Atlassian: Mike Cannon-Brookes and Scott Farquhar

Hey everyone, just a quick announcement before we start the show. So A lot of you may know how much I miss seeing all of you at the live in-person shows that we do around the country during normal times. So I am really excited to finally announce our first how I built this virtual event. It's happening next month with Jay Shetty. Jay is a best selling author, former monk, and wellness coach, and if you're searching for purpose, peace, and clarity in your life, or you're struggling to find meaning and motivation at work, you will not want to miss this conversation. Please join us. It's happening on Thursday

March eleventh, and anybody around the world can take part. For more information and tickets, Head to NPR presents. dot org. And I hope to see you there. And one more quick thing, just a quick note.

There is a little bit of salty language in this episode, so if you are listening with kids Just be aware. And thanks. Oh I would have my computer running twenty four hours a day under my bed.

Both our mobile phones were turned up to the loudest ring tone they possibly could. We'd alternate which nights we were on call and get up at two in the morning and try and answer, you know, the phone call. It's like we're you're you know, trying to sound like you're you know cogent at that time in the morning and then We realise that actually uh it was it was just such a terrible business. Almost anything would be better. Rom NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

Guy Raz and on the show today How two friends from college started a business named for a Greek Titan. Билт а модерндей емпар. Atlassian. Software company that's been valued at over fifty billion dollars.

Back in 2018, there was an article in a major Australian newspaper, the Sydney Morning Herald. The headline read Atlassian, the$30 billion tech giant nobody understands. Today, you'd modify that headline slightly to read, The$50 billion tech giant nobody understands. So let me try and explain as best I can. Atlassian is a software company. It makes collaboration tools mainly used by software engineers and project managers. Their applications have been used by teams who sent the Curiosity Rover to Mars, by Domino's every time you order a pizza, and by Audi's designers who rely on Atlassian's project management tool called Jira. By market cap, Atlassian is one of the 20 or so biggest software companies on the planet.

And those other companies. You probably know some of them. Microsoft, Oracle, Adobe, Autodesk, Salesforce, Intuit, et cetera. Anyway, if you look at the top thirty or so biggest software companies on earth, you'll start to notice a pattern.

Most of them are based in Northern California in Silicon Valley. which makes Atlassian, an Australian tech company, an outlier. Back in twenty fifteen, when the company went public, it turned its founders, Mike Cannon Brooks and Scott Farquire, Into Australia's first tech billionaires. But the thing is.

Atlassian's success may have a lot to do with where it started. far away from the tech hubs Northern California and Seattle. And while that may sound counterintuitive, Launching a tech company in Australia in 2001 meant for starters less competition, less noise, and fewer distractions. And for Mike and Scott.

It also meant not a whole lot of access to startup capital. In fact, in the early days There was none. And so the two founders didn't really have any investors breathing down their necks trying to micromanage the business. And it gave them room to experiment and to make mistakes. And to grow. Mike and Scott met in college. They both grew up in Sydney, but they also both came from very different backgrounds.

Here's Scott. My dad originally did some computing early in his career, but he had sleep disorder and that affected his ability to do work uh as a computer programmer. And so he ended up doing odd jobs. So he worked at a service station at night, he did some manual labor. My mom was a housewife growing up, uh for most of her life, um and interspersed that with uh different jobs. One of the early ones I remember is she was uh clean someone else's house um once a week. Then she worked at Target or Target, as we like to call it in Australia and McDonald's at different at different stages.

And so I would say it's for middle class upbringing. Um you know, we didn't want for anything, but uh You know, we had one holiday a year to the same place every year, type of thing. Yeah. When you were growing up, a teenager, did you feel Compared to other Kids you knew or places you saw that you guys w didn't really have a whole lot.

I didn't really notice the the difference in, you know, our economic status, I guess, when you when you're growing up. You go to a school and everyone in Australia wears a school uniform, so there's no real difference in fashion. Um, I remember in in high school I ended up dating A girl who was from one of the private schools in Sydney. And we would go to lots of different people's houses and

I do remember, you know, quite a few of those houses look very, very different to the house we grew up in, you know, the house Uh and and particularly my parents got divorced, we ended up moving into much smaller houses and uh When your entire house could fit in someone else's living room. you sort of realise that there's a a very different uh way of people living out there. But I never felt that we missed out on anything. Um

I think maybe we with one notable exception which I remember um clearly is that uh I remember my friends had computers And I remember y kind of asking my parents, why couldn't we have a computer? I do never you know. crying as I went to sleep one night of like, Dad, why can't I get a computer?

So were you eventually able to get one? Um it was a month or you know uh uh later. um some you know old computers that I guess had been you know extended their extended their useful life at his work. became available and and he he bought them and brought them home. thinking, you know, he'd done an amazing thing and and helped his his son.

And uh but it turned out those computers were not compatible with any of the games that I wanted to play. And uh I think my foray into you know programming or even using computers was hours, weeks, months of time spent trying to get those computers to play. Um Scott, I'm gonna ask you just to stick around for for a moment and I wanna I wanna turn to you, Mike, for for for a minute. Um I guess your upbringing was substantially different um than Scott's Your Dad was a banker.

Yeah, and I guess your family moved around qu quite a bit when you were young. And you went to a boarding school in the UK, right? Yeah. I was uh five when we moved to Australia and I went to boarding school in England from the age of seven to twelve. And then came back to Australia for high school at the age of thirteen. Wow. So you were like

far away from your parents for like seven years. For six years, yeah. Which is um it's it's kind of odd, it's how I got started in computers because they started the frequent flyer program. 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 catalogue one, you know, Christmas or end of year and said, Hey, you know, you've you've earned all these points. What do you want to get? And you kind of look into like bottles of wine and

Holidays and isn't that your old kid. None of this is really good for me. And uh the back was this computer An Amstrad PC twenty. Four color.

Masterful device. And so I was like, I guess I'll get that. And that was how I got my my first Computer of myself, my own at uh eight eight and a half. Three freaking fly points. What did you do with that computer? I used to um play lots of really bad video games that seemed like the best thing in the world at the time.

Um and the internet. took off so I was on the internet pretty early, luckily. My sister one of my sisters went to university in Edinburgh in Scotland. And I managed to convince my parents that we could email her and that this would be a lot cheaper than sending letters. you know, paying for those forty five cent stamps would be expensive, so instead We joined a an ISP in Sydney called Dialex, which I can still remember it was one cent per minute.

And it was all you know, text based. And had the old motor making those funny noises as you logged in and all that sort of thing. But that got the internet into our house. Yep. That was definitely a revelation for me. S T three seven two five nine at Edinburgh. A C dot CC. UK It was something something very close to that, yeah. I remember those days, yeah.

