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Comment by thesethings | Hacker News Reader

I'm pretty ignorant about financing. I have a question for finance folks:

This company is about 8 years old, profitable since day one, and made 58 million last year in revenue.

I never hear about companies getting such a cash injection at this stage in their lifespan. Perhaps I'm just primed for "things are different now" stories after reading Fred Wilson's recent post on the topic ( http://www.avc.com/a_vc/2010/07/some-thoughts-on-the-seed-fu... tl;dr : "While many businesses require a lot less capital to start, they don't require less capital to grow.").

But even by a new We Need to Grow yardstick, it seems Atlassian is mature.

What do you folks think?

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This reminds me of Jive Software. They were in a very similar position when they took money, in the same market, at a very similar level of maturity, and one of the prime competitors to Atlassian.

I can't speak to the financial implications for their company, but as a customer, the move was terrible. Their prices got jacked way up, they dropped all their offerings in favor of what they saw as the product likely to provide the highest return, invested a ton of that money in sales and marketing, and their service and quality plummeted.

They switched to a subscription software licensing model, stopped listing prices on their website, added a "Solutions" tab next to "Products", etc.

I never understood why they took the money, but I understood why those changes came with the money. As a customer, I hope Atlassian doesn't go down the same road, but given the amount of money and the actual scope of the products they work on, I can't help think that it's an inescapable path.

As the founder of the company, I'd like to say that we don't plan on any changes to the business model or pricing.

We've grown Atlassian 3x over the last 3 years, all by following our current model of reasonable, transparent pricing, and selling in volume to thousands of customers around the globe.

There are things we want to improve of course (around our products - we're never done with improving them), but we don't plan to change our model.

We spoke at great length with Accel Partner about this. They like us for what we are, not what we could be if we changed.

Jira and Confluence are great products - go the aussies!

Now that we've got you here.. how about native support for Mercurial (the plugin is dodgy) :)

Hi Scott --

Thanks for replying. Congratulations on the investment, and I hope this works out for you and your company.

However, in my experience, nobody gives you $60 million (or $6 million) dollars and doesn't expect to have their finger in the pie. Everyone -- CEOs, the board, the investors themselves -- always says that they don't want to change a thing about a company, but how can you really avoid a shift in incentives when you hand over a board seat and start spending other people's money?

Whether or not that priority shift will be a good or bad thing is relative to who is asking. Often, there's surprisingly little alignment between what is good for the founders, the customers, the employees and the investors.

Regardless, I wish you all the best, hope you can keep doing things the way you want them to get done, and hope we can continue as Atlassian customers.

As a relatively new Confluence customer (1+ year), we have been very happy with the product thus far compared with other options. Please keep the focus on quality. Congratulations.

* Also, please consider built-in integration with other single sign-on platforms.

I hope you come and visit often. I'm sure a lot of your customers and potential customers hang here. Lots of good ideas, lots of talented people.

I evaluated a number of social business platforms several months ago, and Jive was significantly better than anything else. Unfortunately, it was also absurdly priced. Confluence was a much better purchase in terms of value for money.

"solutions tab" - that's almost an anti-pattern right there

Why?

Scott and Mike want to take the company public. I suspect they decided this investment allowed them to move towards that goal while also letting them get some liquidity for their hard work. This is likely more like a private equity deal than a venture deal, terms wise. It just so happens that a venture firm gave them the money.

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