”

Q per seat pricing. I've had many guests on the show, including like Mars Grimshaw from benchmark, obviously where Peter Fenton is, who said that per seat pricing would, would not exist in a world of AI. Or would change. Do you agree with that, that AI changes the per seat pricing model? And how do you view the evolution of pricing with the instruction of AI as a foundational pillar?

A I will put pressure on per seat pricing. I agree with that premise in general. For example, if you provide help desk software and it's, you know, licensed on a per agent basis. And in many cases, these, our competitors have these things that are a hundred dollars an agent a month. You know, if you're Salesforce, it can be a 140 dollars a salesperson a month. Um, you know, these are high per seat costs. And in a world of AI, well, if customers can solve issues themselves because an AI agent solved it for you or a search solved it for you, then you've got a problem because, well, I can't charge for AI agent. That doesn't make any sense. Like one AI agent is infinite AI agents, so I can't charge that way. So over time, we are going to have to work out how we solve For value, and previously, you know, per user was a good proxy for the value that you provided. I don't think people have worked out what that looks like, and I think it will change based on how many seats, you know, how much you charge per seat. If you're, you know, a 152 hundred dollars a seat, like you've got a, a much bigger pricing model change to, to worry about than if, like the last thing does, we charge 10 dollars a seat, and then how much is going to be augmented by AI versus replaced by AI. So in some cases, like, yeah, you'll still need half as many seats, Cool. We'll just, you know, we'll meet them with AI a…

AI assessment note: “I agree with that premise in general. For example, if you provide help desk software”

Q per seat pricing. I've had many guests on the show, including like Mars Grimshaw from benchmark, obviously where Peter Fenton is, who said that per seat pricing would, would not exist in a world of AI. Or would change. Do you agree with that, that AI changes the per seat pricing model? And how do you view the evolution of pricing with the instruction of AI as a foundational pillar?

A I will put pressure on per seat pricing. I agree with that premise in general. For example, if you provide help desk software and it's, you know, licensed on a per agent basis. And in many cases, these, our competitors have these things that are a hundred dollars an agent a month. You know, if you're Salesforce, it can be a 140 dollars a salesperson a month. Um, you know, these are high per seat costs. And in a world of AI, well, if customers can solve issues themselves because an AI agent solved it for you or a search solved it for you, then you've got a problem because, well, I can't charge for AI agent. That doesn't make any sense. Like one AI agent is infinite AI agents, so I can't charge that way. So over time, we are going to have to work out how we solve For value, and previously, you know, per user was a good proxy for the value that you provided. I don't think people have worked out what that looks like, and I think it will change based on how many seats, you know, how much you charge per seat. If you're, you know, a 152 hundred dollars a seat, like you've got a, a much bigger pricing model change to, to worry about than if, like the last thing does, we charge 10 dollars a seat, and then how much is going to be augmented by AI versus replaced by AI. So in some cases, like, yeah, you'll still need half as many seats, Cool. We'll just, you know, we'll meet them with AI a…

AI assessment note: “I agree with that premise in general.”

Q funny. Every CEO I speak to says today, and they say this behind the scenes, we just see that actually in person is so much better. The engagements there, the collaborations there, the cultures there, and there's this real binary flip back. And so it's fascinating to hear yours. Is there anything that you know now about remote that you wish you'd known when you had Mike made that decision?

A So one thing we've been working on is we, we believe that you do need to get together as humans to build human contact and, you know, human connection. And we didn't do that during COVID. And so people, you know, take the COVID is what remote work was and Jill was terrible. We didn't get to see anyone. You're like, no, that that's great. Like, but you can still see people and work remotely. You just don't need to see them every single day. And so we've done some research now, which we'd known earlier that, uh, you know, when you get together, people together, we see our team connectivity boost by 30%. So we ask our staff, how connected do you feel to your team? How connected do you feel to the company? And then we get people together, what we call intentional togetherness. So, um, and, and then we ask them, how connected do you feel before and after? And it was just part of our normal monthly cadence and we cross-referenced that with in-office participation. And so the people who intentionally get them together get a 30% spike in connectedness to company and connectedness to team. Now, the interesting thing is if you look at it from a, an atrophy perspective, right? Like, like how long does it take to return to baseline? It's four to five months actually before that returns to the, to the baseline. And so if you actually say, okay, well, if you get together people like three, f…

AI assessment note: “we've done some research now, which we'd known earlier”

Q Is there a trade-off between being the best in the world at something and being a great father? Respectfully, the travels, the intense demands, the quarterly reporting, the, the pressure that comes from being a public CEO and being there for bedtime and stories.