Um and and I guess when it was time for you to go to college You got this pretty prestigious like computer science scholarship to go to the University of New South Wales, which is in is in Sydney, right? Mm-hmm. And and this is a program I guessed where like part of the deal is

you get a scholarship to be part of this program, but you kind of agree to go work for one of the companies that is going to sponsor That sponsors the scholarship, right? Is that right? Yeah, it's called a co op scholarship. So the whole idea is the triangle between industry Academia and the students. Right. And this is where

Scott had been accepted into the same program, right, Scott? Yes. And uh there's a quite quite a lot of luck involved in um where Mike and I have ended up and One of the lucky things was that the programming languages that we got taught. Um and the skills we got sort taught were actually pretty

in line with what we needed to build a software company. We weren't being taught you know, esoteric programming languages that you know you couldn't use or you know, compiler, you know, details where you were sort of down in the bowels of a computer, uh, you know, uh trying to get it to work. We're actually building languages, you know, programming languages that could be used to build applications and build specifically build web applications, which of course is where most software is is these days. And Scott, were you and my close friends in college or or did you kind of have your own like your own groups or did did you hang out a lot? I think both of us gravitated towards uh group assignments where other people

Much smarter than us did. All the work. So we I think we found ourselves in And offer the same group assignments uh early on. Um we'd go to the same parties together, but I don't think we'd be hanging out on a Tuesday night at each other's houses. And Mike, what was your first impression of of Scott? Do you remember him? Yeah. Um, I remember my early impressions he he was clearly a leader. Like, hey, I'm I'm gonna take charge of the situation, I'm gonna sort it out, whatever it was, whether we were organizing

Which pub to go to or how we should all plan for studying or where we should meet or whatever. You know, there were certain kids that just took charge and and he was very much a A take charge kind of leader, which was uh which was really good. And he was clearly into the same things I was, you know, computers and was it was always a good good match. Alright, so you're in this program. It's like part w it's like a work study program. You gotta do

you know, a couple months of school, of like classwork and then a couple of months of working in a in a company and uh you get your assignments and where w what what did you end up doing? Wh where did you have to work? Mike? So we you're supposed to do three six months assignments? And I got my first assignment, which was at Bay Networks.

Which is a networking vendor that became Nortel Networks before I joined. Because I got bought by Nortel. This was in the sort of late nineties where net networking, equipment, Cisco, you know, this was a real hot area. I I spent six months just plug in and machinery. It was the most boring six six months assignment. I can say that now Nortel's out of business. So Um, it was not a fun or exciting six months. And I think that was one of those

signs that maybe maybe the big corporate thing wasn't wasn't so much for me. I was like, Man, if this is what work life's gonna be like, this sucks. Yeah. So uh I actually left the scholarship program after that. Yeah a lot of that six months was spent working on my first startup with another um scholarship kid. Um, called Nikki, who now runs Australia's best Uh venture capital firm.

And uh we actually dropped out of the scholarship course. to pursue that start up after that first of three Six months stints. So about two years into our four year degree. Wow. So you

dropped out of the scholarship program and And what was your startup, by the way? It was called the bookmark box. So hotmail had just kind of appeared. And we were going back and forth from home to this IT placement to

student computers at at school, you know, you had to log in on the student network and everything, and we synced people's bookmarks across their browsers and different things through a kind of a Web app. Sure. Yeah. And I've always said it was a one year amazing experience, right? The two of us

I can r viscerally remember the formative moment. We got an office in a local kind of what would now be an accelerator incubator. At the Australian technology park. And the office was a room about the size of this podcast studio and we got our own whiteboard and we had a table and we walked in and the two of us were like, Right. Now we better do so. You know what I mean? No windows.

Very much okay, now it's time to get get serious. But we learned a ton of the things that we're gonna do. Uh we ran for about twelve months. We raised a little bit of money from what would now be called friends and family, parents and uncles and stuff who felt sorry for us and gave us five grand or ten grand. And

We had two competitors. One was called Blink. I forget what the other one was called. Anyway the Blink raised thirty five million dollars. And we were sitting in Sydney and we were just like, Holy shit, we're gonna get smoked. Yeah. So we called up the two or three guys that had raised a big bunch of money and said, Look, we got We got a couple of million bookmarks and we got I think we had a couple hundred thousand users. Um, do you wanna do you wanna buy this thing off us? And one of them

Said yes. So I I flew to New York and did a bit of Negotiating with Blink? And we sold it to them for a couple of hundred grand or something and and pay the investors back their money and ironically, uh the the Th the the worst well the funniest part about that story, my dad would hate me saying this is he I think my my b dad put in five or ten grand And uh you know, barely got his money back kind of thing and and decided that maybe I wasn't worth backing. And so he never invested in it last year. And he's always kinda said, Hey man, I backed the wrong one there, basically, right? And I was like, Well, sorry. Did your parents support your decision to to drop out of the scholarship program?

No. No, my mom was not this was not not an okay thing. I remember her saying to me that The only thing she made me promise is that I would get my degree. So Scott, all right, you are still in the program, you do not drop out of it. And while you were in this program, did you start to have thoughts about what you would do when it was over? Did you just assume that You'd end up working for one of these companies that sponsored the the scholarship?

I worked for three uh companies during my uh scholarship. It was um IBM, then PWC, then ASX, the Australian Stock Exchange. All three way to acronym companies. And My experience with that was working in a large organization was just

full of people that were trying their best, but didn't seem to be really on the path to success and Uh I remember during my IBM uh process it was year two thousand Y two K problem and my job was not, you know, to go into the code and fix the Y two K problem. Um if it existed, it was really to go and make sure that all the contracts that they had with their customers excluded that so that they wouldn't

be legally liable if they if they had any problems. And I had, you know, roughly similar experiences at the other companies that we I worked at. And so after that it was Definitely not a um encouraging sign in in terms of working for corporate Australia. All right. So so Scott, sounds like you're clearly getting disillusioned with with the corporate work that you're doing as part of this scholarship program. And And Mike, you've left the program, but you're still uh a student.

at the university and and you've already sold your first company at this point. That's right. And then I guess what, around two thousand one, um Mike, you send out an email like to some of the people in your class or your cohort of friends seeing if anyone wanted to do another startup with you. Like what what was the email that you sent out? What what was the pitch? Yeah, I sent an email to uh a bunch of folks saying before you all take grad jobs kinda things.

Do you want You know, does anyone want to do something something crazy and try our own thing? And the thinking was to not get a real job. Right. Right. Like i i i even if we'd built a really crappy company and we'd been able to kinda survive and go through, that would have been more exciting to me. Then

going to work in a very large company with a suit and tie, as all our friends, you know, sort of heading to do it just wasn't Wasn't my thing, you know. And so I wondered if other people wanted to have that that fun experience too. And and a bunch of people answer that email, right? Just one.

Just one. Just one, I think. Yeah. So ended up pretty quickly. Just marking myself and uh You answered the email and said, I'm in. Yeah. I I'm in and and uh

Okay, great. What are we gonna do? We gotta get a website, we've gotta get going. What were you gonna sell? What was your business? Look, I I think it was obvious it was gonna be some sort of a digital business. Right. Right. We were in technology, we we we were all you know, uh into using technology and building technology things. Yeah. I should probably formally at some stage thank IBM, PWC and the ASX for putting Scott off the corporate career'cause that was probably one of the reasons

He said, Yeah, let's try something else because he'd also had a pretty negative journey there. And then, you know, we kinda hung out a lot and tried things. Tried various ways to make money. Scott, I'm I'm trying to understand how you would have taken that kind of risk at at that age because

You didn't grow up with money. And you got this scholarship, and I'm sure everyone was really proud of you. I'm sure your parents were really proud of you. And you were gonna be set. You were gonna have a really good solid, stable job, you were gonna make decent cash. And you were giving that up. So why? Why were you willing to take that risk at that point?

It sounds trite, like but it didn't feel like a big risk to to give up, you know, a corporate job. Maybe we were young and naive and but I always felt that and with whatever I've done, you know, as a smart kid I could you know, there will always be jobs for smart kids out there and if I Didn't get a job with this particular Graduate year, I'll get a job in the next graduate year.

