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Atlassian is 20 years old and unprofitable

smartcompany.com.au

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Re: Atlassian is 20 years old and unprofitable

#301

Post by gomox »

jakub_g wrote: post #6

> While it is still used by many tech businesses (including the author’s), it has no real network effect — that is, users can switch to a competitor product like Asana, Basecamp or Monday.com with minimal cost (other than the initial hassle of switching to a new system). Lol. At some companies, Jira workflows literally run the whole company. At my prev job, prod deployments were tightly linked to Jira.

I was about to write the exact same comment - quote the bit where they say Jira has no network effects and add "LOL" after it.

How out of touch can you be with the stickiness of enterprise SaaS, and still write financial commentary?

Re: Atlassian is 20 years old and unprofitable

#302

Post by gwbas1c »

ryanackley wrote: post #107

Worked there from 2008-2013. So early-ish employee here. I still have a chunk of shares from the original ESOP program. Saying that for full disclosure because I'm biased and this feels like a hit piece to me. When I worked there, they disclosed all financials in our internal Confluence site. There was a policy of full transparency with the employees. The owners (Mike and Scott) had impressive business discipline. Th…

> I'm paraphrasing here but he essentially said, you're leaving growth on the table. His thesis was growth is more important than profits.

But, you can't grow forever. At some point you hit things like the maximum market size and there's no longer any way to invest your profits back into growth.

Or, to hit a lot closer to home: As a stockholder, your stock won't appreciate in value forever. Software companies very rarely turn into Microsofts and Googles. You need to sell at some point in order to realize the value of your investment. (Unless you're getting dividends.)

Re: Atlassian is 20 years old and unprofitable

#303

Post by carlsborg »

I suspect the following is built into valuations of many software companies with subscription revenue models: they can reduce headcount dramatically and keep a relatively tiny headcount of staff around to sustain the existing recurring revenue and be highly profitable even in a slowing economy. For example how many people would MongoDB, with close to a billion dollars of annual revenue, need to keep the lights on, assuming zero new feature development, sales or marketing? The software is already sold and integral to the enterprise projects that use it, and in the enterprise migration to a new vendor is often a considerable project in itself.

Re: Atlassian is 20 years old and unprofitable

#304

Post by mytailorisrich »

ryanackley wrote: post #107

Worked there from 2008-2013. So early-ish employee here. I still have a chunk of shares from the original ESOP program. Saying that for full disclosure because I'm biased and this feels like a hit piece to me. When I worked there, they disclosed all financials in our internal Confluence site. There was a policy of full transparency with the employees. The owners (Mike and Scott) had impressive business discipline. Th…

I think it depends on what you mean by "profitable".

If that means profits available to, e.g. pay dividends with then sure. But I think it ought to always be the goal to have a profitable operation then you can plough the profits back into the business to push growth (which will mean reporting 0 profits).

Re: Atlassian is 20 years old and unprofitable

#305

Post by naravara »

gwbas1c wrote: post #302
ryanackley wrote: post #107

Worked there from 2008-2013. So early-ish employee here. I still have a chunk of shares from the original ESOP program. Saying that for full disclosure because I'm biased and this feels like a hit piece to me. When I worked there, they disclosed all financials in our internal Confluence site. There was a policy of full transparency with the employees. The owners (Mike and Scott) had impressive business discipline. Th…

> I'm paraphrasing here but he essentially said, you're leaving growth on the table. His thesis was growth is more important than profits. But, you can't grow forever. At some point you hit things like the maximum market size and there's no longer any way to invest your profits back into growth. Or, to hit a lot closer to home: As a stockholder, your stock won't appreciate in value forever. Software companies very ra…

> But, you can't grow forever. At some point you hit things like the maximum market size and there's no longer any way to invest your profits back into growth.

Atlassian is probably a fair bit away from that. Amazon is much closer to that mark today but they got there after following exactly this strategy since the 90s.

Re: Atlassian is 20 years old and unprofitable

#306

Post by virtualritz »

ryanackley wrote: post #107

Worked there from 2008-2013. So early-ish employee here. I still have a chunk of shares from the original ESOP program. Saying that for full disclosure because I'm biased and this feels like a hit piece to me. When I worked there, they disclosed all financials in our internal Confluence site. There was a policy of full transparency with the employees. The owners (Mike and Scott) had impressive business discipline. Th…

> When I worked there, they disclosed all financials in our internal Confluence site.

I worked at Rising Sun Pictures (RSP) in SA 2005–2007 and the CEO at the time, Didier Elzinga, did the same.