A Everyone has the same 168 hours in a week, and there will be people out there who are way better fathers than I am because they spend more time and that that is their life's calling. So for me, it's making all the trade-offs between all the different things I have of Being fit, and my responsibilities to family, responsibilities to work, and so if I devoted a hundred percent of my time to all the things I chose not to have a family, I would probably be better at work than I am today, and if I chose not to do work, I'd be a better father, but I just try and make the balance between all the different things that, uh, that I have.

AI assessment note: “if I chose not to do work, I'd be a better father”

Q Do you think your pathway would still be possible today, given the abundance of funding that we have today, even in a tougher economic time?

A I think it depends on what you're going after and the niche or niches Americans say, uh, that you're going after, because if there are thousands of other companies or dozens of other companies going after the same customer that you are, And they've raised 10 times, a hundred times, like, more money than you have. They're gonna be able to solve their customers' needs a lot quicker than you are. But there are many markets, like, ah, that go after very, very small, like, niche software. Constellation Software is a public company out there that does a lot of this, where they literally invest in, ah, you know, reservation systems for dog kennels or something, right? Like, very niche stuff, and in those situations, I do think you can bootstrap businesses. Uh, you know, still today, because there is not much competition there.

AI assessment note: “in those situations, I do think you can bootstrap businesses. Uh, you know, still today”

Q I mean, that's one thing. The other thing is how you set up your teams. Something that's very unique about Atlassian also is the remote Work nature of it. Will that persist? How do you think about that? And what do you might talk about when you say about the team structure being remote?

A Early on in the pandemic, so I don't know, March, April of 2020 when the world was still kind of trying to work out what this, you know, new world would look like. Mike and I, um, you know, had both not been to the office for a month or two because we'd shut our offices down and we knew that COVID was going to go for multiple years. And we knew that during that time we wanted to keep hiring people, and if we did that, like, are we gonna hire people who were gonna work from home but have to live within 25 kilometers an office, 50 kilometers an office, 30 miles an office for your American listeners. We decided, no, we wanted to hire people, and given we had offices around the world, we had people in Australia, the UK, the US, Europe, we wanted to basically allow us to continue hiring, and so we made the decision that we would never require someone to come back into an office, which is probably not dissimilar to other people like out there who sort of made that decision by abdication, like that kind of ended up what's happening is, you know, during COVID people could work anywhere, they didn't stop it. But we were very deliberate about saying people, that is the path we're choosing, and we're, we're on a public record. So we had people who, you know, worked for ASEAN, people in New York where we didn't have an office, like would, you know, come, you know, work for us. People in, y…

AI assessment note: “we made the decision that we would never require someone to come back into an office”

Q to anyway, when we look at like Jira today, it's a polarizing product. And I suppose there are a couple of the biggest CPOs in the world. And they said the challenging thing is it's trended towards catering to power users while upstarts have appeared that simplify the experience and it makes it much easier for that new onboarding for new customers. How do you feel when you hear that?

