Atlassian Co-Founder Scott Farquhar on The Biggest Lessons Scaling Atlassian to $50BN…

So Mike and I started Atlassian graduating out of college. Neither of us wanted to get a real job. He had dropped out of his degree to do a startup that he eventually sold. I was coming out of cold. I didn’t have any entrepreneurial experience, but I didn’t wanna go work for a bank and insurance company. And so we tried a bunch of different things around software. We tried doing third party support, and eventually, we built a product called Jira. And twenty two years later, two hundred and fifty thousand customers, 11,000 staff.

Like, it’s sort of grown a lot since the two of us. Did you love

Look, I’m a firm believer that two things. One is that you’ve got to love what you do. Otherwise, someone else out there who’s just as smart as I am, who is more passionate about what I’m doing, will beat me, like, every single day of the week. So I’m a firm believer you need to be passionate about what you do. At the same time, I think there’s an aspect of when you get good at something, well, you learn to love it more, and I think you need to, you know, try something on for size.

And so for me specifically, I’ve always loved building software. Like, I love the idea that you can create something out of nothing, write some code, and it controls this thing called a computer. So I’ve always loved that. And it’s bug tracking, like, your what your life is gonna be, you know, like for the next twenty years. You know, that’s what which is what Jira originally started with. I don’t know the order said, yes. That’s my last goal.

But when I look at what we’ve done around turning that, you know, initial starting point into a great company that people will have to work at and products that help our mission now is to unleash the potential of every team, and so I get super jazzed about that mission.

Before I answer that question, I just just really wanna give you credit for that Australian accent you tried to attempt just there. I thought that was very, very well done.

So we started in what I would say is a nuclear winter of technology, which was the dot com crash of two thousand and one. We had that with September 11. Like, no one was raising money to start a company in 2001, which is great because we got to bootstrap Atlassian for a long, long time. It took us ten years before we were brought VCs on board, and we didn’t take any money on the balance sheet for fifteen years. So, you know, we really, really did bootstrap Atlassian for a long time, and I think it’s because the world was changing, and no one else was raising money at the time.

And I think companies grow up in their environments, like in a symbiosis, and the environment we grew up in was one where you could build a company without raising venture capital. I think today, if you were doing an AI startup, the environment’s slightly different. Right? Like, you’re not gonna be bootstrapping your AI startup these days. And so, like, for us, like, we were just really lucky to grow up in that era.

think it depends on what you’re going after and the the niche or niches Americans say that you’re going after. Because if there are thousands of other companies or dozens of other companies going after the same customer that you are, and they’ve raised 10 times, a 100 times, like, more money than you have, they’re gonna be able to solve their customers’ needs a lot quicker than you are. But there are many markets that go after very, very small, like, niche software, and Constellation Software is a public company out there that does a lot of this where they literally invest in reservation systems for dog kennels or something.

Right? Like, very niche stuff. And in those situations, I do think you can bootstrap businesses, you know, still today because there is not much competition there.

think there’s a belief that startups are glamorous, and I don’t think that is necessarily the case. I think there’s a survivor bias there, you know, as people you talk two or three years in, but most startups are really freaking hard. Most startups really fail hard. And so I I think the glamorous aspect of a startup nature is a bit hyped, you know, and it definitely wasn’t glamorous when we started. Like, there was no companies that did what we did. We had the startup meant I didn’t get a real job, which meant you were unemployed.

And I actually remember my my girlfriend was an investment banker at the time, and people would ask her, what does your boyfriend do? And she’d say, he’s doing a startup. And then they would say, well, do you mean he’s unemployed? And so that was kind of the boys back then. And so I I think it’s not as glamorous as people make out today.

honeymoon, actually. It’s an interesting He told me to ask about this one. I did hear. Okay. Good. So in was it 2010, we got married. I did a destination wedding with my wife in in Vietnam. And from there, we flew to Africa, to Botswana to do safaris, basically. And I wouldn’t recommend, you know, safaris on on a honeymoon. You sort of get up at four in the morning. You taken malaria drugs. You know, you you see animals really early in the morning, and you try and sleep through the day, then hours in the afternoon.

And we were in seasonal mosquito territory, like, one of the deserts had rained for the first time in twenty years. And so This is a culture of really sexy events coming together. Yeah. Yeah. It’s totally, like and so I I’ve been literally killing mosquitoes on the tablecloth of our, like, dinner, you know, thing and killing a 100 of them. So we sort of have this not great, like, you know, honeymoon in terms of the of the location. And then we were just about to head to a really lush verdant green, like, beautiful, you know, place, like, outside of the safari.