And it I just felt like wow, I've got better things to do in my life than uh, you know, kind of be downstream of a whole bunch of poor choices and I remember that Local um tie place and three Satay chicken skewers and rice was four dollars fifty um at the at the local Thai place. And I I if I could get dinner for four dollars fifty and you don't need you don't need much money to live. Um and Mike was a really smart guy. You thought, hey, this guy already took a risk, started something, successfully sold it.

So maybe Yeah, maybe there's something there. And and you knew him already. And you liked him? Yeah. He's a smart guy. He's totally trustworthy.

And the decision to start with Mike, uh, you know, wasn't didn't seem really risky because The graduate salary, I remember, was forty eight thousand five hundred dollars. Uh, if you've only worked at PWC. And the thesis was if we can earn forty eight thousand five hundred 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. So what what was the idea? What was the business that you came up with?

The initial business was um It's actually a a pretty bad business uh i idea, which and I say grateful that it was so bad that it failed. Um, but the original business idea was to provide support for someone else's software. And there was a company out of Sweden That produce software and

We'd been using it uh previously and we thought it was a a great bit of software, but they had terrible support, you know, great software, terrible support. Like wow. We can provide that amazing support. I could a match made in heaven. So we got an email address, got a web server, put up some content, um, so that people would find us. We our pricing model was horrifically broken. We would have it such that You would only pay us if we were successful in solving your case, which meant that Wow You know, and I think you had to pay us three hundred dollars if we were successful. Sixty US dollars was the initial

Price. And and did you get authorization from the company that made the software to be their tech support? Not really. No, I get you, okay. They were renowned as having amazing software and terrible documentation support, everything. So we thought well if we write their documentation

Sort of. People will come and read it, and then when they have a problem they'll they'll call us and Maybe they'll pay us some money to do that. Now The problem is the documentation we wrote was pretty good. that they would only call us with the hardest possible problems.

And then the three hundred and sixty dollars was totally not a worthwhile business model to solve what were the one percent of really, really hard problems. One of our first support calls was at a party and I m remember disappearing upstairs. in the middle of this party. It was actually at Mike's house and I had to get him to give me his password for his computer, and I had to sound You know, very official like uh hello but last year and of course there's party going on, music, people screaming, like people downing

Alcohol and uh I think I spent the next five hours trying to debug this person's support call. And not surprising I didn't end up solving that customer support call uh at four AM in the morning at in Sydney time. But I do remember waking up the next morning, I I don't know what time it was, eleven or something, and

walking down the street and and coming to me the the answer to their support call. I ended up solving it, I guess, in my sleep uh that night and uh that weekend. Someone like that. They faxed us, I remember their their check. Three hundred sixty bucks. Wow. On the facts machine. And you called the business Atlassian from the beginning. Right. Yes. Where did that name come from?

I mean Atlas, I guess. So my My mom is uh Latin and ancient Greek. major, I suppose you would say in America. Yeah. And because We were initially gonna provide

customer service. That's what we were doing, right? We were providing tech support. Atlas. was a Greek Titan. He was actually a bit of a bad guy and his punishment was to theoretically hold up the sky. And so we thought this was kind of a

Uh, what we used to we had this branded term legendary service. We were gonna go above and beyond to just deliver this amazing legendary service, right? And he was a legend that was providing Service to the world holding up the sky. And so we sort of turned it into an adjective, um, because Atlas dot com was taken, so Atlassian was a an Atlassian effort, you know, was a was a legendary service effort.

So when you started this tech support company, me you're both so young, you were two kids. You had some experien starting up a business, Mike, and and selling it. But did you guys go through the whole formal like you know, in the US you would incorporate into an L C I mean sometimes depends a d I mean, you would have a conversation about equity and who got what. Did you did you do that, any of that in in those days? So we did we did the incorporation thing. Yeah, we went and bought a business name. In Australia it was a hundred and ten dollars or so, you'd get into the little local agency and somewhere we still have this a laminated piece of paper with the

Alassian business name somewhere. And then you know, there was two of us, so a hundred shares, I think you have fifty shares each. And uh I I remember um Actually going into a bank and'cause we had wanted to set up a business account. And I remember going into the bank and thinking

Shit, I hope no one knows. notices that I have no idea what I'm doing. And like are we a legitimate business? Like are you allowed to open a business account? Like do we need to have done something businessy before we could Open this account. And then, you know, w later on in in White we, you know, got a lawyer to kinda look at the you know, when we started having employees and wanted to

Make sure it was more um solidified, I guess, you know, a shareholders' agreement. And the lawyer, you know, sort of says Oh great, well it's fifty fifty If you were gonna settle a dispute, how do you, you know, settle it and Um I think we know there was some escalation processes, but at the very end it's like well What's the final way of doing it?

and we put in r rochham, or or rock, paper, scissors. Uh into our shareholders' agreement. And so It's change now, we're a public company. We we can't solve s problems like that anymore. Yeah. Uh but you know, for the first few years, if we disagreed, um it would have ended up at rock, paper, scissors. Um and I was highly incentivized to never let that happen because I think I I I was every single game of that with I've ever played with Mike. So it was you lost every game of rock, paper, scissors. Of course. Oh.

So you guys have you've got this service business, this tech support business. For this one product. And how long does that last? How long are you in the service business? Before you realize it's not working. I think it was less than a year.

That we were in the service business. I would have my computer running twenty four hours a day under my bed, you know, so have the sort of fan spinning up and And down where you're trying to sleep. Both our mobile phones were turned on to the loudest ringtone they possibly could. We'd alternate which nights we were on call and uh you'd get up at two in the morning and try and answer you know the phone call. It's like uh uh um Allah Alassian? That's yeah we're you're you know, trying to sound like you're uh cogent at that time in the morning and then you know, trying to sound like you're a big company. We realized that actually, uh it w it was just such a terrible business that an almost anything would be better.

And our true passion was not supporting software, it was building it. And from that uh we've then started exploring where we wanted to you know build software. Was there a point where where one or both of you consciously sat down and said, Hey, you know, this isn't working. Let's do something different, or did it just did that just happen organically? What do you remember? I think what we started to do is we started to write Software.

to try to make our own business better. So we wrote an application to put a lot of that content, the documentation online. We had kind of like a knowledge base type thing. We wrote a email archiving tool because a lot of it was done via email and the You had no archives of the shared inboxes sort of thing, so we wrote one of those. Uh and then we wrote uh

Support system. Which actually we called the Atlassian support system, which has since gotten us in a lot of trouble. Um because it was known by its acronym and it was not um particularly well branded. It's a great acronym. Yeah, we totally nobody realized this for years, I gotta be honest. And then suddenly someone said, Hey, do you realise? And we're like, Oh no. Um So that was a application to provide that support, right? So people could file a ticket and there was comments and all that sort of thing. This is like pre Google Docs where you could just put everything in the margins.

You're just like sending things back and forth. Yeah it was a Pretty primitive application for for Uh Providing support online, I suppose.

And that writing of software convinced us that that was a much more both fun thing to do. And obviously in the application we were supporting, we saw that they were making a lot more money in selling the software Thousands of times. And writing it once. then we were every single time to make a dollar we had to provide this support.

