Worked there from 2008-2013. So early-ish employee here. I still have a chunk of shares from the original ESOP program. Saying that for full disclosure because I'm biased and this feels like a hit piece to me.
When I worked there, they disclosed all financials in our internal Confluence site. There was a policy of full transparency with the employees. The owners (Mike and Scott) had impressive business discipline. They were profitable every quarter. They had many many opportunities to get vc money and go wild. When they finally took VC money, It was a modest amount ($60M I think) and the purpose was explained to us as setting up an ESOP program and putting Atlassian on the path to go public.
A year or two later, Doug Berman, the founder of Great Plains software became chairman of the Atlassian board. He gave a presentation to all of the employees at the Sydney office. One thing that stood out was that he said, it's actually bad to be profitable when you're growing. I'm paraphrasing here but he essentially said, you're leaving growth on the table. His thesis was growth is more important than profits.
So whether you agree with that or not, that is obviously the idea they are operating on rather than uncontrolled spending and helicopter dropping stock on employees heads out of desperation.
The idea that growth is better than profits was in-built into Atlassian's proposition to shareholders, ultimately.
The slow and steady mentality is fine, but we see over and over that it isn't what the market wants. A private company or a high risk growth company, those are the two options for a software company.
Either that or they'll be taken over. They're revenue now is just a $2bn, so that "grow grow" mindset from 10 years ago did not work out. In theory, a steady CEO could try to steady at that size with a nice margin. But, actually declaring and pursuing that would mean halving the companies market cap to a "normal" P/E of 20-30X.
At that price (say $20bn) one of the big software companies would just buy them... for their own growth targets.
Moderation has no place in the public markets as a software company. It's remarkable how unstable a stable condition is.
What's wrong with having a small or medium company? Why must a company sell its soul for the chance of becoming a money-printing behemoth in the future?
I understand that being small leaves you vulnerable to the predatory tactics of big players, but I see that as a consequence of lax regulation. There are too many mono/duopolies already, and the bigger they get, the harder it will be to split them apart.
> I understand that being small leaves you vulnerable to the predatory tactics of big players
This, I think, is the core of why. It's not that being a medium sized publicly traded company is immoral or unprofitable - it's that in a public market your stock is priced on future earnings and choosing to be smaller than possible means your tech can be bought for cheap. If you choose to stay smaller than maybe you could be - you're leaving ROI on the table in a lot of peoples' eyes (even if you're right and you'd lose money trying to get huge). So, as your stock price drops off to reflect the expectation that you're not going to get super impressive earning growth, you start to look appealing as an alternative to developing technology for an industry giant. Why spend $5bn over 10 years to develop competing services when you can borrow $5bn today, buy atlassian, get a tax break on the debt and start making a play for market dominance with the atlassian tech?
If you want a small or medium company, staying private is a more sustainable approach.
Well, it is fine to be a small enterprise, but unless you have a huge moat, you run the risk of a different growth-at-all-costs competitor (not necessarily a giant) coming in and vacuuming up all your customers.
Salesforce vs. Siebel being a great example of exactly that.
> Salesforce vs. Siebel being a great example of exactly that.
While I agree with your statement, I had to look that up because it sounds interesting. In 1999, the year Salesforce was founded, Siebel was the dominant player in the CRM field, holding 45% of the market, so not precisely a small company.
More than a budget war against a deal-with-the-devil startup, what killed Siebel was its inertia. Siebel sold expensive in-your-premises software, while Salesforce sold SAAS, and emphasized a cheaper cloud model. Siebel didn't react until 2003(!), when it released its first cloud version. By tht time, the expertise of cloud solutions of Salesforce made Siebel look like an amateur.
Siebel surpassed 1 billion revenue in 2000, while Salesforce did it until 2009. They had their chance.
I still agree that even if a small company did everything right, another one with more money and no fear of heavy losses would eat their lunch even if their product was inferior.
I'm not arguing with you, I just like talking about this, because Siebel himself has engaged in a huge disinformation campaign about what happened (he wanted to save his reputation and eventually launch c3.whatever). I've even personally listened to him bitch about HBS/GSB case studies about Siebel.