And that night, I got a message from Mike. The message had had to go from Australia to South Africa to Botswana to then, on a radio signal, to someone who then drove, I don’t know, 20 miles in a truck to give us this message. Like, it was kind of a form of whispers all the way along, and the message literally just said, call me urgently, Mike. And Mike was the only person in the world who knew how to get in contact with me. So if my parents had died, that’s the message I would get.

Whatever bad things in the world could happen, that was the message I would have got. So then I had to sleep through the night because there was no way to get out, and the next morning, we were transiting, and so we traveled back into, you know, a place where I could get telephone reception. And I called Mike from the tarmac of the airport, and it turned out that back then, a solo hacker had got into, you know, one of our systems. And back in 2010, you know, the concept of there being hackers and, you know, that type of stuff happening was really unknown.

Like, there hadn’t been, you know, hacking scandals or anything like this. And the bit I forgot at the start of the story was that after the honeymoon, I was actually flying directly from the honeymoon to The US to raise our first dollar of venture capital. And so we had lined up five VC interviews for that week, and, you know, so we were sort of like, on a high. I just got married. I was about to go raise money for the first time. We’d run Atlassian for ten years and hadn’t really taken money off the table in any way, so this is gonna, you know, secure my kid’s financial security.

So we go from that to standing on a tarmac, and, you know, Mike is saying that, hey, we’ve been hacked in some way, but we’ve got all hands on deck. And we had people sleeping in the office. We actually took out the hotel. Next door to the office, the coffee cart is basically, if you say you’re from Atlassian, you know, like, we’ll fix you up, like, and everyone got free coffee. And for about three or four days, like, the entire company had been on 100%, you know, working through this, and I’ve got experience with how how to deal with this.

So then I have to turn to my wife and be like, you know, my new wife has only, you know, a few days and say, hey. I think we need to cut our honeymoon short because I need to go back and deal with this crisis that is happening in the company. And if there’s any conversation you wanna have with your newly wed wife, it’s not we’re cutting our honeymoon short to to go back. What what did she say? She said, that’s what we need to do.

That’s what we need to do. And so we got to have one day at this beautiful resort, and while we waited for the the flight out, and then I flew directly back to Australia. And basically, we relieved Mike, you know, kind of we tag teamed and ran the investigation. And, you know, it turned out they hadn’t gone into anything, you know, too serious, and we called these VCs up to tell them what had happened because we felt, you know, openness and transparency was important, even though they have never come out, may have never, like, come out publicly, we we told VCs, we told customers because, I guess, that’s who we are.

And it it turned out the VCs were very nonpost about it. They they said, why? Actually, this happens all the time. Just no one talks about it. Like, oh, wow. We didn’t know. So then the next week, I was back working for three or four days and jumped on a plane, and maybe we did back to back VC interviews for five different companies. And then So that

About a $60,000,000 run rate, I think. But something in that range, like, $100,000,000. And how much were you going without asking for in the race? So when we did this, we told people that it’s one shot college and void bidding, cause I believe that was the best way to get a result, because the way most VCs do it is they give you an indicative offer, and then they sort of talk amongst themselves, and then they kind of agree on the price, and there’s a bit of a collusion that can often happen there, and they sort of do a price that’s enough to get in the door, and then, you know, they get a second chance to up their number.

And I felt that that was not the right way to do it. There was not enough game theory involved in that. And I actually had a fight with my CFO at the time about this because he said it’s not the way these things are done, and said, I I don’t care about the way things are done. So we actually got closed envelope bids. We said, hey. We wanna raise, you know, I don’t know, you tell us how much we raise, you know, tens of millions of dollars, but you tell us how much we want you to put in, and then you tell us what the valuation was.

So we’re on $60,000,000 of revenue. I think we were doing 20 or 30% profit margins, so we’re making decent money at the bottom line. And the valuations we got back varied between there was one sort of high hundreds. There was three of them ended up in the 2 to $300,000,000 range, and Accel, who ended up winning for us, came back at 405,000,000 US dollars, you know, which looks back crazy. That’s like a five or six times revenue valuation on what we were doing back then. But back then, that was a lot of money, and they they put $60,000,000 into the company.

That’s what we said. So we prescreened them. We only invited people that we thought we were would have it on our board and be happy to grow with and go on this journey with. So once we prescreened them all, we then told them that, like, we would choose the highest bidder. When you think about

No. VCs are definitely our partner, but we’ve spent all that time upfront. VCs have been knocking on our door for years to invest in Atlassian, and so I’d had multiple conversations, breakfasts, dinners with all the people, all five firms that were bidding and all the partners that were bidding. And so we had Peter Fenton over at Benchmark. We had Byron Dieter over at Bessemer. We had Richard Wong at Accel who ended up being the company we went with. So I I knew these people really well.