It was a very non scalable business, right? If we'd read enough business books, we would have probably realized that a lot earlier than we did. So we we sort of pivoted to try to sell some of the applications That we had made for ourselves, thinking maybe other people wanted to use these Software applications.

These were basically applications to to assist people who were building online businesses at the time, right? Yeah. Um back then the all the scaffolding to build an internet business didn't exist. Right. Um, you know, there was no El Aquar, there was no front, there was no HubSpot, Survey Monkey, you know, kind of all these things that people take for granted just didn't exist. And so

We built almost all of them from scratch in house and Yeah, so yeah, we build an email archiving tool that would be, you know, probably equivalent to something like, you know, front or you know, other email group tools today we built a way to track our visitors across our website. We build a content management system, you know, sort of where everyone uses WordPress today, but And we built our own version of that.

You gotta remember we're on the far side of the planet. Right. Yeah. And we had done the evening thing, that wasn't any fun working Overnight, all night. We also didn't have any money, so we couldn't hire anybody. So the Atlassian business model

came because we knew we needed to sell software somehow Online. Because we didn't have any salespeople. We couldn't afford to hire them. We didn't have any money, so it kinda had to sell itself.

And that required us to do a lot of this tracking and mod modern things a long time ago. I wanna I wanna sort of d dive in a little bit to actually the ideation of the products that you started to build. Because people who listen to this show know that the vast majority of the things that we do on the show are like consumer facing products, right? Like

Pita chips or a cosmetics brand. And uh your products are mainly used by businesses and m really used by software developers, still huge business. So we'll get to that. But How did you begin to s to think about what pieces of software to build. Like were you guys

Saying Hey, let's build this because maybe businesses will use will use it and maybe we should use our time and energy building something like this. Or was it just More like, hey, you know, we need to solve this problem for ourselves. Let's build it. Like what was the process?

It's a lot easier to explain to your parents what you do if you're uh you know still cooking. Right. So that that sounds like that sounds great. Um but uh the For us it was building stuff that we needed ourselves and realizing that there's gonna be a lot of other people out there that are gonna need the same thing. And it really was a a a process of constraints. 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, we didn't have people that had done it before to sort of drag us back to the mean. And we just grew up without anyone telling us the way, you know, it couldn't be done. And our experience of computers was You know, downloading and using computer games and

uh that was a very different world to the way that enterprise software was sold back then. But not today. Like, you know, these days you download enterprise software in the same way you would download a computer game. And I just think we were at the forefront of how that happened. Um and almost the thing we built in that model. is actually almost less important than the fact that we changed the business model of how people adopted software to be much more consumer like. To Scott's point, I think we built three applications in the early days. Yeah. And we put'em out to say, did anyone else need this? And we'd sort of do a little online promotion and this and that. Um and that Atlassian support system kinda became the guts of what is now Jira, which is still our biggest application.

And in simple terms, uh Jira is is basically software that that helps teams of people manage projects. And I guess initially, um, th this was for software building projects, but now all types of projects, right? Sure. Yeah. Yeah, definitely. It started with software developers. Right. Software developers were a great audience because they went and found tools to solve their problems? And they worked with a lot of other groups inside those companies. So we would watch people using our software and say, Hey, w why is your marketing department using this? And they would say, Well,'cause we brought it in and

They work with us and they like it, so they started using it. We're like, great. And 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. So the two of you really just kind of Hammering away at the keyboards.

You built put together what became Jira. Yes. And how long did that take? That first version. I think that the

First version of the U.S. Three months or so, I think, before we put something on the website that was Uh I'm I'm surprised anyone would have downloaded it. And I think it probably took us Six months till we got to what we would say is a one point zero version. So something that we felt was, you know, good enough for people to use. And and was it did it require a lot of resources or cash? Or was it just literally the two of you and you had to pay for an internet connection and

He just started Coding. If you look at our our costs, um we didn't pay ourselves for a long time and Even after that I think we paid ourselves a week for the first two years. So w we were relatively inexpensive. And then it was the cost of, you know, broadband internet back then.

Cost of a website, uh and you know, bandwidth costs which you had to pay for separately. So It was relatively cheap. We say that we put it on a credit card. What do I really mean by that is we put it on Mike's credit card,'cause I think I had about a one thousand dollar limit on my university you know credit card. I think Mike had you know ten or twenty grand and so we could, you know, afford to build our business on that.

And it consumed our time, too. You know, we didn't have anything else to do but work. And so when you have your own business, especially one that's twenty four seven you know, we we didn't have a cafe that we had to open and close at certain hours, right? And so You know, if there was something else on, we'd go do it. If friends were going to the pub, you know, we'd go At six o'clock and we'd go have a couple of beers and at ten o'clock we would go back to the office if we didn't want to go to sleep and keep working.

It sounds like you guys really had it together. I mean I and I guess I shouldn't be surprised, but it sounds like You really had this plan. W did you feel different from your peers? Did you feel like you guys were kind of Oddballs in that way? I

I felt different to our peers, uh on a couple of different fronts. One is, you know, they've all taken safe jobs and there's a high pressure of Man, if we fuck this up, w we're gonna look like the idiots, right? Like we know, we're the we're the ones that kind of are gonna be working for these people when we kind of crawl back to corporate world and they'll be our bosses in a couple of years and so I think there's a high uh level of kind of anxiety around, you know, proving uh that you've done something especially when your peers have all taken a

a very different path. Um but also I think in in Australia like the the idea of a entrepreneur Just didn't really exist. And so um There wasn't even really a category for you know to even to be called that. Whereas today I think people go, Okay, you start an accounting, that's a valid career path. Yeah. My girlfriend at the time, my now now wife. She uh is an investment banker and and was back then.

And all her investment banking friends would tell her like Why are you dating Scott? He he doesn't really even have a job. And uh you know, and so it was just such so unusual and I think you have something to prove. And I think you had simple uh I was gonna say had simple existential goals. I mean, if we didn't make money, we were gonna die, right? W there was no big well of money behind this business, it was just us. So the fear of death

When we come back in just a moment, how Mike and Scott started to market their software using some pretty clever gorilla tactics. one of which involved several hundred bottles of fine Belgian beer. Stay with us, I'm Guy Raz, and you're listening to How I Built This. from NPR.

Hey, welcome back to how I built this from NPR. I'm Guy Raz. So it's around 2002 and Mike Canonbrooks and Scott Farquhar have decided to turn at Lassian, their two-person tech support company. into Atlassian A software development company. And their hopes hang on a set of development tools known

is Jira. Jira used to sell for eight hundred dollars again. It was a terrible pricing scheme. It was eight hundred dollars For everything. Or you could like that was it. And We needed to sell one copy a week. And if we sold one copy, we would eat.

Pay Brent. Do all the things that was eight hundred dollars, split two way and everything else, right? If we didn't sell one copy, we were gonna go bust. If we didn't sell one copy for too many weeks, you know, some weeks we'd sell two copies, that was amazing, right? But then some weeks you'd sell zero. The motivation of such a simple goal.