>In 1999, the year Salesforce was founded, Siebel was the dominant player in the CRM field, holding 45% of the market, so not precisely a small company.
Sure, but CRM was a new market back then (many argue that Siebel invented CRM) and Siebel was roughly equal in revenue scale to Peoplesoft and c. 10% the revenue scale of Microsoft. It would be very hard for anyone to argue that they ran out of space to grow (vs. choosing to slow down growth for profitability, especially in light of the dot-com crash)
>More than a budget war against a deal-with-the-devil startup, what killed Siebel was its inertia. Siebel sold expensive in-your-premises software
One great way to stop being an expensive piece of software and to grow faster is to lower your prices (but then you run the risk of becoming unprofitable).
Also worth noting that in 2000, Siebel spent c. 33% of revenue on Sales and Marketing, while Salesforce chose to spend 500%+ of revenue in the same period.
>while Salesforce sold SAAS, and emphasized a cheaper cloud model. Siebel didn't react until 2003(!), when it released its first cloud version.
Again, Seibel chose to spend 13% of revenue on product development in 2000. Easy to crush competition, but only if you're willing to spend for it.
>Siebel surpassed 1 billion revenue in 2000, while Salesforce did it until 2009. They had their chance.
Exactly, and choosing to harvest profit out of that $1bn of revenue too early is what did them in (though arguably, they are still probably something like $1-2bn of market cap for Oracle).
Seibel is and always will be the perfect example of disruption/the innovator's dilemma, which ultimately boils down to 'if you're comfortable with your current profits and not worried about growing top-line revenue, you will likely lose both.'
Nothing is wrong with it, I'm just predicting that this isn't a sustainable state for a publicly traded company. I don't think aggressive antitrust is likely and I don't think it would change the above regardless.
Markets pull towards potential, and the potential of Atlassian is valued higher than it's stable state.
It's not just that. The job of the companies is to make the most money using the legally available means, and the job of the government is to create regulation that makes "good" behavior profitable and imposes heavy penalties for disruptive things.
Except the government got addicted to printing money and throwing it around to boost GDP (and taxes) through bullshit business models and bullshit investments. They literally created framework where being an overstaffed money-bleeding behemoth creates higher returns for the shareholders than being a lean-and-mean niche business.
> What's wrong with having a small or medium company? Why must a company sell its soul for the chance of becoming a money-printing behemoth in the future?
If you don't go the unsustainable blitzscaling route you'll be outcompeted by those who do, just as Atlassian did to plenty of smaller, more sustainable competitors.
> I understand that being small leaves you vulnerable to the predatory tactics of big players, but I see that as a consequence of lax regulation.
That's nice, but that doesn't make it go away. Do you have a plan to make the regulation non-lax?
Not necessarily. If your company has strong fundamentals, for example Microsoft, then blitzscaling is not needed because not even a free alternative can compete with you. And if you don't have strong fundamentals, you really shouldn't be taking investor money anyway. Blitzscaling is just an exciting term to align founder and investor incentives (which tend to be at odds with one another)
Take a look at o365. Planner is an identical product to Trello. They're buying GitHub which competes with Bitbucket. Sharepoint & MSoffice are alternatives to Confluence. There might not be an equivalent to Jira but the Microsoft machine is increasingly muscling into their turf.
> but we see over and over that it isn't what the market wants.
What the market wants is short term growth and I firmly believe that is what is destroying our economy and the market.
Instead of building pillars and companies that outlive the founders, we have short term cash grabs. We have VC firms buying up our existing pillars, gutting them of any valuable assets, saddling them with debt, and then selling off the carcass. We have firms buying up real estate and creating or exacerbating scarcity to drive up demand and prices. We have shifts towards subscriptions and quarterly profits.
Perhaps, but I think on this instance... this short-termist mindset has a basis.
What kind of a 100 year future does Atlassian have? Jira certainly isn't a 100 year product. Software is so fast... IDK. The pox is not just a product of greed and malice and nothing.
