Atlassian’s top 25 employees were all classmates or friends before they joined the company. The founders, co-ceos and fellow college students, started their business to avoid job hunting. Made $1 million in the first year. The company’s five core values are great, especially the one “Build everything with Heart and balance”.

Editor’s note: This article was originally published on February 7, 2014 and has been republished now that the company has gone public in the US.

In the Sydney office Atlassian lists as a site, Mike Cannon-Brookes reclines in his seat behind the conference table, shoeless. He lifted one knee to reveal brightly colored Superman socks.

Chairman Doug Burgum, who regularly visits from the US, commented on his CEO outfit: “The same white T-shirt you’ve been wearing for three days.”

Burgum also wore a simple gray T-shirt and jeans. Co-ceo ScottFarquhar was there, sporting a comfortable navy T-shirt. Many employees wear them for simplicity.

These guys in the back are wearing shoes.

The three are the leaders of Atlassian, the star of the Australian software industry that recently made a global splash by announcing its debut on a US stock exchange, and whose company is widely estimated to be worth more than $3 billion.

Co-founders Cannon-Brookes and Farquhar, both 34, have ranked among Australia’s richest people for the past seven years. Enterprise software is not the most attractive business, but Atlassian is proving that successful businesses in Australia are not limited to the nation’s traditional profitable industries such as energy and manufacturing.

Economists and policymakers have become increasingly convinced that Australia needs to look to other industries to create future jobs. This week, federal Treasurer Joe Hockey called for major changes in the structure of the country’s economy.

Atlassian, meanwhile, received approval On Tuesday to move its corporate headquarters to London, where it will gain some advantages, particularly in terms of tax arrangements that will help it prepare for an IPO. The move has caused some consternation in The Australian tech industry. Some people think that the company has abandoned its roots.

The reality of Atlassian’s founders is even more of a double whammy: they are the stars of Australia’s tech start-up scene, millionaires’ millionaires, entrepreneurs in the limelight, leading many to think: This is my role model.

Atlassian in its early days was a startup fairy tale. It turns around on credit cards. One of the founders was a scholarship college dropout. All the early employees were their classmates. One of their founding slogans was a popular Sydneysider curse: “Don’t f * * k customers.”

Atlassian’s core product, a project management and defect tracking tool called JIRA, is now a global standard for clients ranging from NASA and universities to tech giants like eBay and Twitter.

They’ve been through some rough patches so far, from struggling in a San Francisco office space to the death of their friend Jeffrey Walker — the first person Atlassian hired in the US.

This is their success story.

I don’t want to be a politician

While two young men ended up building a 750-person multinational business with $10,000 in credit card capital, Cannon-Brookes and Farquhar were famously low-key. This pervades the company, which has kept a relatively low profile both in the investment community and in the media.

In Atlassian’s early days, its founders turned down about a dozen offers from potential investors or buyers who were surprisingly far below the company’s value. But it wasn’t all bad: One of the bidders was Plumtree Software’s Jay Simons, who is now Atlassian’s president.

The other was Brisbane Technologies, which abruptly ended talks eight years ago — after realising that Atlassian, with a turnover of $10m at the time, was a bigger company. “They’re taking us out of the picture,” Cannon-Brookes said.

When Farquhar asked Burgum to become Atlassian’s chairman in 2012, he picked up a phone in Sydney and dialed Burgum’s line in North Dakota. The tech industry veteran didn’t recognize the company’s name, even though he was familiar with JIRA.

“It was 4 in the afternoon, and it sounded like their sales call,” Burgum said. “Most of the companies I work with are JIRA customers, but I think like a lot of people, I’ve heard of the product but never heard of the company.”

Atlassian now expects revenue of $150 million a year, but still acts like a cog.

Peter Cooper, a consultant to a number of Australian startups and organiser of the annual SydStart conference, described Cannon-Brookes and Farquhar as reluctant industry politicians, Their public image stands in stark contrast to that of other Australian tech entrepreneurs, such as “PR strongmen” Matt Barrie and Ruslan Kogan.

“More humility in Mike and Scott; Their street cred doesn’t come from what they say, it comes from what they do, “Cooper says.” Over a thousand entrepreneurs came to Mike’s Sydstart talk. People are drawn to them. Mike’s opinion is highly valued, whether or not he intended it.”

“There is a hatred of the rich in Australia, but [Cannon-Brookes and Farquhar] are not flashy and very popular. They make it cool to make software commercially successful, which is especially hard for enterprise software.”