I remember like there's a reason you went back to work after the pub is like it's Wednesday and we haven't sold anything this week. Like we need to sell one thing. So you'd go home and Back to the office and you Answer every customer service email as quickly as you could, or you'd get back to someone, or you'd get on the phone and try to ring them, can we help you? Like what 'Cause you needed to sell just one thing a week for eight hundred bucks. And in the early days our website would always make it seem like we were bigger than we were. Um, you know, we'd say Alassian has a number of international offices. Um, that number just happened to be one.

we'd have sales at Alassian and accounts at Alassian and support at Atlassian and That would all go to Mike and myself both equally. And you know, if people called up, it'd be like Oh, cool, can I speak to uh Two accounts. And be like, Uh sure, I'll get accounts on the line And like

Mike, um your accounts now, okay? And so y you hand the phone over to Mike from accounts and it is accounts. Um so you know, we just did every every job that w there was to do and and sometimes we put different hats on when we did them. And different voices. So you have a website for your business at Lassian. And and what? I mean you just kinda hang a shingle out and say, Hey, here's Jira

You can download it to But How did you even Market it. I mean how did you Did anybody to even know what it was? Did you start

Calling people? Did you just kinda hope that people would land on the webpage? By accident? I think there's uh A belief that if you put it up there people will come and totally not true. No. Uh I I think that There's a couple of things that worked well for us. Um, we were the very early days of internet marketing.

And so we could buy, you know, Google AdWords, which were just new back then. And things that would now cost you ten or twenty dollars for a click would cost us ten or twenty cents. And I always wish we had more money to spend on that. You know, we w our marketing budget might have been you know, a hundred dollars a month or a hundred dollars a week, like it was very small uh dollars back then. We would turn up to software events and obviously that's where

We know the bulk our customers would be But we couldn't afford a booth at these software events. And so we would turn up as attendees and try and hand out business cards or try and, you know, corner people in the hallway to give them a demo. We did we did plenty of guerrilla marketing. Do you remember we went to was it in San Francisco somewhere?

We printed out a whole bunch of flyers, basically, and then snuck them into the conference. And we'd just judiciously leave twenty on a random bar top table that was a you know, and kinda walk around the conference and just keep leaving flyers around for hopefully someone to pick'em up. early in your business you were you were going to the US to promote This product? The US and Europe, yeah.

That's where our customers were. And um so we were at a conference in Belgium, which is one of the biggest technology conferences. And they had a session where they were gonna do a live podcast at three o'clock in the afternoon in front of an audience, right? And so we thought We asked them If we could provide beer for their session for the sort of five, six hundred people that are watching them, you know, the three of them on this panel podcast. And of course they said, Sure, yeah, whatever, that sounds great.

We didn't ask the conference organizers, of course,'cause we would have gotten in trouble and it wouldn't have worked. So instead we took our little rental car to a local bottle shop. And bought as many cases of really good Belgian beer as we could. And then we stood at the front as people were going in. And every time someone walked in, we would put a sticker that said Atlassian on the front of the beer as if it was kind of our beer.

And then give it to the attendees. Right. And they Thought this was fantastic. This was like the best session ever, and we had four or five everyone on stage had one. And we would just do sort of stunt marketing like that to the right communities. Which got our name kind of known. I I I love that. It's so great. So in the first sort of year after you released Jira, was it I mean, I can't imagine it was a massive hit. I I have to imagine it was like kind of

you know, you'd sell it here and there and and people who bought it liked it, but it wasn't I I can't imagine it like Flying off the shelf, so to speak. We started with the one copy a week. Uh I don't know that's flying off the shelf. We didn't really have a shelf, but it wasn't it certainly wasn't flying anywhere. Um But by the end of year one it was doing all right. I think we made maybe a hundred grand in year one. Yeah. And in the early days it was very much um kind of hand to hand combat. Like every customer is someone that you have

Spent a long time handholding through to the sale. And a big milestone for us was. I still remember it when the the the facts came off the fax machine, um back then and it was American Airlines. And uh American Airlines who basically faxed us uh, you know, a a purchase order or a check for the eight hundred dollars. And I went to Mike and said, Mike, um

I haven't been dealing with the American Airlines like you thanks for doing all the work behind the scenes, getting them across the line and my s I said I haven't done any work in American Airlines either. And so we looked at each other and like, Holy cow, like American just sent us money over the internet for doing nothing and uh obviously they, you know, be benefited from our software, but that was sort of the moment Well we went from having a Almost like a cornerstore business to having a scaleable business. And uh and my God, American Airlines. Jeez, that's a bar I mean

They just spent eight hundred dollars. That's that's a th that that didn't even have to go through like anybody. That was just some random person in American Airlines who authorized it.'Cause you know, that's nothing. It's a not even a rounding error for them. And was that I mean And then that was it. It was like you just buy it and then you own it. Yeah, you you bought the eight hundred dollars got you one year. Right.

Unlimited usage. But updates for one year. So we were improving the software every week or two weeks. And so our hope was they would buy a a maintenance contract. Which was four hundred dollars. for the second year and the third year and the fourth year and that maybe they would pass four hundred dollars a year.

Assuming we kept adding value to the software, right? Was that common in two thousand two, two thousand three? to uh you know update software that regularly? No, it was it was very unusual. And It's almost like a

Back then it's like C Ds, right? Every person you'd buy your C D and once you bought it, that's you know, the artist had to go out and produce more soft you know, more more music. And I think very early on we said well that's not a great model because That means we're incentivized to hold back all the new features. It's like, you know, if a Adele had a great album and she had great song. She's like, Well actually I'll ki put half of them in the good album and I'll save half of the good songs for the next album because I only get paid by, you know, selling albums.

Whereas we thought the model was it was better if you're aligned by Hey, if you use our software and continue using it and being happy with it. You pay us uh to go. But it was incredibly unusual back then. And you know, it's interesting. A couple weeks ago we had um the founders of Riot Games on the show and they you may know their their

their game uh League of Legends, right? Very big game, one of the biggest PC games of all time. And what made that game really popular early on with gamers was how complex it was, actually. It's a very, very complex game. And but that was actually an advantage that they had because people really got into it. The the the learning curve was really steep.

But then once people got it. They were hooked. And from what I understand it's kind of similar with Jira. But it was actually pretty complicated for people to figure out at first.

But that actually is something that developers liked. Was that intentional? Did you make it complex? Yeah, I wouldn't say we intentionally made it complex. We were madly adding functionality to the application for for many, many, many years. The good side about that is the people who got up The curve of understanding the power of Jira.

became these huge fans. And they became superstars at their company. Because they could solve all these problems for the company really, really cheaply. Again Hey, we've already spent the eight hundred bucks. You got another problem? I'll solve that with Jira. So the people who solved the complexity or understood it. They saw the matrix, if you like, right?

And we ended up hiring a whole bunch of those super fans as well, like people who were like massive Jura fans. We'd say, Hey, do you want to work for us? Like you know so much about our application. And they would then make it better. Now over time we've had to remove a lot of that complexity And we've tried to simplify it, but keep the power But in the early days we were just Yeah, we were certainly just adding

I'm curious because there's there's a concept and now it's of course taught in business schools and it's, you know, every venture capital firm looks for this called the network effect, basically. And and it's this idea that uh that if you can create a product that can sell itself, then you've hit the holy grail. So for example, We had Drew Houston on the show recently and You know, he created a product that when you used it, when somebody sent you a file, you had to sign up for a Dropbox account, and it was free.

But that's how it grew, and then you had it, and then if you wanted to send somebody a file they and and so, you know, there's a chain. And it's Something that really happened. With Your product Jira.

from the start, right, that it really kind of became this self perpetuating Yes. Phenomenon. So what's important here is is teams. So our viral effect is not like a Facebook or a Slack or a Cowdly, they're all fantastic applications. Our viral effect is teams. Right, often we we talk about the individual gets all the credit.