> What kind of a 100 year future does Atlassian have?
We're talking about a company that produces products that are widely used. JIRA is not the issue, but the company that produced it. 100 years is stretching it, but I would believe that Atlassian outlasts yahoo.
Probably because the valuation is currently 10x revenue, and was previously more like 70x. "Only" is probably because the parent still feels like Atlassian is highly over-valued.
> growing 30% YoY for the last 3~4 years alone. This is unheard of in any other industry/market.
It has been common for the leaders in every other market throughout commercial history, as it pertains to corporations of large size. What you're looking at are presently old industries and comparing them to newer, that's where your mistake rests.
Walmart did it. Sears did it. Kmart did it. Best Buy did it. US Steel and its components did it. The various automobile majors did it. Standard Oil and the other oil majors did it. General Electric did it. Caterpillar did it. Pan Am did it. Many of the railroad companies did it during their time. McDonald's, Starbucks and most large chains do it during their expansion->saturation phase. Coca Cola did it.
It's exceedingly rare to find a large corporation that didn't bang out 30% growth years for a decade or more to get as big as they got.
One day, decades from now, "cloud" will look like a big dead industry too, and people will talk about how it never grows fast. Just ask the people that used to make business software you install onto PCs.
> And has been growing 30% YoY for the last 3~4 years alone.
Growing revenue while still not making a profit is not impressive. If you give me $100 today I can go out a buy $100 a pair of new shoes, and sell it for $70. Give me $200 and I'll go out and by two pairs of shoes and sell them for both $84 (total)! Keep giving me money and you'll continue to see this growth I promise!
> This is unheard of in any other industry/market
Given my example above, that should be a warning, not a sign of success.
I find it mind-boggling that people can really not even grasp that growing revenue with out demonstrating you can transform that revenue into profit doesn't mean all the much.
Grow profits every year by 30% and I'll be impressed.
Atlassian makes zero profits because it reinvests them in growth (hiring, acquisitions). The common sense here is that you return profits to shareholders only if you can't grow fast enough. That's the case for a lot of other industries where you have single digit growth in good years. But if you can grow 30% annually, you bring much more value if you reinvest your profits.
>It is when you’re a software company and the marginal cost of the goods is zero.
$600mm annual sales and marketing isn't cost of goods but the method of accounting that I subscribe to includes such costs as a fundamental cost of production delivery.
> If you give me $100 today I can go out a buy $100 a pair of new shoes, and sell it for $70. Give me $200 and I'll go out and by two pairs of shoes and sell them for both $84 (total)!
Hilarious that you use the analogy of shoes. This is exactly the problem. Great explanation on this concept:
True, but it is not unheard of for a software company. In fact, it's expected. Hence the valuations for software vendors compared to manufacturing, retail, etc.
This phenomenon might to some degree be a function of the board’s veto power over the CEO. A primary reason you typically go public is to grow, so by default at IPO you’re a “growth stock”. But from that point on, its difficult to ever make a transition to a steady, sustainable “dividend stock”, especially as a tech company. If you try to, the stock will tank, all the “growth” investors will get mad and you (the CEO) will probably get fired by the board, and they’ll bring in a new “growth” CEO.
Fundamentally, why would someone buy a stock of a company that doesn’t eventually make a profit or offer some sort of dividend? Seems like Atlassian traded profit for staying power, but can they leverage that staying power to bring value to their investors?
People buy growth stocks because they can sell them for more tomorrow, it's often a bit of greater-fool theory in play.
For the successful companies that do grow into a dividend company, they often have valuations that far outstrip their eventual settling location at some point in the trajectory.
The idea is they'll eventually get purchased, or have a profit and dividends. But if you're growing so fast it makes sense to focus on that over profitablity. Most investors would rather have a 1.40, next year than a dollar today.
Directly related to that, if the expert they hired to the board that led them in this direction was from Great Plains it useful to note that Great Plains exited by being bought by Microsoft.
> it's actually bad to be profitable when you're growing.