Silicon Valley Beach in its early days



Scott Farquhar and Mike Cannon-Brookes speak to employees at Atlassian’s 5th anniversary celebration in April 2007

Cannon-brookes and Farquhar met through unSW’s prestigious co-operative scholarship program. They registered Atlassian with ASIC in 2001 and launched the software company in October 2002 in a low-key office on Kent Street.

At the time, Nasdaq investors were fleeing the dot-com crash, and digital businesses in Australia were few and far between. An April 2013 Google/Pricewaterhousecoopers report found that only a fraction of today’s 1,500 tech startups survived in 2001.

SEEK, the recruitment site, is one of the few companies to have survived the dotcom boom and bust. Today it has a market capitalisation of $440m on the ASX, but SEEK’s experience shows just how tough an environment it was for tech entrepreneurs.

SEEK started in 1997 and went through six rounds of funding before listing in 2005. Co-founder Paul Bassat recalls early rounds as “quick and easy” — but when the bubble burst, everything changed.

By 2001, the year Atlassian was founded, both investors and potential entrepreneurs were in short supply.

“We did a [fundraising] round in 2001, and it was a long, hard round because people had lost faith in Internet companies to some extent,” Bassat says.

“Markets left a period of ‘irrational exuberance’ and, as Alan Greenspan described it, entered what might be called irrational pessimism. There is not enough money and not many entrepreneurs willing to try.

“There’s no question that the dot-com bust blew the wind out of navigation for a while.”

Former UNSW students — even those in the collaborative scholarship program — say they hadn’t heard of Atlassian until the mid-2000s, when the company hit $15 million in revenue and started making tech headlines.

The Atlassian startup riches story went mainstream in 2010, when the self-sustaining company received its first ever capital infusion — $60 million from Accel Partners, at the time the largest investment by an American venture capital fund in a software company.

Alex North, who graduated from THE UNSW program in 2005 and has gone on to work at several well-known tech companies, says there was little entrepreneurial interest among his classmates, but Atlassian’s success has sparked interest in local startups.

“When I graduated from college, no one was talking about or aspiring to start a new company right out of school. This is not a particularly encouraging alternative to employment.” He said.

“We knew the Atlassian people, but at the time their story wasn’t successful enough to change the conversation. I was lucky enough to find a startup company, Sensory Networks. I joined the company and left after 18 months, and then started my first startup, but not many people would do that.

“The conversation has changed over the last decade, especially with Atlassian expanding graduate recruitment and people realizing they can start another Atlassian instead of just working there.”



Mike Cannon-Brookes, David Gonski and Scott Farquhar / UNSW

Atlassian’s founder describes himself as a below-average student. Farquhar barely managed to maintain the 65-point average required by the four-year cooperative scholarship program, while Cannon-Brookes’ score dropped from a high first semester to 53 at graduation — just enough to get the “certificate” his mother insisted on.

To the consternation of his course counselor, Cannon-Brookes gave up his scholarship and “boring” internship two years later to start a business with Niki Scevak (now Blackbird Ventures). “No one ever walks away from this prestigious scholarship, especially if it’s not to start their own business,” he explains. “He explained.

The university took a different approach last year when it presented two Atlassian boys with its 2013 Young Alumni Awards. They received the award last March from David Gonski. Cannon-brookes didn’t even wear his signature baseball cap to the ceremony.

Farquhar claims he didn’t even know the meaning of the word “entrepreneur” until he won an award for it in 2006. His purpose? To avoid a “real job,” when other scholarship students went to IBM, Nortel, PWC, and ASX, when they also each received a PWC graduate salary of $48,500.

Atlassian mode



Atlassian Planning report by MikeCannon-Brookes, March 2008.

Atlassian’s founders didn’t set out to know exactly what they were selling, but they hoped it would be software. The assumption was that once developed, software could be cheaply copied and sold, and that distribution would become cheaper and easier as Internet speeds improved.

This assumption was later realized. Jira was released for download in April 2002. Revenue quickly grew from $1 million in its first year to $1.49 million in June 2005, when Cannon-Brookes and Farquhar were named “Young Entrepreneurs” and “Entrepreneurs of the Year” by accounting giant Ernst & Young.

As of June 2006, Atlassian had approximately 4,340 customers and 50 employees in Sydney and San Francisco, with the San Francisco team responsible for developing, supporting and selling Jira as well as another collaboration platform, Confluence. By June 2007, Atlassian’s headcount had almost doubled to 98 people, with projected revenue of $2.25 million that year.

In the beginning, Farquhar says his management philosophy was rooted in his fellowship co-op internships and the experiences of former college classmates, focusing more on what not to do and less on what to do.