But the team really did the work, right? Neil Armstrong landed on the moon, but there was a massive team of people at NASA that put their thing into the air and got on the moon and everything else, right? And so teams are the people who really do the work. And we believe that and it's it's true. So we would have an early goal. 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, they work with other teams, et cetera. So You know, almost all our applications now are basically free for a team. Why? Because we want one team to

download or sign up to you know online applications, use it. and get value and think this is brilliant. Then we want'em to go to the other team they work on and be like, Man, working on this team stinks. We're so inefficient. Can we use the thing that we use on that other team?

And so we'd find one team, two teams Five teams, ten teams. You know, when you go to a big company, there are there are hundreds of thousands of teams in these big companies. I guess by Like

Two thousand six, right? But this is just insane to me. This is just Three, four years in, I mean You had fourteen and

Almost fifteen million dollars. in revenue, you've got fifty people, okay So let me let me just back I wanna kinda back up from the product for a moment and just talk about the business. Side. Um, you know, yeah, I get, Scott, you kinda have leadership tendencies and

Mike, you know, you had a a little startup, but but really both of you were s were were most of the time those early years it was the two of you just grinding away at a computer What did you know about how to lead fifty people and run a business. Like That must have been a pretty steep learning curve. I still not sure that we know everything there is to know about leaving people. Um

I mean I think we w you know, we had increasing confidence over time that we knew what we were doing. I think one of the most important things is we're always very uh first principle driven. I mean y you sort of said it in your question We were both incredibly naive. The good thing is we knew that we didn't know what we were doing. Yeah.

We knew that we didn't know anything about business. And so we had to figure it all out from first principles. So for example when it came to people We both knew that we had terrible experiences working other places. And so we

Wanna build somewhere that we want to come to work. And hopefully other people will want to come to work there too. I I have a strong memory when you know we were very early on at Alaska and our friends had just joined all these big companies. And we used to go and have lunch together. And I remember this distinctly, we were downstairs at a y a Yamcha place, um

And one by one people sort of bitched about their jobs. They complained about the people they work for weren't smart. They complained that they weren't listened to. And I remember, you know, after that lunch coming back to Mike and thinking Wow, I never want to be or build a company where These incredibly talented, you know, these people many times smarter than me. Um have gone to work.

And they don't feel empowered to get job done or you know, and their only way to improve things is to bitch to their, you know, friends at lunch. Yeah. I'm trying to understand how you uh and I know you've sort of Jokingly, probably there's some serious to this, but that You know, when you say Well, we're still trying to figure out how to be leaders. But here you guys are.

At this point, you're in your late twenties. You're still really young, right? and you've got a growing team at this point, like fifty, and then the next year a hundred. And That becomes tricky, right? That that

Starts to create. potential points of friction. And I wonder Whether you guys really understood how to manage people, right? Was it Was it pretty easy? Were people just kind of self directed or

Did you know what you were doing? Look, I'd say we've probably made every management mistake in the book. In the first five to ten years and probably some more in the last ten years. But We were honest enough to know when we made those mistakes. Scott?

In in the early days, I remember distinctly, um, when you're a startup you hire the first dozen people, d you know, a few dozen people yourself. Um and at some stage you transition hiring from You doing it to people that you've hired, hired the next people. And th I would say the first fifty we hide ourselves and the next fifty, you know, were hide by other people. And

We looked around one day and realized that second fifty people we'd hired Really want fitting in. They turned up because, you know, we were a cool place to work, we had beer in the fridge. We had a We had a ping pong table back then. But they weren't aligned with how we wanted to work, our work ethic or our mission as a

company. And Mike and I sat down and said, Well Obviously that's not the fault of the people that, you know, have done the hiring. Like we haven't told them what's important. And we did a exercise that Jim Collins actually created. where you effectively do a mission to Mars and you say, if we were gonna recreate OSIN on Mars

Which people would you want to transplant and make it feel like the same company? And in many cases they're not the senior leadership. You know, it's that one person that embodies something about the company that is really important. And what you do is you identify those, you know, half dozen people And then you back solve and say, Well what what is it about those half dozen people?

that makes them Atlassian. And uh you know, and and as a result, we sort of on a bit of butcher paper at an off site, we we wrote up what has become Alassian values and they haven't changed in That sort of fourteen, fifteen years since we created them. But that really came because we screwed up early on. You screwed up by picking the wrong people. Yeah. And one thing we've always believed is

You know, if our business is gonna 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, right, in us. And that's that's sort of been our I guess mantra for self development, right? You can't read this stuff in a book.

You can Go and talk to other people, you can learn however you learn yourself. but we knew that we needed to grow faster than the company. Otherwise, you know, it wasn't gonna Fulfill its mission.

When we come back in just a moment. Mike and Scott explain how you can have a meeting about possibly being acquired. Without knowing you are having a meeting about possibly being acquired. Stay with us. I'm Guy Raz, and you're listening to how I built this.

And PR. Hey, welcome back to how I built this from NPR. So it's around 2006, 2007, Atlassian is about five years old, and At this point, its revenue is like 20 to 30 million dollars a year. And it's safe to say

The company is starting to get noticed. So I'm guessing that that You guys already had people coming to you looking to acquire you when you were like doing, you know, ten, fifteen twenty million dollars. D did that happen? I mean did you

Did you have companies coming to see if if you guys would sell? We didn't have a lot of explicit offers in the early days for acquisitions. Um, because we were on the far side of the world and everyone assumed we were far smaller than we were. And Australia wasn't really a a it was it wasn't on a tech map. No, no, that's true. And by the time Anyone did show up?

I think we were even more confident in our own abilities and the business, which made it b very easy to to say no to to any sort of offers along the way, right? we were always looking at it and saying, Well, we know how big we're gonna be three years from now. Really confident in that now. Why would we do this? It just it just never made any sense. So it was it was always a pretty Relatively easy decision for us along the way. Do you want to tell the story about uh

the meeting that ended up in retrospect a acquisition meeting, but we didn't realise it. Yeah, I did have one. Relatively famous, what I now know was an acquisition meeting. Um I was with our then president. And we were in

You know, some Silicon Valley office park at this big firm. Famous guy running it, I won't say who it was and everything was going on. And uh they were kind of a competitor, I guess you might say, but we work together in some ways and You know, this and that. And then we were just getting through the pleasantries of the meeting, sort of discussing roadmaps and various other bits and pieces.

And then a fire alarm went off. I kid you not, the fire alarm goes off. And they're like, Oh, we gotta get out of here. So we all pile into the fire stairs and go down this Silicon Valley office park, three floors, and we're all standing out in the car park. It's almost like it's I remember in the car car park thinking, Wow, I'm I'm literally in office space here. Like I'm looking at this big, boring building like we're all in the car park. And

You know, we must have shared some numbers and and back and forth and they're kind of confused and And we must have been having two or three different conversations. Fire alarms over. We all go back upstairs into the conference room. Two or three pleasantries.

Meeting over, we all go. We get out of here think I'm like what what happened? I said to my president what What What what just happened there? Like we were having a good meeting and then the fire alarm went off and it seemed like they just kicked us out. He's like, Oh yeah, they realize that we're bigger than they are and they were trying to buy us. And in the in the fire alarm car park they had realized that based on revenue, we were actually larger than they were.

