Atlassian gets IPO share price of $27 | Hacker News Reader

Atlassian gets IPO share price of $27

businessinsider.com

285 pointslxm149 comments

It's refreshing to see a tech company IPO that isn't VC backed and actually can sustain itself with its profits.

Maybe I'm just naive but I find it strange how so many companies focus so long on acquiring users and not on making money, thus forcing them to continue to get outside funding. For something like Facebook I can understand how this makes sense, but it seems as though this strategy is currently the norm rather than the exception.

Full disclosure: I'm on the iOS team at PlanGrid.

We're a YC-12, VC-backed company. We were profitable within a year of the seed round. We still have the bulk of our Series A in the bank but went ahead and raised a $40 million Series B because terms were extremely good (low dilution plus we can ride out any downturn). I suspect some of these high valuations are simply investors paying a premium to buy in, not an expectation that the company is or isn't worth that much.

When I walk around SF with my PlanGrid shirt on it isn't other people in tech that say hello or know who I am... it's the guys working at construction sites. People in hard-hats and boots who tell us our software has changed their lives.

The tech press and insular SV community obsesses about the ultra-unicorns. Some of us are just busy quietly solving people's needs (usually in industries that have been long-ignored by SV/tech) and we're doing quite well for it.

There may be a bubble but if you build something that provides real, immediate value to customers then the rest of it is just noise.

Just checked out your site and I have two things to say:

1 - this is getting forwarded to our construction manager. This should help them tremendously.

2 - I got a bit of a funky layout on 6+ (safari). Not sure if it's me or not but a heads up, regardless.

Thank you sir.

[edit] sent screenshot from phone via support email [didn't want to reply and hijack thread]

Another PlanGridder—we're really proud of our product and really appreciate your support--so thanks :) people find our product really helpful, hopefully your construction manager + team will, too!

could you send along a pic of the funky layout?

It sounds like you guys/gals made sound decisions. I think there could be other harmful side-effects you aren't considering though. VCs like to superglue a cinderblock to the gas pedal, speed up spending to get to billion dollars or bust. There is no paying dividends, no having a strong business that isn't a billion dollar business. Also when it is so easy to get a great valuation and limited dilution, it's hard to maintain that valuation after the markets turn. If you really are able to maintain control and not increase spending with the additional capital, then that's fantastic.

I see PlanGrid is aimed squarely at professional constructors. Is there any benefit in using it for small, private projects, or is it too "enterprisey"? Say you're building e.g. a garage. And can you ELI5 what "free for 50 sheets" means?

I'm not from PlanGrid, just discovered the tool and my co-workers are running some tests with future projects. However, the answers to your questions (From my POV):

- ELI5 what "free for 50 sheets" mean : This means that you can upload 50 PDFs that contain your plans (Blue Prints). So if you are undergoing house renovations and your Architect drew up plans that are 25 pages, then half of your quota would be used.

- Is there any benefit in using it for small, private projects : That depends. If you're outsourcing your work and have a contractor, then yes. The plans are initially updated on the service and any revisions that occur throughout the project would be instantly synced.

PlanGrid, from my limited exposure, is a markup tool for the initial plans. Their goal is to keep everyone in the "know" with a project that constantly changing. If you and a buddy are working on a deck, might not be useful. If you are contracting/sub-contracting work, it will be very useful.

My 2 cents.

PlanGrid co-founder here. It's definitely useful for a project of any size, but the value definitely scales non-linearly with the size of a project.

If nothing else, if you have a construction project that has paper plans, PlanGrid is the best way to make them digital, shareable, usable by multiple people.

This wasn't readily apparent to me after watching your video so I guess I'll ask here - what do you think is the core value of PlanGrid?

Is the point to be a full document control type solution (e.g. - in the same vein as Aconex) or is it a collaboration tool focused on construction? It appears to be the latter?

I guess I could just ask one of the guys I know from DPR...

Construction is booming here in Atlanta. If you want a technically knowledgeable sales rep in ATL, tell me who to talk to. The app looks amazing, as in it's actually innovative, as opposed to just another chat or email client. I'd love to be a part of that type of company.

I don't think so? All I know about plangrid is from their landing page, but it seems like it'd be like using e.g. JIRA or Gerrit for a single-person project. i.e. it wouldn't provide any additional value

Yeah, I'm unsure, that's why I ask. Some of the features (version control, progress pictures, fast rendering on mobile devices) definitely seem useful even for a single-person project.

