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5 Interesting Learnings from Atlassian at $2B in ARR

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We’ve done so much great content with Atlassian over the years, with CEO Michael-Cannon Brooks to Trello Founder and CEO Michael Pryor to ex-President Jay Simons, and the learnings are always amazing.

Atlassian is a fascinating case study because it showed so many of us that developer-focused SaaS products can be huge, and not just huge, but huge even in competitive markets.  Atlassian dominates several markets where it still has intense competition (e.g., everyone from Asana on), and is fine ceding areas to partners where it’s less strong (e.g, Slack).

And Atlassian has always done things a bit differently.  With for the most part, a relatively small sales team (although a large channel since the early days, providing a lot of those functions externally).  And a huge investment in R&D since inception.  And … proof that you can build a decacorn from anywhere.

So what are 5 Interesting Learnings we call all take away from Atlassian at $2B in ARR?

  1. SEO and brand continue to work at scale.  Atlassian had 21m unique viewers to its website last year, up 30% year-over-year.  A vivid reminder that investment in content and brand pay dividends … forever.

2.  It’s never to late to add a great Free edition.  Atlassian was relatively late to adding free editions for some of its products, but it’s working now.  In fact, Atlassian sees Free as its key engine of growth for the next decade.  While the Free editions of Jira and Confluence were somewhat inspired by Covid, the experiment worked.  Sign ups have tripled.

3. 121% NRR overall, 130% in enterprise.  These numbers aren’t a surprise, but they are still top-tier and what you should aim for as well if you sell similar tools.

4.  A long path to multi-product revenue streams, but today, 40% of revenue not from Jira+Confluence — and that’s growing.  A top learning from this series is that to continue strong growth past $1B in ARR, you probably need more than one core product.  We’ve seen this with Twilio, Veeva, Salesforce, and many others that find a second and often third anchor product to continue to fuel growth higher than 20% at $1B+ ARR.  In just a few years, a minority of Atlassian’s revenue will be from its traditional 2 core products.

5.  Atlassian, too, is going more enterprise now.  One of the biggest changes from IPO to $2B ARR is just how enterprise Atlassian has gone.  It’s $50k+ customers are growing 44% and it’s $500k+ customers are growing 56% … and it’s $1m+ customers are growing 76%.  They now have over 100 $1M+ ACV customers.  We’ve seen Slack, Asana, PagerDuty and Zoom all go more enterprise post-IPO:

And a few other interesting notes:

6.  Channel partners drive 63% of revenue (!).  A lot of Atlassian’s sales efficiency is driven by its channel partners doing the heavy lifting on sales — and it’s still working well at $2B in ARR.  Atlassian only spends 15% of its revenue on sales and marketing, which is the lowest or close to it of any Cloud leader.  But that doesn’t mean it doesn’t do sales and marketing.  It’s partners just do a lot of the sales, and its brand and web traffic do a lot of the marketing.

7.  Atlassian is a cash-generating machine.  Yes, it can be done in SaaS, especially companies that are very efficient in sales and marketing like Atlassian and Zoom.  Atlassian is generating $500m+ a year in free-cash flow:

 

The post 5 Interesting Learnings from Atlassian at $2B in ARR appeared first on SaaStr.



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Venture Capitalist Firms

Top 10 SaaStr Videos of the Week: Twilio, MongoDB, Blackline, Stripe and More

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Catching up on some YouTube over the weekend?

Let’s take a look at the top SaaStr videos other SaaS founders and execs are watching:

#1.  “How to Collaborate, Manage & Work with Developers with CEO of Twilio, Jeff Lawson.”  Jeff has been doing a lot of speaking to promote his new book, AskYourDeveloper.com, but we did a special take on it, a deep dive on how really to work with a engineering team for the first time.  Take a watch!

#2  “Churn is dead. Long live Net Dollar Retention Rate with Dave Kellogg”.  A top presentation from SaaStr Scale on how to drive up NRR.

