Original link: https://maxoxo.me/atlassian/
Mike Cannon-Brookes, who graduated from the University of New South Wales in 2002, sent an email to his classmates asking if anyone would like to start a business with him. At that time, Australian fresh graduates preferred to work in some well-known companies rather than start a business. Mike’s Only one of his classmates, Scott Farquhar, was willing to start a business with him. The two started their entrepreneurial careers with a $10,000 credit card advance, initially doing what amounted to technology outsourcing, helping other companies solve technical problems. External companies usually put forward various requirements to them. In order to facilitate the management of these requirements, they developed a Ticket management software, which is the predecessor of Jira, and Atlassian officially released Jira in late 2002. Jira is a software that focuses on project management in software development. At that time, Jira was not a simple application. Because of the complexity of project management itself, Jira required a certain learning cost, but since only Jira could satisfy the project at that time The various needs of managers, and the customers of the target group are also willing to spend energy to learn how to use Jira.
With the success of Jira, Atlassian also began to focus on team collaboration products, as their mission “unleash the potential of every team.” The TEAM before the IPO mainly refers to the development team, the product line from Jira to Confluence, to acquisitions Bitbucket and Fisheye, etc. are all for service development teams. After Atlassian’s IPO (ticker: TEAM) in 2015, Atlassian expanded Team to all teams within the company, not just development teams, but Marketing, Sales, Finance, HR.
Unlike software companies in Silicon Valley (Dropbox, Facebook) that only focused on one product at the beginning, and gradually began to expand other business lines when the product was good enough, Atlassian released Confluence a year after the release of Jira, but its own After all, the energy is limited. After that, Atlassian started a crazy acquisition model. In 2008 alone, it acquired 5 companies (Bamboo, Fisheye, Crucible, Clover, Crowd), and these products undoubtedly serve the development team. In 2017, Atlassian acquired Trello, expanding the customer base to almost all teams, and the internal incubator Point A also continued to have new products.
Since the launch of Jira in 2002, Mike and Scott have been thinking about how to sell the product. Since there is no sales, they plan to allow users to complete the purchase by themselves, so they put the product clearly marked on their website. This strategy is feasible for small and medium-sized companies, and just like the Beamer introduced earlier, users can buy it themselves. But they weren’t sure about big companies, until one morning in 2003, when an American Airlines order was printed on a fax machine, the two founders asked each other if they had contacted American Airlines, and after getting a negative answer, they realized Even big companies like American Airlines can buy their own products directly on the site, reinforcing their decision to let users buy for themselves. Atlassian briefly opened an office in New York in 2004 and then closed it, as Atlassian wrote in its 20th anniversary blog:
Software should be bought, not sold. [1]
Although Atlassian is ambitious to serve all teams, it is obviously unrealistic. If you want to better serve the Marketing or Sales team, you will inevitably go to CRM, and will directly compete with HubSpot or Salesforce. Obviously, this is not Atlassian. good at. Even though Atlassian already has solutions for multiple teams such as Finance and HR in the Solution on the website, they are actually just various ways of playing Trello, not a real solution. Judging from Atlassian’s actions, currently only the acquisition of Trello is aimed at expanding the team type, and other products are still serving the R&D team.
growth pattern
Since the IPO, the revenue growth rate of the products acquired by Atlassian is higher than that of the self-developed products. The self-developed products are basically 4x at the time of IPO, while the growth of the acquired products is almost 8x [2] . Toplyne also calls it Acquisition-Led Growth, and it is. But the acquisition only shortens the time of the product GTM (Go-to-Market), and the growth of the product itself, Atlassian mainly relies on PLG and partners.
PLG can be said to be a road that Atlassian had to take at the time. Atlassian’s headquarters was in Australia, but most of its customers were in North America. Traditional companies usually set up branches or sales teams in North America to increase investment in this area. , Atlassian opened an office in New York in 2004, but the revenue was not as good as expected, so it also closed a year later. Atlassian’s strategy is exactly what former VP Jay Simons said “It all starts with a remarkable product” can be divided into the following steps:
- Attract customers to try through excellent products;
- Customers feel the value of the product and pay when they try again;
- Paying customers become product promoters and promote them in company content;
- Customers discover other products and try them out in the process of using the product;
During the whole process, Sales does not need to contact customers. The emergence of Sales is more in the fourth or later stage. The main task is to sell more products to existing customers. Compared with letting Sales in the first step The sales model of intervention, allowing Sales to intervene after the first customer pays can improve sales efficiency. Because the customer has already paid for the product at this time, it shows that he has trust in the product and the brand. At this time, he is thinking that the resistance of him to sell another product will be relatively much lower; so Atlassian’s Sales can be said to be enhancing the value of existing customers (ARPU). ), which is different from the strategy in which Sales is responsible for closing new orders in the traditional sales model. Jay Simons also mentioned that this model is not applicable to all products. For example, Workday is a financial management and human capital management software. The complexity of the product itself and the purchase decision are usually driven from the top down within the company. Under this model First of all, it is difficult for the product itself to show its value to users in a short period of time; secondly, users cannot decide whether to buy software.
The early acquisition of Jira mainly relied on its own website and partners. Atlassian’s SEO strategy on the website is to provide courses rich in project management and agile development, which is the main role of Atlassian University . This method of attracting traffic through content is still applicable today, and HubSpot is taking a similar approach to get enough keywords to get more organic search traffic.
Another strategy of Atlassian is through partners, which are mentioned in the 2021 financial report , or customers brought by partners contribute about 40% of revenue. In addition to solution partners, Atlassian is also trying to build Jira into a platform. Jira’s Marketplace is equivalent to an App Store, where developers can submit their own plugins. The Marketplace achieved a total transaction volume of $500M in fiscal year 2021.
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Overall, Atlassian’s growth can be divided into 3 stages:
- 2002-2010 mainly relied on Jira and Confluence, and the strategy was to attract customers to self-purchase through excellent products;
- 2010-2015 mainly rely on a large number of acquisitions, rapid expansion of product lines, and expansion of product usage scenarios, thereby increasing the ARPU of existing users;
- Since 2015, the original customer focus has been expanded from the R&D team to all teams.
Atlassian’s most recent acquisition was Chartio in 2021, AgileCraft was acquired in 2019, and Trello was acquired in 2017. The two most recent acquisitions are still Gap, which complements the R&D team, while Trello Only in the true sense is expanding to more diverse teams, but this expansion of customer groups seems to have stopped there. Trello’s competitors include Monday.com or Asana are also big players that have already been listed. Atlassian is a new player. There’s clearly no advantage to a character entering a new track. Although Point A has been launching new products, these products seem to be constantly enriching the Jira product. Obviously, Atlassian has encountered a lot of resistance in enriching the customer base and allowing the product to serve more different teams. After all, Jira is an indispensable tool for the R&D team. The product ecosystem built around Jira may not be applicable to the Marketing team or the Sales team. But even if it returns to its main battlefield, Atlassian is also facing the challenges of a lot of big manufacturers for products for R&D teams. Bitbucket is no longer as popular as GitHub or GitLab. Confluence is also challenged by Notion. There are also many core products, Jira. The challenges of startups, GitHub and GitLab also have integrated simple Ticket tracking functions, and GitHub has been strengthening its capabilities in this regard, and the future is not clear for Atlassian.
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