I've seen this happen so many times:
- profitable, down to earth founders generating net profits
- VC approaches said outfit and tries to gather as much info
- VC realizes said outfit is difficult to emulate and break into market
- VC invests and starts demanding they run at a loss to grow quickly
This works well when interest rates are low, and VC is not under pressure to deliver returns. However, when capital suddenly becomes slightly expensive, the whole house of cards start to crumble taking down the good business with it.
Neither strong prudence or optimism helps here. Once you start running at a loss post-VC money, you no longer control the destiny of your own company you started.
Let this cyclical downturn (likely to last for 5 or more years) be a lesson that the previous generation learned. If you are not making growing net profit (Revenue - COGS), you are no making period. Not so while ago people were arguing that debt is an asset and cash is a liability. It's always amusing to me how quickly people denounce gravity are impacted by it.
- Your entire theory relies on VCs having some power over decisions being made at Atlassian. That isn't the case. The founders of Atlassian have always been in control. After taking VC money and going public, they still have over 80% of the voting shares [0].
- A downturn of 5+ years would be the longest downturn in the USA in the last 100 years [1]. Anything is possible but it's unlikely to be that bad.
GDP contraction won't last five years. But it will be longer than the GDP contraction before VC money becomes as easy as it was for the last five years.
Easy money being available after five years is also uncertain. With covid shock, then global sanction following Russian invasion, and deglobalization following in the wake of these two events, global economy is faces serious uncertainty in coming years.
You don't say it explicitly, but there's a bit of a garden-of-eden in this story: Founders were running this great wonderful profitable business and then those darn VCs come in and ruin everything.
A founder isn't forced to take on investors. The same founders who were so "down to earth" and profitable are the ones making the decision to take on investors. The founders can't be responsible for profits and then suddenly get taken advantage of by investors. Everyone involved is eyes-wide-open.
Lots of great businesses have been built, in partnership with investors, during higher interest rate periods and downturns.
Disagree. These companies absolutely pump out cash on a free cash flow basis:
"It’s the absolute dollar free cash flow per share that you want to maximize, and if you can do that by lowering margins, we would do that. So if you could take the free cash flow, that’s something that investors can spend. Investors can’t spend percentage margins.” “What matters always is dollar margins: the actual dollar amount. Companies are valued not on their percentage margins, but on how many dollars they actually make, and a multiple of that.” “When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.”"
Bingo. The VC wants the grand slam that returns the entire fund. He'd rather have an x% chance of a grand slam than a 3x% chance of a double/triple. Founders have a very different calculus because their risk isn't spread across a portfolio of companies.
The problem is that choosing to be unprofitable is a strategy that maybe worked (or just was fashionable) the past decade under very specific circumstances (lot of free money chasing higher returns in a context of very low rates), but otherwise obviously makes no sense, it's antithetic to the very idea of a business. It's not to be confused with the sane version that is reinvesting profits for growth instead of distributing them as dividends.
In the space Atlassian is in, choosing to be unprofitable while quickly growing could make sense.
It is not necessarily true for other sectors (e-scooters, different delivery services, maybe even Uber), as there is no stickiness in those areas. Whenever a cheaper Uber would come to my city, I'd drop them within a second. They are usually cheap while they can burn VC money.
If Atlassian can keep their system for a couple of years in a big, slow legacy company, the company will end up with tens of thousands of tickets and pages.
Then, no matter how everyone thinks that all the products of Atlassian is terrible (there is a thread about it every second month here), the company will never leave Atlassian because nobody wants to spend the time on migrating all that stuff and everybody is afraid to say that "we will probably not going to need poorly written user stories from three years ago", and they don't want to risk that the new system doesn't cover everything that e.g Jira does.
Once a company is locked in, it will keep paying because paying any amount is easier for them then migrating, training the employees to use the new system, broken links, missing features, etc.
You have it nailed: they offer low-churn products.
Atlassian is well-managed. Their revenue is fine. Their cash flow management is good. Their compensation plan is effective at retaining employees--the stock employees receive is likely to be more valuable at the end dof the vesting cycle than it is today.