We’d spent a lot of time with them, and so it was like, hey. We can choose any of them. Like, put your best foot forward. And actually, we went back to Peter Fenton at Benchmark, was I think the runner-up bidder. And we went back to Accel and said, hey, look, all things considered, maybe we should get two VC in there, even though there’s a huge difference in valuation. And we went back to Peter Fenton and told him if he matched Accel’s price, Accel were happy to split the deal with him.

And I don’t know how much Accel’s made of us, like, it’s a 100 times, I think, when they distribute it. So Peter Fenton could have put in $30,000,000 at a 100 times, that’s $3,000,000,000 back. 30% for a benchmark is a billion dollars. Six partners, probably a $160,000,000 each, like, I guess. So anyway, I think Peter regrets that that second chance draw that we gave him. I’m gonna be honest. I don’t think they need the money. That is one that keeps you up at night. Yeah. But again, I think if we hadn’t, after we would have invested forward, we would have got a valuation in that sort of 2 to $300,000,000 range, because that’s where most people averaged to, and we got the outlier.

We’ve actually raised money from before we went public, the year before we went public to give some employees some liquidity and to get in a public market investor. We ran the same process, and actually, the numbers were almost exactly the same, just out of zero. And so we got, I think, five firms to bid then as well, and we got a couple of valuations in the billion dollar range, a couple in the two three, and then one at the $4,000,000,000 range. We kind of ran the same process later on as well, and it did work really well.

That’s

When you’re small as a company, or what I found when we were small as a company, the mistakes are mistakes of commission. Like, you do something stupid that didn’t make sense, or you invested time in something that ultimately was a waste of time. I think when we get larger, most of the mistakes I’ve made are of omission, you know, not doing something that we should have done. And most of the opportunities or biggest mistakes we’ve made are not going hard enough about new opportunities. And so we’re about $4,000,000,000 business, revenue wise, valued at 40 to $50,000,000,000 today in 2023.

But, you know, we had a competitor to GitHub that we built, you know, called Bitbucket. We had a competitor to Slack that we built. And in both cases, I’d argue we had as good a product. In many cases, I think against Slack, we had a better product, but we didn’t invest enough behind these new opportunities. And so my biggest mistakes are being in the right place in the right time, but not betting hard enough behind the opportunities that we’ve had in front of us. And, you know, we could argue that’s from our bootstrap background, or you can argue mentally or whatever, but that’s that’s the biggest mistakes we’ve made.

Investment has to come from somewhere, and so the hard part is you gotta starve something else to invest in in the new thing. And we started a program we call Point a, where we incubate new products inside Atlassian. Those new products, we’ve got one called Atlas, is about OKRs and projects. We’ve got one called Compass, which is about really a developer portal that basically tracks everything developers do these days in components and microservices, and I have here on the list. We we know created, like, four or five of these things, and we’ve just made sure that we’ve invested sufficiently behind these new areas such that in five years’ time, we’re not sitting here saying, we created a category and someone else stole it from us.

We’ve created these amazing categories, and we’re investing heavily behind them. Do you think the single biggest job of a CEO is resource allocation? I’ve got a an article, basically, that I bring up every couple years, and I’ll I’ll put it in show notes. Basically, it’s like the four things a CEO should do. One of them is effectively hire and fire the management team. Two is basically set the vision for the company. Three is set the culture for the company. And four is basically resource allocation, where you put the dollars and the bets.

And those four things are the most important. And I go back to that article probably every single year to remind myself, or look at my diary, and say, how much of my time am I spending on those four areas? And so, yeah, resource allocation is one of those four. Should they be equally wasted? Should it be 25% each? I don’t think resource allocation is something you do every single day. I think if you’re doing that, you’re probably not gonna see the forest for the trees. But I’d say quarterly is a more reasonable cadence resource allocation, and the larger you get, the, you know, the harder it is to to steer the ship.

We at Atlassian went through a huge process to move it from annually to quarterly a couple of years ago, and so we still do it quarterly. Scott, what are you best at? What are you worst at if you do your report card for yourself on those four? If I did best and worst, I’m not sure I’d categorize in those four categories. So if you let me deviate from that question, the the things I’m best at in the world, I think, is systems thinking. Like, really understanding if I change this knob over here, what’s gonna happen to the entire system?