My opinion is because HN is highly entrepreneur+VC focused and tech happens to be the area of interest. As such the discussion leans towards investments with huge payouts. Companies that are profitable and don't need funding are not particularly interesting to investors.

If this was a tech-only forum then the business guys & gals probably wouldn't even be welcome, & vice-versa if it were a business-only forum. It's an interesting mix here that probably wouldn't normally have a lot to talk about together. But I do think it puts stars in a lot of programmers eyes who might not otherwise care about that kind of stuff.

Nice to see a "hard hat" (don't pardon the pun) business solving real pain points for regular problems. Good work.

VC-backed firms that are focused on enterprise don't worry me, those focused on the consumer side worry me. Consumers are more fickle than businesses, which generally lock in vendors and want streamlined items.

With consumers, an item like Snapchat is the hot item today, but AIM was the hot item before that, then it was Skype, etc, etc, etc. Consumers don't have the loyalties that enterprise has. Facebook was smart because it has built an ecosystem around its graph, others haven't and I fear eventually those "utlra-unicorns" are going to face reality and that is going to hurt firms, even your own.

And with some firms their path to profitability is total nonsensical. Monetizing is extremely difficult when you can't actually charge your customers in any significant way without completely driving them away.

> People in hard-hats and boots who tell us our software has changed their lives.

That is so great, this is what it's all about in my opinion.

https://youtu.be/ARIE9_HmATY

VC backed companies are focused on capturing a market as quickly as possible. A free or below cost product helps with that goal, as does having a lot more money than bootstrapping could provide.

If you think of a VC as a conglomerate, startups are money losing R&D and market research divisions, searching for the next goose that lays golden eggs.

Buy it does seem that transitioning from a free to a paid for service is a tripping point for many of these VC backed startups. Of course by the time this happens it has usually gone through an IPO, the early investors have made a nice profit, the shareholders start requesting a return, the company has difficulties monetising and the shareholders eat a write down. But the VC makes out OK.

You may enjoy this article from venture capitalist Fred Wilson.

http://avc.com/2015/10/negative-gross-margins/

Yes it's refreshing to see, but it would be a much, much worse world if this was the only type of company. I get the cynicism towards companies that spend forever on "user acquisition" and there have been some companies that never turned a profit. But if you want to build infrastructure that has relatively high fixed costs and really low marginal costs (which by the way defines most of the software industry) there's always going to be a need for up front capital and returns to that capital.

So you could claim a company is spending too much on user acquisition, but another way of framing it is financing their fixed costs and working their ass off to get to a point where they can sustain their fixed costs from the variable costs of their user base.

How does user acquisition finance fixed costs if there is no clear revenue stream yet? Are we assuming everyone is depending mostly on ad revenue?

I mean ad revenue is definitely one model like this. But even Dropbox, Uber, Tesla, Netflix and many others would fit under that category.

Sometimes the generating revenue part itself is expensive to build, if you can't even get tons of people to use your product for free you're going to have trouble getting there (but that's a lot more for advertising-based revenue).

I think a lot fewer companies have no revenue stream that you're suggesting. Sometimes very early companies haven't figured out revenue, but they also haven't figured out product. Sometimes they're closely tied together, sometimes they're not.

> Sometimes very early companies haven't figured out revenue, but they also haven't figured out product.

Then they shouldn't be considered a business.

Okay, go write a strongly worded letter to twitter explaining that they're not a business. There's a difference between no product and imperfect product / market fit.

I find it strange that people still don't understand that building an asset is valuable and that a growth company should grow.

If you know how to turn $1 into $2 (of value) you should be spending as much money as you can.

Because markets aren't infinite.

I can easily turn $5 into $10; buy candy bars and sell them to my neighbors next time I watch a sports game in person.

So I'm really confident I could double $5. But could I double $50? I'll definitely get caught trying to sell $500 worth. So I just sell a little more all the time while remaining cash flow positive, and that's how I learn the limits of the market without going bust.

What you're describing is often called "capacity." I found this to be an accessible primer: http://qwafafew.org/images/uploads/san_francisco/sf-20041018...

Oh, c'mon. You do it for as long as you can.