Wow. And so this it wasn't gonna happen. So they just kicked us out of the room and I was like, Wow, that totally didn't understand that. You knew that That you had I mean you were looking at the trajectory and you knew that you were you were gonna get Bigger and bigger and bigger. You could just see that from from the growth and the sales.

We were Very confident in our business model and its ability to deliver growth into the future, yes. Patiently, Ryan. I mean What's really important about the Alassian business journey has been patience.

Patients for revenue. To come later. But with a more solid model behind it, if if you like. And part of that was we're very patient people, we're very long term thinking. We've always had these super long term goals for the business.

The second part of that is Australia. We're a very resourceful sort of survivor nation, right? It's a pretty rough country. It's it's super hot, it's super dry. You know, we've had to figure out how to farm the land, we've had to figure out how to What products can we make down here and ship to the rest of the world?

Because we're a million miles from anywhere. We had to be patient. because we couldn't afford to hire any salespeople and 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 instead of once we could afford to hire salespeople, we were saying, Well, hang on a second, if we make the product better We're not only gonna sell a dollar this year. We know we'll sell two dollars near and three dollars a year afterwards. That's a way better equation for us over a three to five year period. So let's go hire that extra engineer.

If you can demonstrate value to someone You don't need a salesperson. They've already using a product. They already got the value. They get it. I guess in two thousand nine. So this is like Almost ten years in, nine nine eight years in.

Both of you got married that year and you turned thirty. And each of you separately took a three month. Sabbatical. Like you you d d traveled with your p partner and the other person ran the company for that time. When you did that, was there any thought?

Among either of you. But maybe you should just, you know. You did well. You could probably sell it, cash in. And uh move on. Was that ever a thought that or ever conversation the two of you had? Could have probably walked away with, you know, twenty five, thirty million bucks each, maybe.

Yeah. Such a good story'cause I think You have those moments where you have to stop and think. And it was around two thousand and nine, maybe early two thousand and ten We had spent eight years of the time building the business. You know what I mean? And and I often describe it as we were heads down, like we were looking at our feet.

Just trying to run and not fall over for many, many, many years. And for some reason Maybe it was turning thirty, maybe it was getting married, maybe it was whatever. We both had a bit of a life Inhalation, a bit of a pause. Right. And

The business was probably on its own feet by then. I mean, it sounds ironic. I think we had like fifty million bucks in the bank and probably fifty million dollars in revenue kind of scale and a profitable But we felt like Okay. It's not gonna die. Now we didn't really intend to get here.

What do we want to do? What do we really want to do? Like what's what's next? And you sort it was almost a look back, look forward kind of moment. And we sort of realized, Hey, wow, we could We could probably sell this thing to someone. We had taken no no no capital, no investment. Um we still owned a hundred percent of the company.

You know, we could probably sell this thing and be pretty set. Right, and it sounds naive now what we actually thought we were gonna get for it. Um And we we kind of you know, we did a lot of really good talking and thinking. And realize that we weren't done.

You know what I mean? We both believed that the next decade was gonna be better than the last decade for the company. And that was really A really powerful moment. So that's when we uh as you said, said well, okay, well we gotta take A sabbatical.

And Scott, what was what was that time like for you? It's weird. I um I remember being quite an emotional time of sort of just even opening up that door and saying, Well, hang on, that's even something we should consider. It's kind of a tough conversation to have to sort of you know, to even to throw that on the table and say, Hey There's an option here that we should talk about.

Um and that's that's pretty emotional. And also I feel that You know, when you're grinding away for eight years It's tough because you're um Your identity is the company. Yeah.

Yeah, and uh I remember for a while I you know, I talked to m with my wife about this Is that When when you first meet your partner in in wife, like it's like, Well, what's more important, the company or my wife partner? You know, and you know, in the early days it's the company, right? Like you know, girlfriends come and go. Um and at some stage you go, Actually my wife partner's more important than the company. Yeah.

And I think over time you start extracting your emotional state, or your kind of identity from the company. Um but it was it was a pretty emotional time to sort of even just consider it. You know, out of all the founders of co founders I've ever interviewed, I think the two of you are most similar.

I I I'm I know that you've got differences, obviously, but most similar in temperament. And I wonder I'm just I just wonder whether you were always aligned. I mean, you now had employees, you had a growing company, you were, you know, the leaders of this company. I'm trying to figure out how you were always able to see eye to eye and not have conflicts.'Cause I I've never Every yeah seen that with co founders ever. But we had we had the scissors paper rock solution ready at any time.

And so when you know that that's the end solution, you're like, Oh, we better work this out. Because if it gets to that man shit, we might just lose. Um I think it's always helped us as well. Well Been more helpful than less helpful, that we're in exactly the same life phases at each stage. Yeah.

So when we started getting paid nothing and drinking the cheapest beer we could find, we were both doing that, so that felt fine and we didn't really know any different. Around that time you're talking to two thousand nine, two thousand ten. We were both Getting married, we got engaged. Yeah, within a year of each other and so

It was a similar view on life, right? I often think if one of us at that stage had been fifty and looking to retire And you know, the kids were going to college or something, we had built like it might have been a different view on the world, but because we were kind of had similar views on where we were at. Um and then as you know, as family started to come along, we had kids, you know. It's it's a super brutal time for sleeping and trying to run a business and everything else, but because

you know, kind of through that time you'd give the other person a lot more slack because you're like, Oh man, I understand, man, I've been there. That that sucks. That's a really hard period. As you grew and eventually you you know became you decided to go public. At a certain point, I mean you became I think you were the first so called Australian unicorn. billion dollar plus company today your market cap is I think last time I checked fifty billion US dollars. As you really started to grow and become huge, you also started to become visible.

people in Australia. And Australia is a It's a big country, but it's also a small country in a sense, right? Yeah, we have a it's Australian's about twenty five million people. Do you How have you dealt with that visibility?

of being visible Australian You know you're no let's uh just put it out there, you t two of the richest people in the country. Multi billionaires When you think about wealth, is it

Does it mean anything or is it just like a number on a piece of paper from a bank statement that's not doesn't really mean anything? It's been hard coming from a a a background where, you know, I I always view time and money as a sort of almost the same scale, like you can generally spend money time and In many cases you can do many of the same things if you have enough time without the money. And uh I went for a a drive round Tasmania uh over the the weekend. Uh lucky we've opened up in Australia.

And uh I remember thinking, wow, I really need to fill up the petrol tank before I return the car. Like that'll s you know, they're gonna screw me on the petrol. Screw you on the petrol, yeah. And and I was thinking

But hang on, like is that really worth sort of fifteen minutes out of my way? you know, to save probably eight dollars on petrol. Um and you know, in a different life, like th I would have done that. Yeah. Um and it was really hard, I think, to sort of go, Actually no, I value my time at more than you know, the eight dollars it would have saved and so

I think it's just a thousand things like that that change And you know, to try and make the the right choice which maybe different now than it was growing up in that sort of time value, time money trade off. Yeah. You know

one of the few places more obscure to start a tech company Uh in than in Sydney at the time was Ottawa, Canada, which is where Toby Ludke started Shopify. And Sha Toby was on a show uh a year or so ago and he said that if he That Ottawa actually is why Shopify became successful. That he really resisted. starting that company or or or scaling that company in Silicon Valley, even though investors really try to push them to do that.

that Ottawa was the secret weapon, you know, finding really talented, committed people in this freezing cold place. That enabled him to build this. hugely successful business. Um

There were a lot of challenges to starting this company in Australia, certainly when you did it,'cause there was no There's no community. But do you think that starting in Australia actually turned out to be What made it successful? But had you done this

Elsewhere it may not have worked. Totally. Uh starting a last in in Australia is the only reason we're successful. Um Yeah, adventure capitalist telling us that We couldn't build the company, you know, we we're be a million dollars of revenue, they said, Oh, that's really nice. You

you've built a tiny little s tiny company, you can never build it to ten million dollars of revenue and We went back on ten million dollars revenue and They're like, Yeah, well you never get to a hundred and and we sort going back after that. And I think just the fact that we, you know, didn't have people Uh, you know, that was the only person telling us the way we couldn't do it.