You know, I read a lot of physics books all the way to psychology. I try and, like, just map out of the universe work, and that’s a real strength of mine. Can anyone be a systems thinker? And what does it take to be a good systems thinker? I think to be a good systems thinker, you have to be incredibly curious and incredibly curious across a large range of disciplines, because systems thinking involves the people that need to be involved, and, like, our customers, and the market dynamics.

And the great thing about running a business is it’s rewarding and complicated and changing every single day in a way that almost no other field does. And so I love running a business because it’s, like, rewarding and intellectually challenging and stimulating, but I also spend a lot of time, you know, curious about, you know, how things work.

Oh, you just hit on my weakest point, which is prioritization of what is important. And I really have to step back, I because can get so excited by almost anything. I can get excited by the UI mock up in a product. I can get excited by the next great marketing idea that, you know, I come up with. And so, yeah, I need to surround myself with other people who are really good at helping prioritize.

The history of technology, at least the way I would write it, is that it’s very much a winner takes all market. And once there’s, I mean, a winner established in a market, it’s hard to disrupt them except when there’s a technological change. And if I go back through the ways of change, I would say we went from mini computers to well, made friends with mini computers to perform my time, then we went to desktop PCs in the nineties. And, you know, you see companies emerge and see companies decline.

Right? Like, you saw DEC, DEC, and a whole bunch of, you know, mini computer people didn’t make it to the PC, and instead you saw sort of IBM and Microsoft rise. And then the Internet came around, and you saw Microsoft wane a little bit, and you saw a rise of Netscape and Google and eBay and PayPal and so forth. And then mobile came around and didn’t really displace anyone, but Apple suddenly came back into the fore, and Microsoft continued to sort of miss that area. And then you saw, I guess, cloud, public cloud, which, you know, changed a lot of enterprise stuff, but not much for consumer.

They didn’t care where things were running. And now we’re seeing AI. And I think, again, in each of these changes, you see some companies continue to survive, some companies rise from the ashes, and some companies don’t make the transition. And so as much as it’s the next greatest buzzword out there, I do think that there’s gonna be a big change in how technology works and change the landscape, honestly. I think you’ll walk in five years’ time and the list of top companies may look very different to today.

So I don’t think you can avoid having an AI strategy as a company.

Definitely. Look, I think we’re still in phase one of AI, where people are adding AI to existing products out there. And so, like, everyone needs to do that, but a lot of people are doing the simple power trick, which is, like, let’s just summarize some text, or, like, give me 10 bullet points, and, look, that is a commodity now. Like, you know, whether you’re using OpenAI or any of the other ones, it’s gonna be a commodity. I think the real interesting things happen where you’ve got multiple unique datasets, and you can bring them together to do different things.

For example, I think getting help from someone else, like another human, is gonna become much more a search problem than it used to be, because to solve someone’s problem, the data probably exists somewhere in a knowledge base, in someone else’s support ticket, or whatever to solve your problem. And I think Atlassian’s in a unique spot to be able to solve those types of workflows, or if a bug report comes in, like, you know, from or even just a log file, like you’ve got an iPhone application and it has an error, great, that error.

Let’s go back and work out, like, who wrote the code and why did they write it, and can we fix that error? Can we fix that error and automatically deploy it to a customer? So once we can tie workflows across large surface area and tie datasets across large surface area, I think that’s where magic happens, and it’s still unclear what the UI looks like for those things. Is it chat interface? Is it a traditional interface? Is it voice? Like, is it just bots talking to each other?

I don’t think we know, but I do think the data and the workflows are gonna be really important.

We have, you know, multiple thousands of engineers in Atlassian, and we have multiple hundreds of engineers working on, you know, AI things at the moment. What we do, if you look at our data, our data is our customer’s data. Like, we don’t control our data. We’re not like Bloomberg, where it’s like we have fifty years worth of trades that we can, you know, put into a large language model. Like, we have our customer’s data, and we need to help our customers access it better. So we don’t have to make the huge widths and investments of, you know, building our own large language model or building, you know, our own thing across companies, across, you know, data sets.

So what we do need to do is integrate them in interesting new ways, and so I think that’s not wasted work, because, you know, if we can work out what the most useful way of doing that is, I think that’s gonna be, you know, time well spent. And, yes, you could wait, I guess, till that paradigm has been, you know, sorted out. But, you know, I think by the time, like, Uber worked out the exact way to order a car and that it was cars and not limos and stuff like that, it was hard for other people to catch up because they had an advantage.

And it’s not just understanding what works, it’s often understanding what doesn’t work. And you can’t really buy your way into knowing what doesn’t work. You can buy your way into what does, but you then gonna still have to go through that process of random walks to work out what doesn’t work.