So you pretty much just described the plot of Breaking Bad ;)

I'm by no means a savvy investor, nor an expert in this, and am probably stating the obvious but the rationale is Active Users have a value, even if they're not actively providing revenue. Previously, it was simply monetizing that audience via Ads.

More recently it's monetizing the data that those users generate.

There is also value gaining a particular segment, such as Activison-Blizzard purchasing King gaining access to all the casual mobile gamers.

Essentially, its that those users could be used to generate money, and thus are valuable.

The counterargument is that nobody knows how much value they will have--and sometimes people are too optimistic. See "Investor Storytime" here: http://idlewords.com/talks/internet_with_a_human_face.htm

Therein lies the risk / reward for investing in a startup that isn't generating profit.

According to Crunchbase, Atlassian has raised $210M in funding in two rounds.

https://www.crunchbase.com/organization/atlassian#/entity

Last two rounds were for the employees. Atlassian raised rounds to allow employees to convert equity into cash, if they so desired. Housing is very expensive in Sydney. Additionally Atlassian paid the taxation bills of their employees as well. In Australia, tax is due to be paid immediately on issuance of equity instead of the fair and reasonable benchmark of upon sale/capital gains. This has since been corrected in legislation but it excludes Atlassian as there are company age (ASIC registration less than x years old) and revenue/valuation limits. See http://generalstandards.co/blog/new-esop/ for details.

Tax on issuance of equity is the same in the USA. Even worse you cannot use most of capital losses against your normal income taxes, just other capital gains. I think canada does it on sale only.

Not with ISOs though in the US (except a possible AMT issue)

As someone who got those kind of ISOs, it doesn't take much stock to trigger that AMT tax. In practice, ISOs do not have their tax benefits in the majority of cases because of AMT.

Looks like you missed part of the article:

>Atlassian was founded in 2002, but it hasn't taken any outside investment. The last two funding rounds from Accel and T. Rowe Price were done to let employees sell some of their shares, and Atlassian says the cash wasn't used for operations.

But they were bootstrapped and very profitable for several years before taking any funding.

Has anyone looked at the prospectus? The founders are going to do very well.

Michael Cannon-Brookes Shares - 69,732,090 Percentage - 37.7%

Scott Farquhar Shares - 69,732,090 Percentage - 37.7%

Well done, gents. Well. Fucking. Done.

<3 bootstrapping. They started this company on their credit cards. The founders are already well involved in mentoring local startups here in Australia. This is fantastic for the local ecosystem all around. Atlassian founders/directors/employees will be the PayPal Mafia (for Australia).

Not to nitpick, but it would have probably been far better for the ecosystem if the money was spread more evenly. Few at PayPal made it super big of course (not even the "leaders" in relative terms) but they where also quite young and hungry to do something else. I'm sure they are all going to try and pay it forward as best they can and funding opportunities will increase, but that doesn't necessarily create this dynamic diversified ecosystem that PayPal left behind.

Note that this has been a 14 year play from founding to IPO. It's a long road without VC, but still really nice to see someone building a tech company the old-fashioned way.

Atlassian may be the one of the only tech companies that actually deserves its valuation.

Is it that much longer in today's 8 year minimum timespans for IPO? Especially as founders with %75 majority control and no investors saying no, you can pay yourselves pretty great salaries.

How many employees get to split the remaining 20%?

Well done, founders.

* How many employees get to split the remaining $1.1bn?

(The new valuation, according to the OP)

Actually (and please correct my arithmetic wherever it's wrong), the prospectus shows 96.1% to founders, directors, officers, and VCs (page 146).

At $5.8B, the founders stake is $2.1 billion each, and the 1300 employees share $226 million.

It's good to be a founder!

Australia makes it incredibly difficult to give equity to your employees - they literally get double punished and it's often better for the employee not receive. The Australian Taxation Office will charge on receipt.

So you get 1% of the company and it's last investment round was $10M - Boom you get a $100,000 tax bill that year! Even though it's all only paper value.

Then if you do liquidate you're taxed again on the gain!

It's a huge problem and there are a lot of folks in the startup community trying to get it rectified.

Isn't options the default rather than a grant? The tax should only apply on exercising/liquidation.

That's not true. The company gets 10M. The shareholder still received nothing, and thus has no tax liability.

When the shareholder sells their shares they will be taxed.

