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This is a company that was founded in 2001. I still remember their CEO building his original audience on TheServerSide.com, back when Enterprise Java was the t
by rgrieselhuber 13y ago
This is a company that was founded in 2001.
I still remember their CEO building his original audience on TheServerSide.com, back when Enterprise Java was the thing.
They took 13 years to get to this point, a solid 8-9 years longer than most enterprise SaaS companies are expected to take (by VCs). And yet, not a single VC I've asked if they wish they were in Atlassian has said no.
You can build huge companies on your own terms and you don't have to swallow the story that everybody tries to feed you. You do need to do one thing though (and only one thing): get traction and keep it growing.
- tluyben2 13y agoCan you give examples of SaaS companies which did that in 4-5 years; I know you said 'by VCs', but i'm curious.
- rgrieselhuber 13y agoSalesforce was founded in 1999 and IPO'd in 2004. Marketo was founded in 2007 and IPO'd in 2013. Both are closer to 5-6 years. Salesforce had just over a $1B valuation post-IPO, Marketo was ~$500M.
- tluyben2 13y agoThat's both a lot less than $3.3B though. You meant 'this point' being an IPO only?
- rgrieselhuber 13y agoYes, but that is also worth noting. Some of the more recent SaaS IPOs were built on lots of funding and, as a result, don't have great fundamentals.
- tluyben2 13y agoIndeed. Those fundamentals and lack thereof are worrying. It seems everyone just goes for their own wallet content, not for building value over time. In the end bad fundamentals result in some kind of damage; not for the founders, but for the employees and others directly and indirectly involved when the axe falls. I don't really respect that if it is intentional. Billions or not. Hoped to see some different cases.
- FollowSteph3 13y agoI would add with similar fundamentals. Or even just the similar revenues...
- fjaved 13y agoVeeva Systems (VEEV) took just a touch longer at 6 years and did it with remarkable capital efficiency. Founded 2007. Raised $4m from VCs. IPO in 2013. Opened at $2.4b mkt cap, closed day at $4.5b, $5.6b today.
- rgrieselhuber 13y agoI just came across their story the other day - really inspiring. I'd love to hear the full story of how they did it. They are in a super specialized market, so I'm guessing that helped.
- pinaceae 13y agoyes, we are tackling a single vertical, life sciences - with multiple SaaS products. the core vision is the industry cloud. by being super specialized, the cost of sale is massively lower. no need for an army of sales people. focus is on product and delivery/implementation - once it is proven that your stuff actually works, others take notice in a tightly knit industry. Eli Lilly, one of our customers, just got awarded for their innovation around using our products: http://www.informationweek.com/strategic-cio/executive-insights-and-innovation/eli-lillys-field-reps-armed-with-data-/d/d-id/1141542 http://www.informationweek.com/strategic-cio/executive-insig...
- rgrieselhuber 13y agoThat's really interesting. I'd love to ask some questions - if you don't mind emailing me (address is in profile).
- hox 13y agoGreat to see both workday and veeva mentioned here, both tri-valley software companies proving that success can come in the Bay Area outside of Silicon Valley and San Fran.
- e1g 13y agoWorkday (NYSE:WDAY) was founded in 2005 and floated in 2012 with the valuation of $4.5B (currently $15B). However the Workday story is different because it was started by grownups and well geared towards enterprise from the start (business model, marketing, connection, financing, etc).
- josegonzalez 13y agoAs opposed to all other companies that are started by toddlers?
- e1g 13y agoThe "grownups" reference was snide and dismissive of the great work done by young founders - I should not have used it. For context, I was comparing the origin of Atlassian and Workday. Atlassian was started by two 22 year olds through a sizeable credit card debt. Workday was started by a 65 year old ex-PeopleSoft CEO with his funds and an additional $15M in VC finance. "Mature" would have been a better suited word. Thank you for calling me out on it.
- caoilte 13y agoThat was quite a grownup mea culpa. Sorry, I meant mature.
- dllthomas 13y ago"And yet, not a single VC I've asked if they wish they were in Atlassian has said no." Well sure, a hit is a hit. A hit that took 3x time is still worth being a part of if your hit ratio is less than one in three. With hindsight, of course they "wish they were in Atlassian."