Atlassian has got a collection of offerings that are industry standard. When used at large companies, they become quickly entrenched, with very low churn.
It is also a collection of offerings that is chosen by startups. Last quarter through a year from now, I expect that stream to be dry. But they are on 3-year contracts at an awful lot of got-my-Series A startups that will have to tighten their belts in other ways before trying to rotate off of Atlassian.
If you are actually producing e-scooters it could make sense as well when you have plans for reducing your costs long term through economy of scale so you reach the minimum efficient scale.
> but otherwise obviously makes no sense, it's antithetic to the very idea of a business.
How does it NOT make sense? The purpose of a business like this is not to generate some short term profit. These are winner-take-all markets - they're playing for complete and utter domination of an entire product category.
Their Q1 revenue grew 37% YoY - how on earth would you care about profit over what they doing here? They should keep hitting that as hard as they can.
Yep, exactly what UBER is doing and what Tesla has found themselves doing with high spending on their Texas and Berlin Gigafactories. It's a short term pain for domination... expand fast and be the market leader in every country before someone else beats you to it. Then, soak in the profits.
Which works when the unit economics are good. You can take the profit from an operating business, and just inject it back in the business to grow. That sometimes looks like an unprofitable business, but the test is: "if the company freezes growth tomorrow" would it be profitable?
Teslas are profitable, once you pay off the amortized cost of a factory. It isn't clear that uber is profitable. They had 5-10% gross margins pre-IPO, and it has gone negative since.
I think it can make sense temporarily trade profitability for growth, especially if you are using debt/funding to take advantage of certain circumstances. But it certainly isn't sustainable, and the purpose of the growth should be to increase profitability in the not too distant future.
You could rephrase "choosing to be unprofitable" as "spending revenue on more staff and/or higher salaries to retain them" for software businesses. Or in the case of Atlassian, acquisition.
> I'm paraphrasing here but he essentially said, you're leaving growth on the table. His thesis was growth is more important than profits.
But, you can't grow forever. At some point you hit things like the maximum market size and there's no longer any way to invest your profits back into growth.
Or, to hit a lot closer to home: As a stockholder, your stock won't appreciate in value forever. Software companies very rarely turn into Microsofts and Googles. You need to sell at some point in order to realize the value of your investment. (Unless you're getting dividends.)
> But, you can't grow forever. At some point you hit things like the maximum market size and there's no longer any way to invest your profits back into growth.
Atlassian is probably a fair bit away from that. Amazon is much closer to that mark today but they got there after following exactly this strategy since the 90s.
>> Atlassian is probably a fair bit away from that.
How do you justify that?
One way Atlassian's market size gets limited is by being viewed as a competitor to Microsoft (or other large incumbent's) products. Some customers can choose both, but not everyone can. The feature and experience differences don't matter much to the buyers (procurement), so if something is cheaper elsewhere, then it's a harder sell. It also increases risk in a potential recession where Atlassian is viewed as a luxury option. I feel like JetBrains play a smarter game here.
It feels like folks have forgotten how bad a niche developer tools have been. Circumstances have meant that VCs have been throwing money at developer tools and developer experience has been in vogue. Things will probably be better in this wave than previous ones, but it's still much riskier than other markets. Developers may rule the world, but the software powering their day-to-day is very different between software companies and the majority building line-of-business software.
Amazon is a bit of a unicorn in this regard though. They've been able to consistently pivot profits into expanding services into new (but highly related) areas. Most companies are overly aggressive in trying to chase exponential growth, they end up outgrowing their competence.
> When I worked there, they disclosed all financials in our internal Confluence site.
I worked at Rising Sun Pictures (RSP) in SA 2005–2007 and the CEO at the time, Didier Elzinga, did the same.
But what RSP did went even further. Didier and the CFO did a full disclosure presentation about the company's financials quarterly or bi-annually (can't remember).
It was great. Not least to make everyone understand why they couldn't pay rates that VFX professionals who moved to AUS from the East coast or London where used to – at least at that time (it was early years for RSP then).
RSP remains one of the best workplaces I ever had the luck to be employed at.