I don't understand your scenario at all... :\

His scenario was the company raises at 10M and afterwards gives 1% of it's shares to the employee. Actually I think most countries would treat that as taxable income which is why companies usually give options not shares once they get going.

That is still not a taxable event. Even if it's shares and not options.

The shares won't be taxed until they are sold.

I know this, because I've worked in an Australian company and been given shares and they made no difference to my tax liability.

That's $200k per employee if they sold today, they were already getting paid well.

A nice payout for sure.

Sure, in absolute numbers, $200k is great. Relative to a multibillion liquidity event, and in particular where founders kept so much, it's a shit deal. Two guys have 18x all their employees combined. Oh well, the employees were bad negotiators who sold themselves short. But they created two billionaires and had fun and a working salary along the way! :-)

At any rate, this always bothers me because even though we do what we do because we love technology and helping people, and it's not all about making money, I believe that everyone should reap the rewards in a measure equal to their contribution. Very few people realize how much the cap table favor founders and investors. People happily say "I'm not here to get rich, but if this works then we'll all make money together." That's great, but the reality is that if it succeeds, still a handful of people will rise to become amongst the richest on the planet, while the rest get a very nice (sometimes awesome) payout, but still a tiny fraction of the first one or two. Employees: you were never in it together. You were working to mint a billionaire.

Atlassian was founded in 2002. An experienced developer, with a salary of A$140000 per year in 2015 dollars, who've worked there since 2005 for 10 years, will have received A$1.4m in 2015 dollars in salary. Add the $200k payout and it adds up to A$1.6m.

Atlassian is valued at A$8b, that is roughly $8m per employee.

Collecting only A$1.6m out of A$8m total value per employee isn't spectacular, but it isn't as bad as the nominal $200k payout makes it out to be. If you were working on a full time basis, you never had to fund the business on your credit card, and even if Atlassian went bankrupt the day before the IPO and plunged to $0 in value, you still got to keep A$1.4m of the A$1.6m.

You got to become a millionaire if you saved and invested well, while minting a billionaire. Sure, it's not a good a deal as being a founder of a IPO'ed billion dollar startup, it's not exactly a bad deal either.

If you're counting the employee's salaries, be sure to count the founders' as well.

In Atlassian's case the salaries of founders probably add up to around $3m, which is insignificant next to the $4+b value of their shares.

Also, high salaries for founders is an issue only when the founders did not fund their own business.

You're right, in a startup, funded by VC, that pays the founders significantly more salary than their employees, is a lot less equitable compared to a bootstrapped startup funded by the founders' credit cards, or a VC funded startup that pays its founders little. In the latter cases, the founders take a lot more risk, and so their reward, should their startup succeed, would be a lot more "deserved".

Many employees were compensated with large bonuses from the VC rounds. Indeed, that is why they took VC money.

prospectus: http://www.sec.gov/Archives/edgar/data/1650372/0001047469150...

  Atlassian was founded in 2002, but it hasn't taken any outside 
  investment. The last two funding rounds from Accel and T. Rowe Price 
  were done to let employees sell some of their shares, and Atlassian 
  says the cash wasn't used for operations.

That's impressive!

Pre-IPO discussion https://news.ycombinator.com/item?id=10708908

This is interesting because the valuation is:

- Either driven partly by what Slack is valued at (and then you add the other parts of Atlassian to get its total value)

- It really is this valuable, which would make Slacks billion-dollar + valuation a lot more legit than when people were nay-saying about it

- Just investors throwing money around because money is still 'cheap'

I still think that some savvy retail investors understand the tech market a lot more better now. This company is not burning through cash and shooting for super, super long-term growth (Twitter and it's ilk) so this feels more like a Microsoft listing than a Facebook listing.

Good on them for building something legit and something people would pay for (instead of advertising revenue).

Slack seems like a great product but here are some interesting facts:

- Atlassian has more than 10x the revenue of Slack[1]

- JIRA and Confluence account for substantial amount of Atlassian's revenue. Two products that don't even compete with Slack[2].

I think Slack is a current silicon valley darling so people love to make this comparison but it doesn't directly compete with Atlassian's core business. It also has an order of magnitude less revenue.

[1] http://www.businessinsider.com/slack-expects-30-million-reve...

[2] https://www.sec.gov/Archives/edgar/data/1650372/000155837015...

I really like Slack but I think it will be troubled in the short/long term in the same way Dropbox is now. It is innovative but many others will catch up it soon.