“When we go to lunch with friends who have worked at these other companies, the biggest problem we find is that they think their managers are idiots in some way,” he says.

“It’s more that they don’t have a mechanism for change. They always feel unempowered, so I said to Mike, “Shit, I don’t want anyone leaving Atlassian to have lunch with them and whine about how they can’t do things.”

“That ultimately promotes one of our values: ‘Be the change you want.'”



Atlassian values, Scott Farquhar’s presentation on “The Software Business” in 2010

Atlassian is known for its five core values, which reflect the ideals of its 22-year-old founders:

  • Open company, no nonsense.
  • Build everything with heart and balance.
  • 3. Don’t kill customers.
  • 4. Team spirit.
  • Be the change you want.

Lachlan Hardy, Atlassian’s former design engineer and now Microsoft Technology Promotion Australia, says Atlassian’s attitude and people have been the “highlight” of his two and a half years working there, having joined Atlassian in December 2007.

“The values of the company are actively used in conversations, blog posts and documents, completely in good faith,” he said, recalling some of the aphorisms: “If we change this feature, are we ** * ing the customer?” ; “Postponing a project is not ‘build with heart and balance'”; “And” If you think it’s wrong, why don’t you ‘be the change you want’?”

Twelve years since its founding, Atlassian’s values are known not only to its 750 employees, but also to its 30,000 customers, investors and the wider tech industry.

When founders finally warmed up to become Accel’s $60m partners, Accel sent them a T-shirt emblazoned with the words “DFTPC”, which means: “Don’t F — K the portfolio Company.”

Early days: Cocktails and poker nights



Mike Cannon-Brookes at Atlassian’s 2005 Christmas party

In its early days, Atlassian was largely a cult band made up of university of New South Wales (UNSW) graduates and their siblings and collaborators. People throw themselves into everything from coding to furniture assembly to social poker.

Matt Ryall, who joined the company from Australia’s MacquarieBank in January 2006, recalls Farquhar’s surprise when he received his application: “I was talking to [a friend of mine] over a beer and said I wasn’t too happy with my character, and he said,” Why don’t you look at those Atlassian guys.”

“I sent my resume to [email protected] that night, and Then Scott said he couldn’t understand why anyone would apply to Work at Atlassian because he was like, ‘Who knows you here? ‘

“At the time, there were 25 people in the company, and I think everybody knew everybody. They were all friends or friends of friends or went to college together. I was the first person they hired who wasn’t recommended by a friend.”

Jonathan Nolen, director of developer relations, joined the company in late 2005, the second U.S. hire after Walker. He describes days when a close-knit group of 20-somethings work, play and live together.

Things are moving fast. Atlassian’s Alabama Street team in San Francisco’s Mission District had about 10 people in early 2006. Cannon-brookes and Farquhar were hands-on ceos, and both spent the first half of the year building the office and the Atlassian culture with the new team.

“At first they just rented an apartment in the Tenderloin,” Nolen says, a grimy neighborhood. “No one has ever been robbed, but it has a lot of students living there, so it’s a relatively cheap mansion apartment.

“It has two rooms, so new arrivals can use another bedroom. People talk about how scary it is to share an apartment with a CEO, but at the time I wasn’t scared.

“These guys are in their early 20s. I like them, they’re all friends, so we go out together. We would have dinner and drinks and talk a lot – it was always about the product, or at least the business.

“Everyone is passionate about what the product is, what we want to do, how we can make it better, because we use it every day. So we’ll be up late at night talking about what the next feature should be and why it’s important and how it’s going to fit into the business.”

For the American team, Fridays are all about lunch at Puerto Alegre, a Mexican restaurant at the other end of the mission, and margaritas after margaritas to celebrate “whatever it is”.



Atlassian’s band in San Francisco

Walker, a jazz guitarist, holds impromptu concerts at 4 p.m. on Fridays with like-minded employees, including Elisa “Boots” Wang, a drummer and sales engineer, and Morgan Friberg, a guitarist in marketing. Walker enjoyed spending time with them, as he wrote in a blog post a few months before his death in 2009.

“Jeffrey has had a tremendous impact on our culture,” Nolen said. “This guy is awesome. He gave me tons of good advice on how to work at the company, how to overcome disputes in the Pacific and how to interact with people inside and outside the company.”

Meanwhile, Australian employees paid up to $20 to enter Texas Hold ’em tournaments. “Ostentatiously gambled,” says Justen Stepka, whose Internet security company Authentisoft was bought by Atlassian in mid-2006 and joined the Sydney office. Stepka now manages Atlassian’s BitBucket products and SAN Francisco-based Sourcetree products.

