Winner: SmartCompany 2007 Award for Millionaire Entrepreneur
SmartCompany50 rank: 5
Revenue: $22.5 million
Growth: 117%
Founders: Mike Cannon-Brookes, 27 Scott Farquhar, 27
Based: Sydney
Employees: 100
Industry: Information technology
Website: www.atlassian.com
In 2002 when Mike Cannon-Brookes and Scott Farquhar (right) were both 22, they started Atlassian Software Systems. Within a year the two young blokes had made $1 million revenue, winning the SmartCompany 2007 millionaire entrepreneur award.
And their revenue has kept climbing to $22.5 million in the 2006-07 year from $14.9 million for the previous year. The business, which has been profitable since inception, bought Cenqua in August this year, further fueling revenue growth.
The company makes software that lets workers in professional services companies work together on projects. Co-founders Cannon-Brookes and Farquhar developed their first product JlRA because they could not find an affordable tracker that did all the things they wanted.
Their second product came about in the same way. They kept breaking wikis and so they developed their own: Confluence. The timing was perfect. Businesses across engineering, biotech, transportation, logistics and hospitality all need to collaborate on knowledge effectively, which has led to an explosion in the wiki market. Their product was created again to solve their own problems; continuous integration software called Bamboo.
Customers report that their products increase productivity and responsiveness. “It immediately lowers the entry level of technical expertise needed to increase a company’s ability to manage knowledge capital.” The pair have over 7000 customers in more than 90 countries.
The company has no sales force, relying entirely on online techniques, which generates 80% of sales. Organisations can download the software, install it and then purchase it online.
The pair also use Web 2.0 techniques to communicate with customers, claiming to attract 200,000 unique visitors a month. “If we need to know something then it will most likely benefit our customers to know,” says Farquhar.
They publish a lot of information on their website, and while one site is maintained by one person in the marketing department, their other sites are maintained by their community.
Feedback comes from a customer advocacy division, and there is an intranet site where staff can post comments and ideas.
The pair, who started the business from home, say that being profitable since day one has not led to flashy offices and expensive overseas trips. Profits are poured back into the business and staff levels and office premises always exceed current requirements but meet future targets.
More than 80% of revenue comes from exporting with the US their main market. New competitors are entering the market, many of them backed by venture capitalists. Also big name industry leaders are also taking on Atlassian. But that’s nothing this pair of entrepreneurs could not handle.
Key success factors:
- Solve your own problems and you could find you have a new product or service that solves your client’s problems.
- Online techniques can be responsible for generating nearly all of sales revenue.