A As every product lead CEO wants, like I want my product to appeal to every single user and be the best thing for them to use every single day. One of the Benefits of Jira is it can do a lot of things for a lot of people. The great part is you never grow out of Jira. So, you know, no matter what size your engineering team, whether you've got 20 people or 20,000 people working in engineering, like, you never grow out of it. So that's the benefit of it. The downside is that, you know, that complexity can sometimes be overwhelming for, you know, some customers. There are two parts of that. One is, you know, the product itself, like, we can continually do, and if you look at Jira now versus five years ago versus five years before that. We continually simplify the product. The other part, unfortunately, is sometimes how it gets set up by people, and sometimes people, you know, complain, hey, Jira's got 14 fields I need to, you know, fill in before I can raise a bug. You're like, well, we don't ship with 14 fields out of the box. Someone has configured it that way, you know, because they, they've done it over time. And so, you know, sometimes you have to tease out which is the inherent, you know, Jira complexity, and like, which is the sort of Complexity because the Jira admin has decided that you need to fill out 14 fields. But we have a huge investment by continually simplifying tha…

AI assessment note: “The downside is that, you know, that complexity can sometimes be overwhelming for, you know, some customers.”

Q Final one, I promise, and let me do a quick fire. You have an amazing relationship with him, your wife, through an incredible journey with Atlassian. What's the secret to a happy marriage?

A I think putting your partner on a pedestal is really important, like, to do that, and, uh, it's a great book, actually. It's the one thing, I think it's the one thing you need to know, or The one thing, I can't remember Marcus Buckingham, but a whole bunch of research that shows that, you know, couples that put each other on a pedestal actually do better than couples that are realistic about their, you know, the opposing person, and, uh, I don't know, I feel like I've always put my wife, Kim, on a pedestal, like, she's the most amazing person, um, on every front, like, whether it's work, or friends, or family, or our own nuclear family, and so she's the best friend by a long way, like, and, uh, we've had a shared journey. Um, and then lastly, um, I've learned how to say sorry quickly, uh, when I screw something up. And, uh, I feel like, uh, that's something she taught me. She taught me to just say, you know, I do something bad or whatever, and she'd just tell me, say sorry. And for about five years, I'd, I'd like dig my heels in and be like, no, no, why would I do that? And then I think for the last, uh, we celebrate 20 years, uh, a month ago. So, uh, for the last 15 years, I think I've learned that, uh, when you're wrong, just say sorry.

AI assessment note: “putting your partner on a pedestal is really important”

Q To what extent do you aggressively allocate towards AI today versus appreciating we're still in phase one. A lot of the money will be burnt in, in, you know, productive ways, but still burnt because you need to burn it for progression to happen often. So what extent do you aggressively allocate versus do, but tentatively in the knowledge that we're still in phase one?

A We have, um, you know, multiple thousands of engineers in Atlassian and we have Multiple hundreds of engineers working on, you know, AI, uh, you know, things at the moment. What we do, if you look at, um, our data, our data is our customers' data. Like, we don't control our data. We're not like Bloomberg where it's like we have, you know, 50 years worth of trades that we can, you know, put into a large language model. Like, we have our customers' data and we need to help our customers access it better. So we don't have to make the huge list and investments of, uh, you know, building our own large language model or building, you know, our own thing across So across, you know, data sets. So what we do need to do is integrate them in interesting new ways. And so I think that's not wasted work because, you know, if we can work out what the most useful way of doing that is, I think that's going to be, um, you know, time well spent. And yes, you could wait, I guess, till that paradigm has been, you know, sorted out that, uh, you know, I think by the time like Uber worked out the exact way to order a car and that it was cars and not limos and stuff like that. It was hard for other people to catch up because they had an advantage and it's not just understanding what works. It's often understanding what doesn't work. Um, and, uh, you can't really buy your way into knowing what doesn't w…

AI assessment note: “multiple hundreds of engineers working on, you know, AI, uh, you know, things”

Q Can I take a different tact, but I do want to cover one more thing before we move into a quick fire, and it's more personal, but obviously with the immense success of Atlassian, finances change. I always ask this one, but I think it's really important. How do you think about your relationship to money today?

