Why shared goals win customers—not fancy office latte machines
No sales force. No venture capital. No free coffee. Not exactly the typical Silicon Valley recipe for start-up success, yet Atlassian, an Australian-based purveyor of productivity software, has found its way to more than a billion dollars in sales and more than 138,000 customers. In doing so, Atlassian offers a different model, relying heavily on customer word-of-mouth, a strong company culture and a hard-to-resist low pricing structure.In my extensive interview with Atlassian’s Head of Marketing, Sean Regan shares the rationale behind the coffee embargo, why they re-wrote their best-selling software, Jira, from scratch, how they built up their user communities and why they keep their prices lower than they could. It’s all remarkably refreshing and should prove inspiring to any B2B CMO looking to turn so-called “best practices” upside down.
I read that Atlassian doesn’t provide coffee for employees. What’s the story there?
Our founders, to build our company culture, do very intentional things. And if you have ever visited Sydney, coffee is a huge part of the culture there. There's a shop on every block, but one of the hard things I think about working on software is you need focus. You need time to really get deep into work and solve complex problems. And that can come at the expense of collaboration. The coffee removal was an attempt to get people away from their desks and having conversations with each other.
Is there more to this?
Yes, this goes beyond just having conversations. The way modern software is built is actually an Internet of teams. You don't have one giant team, you actually have several small teams, and so making sure that those teams are communicating and collaborating at a technical level is important but also at a social level. They need to understand each other, and what they're doing. That makes for better products, and a better environment.
Your largest software offering, Jira, has about 65,000 users. Despite that, you made the bold choice to totally redesign Jira from the ground up. Why take that risk?
It was a big bet, and there's no there's no joy in that bet when you're making it. We actually made that bet just before our IPO, which is the boldest time to consider a rewrite as you're about to go tell the whole world that you can predictably deliver results. The reason? Well, every company in the world becomes a software company. Even a company like Tesla is differentiated both by its physical form, but also by the software. Your iPhone is both software and hardware, even your insurance is now online. As companies become more software-driven, everyone else in the company needs to work with the software team more directly. It's not some department down the hall. And so, the reason we completely re-imagined Jira is we had to evolve it to be something that the broader organization could work with. It couldn't be a developer-focused tool. We want alignment everywhere, so connecting those teams that aren't just coders is a big part of the strategy.
How do you encourage intra-community activity with your users?
We have about 400 user groups around the world that generally meet once or twice a quarter and they get together and help each other. It's absolutely amazing. It's the physical manifestation of an online forum and that community is a huge part of growing a brand that self-distributes. We’ve provided the punch and the pie, so to speak. Usually, we help try to organize the venue, and then they self-organize. We help create the conditions, and the community comes in and fills that space. Then they can share play books. They share best practices, tips, ways of working, how they’ve managed to help run their company better.
How did this approach get started?
It all started with our founders, Mike and Scott, in Australia. They didn't really have budgets. They didn't have sales teams. They were just two guys. But what they could have was a bunch of stickers and cases of beer. They just went out with the stickers on the beer cans and handed them out at these meet ups among software developers and they basically started conversations.
Is all this working and if so, how are you managing the associated growth?
It’s definitely been working, we’re definitely growing. When I joined last year, we were around 700 or 800 people. Now the company is at 3200, probably 5000 next year. We’re scaling incredibly. For a lot of companies, that would be mayhem. We’ve developed team health monitors, which involve regular team check-ins to see how things are going. We’ve made internet forms that help instruct our teams on how to run efficiently, and how to check on things. We just have to make sure everyone on our team is as informed as they can be.
Were there other advantages of putting those forms on the web?
That sort of content—online forms and manuals—is a cool opportunity for easy marketing. We have people on the internet searching things like ‘how do I organize a team?’ and ‘how do I run a project?’ These are all keywords we can take advantage of, because they relate to our solution, and appear in our materials. The marketing, in this case, is so close to our product, and so close to our efforts to helping our team run well.
How do you value your product? Where does the pricing model come from?
The most fascinating part of what's changing in business today, perhaps, deals with this. This may be a maybe this is controversial for me to say, but we leave money on the table. Intentionally. We leave money on the table because we believe that our products can be distributed to the whole world, and we believe that you earn a higher price point based on your value. You can go and sell, sell, sell and get the highest price point out of the gate, or you can prove that this is a valuable product over time. That's why we've really kept these price points low. It's good for us and it's good for our customers. And over time if we deliver great value, they'll find great value, and we'll have the opportunity to bring them other products or sell them additional versions or packages that add value on both sets.