Feb 8, 2021 · 1h 12m · how-i-built-this
Atlassian: Mike Cannon-Brookes and Scott Farquhar
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of How I Built This, host Guy Raz interviews Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar about how they bootstrapped a Sydney-based software startup into a $50 billion global enterprise powered by Jira.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 31.3% of the talking time here. How this is scored →
Guy as informed peer 2.5 Guest teaching 2.0 Guest disagreement 0.6 Guy pushing back 0.9
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 45:50 Mike rejects standard consumer network effect comparison
Mike directly corrects Guy's comparison to consumer network loops like Dropbox or Slack, insisting Atlassian's organic growth relies strictly on intra-company team utility.
Hardest push from Guy ▶ 49:11 Guy pushes on young founders managing 100 employeesGuy refuses to accept the founders' self-deprecating brush-off and drills into whether they legitimately possessed managerial competence when headcount rapidly multiplied.
Biggest teaching moment ▶ 30:12 Scott educates on constraint-driven enterprise software modelsScott explains to Guy how being far from Silicon Valley capital forced them to pioneer no-salesperson, low-friction software adoption years before it became industry standard.
Guy holds their own ▶ 1:03:45 Guy cites Tobi Lütke's geographic thesis at ShopifyGuy brings deep industry context by synthesizing past interviews, drawing a parallel between Atlassian's isolation in Sydney and Shopify's deliberate growth in Ottawa.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Virtual Event Announcement and Listener Advisory | 0 | 0 | 0 | 0 | Introductory monologue, event announcement for Jay Shetty, and overview summary of Atlassian's history and scale. No host-guest dynamic present. | |
| Childhood Backgrounds and Early Computing Experiences | 2 | 1 | 0 | 0 | Friendly, biographical exchange detailing Scott and Mike's childhoods and first computing experiences. Guy jokes with Mike about early academic email syntax. | |
| University Meeting and Mike's First Startup | 2 | 1 | 0 | 1 | Mike explains his first startup, Bookmark Box, and dropping out of the scholarship program. Guy prompts Mike to explain how the venture concluded. | |
| Corporate Disillusionment and the Decision to Partner | 2 | 2 | 1 | 1 | Scott and Mike discuss rejecting the corporate track to start a company. Guy pushes Scott on why he risked turning down a secure graduate salary given his working-class background. | |
| Founding Atlassian and Early Tech Support Struggles | 2 | 2 | 0 | 1 | The founders humorously recount providing 24/7 third-party tech support and putting rock-paper-scissors into their shareholder agreement. Guy lightly probes their early legal and dispute resolution setup. | |
| Pivoting to Product Development and Building Jira | 3 | 3 | 1 | 1 | Discussion moves from internal tools to building Jira. Scott explains how lacking Silicon Valley VC forced them to invent consumerized self-serve distribution for developer tools. | |
| Guerrilla Marketing and Early Product Traction | 4 | 4 | 2 | 1 | After Guy compares Jira's growth to Dropbox's network effects, Mike refines the premise, explaining that Atlassian's viral vector was internal multi-team collaboration rather than individual referral mechanics. | |
| Scaling the Organization and Defining Core Values | 3 | 3 | 1 | 2 | Guy presses the founders on whether they actually possessed leadership capabilities when scaling from 50 to 100 people. Scott details realizing cultural misalignment and running the Mission to Mars exercise. | |
| Acquisition Talks, Patient Capital, and Sabbaticals | 3 | 2 | 0 | 1 | Mike shares the Silicon Valley acquisition meeting interrupted by a fire alarm, and both founders reflect on taking sabbaticals in 2009 instead of cashing out. Guy explores co-founder relationship stability. | |
| Billionaire Status, Future Vision, and Luck vs. Hard Work | 4 | 2 | 1 | 1 | Guy introduces a comparison to Shopify's Ottawa origins to test whether Australian geography was a competitive moat. The episode closes with reflections on wealth, remote work, and rock-paper-scissors tactics. |
Statements from this episode (15)
Cannon-Brookes acquired his first computer at age eight using frequent flyer points
“So I was flying from Sydney to London four times a year back and forth and racking up lots of frequent fly points as a seven year old, eight year old, nine year old. And my parents gave me the catalog one, you know, Christmas or end of year and said, Hey, you …”
Cannon-Brookes sold his first startup to competitor Blink for hundreds of thousands
“Anyway, Blink raised thirty-five million dollars. And we were sitting in Sydney and we were just like, holy shit, we're gonna get smoked. There's no way. So we called up the two or three guys that had raised a big bunch of money and said, look, we got a couple…”
Cannon-Brookes' father passed on investing in Atlassian after an early startup underperformed
“The worst, or the funniest part about that story, my dad would hate me saying this, is he, I think my dad put in five or 10 grand, and you know, barely got his money back kind of thing, and decided that maybe I wasn't worth backing, and so he never invested in…”
Farquhar and Cannon-Brookes originally just wanted a $48,500 salary without wearing suits
“The thesis was if we can earn 48,500 dollars and not have to wear a suit to work and a tie to work and work with, you know, kind of average people, then, you know, we've won.”
Atlassian's first shareholder agreement designated rock-paper-scissors to resolve founder disputes
“And we put in Rochambeau or rock, paper, scissors into our shareholders agreement. And so it's changed now. We're a public company. We can't solve problems like that anymore. But you know, for the first few years, if we disagreed it would have ended up at rock…”
Farquhar says raising Silicon Valley capital would have made Atlassian less disruptive
“I really think if we had grown up in Silicon Valley and had venture capital around us, that we would have built a very different company that wouldn't have been as disruptive as ours has been because we didn't have venture capital.”
Cannon-Brookes says developer tools provide an entry point to larger enterprise markets
“It turns out there's way more non-software developers in a company to sell to than there are software developers, but this is still a great sort of entry into the company, if you like.”
Atlassian co-founders paid themselves just $300 weekly for their first two years
“We didn't pay ourselves for a long time, and even after that, I think we paid ourselves 300 dollars a week for the first two years, so we were relatively inexpensive.”
Farquhar notes Atlassian bought early Google AdWords for 10 to 20 cents
“Things that would now cost you 10 or 20 dollars for a click would cost us 10 or 20 cents, and I always wish we had more money to spend on that.”
Cannon-Brookes explains how enterprise software virality spreads through cross-functional team members
“We want to get one team to solve one problem with our application brilliantly, because most people in companies don't work on one team. They actually work on three or four different teams and different projects, different things.”
Cannon-Brookes argues startup leaders must scale their capabilities faster than company growth
“If our business is going to double every two years, as individuals and as leaders, we can only justify our positions if we are more than doubling our capabilities every two years. Because logically, otherwise, you end up with a kind of constraint at the top, r…”
Cannon-Brookes says demonstrating direct product value eliminates the need for sales reps
“If you can demonstrate value to someone
We had to figure out how to sell things online.
And once we had done that and saw the effect of that patience, all we did is kind of continue to double down on that model every year, right?
We would hire more engineers i…”
Cannon-Brookes says Atlassian remained completely founder-owned with zero funding after eight years
“We had taken no, no, no capital, no investment.
we still owned a hundred percent of the company.”
Farquhar claims starting in Australia is the only reason Atlassian became successful
“Starting Alassian in Australia is the only reason we're successful.”
Cannon-Brookes argues distributed teams should use in-person gatherings exclusively for social bonding
“Do the work at home when you're remote from each other, and when you're meeting, build the social bonds, go out to dinner, like run exercises, whatever you're going to do, but don't meet to do work.”