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How the founders of the hottest IPO in tech created a $5.78 billion company: 'Discipline'

Dec 11, 2015, 03:49 IST

Atlassian cofounders Mike Cannon-Brookes (left) and Scott Farquhar (right)Atlassian

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"It's an exciting day, but we're a disciplined company, and we're disciplined people," Cannon-Brookes says. "Whatever we were doing yesterday, keep doing that today."

In fact, this week, Atlassian's Sydney headquarters is hosting employees from its offices all over the world for its 33rd "ShipIt" hackathon, where its development teams come up with new product and feature ideas.

And between the two, ShipIt is "more important than the IPO," Cannon-Brookes says.

"I can't tell you how valuable our company is or isn't. That's up to our investors," Farquhar told Fortune earlier on Thursday.

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Odd duck among unicorns

It's a great result in a year that hasn't always been kind to tech IPOs. For instance, when payments startup Square had its IPO, it lost a third of its private-market value. Meanwhile, Atlassian's new $5.78 billion market cap is well over its last reported private valuation of $3.3 billion.

Atlassian was always an odd duck among high-value startups. First, it's never taken any direct venture-capital investment. Firms like Accel bought millions of dollars' worth of equity in Atlassian from secondary share sales, letting employees cash out, but the company has said that it's never actually used the money for operations.

Second, it doesn't employ a traditional salesforce of any kind, preferring to sink that cash into research and development of its flagship Jira, HipChat, and Bitbucket products instead. Atlassian prefers word-of-mouth referrals and self-service sales via its website.

"We're a very unique company, and we've always been that way," Cannon-Brookes says.

Atlassian

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Indeed, Cannon-Brookes says that the last thing he wants or expects is for this IPO to really affect Atlassian too much at all, internally speaking. And that's what sets Atlassian apart - focusing on its products while others in Silicon Valley fret over valuations, Cannon-Brookes says.

With all of that said, Atlassian's IPO has raised questions from the analyst crowd over how long this self-serve, no-sales model is sustainable before it caves to market demand.

But Atlassian President Jay Simons dismisses that idea, saying that the company is actually getting better at machine learning, meaning that its system can better match customers with the Atlassian product they need over time.

"If we would have changed it, we would have changed it by now," Simons says. "The model grows stronger and gains strength over time."

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