A I think about this a lot because I've got young children, and I remember actually once, um, Peter Fenton used the words about post-economic. What does that mean, right? I thought about that a lot, and I wouldn't use those words, but there's a relationship between time and money, I think, that you have throughout your life, and I know when I was a teenager and through university, I had a lot more Time than I had money. But with most, most things in life, you can trade time and money. Like, if you want to get great concert tickets and you don't have money, you stand in line out the front, you know, stay overnight, like, to get the concert tickets. So I think that trade-off actually exists a lot, ah, in, in life, um, and it doesn't change, you know, if you've got a lot of money, you just, the trade-off, the, the slider moves a lot more, and if you have a lot of time, it goes the other way. I haven't, wasn't born from a family that has, had a lot of money, um, and so for me, um, moving the slider of money and time, Um, has actually been a bit of a struggle. Good example, um, when you take a rental car, like, you can fill it up before you go back to the, uh, rental agency, or you can get them to fill it up for you, right? And if they fill it up, they charge a premium on the fuel that you put back in there. But it probably saves you 20 minutes of running around trying to find the fue…

AI assessment note: “moving the slider of money and time, Um, has actually been a bit of a struggle.”

Q Is there a trade-off between being the best in the world at something and being a great father? Respectfully, the travels, the intense demands, the quarterly reporting, the, the pressure that comes from being a public CEO and being there for bedtime and stories.

A Everyone has the same 168 hours in a week, and there will be people out there who are way better fathers than I am because they spend more time and that that is their life's calling. So for me, it's making all the trade-offs between all the different things I have of Being fit, and my responsibilities to family, responsibilities to work, and so if I devoted a hundred percent of my time to all the things I chose not to have a family, I would probably be better at work than I am today, and if I chose not to do work, I'd be a better father, but I just try and make the balance between all the different things that, uh, that I have.

AI assessment note: “if I chose not to do work, I'd be a better father”

Q to anyway, when we look at like Jira today, it's a polarizing product. And I suppose there are a couple of the biggest CPOs in the world. And they said the challenging thing is it's trended towards catering to power users while upstarts have appeared that simplify the experience and it makes it much easier for that new onboarding for new customers. How do you feel when you hear that?

A As every product lead CEO wants, like I want my product to appeal to every single user and be the best thing for them to use every single day. One of the Benefits of Jira is it can do a lot of things for a lot of people. The great part is you never grow out of Jira. So, you know, no matter what size your engineering team, whether you've got 20 people or 20,000 people working in engineering, like, you never grow out of it. So that's the benefit of it. The downside is that, you know, that complexity can sometimes be overwhelming for, you know, some customers. There are two parts of that. One is, you know, the product itself, like, we can continually do, and if you look at Jira now versus five years ago versus five years before that. We continually simplify the product. The other part, unfortunately, is sometimes how it gets set up by people, and sometimes people, you know, complain, hey, Jira's got 14 fields I need to, you know, fill in before I can raise a bug. You're like, well, we don't ship with 14 fields out of the box. Someone has configured it that way, you know, because they, they've done it over time. And so, you know, sometimes you have to tease out which is the inherent, you know, Jira complexity, and like, which is the sort of Complexity because the Jira admin has decided that you need to fill out 14 fields. But we have a huge investment by continually simplifying tha…

AI assessment note: “The downside is that, you know, that complexity can sometimes be overwhelming”

Q Final one, I promise, and let me do a quick fire. You have an amazing relationship with him, your wife, through an incredible journey with Atlassian. What's the secret to a happy marriage?

A I think putting your partner on a pedestal is really important, like, to do that, and, uh, it's a great book, actually. It's the one thing, I think it's the one thing you need to know, or The one thing, I can't remember Marcus Buckingham, but a whole bunch of research that shows that, you know, couples that put each other on a pedestal actually do better than couples that are realistic about their, you know, the opposing person, and, uh, I don't know, I feel like I've always put my wife, Kim, on a pedestal, like, she's the most amazing person, um, on every front, like, whether it's work, or friends, or family, or our own nuclear family, and so she's the best friend by a long way, like, and, uh, we've had a shared journey. Um, and then lastly, um, I've learned how to say sorry quickly, uh, when I screw something up. And, uh, I feel like, uh, that's something she taught me. She taught me to just say, you know, I do something bad or whatever, and she'd just tell me, say sorry. And for about five years, I'd, I'd like dig my heels in and be like, no, no, why would I do that? And then I think for the last, uh, we celebrate 20 years, uh, a month ago. So, uh, for the last 15 years, I think I've learned that, uh, when you're wrong, just say sorry.