Um allowed us to do things totally differently. And uh, you know, at the right time when the internet's coming out, that's what was needed was totally different thinking. And our our tenure is better, like we've got you know employees that stick around for a very long time. I think it's been totally critical. Uh to our success, but

We also have one foot in you know in Silicon Valley, like if you started a company in Australia in the seventies, you wouldn't be able to tap into the podcasts and the blogs and the Email newsletters and all the information that flows around and so the world is flatter in some ways than it's ever been before. And so I think that combination has made us successful. How is I know Australia is in a different place than the United States and many countries around the world when it comes to Covet, you're in a much better

situation and and have handled it. infinitely better than the United States has, although everybody has. Um How is Covid. Changed.

Your Your your business. And and has it changed it forever? I would say we've separated two things in that that are really, really important. First is

The Ability for people to choose where they work. We're not saying we're gonna close our offices. We're saying if you wanna come to an office you can. If you don't wanna come to an office, you can do that too. Um that's Let us to separate how we work as a company from where we work.

We were a long way down that path before Covid hit. You know, we had I don't know, maybe five or six hundred people working from home on a given day and a bunch of remote employees. And then we send five thousand people home in one day. And you know, the world's largest telecommunity experiment has taught us all how to do that, the goods, the bads. Yeah. But that's really forced us to solve those problems in a really rapid fashion. Has it also changed, do you think, the way I mean, companies used to say, Well, you gotta be here, right? At Alassian, you gotta play ping pong, you gotta have the you gotta gotta gotta the

meet people walk around. It's the campus. There's the the cafeteria. But now it seems like that idea is completely evaporated that everyone is saying, you know, actually distributed the distributed model works. You can you can actually have Executives.

uh who live in a different time zone, different country. What do you think? I mean, do you think that um The office culture is is crucial to maintaining A company's culture? It suits Australia, I would say. We've always been um

You know, colloquially on the arse end of the world. And so travelling and moving around and other things have been a part of the Australian existence in business for a long time. Yeah. Hence we use a lot of virtual technologies. We're very early technology adopters, I believe, because of that, right? It's a lot easier to get on a Zoom call than fly to San Francisco and back. Trust me, I've done it. Yeah.

I don't know, a thousand times in the last decade and a half, probably more. But We're still gonna need to meet each other, right? One of the things we value is human connection. The question is do we meet each other to work or do we meet each other to connect? Yeah.

So we're increasingly having meetings, you know, if you're gonna fly to meet your team or your group You're gonna do that, but when you do that Don't work. Right, 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 gonna do, but don't meet to do work. Both of you are forty. I think, right. No. Forty one.

Forty one. And uh You've got a lot of life ahead of you. Yeah. really rich. You can just stop working right now and

have a you know, foundation and give away a bunch of money and You know, whatever you w wherever you want to. You do whatever you want to do. W what's stopping you from doing that? Why why wouldn't you just kinda walk away now? The I think that you know, with everyone's life you try and work out how do you have the biggest impact in the world, or at least for Mike and my wife, that's been a big part and Like our mission at Alassian is to unleash the potential of every team.

And I keep thinking, Okay, well if I if I worth at Lassian, where would I go or what would I do to have a bigger impact? You know, the teams that use our products put people in space. Like they create electric cars, they uh you know, decarbonize the planet. They're you know, the American Red Cross, like our customers and we get to help them do their And I don't know, I feel

If there was something better out there, uh you know, I'd be tempted, but like the it just doesn't seem a better opportunity to have a big impact in the world. Mike? I think it's not in our DNA. Because you gotta start out by trying to build a product and solve a problem, not Start if people start a business say I wanna make money, you're like, Okay, well that what are you gonna do to do that, right? You've got to provide some value to a customer. But secondly, if they were lucky enough to provide some value to a customer, they would have left long ago.

Once a business passed I don't know, five million dollars in revenue or ten million dollars in revenue That Mike and Scott would have sold back then. They would have they would have been gone. So they wouldn't be here. So then you're asked the question, Well hang on. If I didn't sell yesterday And I don't wanna go and, you know, sit on a beach or whatever, why would I sell tomorrow? And the answer is the same reason I've been here every day for the last twenty years.

Before I let you go Last question for both of you and I'm gonna ask you the same question. How much of your success do you do you attribute to your hard work and your your intelligence and grinding away and how much do you think it happened'cause you got lucky.

Scott, first to you. I think you need both. Like I I really believe that You make your own luck to some extent. And and so you need to work really hard and Teach yourself and so forth.

But uh there's been a lot of things that you know worked out in retrospect were waki. You know, we live in an era and time when Australians can operate on a world stage if I were born fifty years earlier. Maybe what harder. Or you know, the internet came around, so there's a lot of things that were the right timing and we just managed to take advantage of them. 'cause of who we were and and and what we our skills were. Yeah.

Mike. I would say fifty percent luck. Fifty Scott's hard work, smarts and ingenuity. So you just sat around and ate bonbons. Yeah.

Aye. Yes, I did. Yeah. That's Mike Cannonbrooks and Scott Parquire.

co-founders of Atlassian. And just remember. The secret to their successful relationship? Three words. Rock?

Paper, scissors. Yeah, th there's a there's a easy way to win rock, paper, scissors or rather not not lose. Oh yeah, what is it? So what you do is you you have to control the timing. Yep. So when you're going scissors, paper, rock, whatever, do it start to slow it down and go really, really slowly? And then just watch their hand. And if their hand stays together or starts moving. As soon as their hand starts moving You go for scissors. You go scissors. Yep.

Because you're gonna know they're either paper or scissors. And if their hand doesn't move Right. You go for paper. And so you know you're gonna get a draw or not. And so if you can do that, you can usually Statistically well more than fifty percent. But if you tell somebody that statistically rock

works the most, wins the most, then you can always place it paper against them. Yeah. Yeah, I got two kids, so I always win rock, paper, scissors. Hey, thanks so much for listening to the show this week. If you're not a subscriber to our podcast, please do so wherever you get your podcasts. If you want to write to us, our email address is hibt at npr.org.

If you wanna follow us on Twitter, we're at HowI Built This or mine at GuyRaz. And if you wanna follow me on Instagram, I'm at guy.Roz. This episode was produced by James Delahousey with music composed by Rautine Arablui. Thanks also to Liz Metzger, Farah Safari, Derek Gales, JC Howard, Julia Carney, Neva Grant, and Jeff Rogers. Our intern is Janet Lu Jong Lee. I'm Guy Raz, and you've been listening to how I built this. This

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