5 Interesting Learnings from Atlassian at $3.2 Billion in ARR

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So we’ve covered hero company Atlassian many times on this series. 

First, it’s an epic bootstrapping success story.

Second, it showed early you can build a SaaS and enterprise leader from anywhere. 

And third, it’s a SaaS and Cloud leader we all have opinions on. We have a sense of.

And Atlassian has been saying something for quite a while — that while things have gotten harder the past 18 months or so, buyers are still buying.  

Atlassian has seen some modest macro impacts, but they’ve just kept selling.  Through PLG motions, through partner-led motions, and through a modest sales team as well.

We’re doing a new series on SaaStr on what break-out SaaS startups, scale-ups and leaders are seeing out there and first up is Michael Grinich, CEO of WorkOS.

Our deep dive includes:

What it takes to be “enterprise-ready” today

• Build vs. Buy in 2023
• The stakeholders in a B2D motion
• Nailing pricing as you go upmarket

This edition of the SaaStr Daily is sponsored in part by Hubilo

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My top mistakes as a SaaS founder/CEO:

1. Not convincing the very, very, very best VPE I knew to join as our VPE. I tried and I tried for years. But looking back, I should have tried even harder. I should have camped in his office and literally never taken No for an answer. It would have solved our top problems and been a game-changer. I had a great CTO, but I also needed a truly great VPE to scale past $10m ARR and deal with all those issues. I’m 100% confident we’d be running a multi-billion dollar public company together if I’d closed him.
2. Overreacting to competitive threats. We were growing 100% at $10m ARR, with 120% NRR. Respecting the competition is critical, but worrying too much can hurt you. They couldn’t stop us, even if they could maim us a bit. 
3. Not seeing other chances would come. We had a few tough hits with one strategic partner, and lost a few big deals. That seemed like such a huge deal, and at the moment, it was. But we got more chances later on.
4. Not finding a way to work through team conflicts better. Our CTO was amazing, but we didn’t work together as well as we should of. In some ways, it was a different time. But while I used all the tools I knew to have a better relationship, I should have done more.
5. Not raising a bit more money. We did fine, and got cash-flow positive by $5m ARR. But I could have done a lot more with just a bit more money.

So there’s a sort of org chart you’ll probably end up with at least twice as you start scaling in SaaS:  The “Headless” Sales Org.

What’s that?  It’s a bunch of sales reps without anyone to manage them other than … you.

There are basically two times I see this happening, and it happens to most of us:

First, when you are just getting going, and doing founder-led sales, you start off “Headless”

Your job as founders is to close the first 10, 20, 50 customers yourself, then bring on a few reps, then get those reps closing, and then … hire a VP of Sales to scale it from there.

But if you end up not hiring a VP of Sales at that perfect moment in time (and most don’t), you’ll end up headless. With 3, 4, 6, 10 sales reps all reporting to you.

This edition of the SaaStr Daily is sponsored in part by SAP

Win customers by creating compelling offers with flexible pricing, billing, and bundling options with end-to-end automation. Learn more at the SAP booth in the Sponsor Hall, Hanger West! 

First off, the axiom that companies are bought, not sold, is mostly right.

95 times out of 100, you can’t wake up some morning and just go sell your start-up.

Unless there are pre-existing relationships that have expressed a desire to buy (which sometimes there are) … calling up CorpDev at Google isn’t going to work.

So to me the real question is — when you get an offer … how do you know?

I’ve been through this 3x:

• One time, we screwed it up. We sold to first startup to an other hot startup about to IPO — instead of a more complex deal with Amazon. That was an epic failure. It was A Billion Dollars vs. $250m. But that billion was an illusion. We didn’t do the right diligence, not really, not the right way.
• One time, I got it right. I sold my first start-up in ’04 for $50m 12.5 months after funding. That was right because the capital requirements, and the odds for success, were such a challenging mix, that $50m in 12.5 months was clearly, unquestionably, the right outcome. We had 0 doubts then and 0 doubts even now.
• One time, I don’t know. Not very sure I got it right even though it was very logical. The last time seemed like a logicaldecision in the context of where we were, and the capital markets and valuations were, at the time. But not so much today.

The role of finance in SaaS is changing. No longer are finance teams the traditional “bean counters” of ages past. Instead, due to a decade-long exodus from Wall Street, the strategic CFO has burst onto the tech scene.

IVP Partner Michael Miao explains, “The role and the scope of the modern finance team has changed dramatically in the last decade. I think what we’re seeing in all of our portfolio companies and tech at large is that finance is increasingly seen as strategic, and they now have a seat at the table when it comes to making major decisions at the company.”

In a fascinating workshop session, Miao shares his thoughts on how finance teams can contribute to company strategy and grow revenue. 

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