AI assessment note: “I think putting your partner on a pedestal is really important”

Q you think about that bluntly, there's brands, and then there's actually people. Sometimes people are different to the brand, and, like, Sal and Ryan are amazing, but trust in the relationship, I think, is important. When you take your approach, you don't have time to build that trust, that authenticity in a partnership. Is that a problem, or do you think VCs aren't really your partner and so fuck it?

A No, VCs is definitely our partner, but we spent all that time up front. Um, you know, VCs have been knocking on our door for years to invest in all housing. And so I'd had multiple conversations, breakfasts, dinners with all the people, all five firms that were bidding and all the partners that were bidding. We had Peter Fenton over at Benchmark. We had Byron Dieter over, like, at, um, Bessemer. We had Rich Wong at Excel who ended up being, like, The company we went with. So I, I knew these people really well. We'd spent a lot of time with them. And so it was like, Hey, there's not, you know, we can choose any of them, like put your best foot forward. And actually like we, um, went back to Peter Fenton at Benchmark was, I think the runner up bidder. And we went back to Excel and said, Hey, look, all things considered, maybe we should get two VCs or, you know, in there, even though there was a huge difference in valuation. And we went back to Peter Fenton and told him if he matched Excel's price, um, you know, Excel were happy to split the deal with him. I don't know how much Excel's made off us, like it's a hundred times, I think, um, something like that, um, when they distributed. So, uh, uh, you know, Peter Fenton could have put in thirty million dollars at a hundred times. That's three billion dollars back. 30% for a benchmark is a billion dollars, like, six partners, probab…

AI assessment note: “No, VCs is definitely our partner, but we spent all that time up front.”

Q And how much were you going out asking for in the race?

A So when we did this, we, we told people that it's one shot caused envelope bidding, because I believe that was the best way to get a result, because the way most VCs do it is they give you an indicative offer, and then they sort of talk amongst themselves, and then they kind of agree on the price, and there's a bit of a collision that can often happen there, and They sort of do a price that's enough to get in the door, and then, you know, they get a second chance to up their number, and I felt that that was not the right way to do it. It was not enough game theory involved in that, and I tried to fight with my CSO at the time about this, because he said it's not the way these things are done, and I said I don't care about the way things are done. So we actually got closed envelope bids. We said, hey, we want to raise, you know, I don't know, you tell us how much we raise, you know, tens of millions of dollars, but you tell us how much we want you put in. And then you tell us what the valuation was. So we're on sixty million dollars of revenue. I think we were doing 20 or 30% profit margins. So we're making decent money at the bottom line. And, uh, the valuations we got back varied between, there was one sort of high hundreds. There was three of them ended up in the two to three hundred million dollar range. And Excel, who ended up, uh, you know, winning for us, uh, came back at…

AI assessment note: “you tell us how much we raise, you know, tens of millions of dollars”

Q Do you think the single biggest job of a CEO is resource allocation?

A I've got a, uh, an article basically, uh, that I bring up, uh, every couple of years and I'll put it in the show notes. Basically it's like the four things a CEO should do. And, um, one of them is, you know, effectively hire and fire the management team. Two is, uh, basically set the vision for the company. Three is set the culture for the company. And four is basically resource allocation, where you put the dollars and the bets. And those four things are the most important. And I go back to that article probably every single year to remind myself, look at my diary and say, how much of my time am I spending on those four areas? And so, yeah, resource allocation is one of those four.

AI assessment note: “yeah, resource allocation is one of those four.”

Q Can I take a different tact, but I do want to cover one more thing before we move into a quick fire, and it's more personal, but obviously with the immense success of Atlassian, finances change. I always ask this one, but I think it's really important. How do you think about your relationship to money today?