Afair Didier was also in some role on the board of Atlassian at the time. Maybe not a coincidence.
> it's actually bad to be profitable when you're growing
VCs love risk. They will want to dramatically reduce your chances of a small positive outcome if it means a increase on your (always small) chances of a huge positive outcome.
VCs love _technical_ risk. Outside of the very unusual circumstances of the Zero to One capital-funded-monopoly-theory era, they have considered _business_ risk quite toxic.
My point is that you state "VCs love risk" and I'm trying to help you clarify the way you think about this. VCs don't love _risk_ at all, they love _things that are an technical execution risk but would sell immediately if they can be done_.
Business risk stuff - does the market exist? is a new pricing model possible? etc. - is not at all on the list of risks that VCs like.
It's like that scene from Silicon Valley (which is almost always accurate).
Seriously, when did it become normal in capitalism that you should not prove that your business can make money? That there a customers willing to pay for your product? That the promise of future maybe profit sells better than actual profit now? This is insane.
We've been in a bubble so long that there were people who have worked only in the current tech bubble. People run companies now that think a stock market crashes ultimately means more money flows in from VCs. I once worked for a c-level that seriously thought he had discovered something amazing when he realized that a company that made more than it cost to run the business had unlimited runway... the very idea that a company could run without constantly running to investors begging for more cash was completely foreign to him.
This has been the consequence of increasingly cheap money and investor money having nowhere to go after the real estate crash in 2008. To be fair, if money is basically free then it does make sense to grow without worrying about a profit. If you've had an entire career without every having to worry about more investor money coming it, it would start to seem wasteful to not spend it all.
But that's why these current economic conditions have me very worried: money can't be cheap anymore. If interest rates continue to rise we'll see a massive contraction in tech. First it will be the smaller, direct to consumer startups, then it will be all of the companies that have those startups as a non-trivial portion of their revenue.
If I have a company with good cash flow, all employees (including me) are compensated well, and I'm spending a chunk of that cash flow on R&D and growth but have only marginal profits if any am I doing something wrong? Should I cut R&D to pay dividends? How about if the company is privately held?
There's a difference between 'not profitable' and 'losing money.'
If "profitable" is a switch you can flip, then what you're describing makes sense.
The issue is that many of these companies have never demonstrated that if they want to they can be profitable. The big assumption in these growth models is that there is a point where you can just magically flip that profit switch.
For example if I run a lemonade stand where I spend $3 to make a $1 glass of lemonade, even if I am able to use investor capital to keep growing my lemonade stand to be the only lemonade stand in town, or even the world, it's not clear that I can survive if I'm forced to make a profit.
I worked for a company that rented a new expensive floor in the heart of NYC to show "growth" to other investors. We were supposed to spread out for the optics, when potential investors did a walk-through.
Wild speculation has been a feature in capitalism for _centuries_. There are any number of interesting historical schemes to read about where investors lost their shirts, or, sometime won big! Every new business venture has risk that it will fail, even in "stable" industries. We should celebrate trying new business that might not work. We just need to ensure we don't socialize the losses.
> One thing that stood out was that he said, it's actually bad to be profitable when you're growing.
The only conclusion to this statement is "When we will stagnate we will then start making profits"
This doesn't sound like a great strategy to me. This is why I'm not investing in "no-profit but growth" except for the stock price increasing in the short term.
I think it depends on what you mean by "profitable".
If that means profits available to, e.g. pay dividends with then sure. But I think it ought to always be the goal to have a profitable operation then you can plough the profits back into the business to push growth (which will mean reporting 0 profits).
The character Russ Hanneman on the TV show “Silicon Valley” took it a step further stating that having no revenue to speak of makes a company more valuable. It’s satire…but is it?
It matters what portion of the cycle we are in. We used to be in the voting portion, now we are in the weighing machine portion and things are very different.