- cheetahtech 13y agoI really appreciate this comment. I have a start up I have been working on for almost 2 years. I am bringing in money, but not enough yet to be life sustaining. So I have a full time job and working every day on this startup. It can get rather tiring... I was questioning its worth the other day, to keep going or to wait. But I must keep going. It doesn't take a year, but rather its a long drawn out process.
- primitivesuave 13y agoI wish I had your kind of attitude a year ago - me and a former cofounder gave up on a promising enterprise startup idea within a few months because we were generating way less money than we had expected. If you're bringing in money you're definitely doing something right, and you're doing better than 50% of enterprise startups out there. I'm glad you're sticking with it because it is indeed a very long and drawn-out process, but can be quite rewarding in the end.
- cheetahtech 13y agoThanks for that.
- mchusma 13y agoAtlassian is an anomaly amongst anomalies, but the timing is pretty normal. I find it strange that there is some kind of apparent value judgement being made on one company vs another. The average time to an enterprise exit is 9.5 years according to http://pando.com/2013/05/21/memo-to-this-years-yc-class-its-damn-hard-to-build-an-enterprise-company/ http://pando.com/2013/05/21/memo-to-this-years-yc-class-its-.... So Atlassian is generally in line with the average. Talk to any person or VC that has built a large SAAS company and they will likely say the same thing. Would every company love to grow >40% annually with spending 0% on sales and 15% on marketing...of course! The reality is that most companies can't do that. You can't look at it and say "I want to be Atlassian not Box." Box has a growth rate of over 100%, so commands a gigantic valuation. If I were starting a business I'd take either unicorn.
- mrkurt 13y agoThey don't really spend 0% on sales. They just don't have a traditional salesforce. They put a huge amount of resources and effort into pre-sales support (which is arguably sales with customer aligned incentives) and customer funnel progression. It is a small but important distinction, what they don't do is scale sales by throwing salaries + commissions at a highly paid sales force.
- itsprofitbaron 13y agoDon't want to be that guy but 4-5 years for enterprise startups "to get to this point" which I'm assuming is either that market cap size or IPO is ambitious - Enterprise startups tend to take a while to get that flywheel spinning. The fact that Salesforce did it in 5 years (Founded: 1999, IPO: 2004) means that they are more the anomalie than the others. For example here's a list of Enterprise companies which have taken 7-13 years to get to IPO: Eloqua - Founded: 1999, IPO: 2012. Years to IPO: 13 Qualys - Founded: 1999, IPO: 2012. Years to IPO: 13 Rally Software - Founded: 2001, IPO: 2013. Years to IPO: 12 E2open - Founded: 2000, IPO: 2012. Years to IPO: 12 Exact Target - Founded: 2000, IPO 2012. Years to IPO: 12 Box (Summer IPO) - Founded: 2005, IPO: 2014. Years to IPO: 9 Demandware - Founded: 2004, IPO: 2012. Years to IPO: 8 Fleetmatics - Founded: 2004, IPO: 2012. Years to IPO: 8 ServiceNow - Founded: 2004, IPO: 2012. Years to IPO: 8 Bazaarvoice - Founded: 2005, IPO: 2013. Years to IPO - 7 Workday - Founded: 2005, IPO: 2012. Years to IPO: 7 Marin Software - Founded: 2006, IPO: 2013. Years to IPO: 7 Marketo - Founded: 2006, IPO: 2013. Years to IPO: 7
- rgrieselhuber 13y agoYes, this was my point. The story you're sold when speaking with VCs is that if you're not at some astronomical valuation within a few years, you're not growing fast enough. A look at how things actually play out reveals a different story altogether.
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- mikekij 13y agoIt could (ideally) be boiled down even farther. You need to do one thing: build a great product! In reality, there is a lot more needed to be successful, but Atlassian is a great example of success being 90% great product.
- teacup50 13y agoAtlassian didn't get caught in the established wisdom trap of enterprise software: worrying more about generating sales leads than about the product. Upfront non-discriminatory pricing, direct purchase via credit card, immediate access to trial downloads, both installable AND cloud offerings, and source access to give customers piece of mind when it comes to solving their own problems and ensuring business continuity. Atlassian does it right in a field where so many don't.
- thom 13y agoA large part of that 13 years was JVM startup time though.
- bjconlan 13y agoHahaha, so true...