There’s some interesting things there. Look, obviously, the smaller the company is, the faster you can move. There’s a saying that, like, if you wanna go fast, go alone. If you wanna go far, go together. And I think that’s the difference between small companies and big companies. Like, if you wanna go far, if you wanna have a big impact, you know, we have a whole bunch of advantages that we can do when we run AI experiments. We can run them with 250,000 customers. Like, we wanna find, hey, how can this work with a, you know, a search problem work?

We’ve got customers with twenty years worth of data so that we can, you know, work with them to run experiments on. And so, yes, we’ve got more overhead than a a normal company, a small company would have, but if you look at, can we move fast? Yes. We have these other advantages that allow us to move fast, particularly in the AI era where it’s about data. If you’re an AI startup and you don’t have access to customer data and customers to to test with, that can actually make you move slower.

So early on in the pandemic, so I don’t know, March, April 2020, when the world was still trying to work out what this new world would look like, Mike and I had both not been to the office for a month or two because we’d shut our offices down. And we knew that COVID was gonna go for multiple years, and we knew that during that time, we wanted to keep hiring people. And if we did that, like, are we gonna hire people who are gonna work from home but have to live within 25 kilometers an office, 50 kilometers an office, 30 miles of an office for your American listeners?

We decided, no, we wanted to hire people, and given we had offices around the world, we had people in Australia, The UK, The US, Europe, we wanted to basically allow us to continue hiring, and so we made the decision that we would never require someone to come back into an office. But we were very deliberate about saying to people that is the path we’re choosing, and we’re on a public record. 80% of our staff in The UK live outside of London, you know, so we have these people around the world who get to work for us, and, you know, we get the best talent as a result.

They stay longer. Our attrition is lower. 92% of them say that they think our remote policies help them to do their best work. And so for me, the opposite is true. Like, I think you have to make the argument why being in an office is the right choice rather than saying why why is remote the right choice.

So one thing we’ve been working on is we we believe you do need to get together as humans to build human contact and, you know, human connection. And we didn’t do that during COVID, and so people, you know, take the, hey, COVID is what we’re at work was, and gee, it was terrible. We didn’t get to see anyone. Like, no. That’s great. Like, but you can still see people and work remotely. You just don’t need to see them every single day. And so we’ve done some research now, which wish we’d known earlier, that when you get people together, we see our team connectivity boost by 30%.

So we ask our staff, how connected do you feel to your team? How connected do you feel to the company? And then we get people together what we call intentional togetherness, and and then we ask them, how connected do you feel before and after? Like, and it was just part of our normal monthly cadence, and we cross referenced that with in office participation. And so the people we intentionally get them together get a 30% spike in connectedness to company and connectedness to team. Now the interesting thing is if you look at it from an atrophy perspective, right, like like how long does it take to return to baseline, it’s four to five months actually before that returns to the baseline.

And so if you actually say, okay, if you get together people like three, four, five, six times a year, you know, not that frequently, you can maintain a very high connectedness ratio. And we found that the people that turn up to the office every single day don’t actually exceed that. So it’s not like, oh, people at the office are here and everyone else is below. No. Actually, like, that office being in the office doesn’t build intentional togetherness. And so we still gotta work out exactly how to maximize that over time and what types of intentional togetherness build the best bonds.

But, like, we’re running all these experiments now that, like, of course, if we’d known them earlier, we would have been, you know, much more optimized than we are today.

what did you learn from that? There’s a couple ones that we’ve made that are risky. I think, look, Team Anywhere is obviously a huge one, because it’s not always a one way door, but, like, we would burn a whole bunch of, you know, employee trust if we changed that now, and we’ve got about half our employees don’t live near an office. So, like, it’s pretty close to a one way door decision as you can make, and we made that relatively quickly, and so that was one.

Look, another decision we made was to shut down Stride, which was our competitor to Slack. And, you know, that was a product that we had been operating the market for multiple years, and if I could share some of the lessons of things that we made mistakes on. We acquired this product. It was growing really fast. It was used by us. It was used by devs, and then it shared you know, went through the entire company. And there’s a couple of things that I would do have done differently with that.

One is that Stride was $2 a month per customer. Like, we just cheap. We’re like, enterprise software, $2 a month, a user a month, that’s incredible. But Slack was free and $10 a month, and free is a lot cheaper than $2 a month. Even though on average, Slack made more dollars from us because they eventually converted people, and so, you know, the freemium model basically can win over time, and you actually get more dollars per customer. So one, I wish we had changed our pricing model.