A I think about this a lot because I've got young children, and I remember actually once, um, Peter Fenton used the words about post-economic. What does that mean, right? I thought about that a lot, and I wouldn't use those words, but there's a relationship between time and money, I think, that you have throughout your life, and I know when I was a teenager and through university, I had a lot more Time than I had money. But with most, most things in life, you can trade time and money. Like, if you want to get great concert tickets and you don't have money, you stand in line out the front, you know, stay overnight, like, to get the concert tickets. So I think that trade-off actually exists a lot, ah, in, in life, um, and it doesn't change, you know, if you've got a lot of money, you just, the trade-off, the, the slider moves a lot more, and if you have a lot of time, it goes the other way. I haven't, wasn't born from a family that has, had a lot of money, um, and so for me, um, moving the slider of money and time, Um, has actually been a bit of a struggle. Good example, um, when you take a rental car, like, you can fill it up before you go back to the, uh, rental agency, or you can get them to fill it up for you, right? And if they fill it up, they charge a premium on the fuel that you put back in there. But it probably saves you 20 minutes of running around trying to find the fue…

AI assessment note: “moving the slider of money and time, Um, has actually been a bit of a struggle.”

Q you think about that bluntly, there's brands, and then there's actually people. Sometimes people are different to the brand, and, like, Sal and Ryan are amazing, but trust in the relationship, I think, is important. When you take your approach, you don't have time to build that trust, that authenticity in a partnership. Is that a problem, or do you think VCs aren't really your partner and so fuck it?

A No, VCs is definitely our partner, but we spent all that time up front. Um, you know, VCs have been knocking on our door for years to invest in all housing. And so I'd had multiple conversations, breakfasts, dinners with all the people, all five firms that were bidding and all the partners that were bidding. We had Peter Fenton over at Benchmark. We had Byron Dieter over, like, at, um, Bessemer. We had Rich Wong at Excel who ended up being, like, The company we went with. So I, I knew these people really well. We'd spent a lot of time with them. And so it was like, Hey, there's not, you know, we can choose any of them, like put your best foot forward. And actually like we, um, went back to Peter Fenton at Benchmark was, I think the runner up bidder. And we went back to Excel and said, Hey, look, all things considered, maybe we should get two VCs or, you know, in there, even though there was a huge difference in valuation. And we went back to Peter Fenton and told him if he matched Excel's price, um, you know, Excel were happy to split the deal with him. I don't know how much Excel's made off us, like it's a hundred times, I think, um, something like that, um, when they distributed. So, uh, uh, you know, Peter Fenton could have put in thirty million dollars at a hundred times. That's three billion dollars back. 30% for a benchmark is a billion dollars, like, six partners, probab…

AI assessment note: “No, VCs is definitely our partner, but we spent all that time up front.”

Q this as a leader, say, with AI? Like, bluntly, as a public company, everyone's told you have You have to have an AI story. You have to have an AI narrative. I get it, but you're also a very successful sustaining business with great customers already. How do you think about that need to have an AI narrative, an AI story, but also just remembering the amazing business we have?

A The history of technology with the way I would write it is that, um, it's a very much a winner takes all market. And once there's a winner established in a market, it's hard to disrupt them except when there's a technological change. And if I go back through the ways of change, I would say we went from minicomputers to, or mainframe to minicomputers, which was before my time, then we went to desktop PCs in the nineties, and you saw, you know, you see companies emerge and see companies decline, right? Like you saw, you know, DEC, DEC, and a whole bunch of, you know, minicomputer people didn't make it to the PC, and instead you saw sort of IBM and Microsoft rise, and then the internet came around, and you saw Microsoft wane a little bit, you know, and you saw a rise of net Escape and Google and eBay and PayPal and so forth. And then mobile came around and didn't really displace anyone, but Apple suddenly came back into the floor and Microsoft continued to sort of miss that, that, uh, that area. And then you saw, I guess, cloud, public cloud, which, you know, changed a lot of enterprise stuff, but not much for consumer. They didn't care what, where, where things were running. Um, and now we're seeing AI. And I think again, in each of these changes, you see some companies continue to survive. Some companies, you know, rise from the ashes, like, um, and some companies don't make the…

AI assessment note: “it's hard to disrupt them except when there's a technological change.”