Insight
Adding enterprise sales to a self-serve business is easier than the reverse
“It's a lot easier To build a self-service business first and add sales later, then build a sales driven business first and add self-serve later.”
Assertion Not checkable as stated
Atlassian Refuses to Negotiate Software Pricing With Any Enterprise Customer
“And to this day, 20 years later, and we have some of the biggest companies in the world, we have one set list price and it's all on our website. We do not negotiate pricing with any single customer. Every customer gets the best price.”
Assertion Not checkable as stated
Atlassian founders avoided salespeople because they couldn't afford them
“They didn't hire salespeople because they didn't believe in salespeople. They didn't hire salespeople because they couldn't afford salespeople.”
Assertion Supported
Atlassian assigns account managers to only 5,000 of its 250,000 customers
“So of those 250,000 customers, we really only cover, call it five to 6000 of those with an account manager.”
Insight
Atlassian enterprise reps pitch company-wide standardization, not core product value
“So so what I always say is we, by the time we are actually engaging with humans, we're not there convincing them the value of Atlassian. What we're doing is convincing them of the value of standardizing on Atlassian.”
Disclosure
Atlassian requires 50% YoY growth potential before assigning an enterprise rep
“Well, if I'm going to add as expensive sales rep, I need to ensure that there's an opportunity to grow that account 50% year over year for the next five years. Like that's how we think about that. Because otherwise I'm going to eat into operating margin or I'm…”
Assertion Partly supported
Atlassian Scaled to $3B Revenue With Under 15% S&M Spend
“We've been able to grow to over three billion in revenue, while keeping sales and marketing spend under 15% of revenue. For all 20 years we've been in business.”
Assertion Supported
Atlassian operated for 12 years before hiring a commissioned sales rep
“It wasn't until 2014 that we hired our first commission rep. So 12 years in business before we had to even think about a commission plan.”
Assertion Partly supported
Atlassian drives one-third of bookings through third-party channel partners
“And we do roughly a third of all of our bookings through these third party channel partners”
What-if
Atlassian regrets waiting until 2020 to switch from trials to freemium
“We went from a trial-based model to a free model, right?
Yeah, we did that in 2020.
It's like, actually, Matt, actually, we believe this has been a massive success for us.
We probably, knowing what we know now, we probably would have done that in like 2017.”
Assertion Not checkable as stated
Founders mistakenly tie revenue targets directly to sales headcount capacity
“95% of companies I work with to have like, that I talk to have that business model. You've inevitably immediately tied. Like the first thing you do is tie your sales, your overall revenue number to how many salespeople you can hire, not how much innovation you…”
Disclosure
Atlassian gathers 5 to 10 years of customer data before assigning reps
“So before anyone gets an enterprise rep, an enterprise advocate, we probably have five, maybe even 10 years of historic sales data with that customer.”
Assertion Not yet assessed · timeframe Jun 2023
Atlassian spends only 15% of revenue on sales and marketing
“We spend 15%, one to five percent of revenue on sales and marketing, roughly, mid-teens which is a fraction of any company that's in enterprise software of our size. And we spend, call it 35 to 40% on R&D.”
Insight
Expansion product pricing models must closely mirror the initial product purchased
“When you think about pricing and packaging for your expand products, realize you've already trained them how to buy. So try and keep it as simple as possible, you know, from a repeat purchase perspective that it's as similar to their first purchase. Then you d…”
Insight
New land products should be treated as entirely separate businesses
“With a land product, you almost kind of want to treat it as a separate business, right? From a brand, like you actually want infinite flexibility on how you take that product to market, because you're trying to get a new set of cohort, and who knows what that …”
Assertion Supported
Atlassian Generated Over $1B in Sales Through Solution Partners Last Year
“Last year alone, we did over a billion dollars in sales. I didn't know I was going to be in a tent today. Sorry. The over a billion dollars in sales. And on top of that, that doesn't include all of their own services and training, what have you.”
Insight
Ramp New Channel Partners by Feeding Them Existing Customers First
“You have to be thinking about, if you want to bring on new partners, how do we actually get their business growing? How do we get them addicted to the Atlassian business? You know, by introducing them to our customers. You have to open up your customer portfol…”
Disclosure
Atlassian Considers It a Failure If Customers Bypass Partners for Services
“If there's any incentive for a customer to come directly to Atlassian for a service, instead of working with a partner, then we have failed.”
Assertion Supported
Atlassian Marketplace Generated $2B in Sales, Paying Vendors $1.5B
“Over the last 10 years, we've done over two billion dollars in lifetime sales through our marketplace. Show the scope of what the type of business we've done here. More importantly, we've taken one and a half billion of that and given it back to our marketplac…”
Assertion Not checkable as stated
Jira Customer Retention Spikes When Users Install More Than Two Apps
“We know if a Jira customer installs more than two apps into their Jira instance, their retention rates go through the roof.”
Insight
Cloud Platform and Partner Ecosystem Returns Take Over 18 Months
“So if you were thinking about, we're going to build a big cloud platform and build an ecosystem, start partnerships, and money will start coming out of the, out the other side in 12 months or 18 months, you're fooling yourselves.”
Disclosure
Atlassian decided early to optimize for one-to-many engagement across operations
“The reality is the way we made a decision very early on is, you know, we're going to try and optimize for one to many, everything Atlassian does. So instead of doing a demo for just one client, Let's do a demo, record it, post it on YouTube so everyone can see…”
Assertion Partly supported
Atlassian sustained 30-35% annual growth for 20 years without triple-digit spikes
“Atlassian never had triple digit growth, except for maybe like year one, where it's like, you know, from 300 K to one million.
Low base.
Yeah.
But instead we've been doing, you know, low to mid 30% growth every year for 20 years.”
Disclosure
Atlassian delayed hiring sales reps until it launched a high-ASP enterprise tier
“When we first added sales reps, it was largely, we had just created a scale version of our product. Like we call it the data center edition. So we basically finally had a product that was built for large customers. And what I say is had an ASP high enough wher…”