Two, is that when you have a small team of like 10 to 12 people, which is what it was when we acquired it, that team runs really, really fast because they don’t have overhead and rituals, they all know each other, and they all know where the code is. And when you double that team, you actually don’t get any more productivity. Because when you double the team, they now need to document things. They now need to work like, you know, separate the code out. They needed to start micro, you know, microservices and subsystems and stuff like that.

So we doubled the team thinking that we would get more productivity, we and ended up basically staying the same. And so what we really needed to do was actually triple or quadruple the team in order for us to actually get the productivity that we needed. And lastly is that it was growing fast, like that product was growing three or four times, you know, year on year, which again, if you’re growing 300%, 400% year on year, you’re like, this is a rocket ship. Awesome. We’re doing great stuff.

What we didn’t realize is we probably should’ve been going a thousand percent per year or more because, like, the market was so big, and so we didn’t invest enough behind it. So, anyway, that’s the lessons for your listeners. Was it a tough decision? Because there’s a lot of cost fallacy there. Acquisition team. Not only had we acquired it, we’d also then rewritten it from scratch, like, on our platform, and so we had done a full rewrite. It ended up not being a hard decision because the way I looked at it was, could I look my staff in the face and say that the next five years of their life was gonna be the biggest impact to humanity working on this product?

I could’ve looked that staff in the eye and say that, you know, hey, working on Hitchat Stride, which is the rewritten product, is gonna have the biggest impact on the world. Actually, I could repurpose you and move you onto other products that have got new ideas that we’ve got. You know, blue oceans, to borrow a phrase from the book, we know we’re not competing head to head against the two players out there. And so in the end, like, you know, deciding to shut down that product, we had a couple 100 people working on it.

It was hard because a lot of people had poured their, know, heart and soul into it. We sold it to Slack. But in the end, it was easy because I could look at the staff and say, no, you’re gonna have a bigger impact on the world doing something else. Scott, do you pay attention to competition? I think you have to pay attention to competition. Like, I think anyone that says they don’t is probably a bit silly because of how they spend their time. But when I look at the ways we win, like, it’s it’s often by ignoring the competition and doing something because we listen to customers.

And so what we actually built in that space for product managers is actually a different take on solving their problem. And I think if we just copied the competitors, we wouldn’t have been as successful, but instead, we saw there was a market there, and we built something different. But, yeah, we we track, you know, competitors and see where they’re going and how we’re growing compared to them.

I want my product to appeal to every single user and be the best thing for them to use every single day. And one of the benefits of Jira is it can do a lot of things for a lot of people. The great part is you never grow out of Jira, so, you know, no matter what size your engineering team, whether you’ve got 20 people or 20,000 people working in engineering, like, you never grow out of it. So that’s the benefit of it. The downside is that complexity can sometimes be overwhelming for, you know, some customers.

There are two parts of that. One is, you know, the product itself, like, we can continually do, and if you look at Jira now versus five years ago versus five years before that, we continually simplify the product. The other part, unfortunately, is sometimes how it gets set up by people, and sometimes people, you know, complain, hey, Jira’s got 14 fields I need to, you know, fill in before I can raise a bug. You know, like, well, we don’t ship with 14 fields out of the box.

Someone has configured it that way, you know, because they’ve done it over time. And so, you know, sometimes you have to tease out which is the inherent Jira complexity, and, like, which is the sort of complexity because the Jira admin has decided that you need to fill out 14 fields. But we we have a huge investment, like, continually simplifying that. But we’re never gonna be as simple as something that is built from scratch for a five person team. What we do though is wanna do the things that only we can do, which is, hey, we scale with you, and we integrate with all the other products that you integrate with.

Right? And so you can start using a simple product, but then you don’t get, like, the amazing workflows that that we can provide. You mentioned the scaling with

I do think that AI will put pressure on per seat pricing. I agree with that premise in general. For example, if you provide help desk software, and it’s licensed on a per agent basis, and in many cases, these our competitors have these things that are a $100 an agent a month. If you’re Salesforce, it can be a $140 a salesperson a month. You know, these are high per seat costs. And in a world of AI, well, if customers can solve issues themselves because an AI agent solved it for you, or search solved it for you, then you’ve got a problem because, well, I can’t charge per AI agent, that doesn’t make any sense.

Like, one AI agent is an infinite AI agent, so I can’t charge that way. So over time, we are gonna have to work out how we solve for value, and previously, you know, per user was a good proxy for the value that you provided. I don’t think people have worked out what that looks like, and I think it will change based on how how much you charge per seat. If you’re, you know, a 150, $200 a seat, like, you’ve got a a much bigger pricing model change to to worry about than if, like, Atlassian does, we charge $10 a seat, and then how much is gonna be augmented by AI versus replaced by AI.