But what RSP did went even further. Didier and the CFO did a full disclosure presentation about the company's financials quarterly or bi-annually (can't remember).

It was great. Not least to make everyone understand why they couldn't pay rates that VFX professionals who moved to AUS from the East coast or London where used to – at least at that time (it was early years for RSP then).

RSP remains one of the best workplaces I ever had the luck to be employed at.

Afair Didier was also in some role on the board of Atlassian at the time. Maybe not a coincidence.

Re: Atlassian is 20 years old and unprofitable

#307

Post by slap_shot »

tarsinge wrote: post #285
ryanackley wrote: post #107

Worked there from 2008-2013. So early-ish employee here. I still have a chunk of shares from the original ESOP program. Saying that for full disclosure because I'm biased and this feels like a hit piece to me. When I worked there, they disclosed all financials in our internal Confluence site. There was a policy of full transparency with the employees. The owners (Mike and Scott) had impressive business discipline. Th…

The problem is that choosing to be unprofitable is a strategy that maybe worked (or just was fashionable) the past decade under very specific circumstances (lot of free money chasing higher returns in a context of very low rates), but otherwise obviously makes no sense, it's antithetic to the very idea of a business. It's not to be confused with the sane version that is reinvesting profits for growth instead of distr…

> but otherwise obviously makes no sense, it's antithetic to the very idea of a business.

How does it NOT make sense? The purpose of a business like this is not to generate some short term profit. These are winner-take-all markets - they're playing for complete and utter domination of an entire product category.

Their Q1 revenue grew 37% YoY - how on earth would you care about profit over what they doing here? They should keep hitting that as hard as they can.

Re: Atlassian is 20 years old and unprofitable

#308

Post by steveBK123 »

ratww wrote: post #268
steveBK123 wrote: post #255

Jira is an interesting product everyone loves to hate. It has the do-whatever-you-want configurability to fit anyones SDLC. Really its a software product that allows you to mirror your organizational structure. That said, 99% of software projects I have been on could be managed with a simple Kanban board like Trello (which they now own). Unless your firm has staff who are full time Jira jockeys in the form of project…

It's kind of amusing: I've seen a few times developers rebelling and moving to whatever other random tool (Atlassian's own Trello, Pivotal Tracker, Github's thing, stickers on the wall) as soon as a hardline PO/PM left the job. Only for JIRA to return when another PO/PM that "really really needs the reporting features" (but didn't really use them) was hired.

My fave thing about Jira is how between the tool & it's plugins, you can roll up all sorts of views for management reporting purposes.

Despite this, exactly zero shops I have worked do management believe their managers will understand those views.

Therefore at a weekly/monthly/quarterly cadence, "someone" (dev leads) have to spend hours hand updating some horrific excel view of project statuses for big management to understand.

Re: Atlassian is 20 years old and unprofitable

#309

Post by steveBK123 »

steveBK123 wrote: post #308
ratww wrote: post #268

Earlier quoted context omitted.

It's kind of amusing: I've seen a few times developers rebelling and moving to whatever other random tool (Atlassian's own Trello, Pivotal Tracker, Github's thing, stickers on the wall) as soon as a hardline PO/PM left the job. Only for JIRA to return when another PO/PM that "really really needs the reporting features" (but didn't really use them) was hired.

My fave thing about Jira is how between the tool & it's plugins, you can roll up all sorts of views for management reporting purposes. Despite this, exactly zero shops I have worked do management believe their managers will understand those views. Therefore at a weekly/monthly/quarterly cadence, "someone" (dev leads) have to spend hours hand updating some horrific excel view of project statuses for big management to…

Also this is "agile"

Re: Atlassian is 20 years old and unprofitable

#310

Post by guhidalg »

alxlaz wrote: post #85
maccard wrote: post #61

Earlier quoted context omitted.

Any tool has lock in. How much work do you think would be involved in moving from perforce to git, or from Bamboo to CircleCI?

I was (a very small, and only part-time) part of a team that did a migration from a Perforce-era VCS to git. It was about 6 weeks of 100% background work -- as in, we prepared cheat sheets, changed or rewrote relevant parts of the CI and deployment chain, while everyone in the company kept using the old VCS. Then it took about 36 hours to move the relevant code bases (a few dozen repositories, some of them 20+ years…

Thank you for sharing your experience. Migrating from software A to B is part of life, Jira does not hold a special technical place. Politically, that's a different conversation...
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