“Atlassian has a very strong gaming culture,” he said. “We play a lot of poker, a lot of board games, a lot of video games. Many of us are nerds who tend to stay behind after work to do odd things. I learned to play cards so I could hang out with those guys.”

Atlassian has an internal rule that if a Texas Hold ’em player wins a hand with different combinations of the worst cards: a, 7 and 2, he gets an extra dozen dollars from all the other players. Former product manager and now development manager Nick Menere is “a dab hand,” Stepka says.

One weekend after the global financial crisis, Cannon-Brookes and seven Atlassian employees checked into the Melbourne hotel to play Crown Poker for “10 hours a day, three days straight.”

Soon a group of Atlassian employees will go on a world tour together, including a trip to Las Vegas. But Stepka likes the plain old days best: “We played a lot of tournaments… This is one of my best memories at Atlassian.

“We have a Friday afternoon game in Sydney at 1 p.m. Admission is $5, tournament-style, and the stakes go up every five minutes until there is a winner. We play once a month on Wednesdays – it’s fun too.

“At first we were kids, we didn’t have wives or girlfriends or anything like that. I don’t remember playing this much with Scott, but Mike would definitely go all out and wait for the big moment. He is not afraid of risks in poker.”



Office poker in San Francisco

Learn to take risks

Cannon-brookes and Farquhar, though already at the pinnacle of tech entrepreneurship, are seen by most as being on the more conservative end of the spectrum.

When Sergey Brin and Larry Page recruited EricSchmidt as chairman and then CEO in 2001, the 27-year-olds told me it was because Schmidt provided adult input. Julia Kirby of the Harvard Business Review puts Facebook’s Sheryl Sandberg in the same category as Apple’s Mike Markkula: Wise older businessmen who managed the young entrepreneurs Mark Zuckerberg, Steve Jobs and Steve Wozniak.



Jeffrey Walker and JustenStepka on a night out

At some things, Atlassian is a different story. The founders are conservative, and Walker’s experience and vision – he led CSC and Accure software – can help build the confidence to make the bet.

He’s far from Atlassian’s nanny.

“Jeffrey is literally the most unfettered 50-year-old I know,” Nolen says. “He’s social, he’s easy to get along with, he’s not afraid of risks, so I think he has an advantage that can provide experience, but I’ve never seen any real conflict between young and old, or anything like that.

“Actually, I think more often Mike and Scott were on the conservative side of the argument, saying, ‘Maybe we shouldn’t do this’ and Jeffrey was like,’ Come on, what can happen? ‘”

Burgum, who also doesn’t want to be treated like an adult in the office, recalls his 1983 days as founder, chairman and CEO of GreatPlains software.

“When I was in their shoes decades ago, I would have said, ‘Oh, it’s good to have some adult guidance in your life. He talked about some of his thoughts when he first met Atlassian in San Francisco.

“It occurred to me during the meeting that these guys were looking for adult guidance, and they were asking me. Wonder, when did I get old?”

Studies show that the biggest danger startups face is “premature scaling,” when a company demands to grow faster than the demand for its products. Atlassian has grown from two people to 750 today, and the timing of growth is critical at all stages.

All things considered, Nolen says Atlassian’s slowness and focus on growth are “very un-Silicon Valley.” Cannon-brookes and Farquhar managed to strike a balance between carefully considering strategy and bracing for impact, and the limited capital the company had in the early days helped to limit its scale.

“Our pain is very evident when we need someone to fill every role. We were never far ahead in hiring until recently, “Farquhar says.

“At first it was more like, ‘Oh, we need someone to figure out the money. Well, that’s like a librarian’s job, they keep tax returns, ‘you know, you hire because you need people like that.”



Scott Farquhar spoke at Atlassian’s User conference

As Atlassian’s leaders, Cannon-Brookes and Farquhar grew with the company, learning from mentors like Walker and Burgum, filling skills gaps — like how to give constructive feedback to employees — training when needed, and making this unique co-CEO structure work.

SAN Francisco-based Jay Simons says the two have become more effective as co-ceos, with Cannon-Brookes typically responsible for product management, design and strategy, and sales and marketing, while Farquhar focuses on engineering and business operations.

“We were writing themes [for a user meeting] and sometimes they might have different opinions,” he says of the challenge of having two bosses at first. “It was important to figure out who was making the decision, or if we had two different ideas, which one we were going to take.

“I’ve seen them develop that skill, and their dual CEO model has gradually become more effective because they’ve learned how to channel their dual energies.”

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