It has a great getting started experience and some fun gimmicks but most of the innovation was cloned from Flowdock anyways. What you are seeing is the power of a famous CEO and an awesome marketing engine powered by an experience VC.

And sometimes that's the difference between making a buck, and making a business.

In my experience, HipChat / Jira / Confluence is a nice stack to work with. What advantages does Slack offer over these?

Jira is definitely a pleasure to use. We only just started it a while ago and I'm often pleasantly surprised by the things I can do with it and just how convenient it is to work with. It's quite a change given that we previously used Mantis.

I am not saying that Slack is better/worse than HipChat, I am just referring to its commercial success that I think is related to its UX. I think its success will be in trouble when new or improved offerings appear.

Slack and Dropbox have pretty different business models from my vantage point. Slack entered the market as an enterprise product vs. consumer. Slack was built for collaboration from day 1, so there is some amount of lock in (change management in an organization is tough).

I look at Slack as being more like a hybrid of the best parts of Box + Dropbox... They have the good parts of Box's business model and the UX quality of Dropbox. And fortunately for them, they aren't in a market where the price is driven largely by the cost of the commodity hardware underneath them.

I have been saying for a long time the real target of Slack is Dropbox, since it adds a ton of valuable context around files shared.

Yeah, I imagine they will drive right towards each other. Dropbox is trying to get better at the whole collaboration / enterprise use case. And I have no clue about Slack's plans around document handling, but feels like a natural progression for their product. I don't think they do a great job there right now, but even something as simple as being able to add tags to uploaded documents (as opposed to free-text subject lines) could go a long way.

I don't think it has a single thing to do with Slack... Atlassian's main product is not Hipchat, it's Jira. A product which thousands of large enterprises use and pay a ton for. And has nothing to do with Slack.

It's price to the enterprise is seen as almost zero from their perspective. The other products that solve the same problem cost 10x as much. The entire Atlassian business model was disruptive. While their competitors were focusing on buying steak dinners for the highest exec that their sales team could get in contact with Atlassian products moved organically through the company. Awesome user groups cheap prices and a strong developer ecosystem made them very difficult to compete with.

One of the complications with trying to compete with disruption is that people inside your own company don't want to realize they are being disrupted. You see plenty of "the old plan is failing because we have not put enough time and energy into it".

Is your assumption that Slack validates the possibility that HipChat can be a bigger business? The group collaboration software market is by no means zero-sum at the moment, but I'd still wager that Slack is causing more churn for HipChat than HipChat can replace with new sales.

There's a global hackathon going on right now at Atlassian. Keep a eye on https://twitter.com/hashtag/shipit33

Memorable tweets so far:

1) Founder of the company last night calling it quits and heading out for a beer. https://twitter.com/mcannonbrookes/status/674734326571921409...

2) Insanely clever marketing by the jira team: https://twitter.com/Atlassian/status/674964465717260288

Reply with your favourites! ;)

Having a bit of fun with the building lights during that hackathon: https://twitter.com/sebr/status/674917395798949888

(Disclosure: am an Atlassian employee, though not in the photo or that team.)

Maybe HipChat will finally have chat notifications on iOS [0]. A messaging app. Probably one of the many reasons people migrated to Slack.

Meanwhile, latest update reads: "New: Scumbagify support! Prefix any emoticon with (scumbag) to show how you really feel"

[0]https://help.hipchat.com/forums/138883-suggestions-ideas/sug...

Atlassian is quite slow to move forward on their products, including their acquisitions.

In some cases -- Bitbucket Cloud -- they really never do. Whenever I think about Bitbucket, I think of https://bitbucket.org/site/master/issues/8548/better-ci-inte...

Tech IPO's of any kind always have my interest, but I have a hard time finding out what IPO is happening and when it is happening.

How do some of you track these things?

The stock markets have trackers:

http://www.nasdaq.com/markets/ipos/activity.aspx?tab=upcomin...

https://www.nyse.com/ipo-center/recent-ipo

How much could they grow? It's not clear to me, unless they suddenly have much more ambitious plans and new categories of product, how big the market is that can sustain infinite growth over time for them. The market is very specialized for them, and if they try going after non tech their products directly then go up against many other players already entrenched (and it's not like JIRA is some shiny beacon of ease and apple-like perceived simplicity -- if they rebuilt from scratch maybe they'd have a better chance)

My impression is that they're after dominance and becoming utterly entrenched, and that they've got a pretty good shot at it. They've had stellar growth over the past couple years. They currently strike a good balance between "creating value" and "extracting value", from a business perspective. Compare to older companies, like Oracle, which are much more focused on extracting value.

