news Australian enterprise software group Atlassian overnight revealed it had approximately doubled its headcount and revenues over the past 18 months, as it rapidly expands its operations internationally on the back of the $60 million in venture capital investment it took in mid-2010.
When the company took the investment from US-based firm Accel Partners, Atlassian stated that it had some 220 employees globally, with two offices outside Australia and revenues of $58 million. However, in a video interview with TechCrunch yesterday (embedded above), Atlassian co-founder Scott Farquhar revealed the company had grown extremely fast since that time.
“We’re about 450 staff in a whole bunch of offices around the world,” Farquhar said. “We’ve got about 200 people in Sydney and we’ve just expanded our offices in San Francisco, we’ve got about 120 people here and looking for about another 70 if anyone is out there and interested. In the calendar year just finished, we did about $102 milion in sales — it’s up about 35 percent.”
Atlassian is a private company, and so not required to disclose much detail about its finances. In addition, it’s not clear how much of its revenues the company discloses in Australia and if any is disclosed internationally.
However, the last time the company filed its financial results with the Australian Securities and Investments Commission, in mid-2010, it listed total revenues of $63.4 million for the year ended 30 June 2010, a figure which was up 23.1 percent on the previous year. In that year, the company made profits of $6.9 million (up from $2.1 million in 2009), with its major expenses being employee costs ($34 million) and the cost of sales ($19.5 million). “We’ve had 40 straight quarters of profitability,” said Farquhar yesterday. At the time, Atlassian said it had 155 staff.
In its mid-2010 report the company said it had seen organic growth from all of its products in the year, with “strong dollar growth” coming from its two main products, JIRA and Confluence, while new products such as Crucible, FishEye, Bamboo, Crowd and Clover had “excellent growth rates”. In its TechCrunch interview, Farquhar said 85 percent of its revenues still came from on-premises deployments of its products, but its products offered on a software as a service basis were seeing the fastest rates of growth.
One of the angles focused on by TechCrunch in its article associated with the video was Farquhar’s statement that Atlassian employed no sales staff to sell its products.
“We have no sales people, no one at all,” he said. “We spend a lot of time on marketing and making sure that people have a great experience with the Atlassian brand … instead of a sales guy calling them up and saying ‘when are you going to buy’, this week, next week, the week after, we allow all our customers to evaluate the product themselves. We don’t badger them to get them across the line.”
Farquhar’s statement is consistent with comments in a speech given by his co-founder, Mike Cannon-Brookers, in April 2011. At the time, Cannon-Brookes highlighted a variety of guerrilla or non-traditional marketing activities the company had undertaken in its early years to get ahead without spending money on customer acquisition. In Atlassian’s ASIC statements, the company stated that in 2010 it spend just $109,200 on marketing activities. It spent double that on finance costs alone.
However, as one TechCrunch commenter pointed out, a search of business social network LinkedIn today revealed that Atlassian does employ a number of staff focused on sales, with employees holding titles such as ‘director of global sales’, ‘sales & marketing manager’, ‘VP of product marketing & sales’, ‘sales engineer’, sales & customer service representative’, ‘technical sales’ or just ‘sales’. According to his LinkedIn profile, Atlassian president Jay Simons, also present in the TechCrunch interview, previously held the title of ‘vice president, sales and marketing’ at the company, after joining from a marketing role at similar firm BEA in mid-2008.
“If you call us, we have people standing by the phone to answer your questions,” Farquhar responded in the comments under the TechCrunch article. “We then spend time to work out why they called us, and update our products and documentation to ensure that we don’t get that same call again. But we don’t have any commissioned sales people in that process of buying products from Atlassian.”
“We aren’t going to rule out sales people, at some time in the future. Never say never. But here’s the way we think about it: You can be a sales-led company, or an engineering-led company. The money we save on sales people can instead be put back into making our products incredible, with more features, improving ease of use (a never-ending challenge), and making a moat between us and our competitors.”
“Having sales people (in the traditional sense) changes the company. They want to obscure price lists, so that they can extract higher prices. They want to hoard information, because that information helps them close deals. They want every lead to be handled by a human, which includes leads that were going to purchase without hand-holding. For companies that have commissioned sales teams, they will never migrate to a self-serve model. There’s too much momentum. Too much inertia.”
According to Farquhar, Atlassian is still aiming to become a public company through listing; an aim which it had espoused when it took the venture capital investment in 2010. However, he noted that becoming a public company was only “one step in a long process”, with the executive noting he wanted Atlassian to “be around in 50 years”.