#3.  “Fighting Churn with Data with Zuora’s Chief Data Scientist.”  Another deep dive on tackling churn.

#4. “Fireside Chat: Jyoti Bansal, harness.io & Dev Ittycheria, MongoDB.”  What do two Unicorn+ CEOs talk about when they get together?  Find out here!

#5. “Lessons in Scaling a Low Code Platform with Airtable”.  Learn how Airtable … got to be Airtable, from CEO Howie Liu.

#6. “Going Long: The 20-year Journey of Being a CEO + Founder with BlackLine”.  Another incredible session with Therese Tucker, on how to build a $7B+ industry winner, the hard way in many ways.

#7. “10 Rules for Defining Churn with ForgeRock and Solarwinds | SaaStr Software Community”.  Another deep dive on churn, this one with 10 great actionable steps to drive it down.

#8. “Dharmesh Shah of HubSpot – From Day 0 to IPO: What Went to Plan, What Most Certainly Didn’t.” A SaaStr classic on some of Hubspot’s top mistakes (and wisest choices) getting to IPO.

#9. “Avoid Trapdoor Decisions: 5 Lessons Learned from Scaling Stripe with COO Claire Hughes Johnson”.  Another SaaStr Classic and a must watch on not making the wrong key decisions.

#10. “How Sales and Product Really Should Work Together with MongoDB”.  This is a critical topic and come learn how the heads of sales and product really worth together at Mongo.

 

 

 

 

The post Top 10 SaaStr Videos of the Week: Twilio, MongoDB, Blackline, Stripe and More appeared first on SaaStr.



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Yes, You Do Have To Pay Sales Commissions When a Partner Mostly Closes The Deal

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Q:  Should we deduct partner referral fees from our sales people’s commission?

This is an important question and the answer is generally No.

At first, this will confuse you as a founder. If I have to pay a partner say 20% of a deal, and they do a lot of the work — why do I also have to pay my own sales rep a full commission?

Because what we all find is that, at least for a long time, if you don’t provide a commission to everyone working the deal, there is (x) too much conflict and (y) more importantly, no one is motivated enough to help the other if they don’t get a full commission.

So yes, at least for a while, with many partners you may in essence need to pay a double commission. One to the partner, and one to your own sales team. It’s OK if it gets the deal done. Especially, if the customer stays for years and years.

Later, you may develop a team that manages your channel.  Once you do, if the revenue from a channel is large enough, you can often pay lower commissions that you do for your direct sales team.  E.g., perhaps a channel manager can own a $2m quota, vs. $500k for an AE.  But even there, it’s two commissions.

The post Yes, You Do Have To Pay Sales Commissions When a Partner Mostly Closes The Deal appeared first on SaaStr.



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MLK 2021

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It took until 2000 for all the states to recognize a day to observe and remember MLK. Reagan signed MLK Day into law in 1983. The difference of 17 years for all to recognize the day speaks to itself.

King’s activism for Civil Rights created a foundation for any of us to bring people together for non-violent movements. The power of seeing people from all walks of life get together to march against one right, although subtle, speaks volumes. Black Lives Matters, Women’s Rights, Anti-Guns, etc. Not just in the US but globally, the surge of non-violent protests from public fury packs a powerful punch seeking change and transformation.

If only the people who have attempted to overthrow our Government on January 6th came to Washington to march in peace. To show their frustration instead of rioting the capital with guns, knives, and ropes with the desire to create havoc and spread hate.

As an eternal optimist, I believe we have got to a place in our country where we are finally coming to a reckoning with our history, especially our dirty history. It took Covid and Trump to get us there, but there are always silver linings.

Joe Biden has put together his top team of 25 people with a myriad of faces, and 12 of them are women, and his VP is a Black Indian woman. This is game-changing.

I want to believe that finally, MLK would be happy in the direction we are finally heading.

The post MLK 2021 appeared first on Gotham Gal.



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