“In other words, the market is not a weighing machine, on which the value of each issue is recorded by an exact and impersonal mechanism, in accordance with its specific qualities. Rather should we say that the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion.” -Security Analysis 1934
A company with no revenue can potentially raise at a higher valuation with a company of $1 of revenue - because now it’s real and investors will start making their mind up about the actual possiblities of the investment
Directly experienced this - having actual _profit_ makes it hard to encourage fantastical storytelling about how big the upside is. It's the company future equivalent of mark-to-market.
Revenue .. well, if you can get huge revenue with huge losses and convincingly demonstrate (mostly by spending) that more losses (= more capital) means more revenue can actually take you a long way. Almost all of the "unicorns" and "decacorns" embraced this model - lose $2-5 per $ of revenue but able to demonstrate almost unlimited market. Most of those companies can never, ever be profitable entities.
I've heard this time and time again in SV circles. It probably is for the right founder who is able to paint a rosy picture and a nice story. I'm not that kind of person, so it's bonkers to me.
Like Adam Nuemann. You have to be tall and loud. Doesn't matter if you are making sense or not. Sometimes VCs act like gullible women on a date who are enamored by a douchebag, I swear.
The article talks about this. The problem is that growth is not there.
What you're left is a company with 8000 employees and a system to problematic to change.
With the recession incoming, the time for free money is over and tech startups are bound for a correction. I'd sell or get ready to wait 10-20 years.
Even in the wait scenario, you're basically hoping that a huge corporation will transform itself and rediscover their startup roots - which is not likely to happen.
It happened with Mashape (sold their unprofitable marketplace to the RapidAPI people - geez, what a bad deal, it was painful to watch) and they managed to reinvent themselves with Kong.
They literally did a bunch of experiments and went on with what succeeded, ignoring their main, flawed, business model.
That's what companies should do to chase success, they need to act like venture incubator, don't bother their teams with corporate BS and hope one of their teams will succeed. If they behave like mammoth corporations they're doomed to fail.
And their typical customers are the least exposed to recessions i.e. medium to large companies who are making software purchasing decisions for the long term.
Atlassian isn't a US company, and if the US is going to have a recession (which I think is doubtful), Australia certainly has a good record on avoiding them.
Atlassian's largest source of income is almost certainly the US.
And even if Australia is unaffected by an American recession, much of Europe, and much of Asia won't be (especially with China's growth slowing down).
Which brings me to my second point, which is the only reason Australia was able to avoid a US recession was selling itself to China, something which it is politically unlikely to do so anymore (although I'm not up to date on the new PM's China policy) and anyways, China may not have the capacity or willingness to support Australia anymore.
Australia recessions are uncorrelated with US due to mining and other raw materials exports being a huge share of their economy... especially selling those materials to China.
I doubt miners are big Jira users.
US tech companies who are cratering right now though...
Yes but with the chance at a job-for-life guarantee and possibly months off per year.
My wife & I have a couple academic friends and they make 1/4 our income probably, but they are unfireable & they also just took off for another 6 weeks stay in southern Europe at a family home this summer .. so there's that.
Guaranteed income & time flexibility are hard to measure in absolute dollars.
My wife & I are on the other hand on our 5th/6th job in our almost 20 year careers, never having had more than 2.5 weeks off consecutively. The hustle now is maximizing the dollars and building some alternative income streams so we can start to wind down the intensity in maybe 10 years and fully exit workforce in 20 years?
When I worked there, they disclosed all financials in our internal Confluence site. There was a policy of full transparency with the employees. The owners (Mike and Scott) had impressive business discipline. They were profitable every quarter. They had many many opportunities to get vc money and go wild. When they finally took VC money, It was a modest amount ($60M I think) and the purpose was explained to us as setting up an ESOP program and putting Atlassian on the path to go public.
A year or two later, Doug Berman, the founder of Great Plains software became chairman of the Atlassian board. He gave a presentation to all of the employees at the Sydney office. One thing that stood out was that he said, it's actually bad to be profitable when you're growing. I'm paraphrasing here but he essentially said, you're leaving growth on the table. His thesis was growth is more important than profits.
So whether you agree with that or not, that is obviously the idea they are operating on rather than uncontrolled spending and helicopter dropping stock on employees heads out of desperation.