So in some cases, it’s like, yeah, you’ll still need half as many seats. Cool. We’ll just meet them with AI and charge twice as much per seat, and everyone, you know, kind of is getting the same value they did before. In some cases, it might be like, hey, we’re gonna miss 99% of the people, and that’s not gonna make sense. So in general, the premise is true. I don’t think we know what we move to, and I think software’s suddenly gonna become free because, you know, per user pricing just doesn’t work.

I think about this a lot because I’ve got young children. Yeah. And I remember actually once, Peter Fenton used the words about post economic. What does that mean? Right? Like and I thought about that a lot, and I wouldn’t use those words, but there’s a relationship between time and money, I think, that you have throughout your life. And I know when I was a teenager and through university, I had a lot more time than I had money. But with most things in life, you can trade time and money.

Like, if you wanna get great concert tickets and you don’t have money, you stand in line out the front, stay overnight to get the concert tickets. So I think that trade off actually exists a lot in life, and it doesn’t change, you know, if you’ve a lot of money, you just the trade off the the slider moves a lot more, and if you have a lot of time, it goes the other way.

And I wasn’t born from a family that had a lot of money, and so for me, moving the slider of money and time has actually been a bit of a struggle because, like, I still feel like, hey, well, why would I good example, when you take a rental car, like, you can fill it up before you go back to the rental agency, or you can get them to fill it up for you. Right?

And if they fill it up, they charge a premium on the fuel that you put back in there, but it probably saves you twenty minutes of running around trying to find the fuel station or whatever, and at the end of the day, it might only cost you $5 more to get them to fill it up. And so things like that, I’ve really struggled to move that. Have you still have you got better? I’m getting better. Like, I think that if you don’t achieve a lot in life and, you know, you have more money, then, you know, getting the time back to be able to devote it to other things is useful.

And I pick with kids, it’s like, hey, if I spend money, I can spend more time with my kids. That’s that’s a great trade off.

I think it is a very difficult thing to do. I don’t think I’ve cracked the code on that. You know, even if we try and isolate our children from that, you know, I bought an expensive house in in Sydney, and to my kids’ friends at school, talk to them about it and how much it cost. And, like, no matter how much you try and isolate your kids from that, it it can be, you know, something that you just don’t have the opportunity to do that. And so for me, it’s just trying to teach kids the value of money and also just being a good human being, treating people well.

So definitely haven’t cracked that, and my kids are still young, so I don’t know if I would have done a good job for another decade or so.

One is I think putting your partner on a pedestal is really important, wanting to do that. And because a great book actually took this is the one thing I can’t remember Marcus Buckingham, but a whole bunch of research that shows that, you know, couples that put each other on a pedestal actually do better than couples that are realistic about the opposing person. And I don’t know. I think I’ve always put my wife, Kim, on a pedestal. Like, she’s the most amazing person on every front, like, whether it’s work or friends or family or our nuclear family.

And so I think that’s one part. Two is that she’s my best friend by a long way, and we’ve had a shared journey. And then lastly, I’ve learned how to say sorry quickly when I screw something up. And I feel like that’s something she told me. She told me to just say, you know, I do something bad or whatever, and she’d just tell me say sorry. And for about five years, I’d, like, dig my heels in and be like, no, no, why would I do that?

And then, I think for the last we saw about twenty years a month ago. So for the last fifteen years, I think I’ve learned that when you’re wrong, just say sorry.

Mike said I had to ask this one. Can I do a non rapid fire answer? Because I feel like just no longer one. 100%. About a decade and a half ago, we were doing some experiments. So two things came together. One is I read a book called Leading Microsoft to Change the World, which is a guy named John Wood started a foundation nonprofit called Rim to Read, and their their motto is World Change Starts with Educated Children. So I read this book, and I was inspired by it, but wasn’t sure how to impact it in any way.

And then the second one was that we would experiment with changing our pricing model at Atlassian, because, you know, though most software cost 6 figures at the time, like, the cheapest version of Atlassian was $1,200, and we thought, no, it should be free or it should be cheap or it should be, you know, like, how do we change that? And so we ran an experiment, like, in a sort of true lean startup way. We ran an experiment to work out what a new pricing model should be.

So we said, let’s make our software $5 for five users for five days only, and we ran basically a one week campaign to just see, well, is there a desire for a five user version of software? And by the way, all the money goes to charity. And so we, as a company, then had bets, like, how much are we going to raise in five days? Is it going to be $3,000 $5,000 The highest bet we had was $20,000. So at the end of five days, in five dollar increments, we raised just over a $100,000 for charity, which is crazy when you think about, like, 20,000 transactions, like, 4,000 a day.

