What do you do when you don’t want to wear a suit to work? One option: Start your own software company, dress however you’d like and become a billionaire.
It’s the road Scott Farquhar and Mike Cannon-Brookes, co-founders of Australian tech start-up Atlassian, took to grow their company from a valuation of zero to $3.3 billion.
According to the Wall Street Journal, the collaboration software company, founded in 2002, filed for a US initial public offering last week and expects to go public before the end of the year.
Solving Specific Problems
Even if you’ve never heard of Atlassian, chances are good that you or someone you know is familiar with its collaboration tools. There’s bug tracker JIRA, team collaboration tool Confluence, Enterprise Communication Service HipChat and more.
“Atlassian's strength is that it solves specific problems. They are not just a generic collaboration company,” Alan Lepofsky, an analyst at Constellation Research told CMSWire.
“With JIRA, Atlassian has firmly established itself in the development and engineering communities. Confluence is a very popular collaboration platform, and HipChat is gaining momentum” he added, noting that the popularity of Slack may be adding to its momentum.
Atlassian’s goal, according to Farquhar, is to “revolutionize the way teams get work done. We want to eliminate busywork and make it easy to collaborate so we can all focus our energy on using the unique skill sets each of us brings to our jobs.”
Unlike some other unicorns (startups valued at more than $1 billion), Atlassian has something remarkable going for it that investors are likely to love— it’s profitable.
Atlassian's’s profitability may be due, at least in part, to the way it sells its products — Point and Click style, transparent pricing via the web. Contrast that with vendors like Box, whose costs of acquiring new customers come close to or have even exceeded their top lines.
“The remarkable thing about Atlassian is their lack of sales and marketing. It's almost all word of mouth,” said Lepofsky.
And while low sales costs are good for the balance sheet, they also leave bucks available for research and development, which Atlassian seems to be using well.
The company sits alongside IBM and Microsoft in Gartner’s 2015 Magic Quadrant for Application Development Life Cycle Management and was named a Challenger in Gartner’s MQ for Workplace Social software.
With the stock market being as erratic as it is now, why pick this time to go public?
Besides the company’s healthy balance sheet, it has some impressive traction. Last week Farquhar announced the company now has 50,000 paying customers. ”Dreams do come true,” he wrote in a blog post.
Swimming against the tide seems to be a good luck for Atlassian as well.
In a blog post announcing the customer acquisition benchmark, Farquhar wrote this:
“$48,500. That was the PricewaterhouseCoopers salary that I turned down in 2002 to start Atlassian with Mike Cannon-Brookes. There was no technology industry in Australia at the time, nor a start-up industry. Our university professors disowned us. Our parents looked the other way. Our original goal was to earn more than $48,500 and not to have to wear a suit to work.”
He and Cannon-Brookes initially bootstrapped the company with less than $10,000 charge on a credit card.
The rest, as they say, shall be history. We’ve got our eyes wide open.