They're also used both in startups and in established firms, which makes me feel confident about their growth.

Confluence is used quite a bit internally at Oracle and given the extent of the company's usage, I wouldn't be surprised if they're making a killing off it and other enterprises.

My employer (large financial institution, 15000+ employees) uses confluence and jira enterprise-wide, as well as others that are more developer-centric. I'd say we're paying some of their bills on our own.

You bring up a really good point around adding vs. extracting value. There are definitely a few well-known large enterprise software companies that seem almost entirely focused on the extraction side once they reach a certain scale and level of entrenchment.

To me that seems like a sign they are ready for new competition, but I really wonder what the mindset is like internally once an org makes that kind of shift.

The JIRA integrations with things like HipChat, Bitbucket, Bamboo, etc. are incredibly valuable for their customers from day 1. Competitors can't offer that level of integration right away and chipping away at one product category will be harder when companies like Atlassian offer well integrated products in suites or ala carte.

The SSO integration they're currently implementing will be a nice addition.

Visual Studio Team Services is just as good at this.

Their biggest customers are large companies that DON'T want apple-like perceived simplicity - they want a powerful product that they can customize to their needs.

The company I work for has both JIRA and Confluence. It took a lot of work from several team members to get it to the current state where most people are happy about how it works, but the output is very highly valued by higher-ups.

It also has a growing ecosystem and good integration.

They've also made some underrated acquisitions, like the JITSI team (Blue Jimp), which recently made ENSO and is working on Hipchat

https://enso.me/

Their products are general enough to be easily customized by a couple of devs (or even only one) for very specific use cases. They're also easily integrated with market leading erp software. Companies that already use it for development departments might very well use it to manage most of their operations under a single umbrella application by linking multiple instances.

Do you, or anyone else, have personal experience with customizing Atlassian's products?

The customizations I've seen at rather big companies have required multiple devs, many months, and the end result has had some rough edges.

From what I've seen it is also non-trivial to scale their products to say orgs with 500+ active users, granted my experience here is a few years back.

Yep, we have a junior dev working on customization and integration with SAP. She needs help every once so I sometimes help her out with the more complicated stuff, but in general she comes out with pretty robust code and the integrations and customizations work as they should.

We have just under 2,000 users in our JIRA, Confluence, Bamboo ecosystem. Customizing things like ticket types and workflows is obviously just point and click. We've also created custom reports, and Jelly based custom event triggers and actions with one untrained person. I guess it depends on the nature of what you're trying to do, but we've found it very easy to customize and integrate.

Hipchat can grow a lot, I really think every organization, tech or not, will eventually start using a tool like hipchat or slack.

When Slack self-hosted is a possibility, Hipchat is dead in the water.

That's the only reason to use Hipchat today, and the Slack experience is an order of magnitude better.

Hipchat Connect takes a HUGE step forward in completing with Slack and I prefer integration over a few flashy features. Yes you can integrate with Slack but my company has bought into Atlassian and it's quite wonderful...

> When Slack self-hosted is a possibility, Hipchat is dead in the water.

I think Slack put some pressure on the Hipchat team but there is plenty of stuff that is highly problematic for how Slack is set up at the moment. In particular even for small teams it can become incredibly hard to see what's happening and the integrations either spam too much or are too useless once it becomes a bit more crowded in a room.

You're forgetting the price: Paid Slack accounts start at $6.67/user, HipChat $2/user. That's a very big difference for even a medium-sized business.

Is it me or is the hosted version of HipChat really unstable the past two or three months?

Isnt self hosted slack IRC?

Slack is starting to become popular with student groups at my university. Definitely has a wide range of potential users.

Your post seems ridiculous to me. They are a profitable company with a solid portfolio of products and you suggest that they are failures unless they do a complete re-write of one of their biggest products?

I didn't say they're failures. I said how far can they grow?

When you go public, you have a legal obligation to your shareholders to make more money next quarter until the end of time. I'm questioning how big they can get with their current products... when they start trying to get into different industries that are already using Oracle, Salesforce, SAP, etc, how will they compete?