I think it’s like, if I could do the math, it’s about one every twenty seconds over averaged over that period of time. So totally crazy. And then I called up John Wood after reading his book and said, hey, we’ve got this big check, like one of those ones you see on TV for a 100,000 US dollars to your charity. And he’s like, hey, you’re from what country? Like, I never heard of you. So he flew down to to Sydney, and we gave him a big for a $100,000, and that started our relationship with Rem to Read, and that kind of has been multimillion dollars over time.

And, of course, all the philanthropy stuff ended up inspiring me to start Pledge one percent, a foundation that encourages startups and companies to give 1% of equity, product profit, and employee time to nonprofits, and that’s inspired about 18,000 companies to Poetry as well. So I guess it’s a long answer, but, like, effectively, a few things came together to start us Hill and Stroppy journey.

Don’t think I have really good answers for what I changed my mind on in the last year. I think it would take a while to make up my mind, so I don’t run to to snap judgments on things. Like, it takes me a long time to certain about things. So that’s either a blessing or a curse, but I don’t really change my mind very often. What have you

For me, that that’s gonna be what it’s gonna be. Like, I I don’t make bets about that or or have opinions. And we made a bet. We thought that it would go down roughly this, and we were, you know, roughly right in terms of where we made our investments. So the public market stuff is not not a big thing. But on the be right part, like, I I’m trying to get better at basically saying, well, someone else might be right, and we’ll find out in the future, and sort of disagree and commit a lot more than I I used to be.

I think that was an area where I would dig my heels in a lot and and try and prove that I was right. But these days, I’m like, actually, more often than not, the other person is right, so I’m trying to let go of that.

things are really going to shit? For me, daily exercise, and I try and be in bed for eight hours a night, They make a big difference to me. Like, I wasn’t always like that, but I have been the last decade or so. You can have dinner with anyone, dead or alive. Who do you have dinner with, and why them? I’ve got three boys, and if I could have dinner with them when they’re six years old again, individually or together, like, that would be, like, who I’d love to, you know, have dinner with.

What has being a great father mean to you? I wanna have a great relationship with my kids, and I want them to speak daily. Oh, sorry. I wanna speak weekly with my kids in twenty years’ time. And so for me, like, I want them to make great life choices, I wanna be proud of their life choices, and I want them to want to spend time with me in in a decade or two.

I think everyone has the same hundred and sixty eight hours in a week, and there will be people out there who are way better fathers than I am because they spend more time, and that that is their life’s calling. So for me, it’s making all the trade offs between all the different things I have of being fit and my responsibilities to family, responsibilities to work. And so if I devoted a 100% of my time to all the things I chose not to have a family, would probably be better at work than I am today.

And if I chose not to do work, I’d be a better father. But I just try and make the balance between all the different things that that I have. Scott, what’s the kindest thing anyone’s ever done for you? I think believe in me is the nicest thing. So whether that is Mike who believed in me to, you know, start Atlassian and invite me, like, you know, kind of to, like, start a company with him, or our first chairperson who, you know, was a very, very successful business person.

But the times, I think, that I feel the biggest kindness, way people, you know, believe in your ability or believe in the potential.

I think cofound relationships, much like a marriage, like, it’s a very intense relationship. And I think both Mike and I, we’re very different people in terms of how we see the world. Mike will have a 100 ideas in a in a day and be comfortable if he goes to bed, one of them survives the the day till the next one, and I’m probably much more methodical and thoughtful about how we do it. And I think the success has been that we both complement each other incredibly well, and I think we both know that Atlassian wouldn’t be the success it is today if it wasn’t for the two of us.

I am just super excited, like, about the opportunities that we can do for helping teams work together. And so some parts of AI, some parts of just doing more for our customers across the board. And so if I think about how much busy work happens every single day across an organization, how much content you need to do, or how much work there is about work, it’s like, what do I need to get done today? What’s the best thing I should do next? There is so much of that that happens.

There are so many dysfunctional teams where, you know, if we all had better emotional intelligence and we could work together better, like, would love our work more. There’s so many people being dragged into the workplace and commuting in two hours each way to turn up to a desk and sit on a Zoom call. Like, there’s so much we can do to improve how work happens for people, for teams, for organizations, and we’re just getting started really in doing that. And so some of that will be AI, some of that will be just training people, some will be helping people have higher emotional intelligence.

Like, there’s so much stuff we can do there, and we’ll never be done with that. But hopefully, in another five years, ten years, twenty years time, we’ll be better than we are today.