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Atlassian is 20 years old and unprofitable

smartcompany.com.au

351–360 of 515 posts

Re: Atlassian is 20 years old and unprofitable

#351
This thing reads like an uninformed hit piece.

Let me go ahead and flex my MBA knowledge for all the engineers in the building who claim that MBAs don't know anything about business...

First, I suggest you read Atlassian's balance sheet and income statement. They're a public company, so it's all publicly available information. [1]

Look how fast those revenues are growing.

Look at how Cost of revenues is declining against the revenue. In 2019, it was 33%, 2020 it was 28%, 2021 it was 25%. That means that as Atlassian's subscriber count increases, its cost per subscriber is decreasing, a direct contradiction to the claims made in this article.

In the statements of cash flows, you'll see that Net cash provided by operating activities increases every year. Financing activities explain losses, not any sort of problem with the fundamentals of the business.

And, when you're losing money, you don't pay taxes. Atlassian is doing a standard business/accounting play here: re-invest in the business and use financial activities in order to pay nothing to the Australian equivalent of Uncle Sam. Income tax expense is a negative number on the balance sheet each year.

The worst claim in the article is that Atlassian represents a "legacy" product. No, not at all, especially if you've been on their cloud products anytime recently. The cloud products get rapid iterations and improvements, including performance.

Atlassian's pricing is extremely competitive, acting as a "bundle" that competitors can't match. Jira in particular has basically no realistic competitor, and OpsGenie does the same thing as PagerDuty at a fraction of the cost.

[1] https://s28.q4cdn.com/541786762/files/doc_financials/2021/ar...

(Scroll to page F-5 about 105 pages in)

Re: Atlassian is 20 years old and unprofitable

#352

> Atlassian has somehow become the Benjamin Button of the tech sector — profitable as a startup and loss making as it has matured. They where profitable, they didn’t need funding the only funding they took was for staff to sell some of the equity. Them now making a loss I think is more a deliberate choice, not a business failure. They could of continued as they where making $$$ but instead choose to go from 700 peopl…

There's very low chance of IPO in 2022 and nil in 2023. They missed the bus. We are in 1970s again.

Re: Atlassian is 20 years old and unprofitable

#353
It seems clear to me that they are a company that no longer cares about strategic investment.

Their forays (acquisitions) into version control have been so amazingly weak. Stash was devoid of even basic features. Now they have Bitbucket:

- they still can't get it to perform adequately after years - it lacks syntax highlighting in PR views - it took them years to get side-by-side diffs into PR views - it integrates with third party tools poorly

I thought maybe the Github acquisition would spur them into recognizing it as a important product category, but I guess not.

Re: Atlassian is 20 years old and unprofitable

#354

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…

> it's actually bad to be profitable when you're growing. I've seen this happen so many times: - profitable, down to earth founders generating net profits - VC approaches said outfit and tries to gather as much info - VC realizes said outfit is difficult to emulate and break into market - VC invests and starts demanding they run at a loss to grow quickly This works well when interest rates are low, and VC is not unde…

Seems like he meant "It's bad for me (the VC) to be profitable when you're growing"

Re: Atlassian is 20 years old and unprofitable

#355

Earlier quoted context omitted.

Atlassian isn't a US company, and if the US is going to have a recession (which I think is doubtful), Australia certainly has a good record on avoiding them.

Australia recessions are uncorrelated with US due to mining and other raw materials exports being a huge share of their economy... especially selling those materials to China. I doubt miners are big Jira users. US tech companies who are cratering right now though...

Ah, thats a big opportunity for some Agile consultants there.

I see if few of those end up mines that would be epic for consultants but just another story for miners.

Re: Atlassian is 20 years old and unprofitable

#357

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…

I think it can make sense temporarily trade profitability for growth, especially if you are using debt/funding to take advantage of certain circumstances. But it certainly isn't sustainable, and the purpose of the growth should be to increase profitability in the not too distant future.

Re: Atlassian is 20 years old and unprofitable

#358

> users can switch to a competitor product like Asana, Basecamp or Monday.com with minimal cost That's just plain nonsense. I dislike using Jira as much as anyone, mainly because it's so excruciatingly slow. But there is no competing product (suite) that offers comparable functionality and provides the same long-term flexibilty. Many companies have built entire workflows (not just development related) around Jira, an…

I have never tried the JetBrains' alternatives (Youtrack, Space, etc) but considering everything from JetBrains is usually very good, I'd like to hear from someone who has.

Used Jira at the last company. Use YouTrack now. YouTrack is better, hands down. Much faster UI, more keyboardable, better integrated into the IDE, integrating it with CI and mailboxes is easy.

Caveats: new job is small so it's a small instance. JetBrain's own YT instance is pretty fast though, so I guess it can scale well. Also, we don't use the new KB/wiki feature so can't comment on that. It's probably got less features than Confluence. We don't use the scrum features.

Biggest caveat - I speak as a developer. One of the biggest problems with Jira was the culture that surrounds it. Clueless PMs who had never written software in their life kept creating fixed workflows in which you couldn't transition tickets to arbitrary states (for no apparent reason, there seemed to be no benefit to these rules). So we were constantly being slowed down by the need to get the handful of people with Jira access to edit the workflows and add more transitions, which was pure makework, especially as even figuring out who the admins were was remarkably complicated. PMs also had a weird Jira fetish, they were like, if it's not in Jira it doesn't exist. So they forced the project to change from a more normal SW dev project early on to mandating that every commit had a ticket associated, and that ticket had to be scheduled into a sprint etc. It was just rank stupidity. Want to do a quick refactoring, as part of your current task? Roll it all into one giant commit because otherwise you'll need to file a ticket. New place doesn't work like that. YouTrack is used more simply, like a todo list. Git logs are the source of truth.

Re: Atlassian is 20 years old and unprofitable

#359

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…

You could rephrase "choosing to be unprofitable" as "spending revenue on more staff and/or higher salaries to retain them" for software businesses. Or in the case of Atlassian, acquisition.

Re: Atlassian is 20 years old and unprofitable

#360

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…

> it's actually bad to be profitable when you're growing

VCs love risk. They will want to dramatically reduce your chances of a small positive outcome if it means a increase on your (always small) chances of a huge positive outcome.

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