> How much could they grow?

I don't see that there is a limit to how far they can grow. They are expanding their user base, they are constantly making or buying new products into their portfolio and they know how to sell and support it.

Their market is very similar to that of Salesforce, which is showing very few signs of slowing (and had a 52B market cap).

> apple-like perceived simplicity

Jira's a workhorse, not a consumer device. If Atlassian went with "apple-like perceived simplicity" their product would probably be terrible for most of their users (enterprise customers) who want customizability and integrations over prescribed use cases.

On the one hand, it's great to see a company do so well making solid basic development tools.

On the other hand, I recall that everybody hated using JIRA. It was sooo slooow and so many little input boxes in the UI. Has it improved in the past 5 years?

> Has it improved in the past 5 years?

Not enough, IMO. It still feels like something from 10 years ago. How do you even make something this slow these days?

Their strong points:

+ Solid super customizable issue tracking model that supports everything

Their weak points:

- UX (so much clutter by default)

- Performance (both client- and server-side - everything feels "heavy" now that we are used to facebook/google-style ajax apps that are "instant")

- Its design invites to what I like to call "bug tetris" - where people spend more time juggling/triaging/refining/classifying/validating/etc tasks than working on the product or whatever they are supposed to deliver.

It's also pretty much the best of the worst, when it comes to something big enough to deal with > 50 employees and software development. Trello is cute, but fails after about 10 contributors, and locks you into it's rather simplistic mode. Basecamp has crickets on it's servers these days. Rally is enjoying it's fat stacks of CA cash, and still sucking :)

None of it's good. Project management can't be put into a box easily, but it isn't Jira that made them rich, it's Jira + confluence + hipchat + integration for your org. When dumping jira means decoupling all that documentation and it's fancy links.. you keep paying the jira bill, and keep adding subscribers. They've essentially mastered vendor lock in for companies making software.

We use self-hosted so YMMV but I've never really considered it to be that slow. It's a solid tool and at the top of it's field IMHO. I'd love (seriously) to hear what others are using we looked at a few alternatives but none of them held a candle to JIRA and that's before you consider the integrations with other Atlassian products.

I've started to use Youtrack on recent projects and like it. A few quirks, but it's a breath of fresh air compared to the most recent JIRA version. (As context, I've advocated and run JIRA installs as an eng lead for ~10 years.)

Sadly this is because this field is seriously under-developed, I feel.

I have found three serious contenders when surveying this area recently:

1. Jira - flexible, but slow and old

2. TargetProcess - if you have bought into the Agile hype machine, this is for you

3. Asana - this one is a bit special. They have the performance and scalability, but it all just feels too brittle. The UX is fancy, minimalistic but not intuitive. It's like a collaborative scratch-pad for people who are really into tool ergonomics. I feel it goes too far in the other direction as compared to Jira.

Why can't someone just spend the 5 man-years required to build a Jira that's flexible, usable and fast?

Compared to its competition Jira does rather well. Jira won't blow you away as an amazing, delightful app. But it gets the job done and is relatively painless.

As someone who knows relatively little about how the stocks works, and this stage of a business' lifecycle... what benefit does Atlassian get by going public?

Liquidity. You can't buy a house with stock certificates.

not much of a problem for the founders http://www.domain.com.au/news/billionaire-mike-cannonbrookes...

Depends.

He can now take out a loan against his shares for $300m if he wanted, which is something he probably couldn't do before, since the stock wasn't that liquid. And he might not have been interested in selling more.

The ticker is TEAM for those wanting to play along at home.

And don't use Google Finance, since they can't seem to add new listings until several weeks after the IPO

http://finance.yahoo.com/q?s=team

https://www.google.com/finance?q=NASDAQ%3ATEAM

Looks fine to me?

With the NASDAQ: prefix it's good now, but yesterday morning at IPO the data was missing. It seems like they get it within 4-8 hours of an IPO, at least that's been my experiencing following MTCH and FIT.

http://bigcharts.com is pretty good as a rule, too.

I'm curious why they chose that ticker instead of ATLA or something.

Because TEAM is an adverisement for their value proposition, and subtly increases good feelings.

Other interesting tickers are Salesforce (CRM) and Southwest (LUV).

Not to mention Alphabet with $GOOG . Talk about stealing brand recognition ;)

LUV is brilliant. CRM, on the other hand, is bit restrictive. What happens when SFDC wants to expand beyond the CRM space?

But regardless, those are 2 memorable ticker symbols.

You mean, "What happened 8 years ago when SFDC wanted to expand beyond the CRM space?" Long story short, their value increased from ~$10/share to ~$80/share today.

And the "cybersecurity" ETF: HACK

I'm 28 and I've never invested so much as a dime. I quite like Atlassian, and I think I could afford to lose $27 if it came to that.

Forgive me for the really elementary question, but how do I actually go about buying shares?

Open an account with any stockbroker and they will purchase the shares "on the market" and hold them for you until you want to sell. They charge for this service so you want one that caters to beginning investors and has low fees for the kind of purchase you want.

Personally, I use Charles Schwab, which is one of the largest US consumer brokerages and has a pretty good reputation. For beginners I usually recommend ShareBuilder (no, wait: recently renamed "Capital One Investing") as they have lots of features for beginners including purchase plans with little to no fees for small amounts and no maintainance fees. But (full disclosure) I may be a biased source: I work for Capital One.

Thanks for the info! I take it there's no DIY approach here, and that for all intents and purposes, I must go through a broker?

Online discount brokers like Etrade, Schwab, Ameritrade, etc are about as DIY as it gets. Load up funds from your bank account and pick your stocks!

Notably, Robinhood is a new startup that doesn't charge any fees and has nice mobile apps: https://robinhood.com/

To "DIY" without going through a broker, just find a friend who owns stock certificates and have them sell it to you. I believe there would be follow-on paperwork where you inform the company of who the new stockholder is so you can receive communications.

Absolutely NOBODY does it this way.

The closest that exists is that a few companies (often utility companies) still have programs from many decades ago where they will sell stock directly to the public.

Finally, you could (theoretically) become a broker yourself and purchase stock directly on the exchanges.

Interesting that it seems they IPO'd in US though they are mostly located in Australia? Can employees in other countries cash out on their stock options or are they compensated in different ways than in the US?

I know a big issue we have here in Australia is that you're taxed on stock options before they're actioned.

http://www.brw.com.au/p/business/tax_on_start_up_share_optio...

I don't know about Australia, but at least in some European countries it's not common for employees to get stock options. But if they got stock options I don't see why they wouldn't be able to cash them out.

I like Atlassian and we use JIRA, Confluence and Stash.

Do I think Atlassian is worth $6bn? No. I planned to buy ~100k in stock at the open, saw the $27 open price, and cancelled my trade.

Is this a nice result for the founders? Yes. :)

Starting price on IPO day means little. It was flat the entire day. The way to judge these is in a couple of weeks (2-3 weeks) to see where the market really values it. See RACE for an example. That had a stronger IPO day "pop" and... here we are. :)

$6bn valuation isn't that much for a product suite that seems integral to so many in the tech sector.

Once a company has gone public is it common for lots of staff who have stock to quit?

Want in? https://www.atlassian.com/company/careers ;) When a company has had 30% growth per year according to their F-1 filing (This is a ballpark - please check the filing), you don't need to wait to get hired. More seriously, in a Forbes article last year Scott Farquhar said some employees would be able to buy a house, so there are probably some people who want to pursue some personal projects. I expect Syndey real estate to become very expensive, but I also expect such companies to have some retention policy, like progressive vesting and post-IPO lock-in period.

“Scott Farquhar said some employees would be able to buy a house“

To be fair, it is Sydney ;)

Sydney is one of the most expensive housing markets in the world [1].

It was actually much higher in the list, but the weak Australian dollar means that the US dollar stretches quite a bit further.

I seem to recall that cost of living in Sydney is also one of the highest in the world, but didn't find any sources on that.

[1] http://www.globalpropertyguide.com/most-expensive-cities

Sydney 7,250 per m^2

Prague 4,569 per m^2

And now add earnings to that and Sydney is not that expensive. Pure price per m^2 says nothing, the important thing is how much m^2 I can buy with my average salary.

That was my point, it took cashing out shares to be able to afford there …

(source: home owner in Adelaide)

yep can definitely confirm everything is very expensive here

As a side question, I wonder if this means GitHub will go for their own IPO.

Can someone please explain what would be the reasons for Atlassian to IPO? Is it to return money to investors? fund new things (such as?)?

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