The Bootstrap Guide to Market Dominance

As someone who works in the product and program delivery space, Atlassian software has become increasingly more important over the years. I’ve been wondering for a while how they became so successful amidst significant competition and what we can learn from the way they optimized their products to meet and in cases exceed market demands.

If you want to understand how highly innovative individuals developed class-leading products and scaled with efficiency, just keep reading!

Who are Atlassian?

Atlassian was formed in 2002 in Sydney, Australia by two students from University of New South Wales, Mike Cannon-Brookes and Scott Farquhar. They started the company with only $10,000 in credit card debt during a market where outside funding was hard to find due to low activity from ventures and outside investors.

The pair initially started out supporting customer service teams but noticed friction within the bug tracking process, which led them to create their first product, Jira, solving problems for software teams in a way that appreciated how teams actually work, rather than how established competitors thought teams should work.

Jira became a go-to for project tracking by developers, leading to Atlassian creating collaboration platform Confluence in 2004, which enabled them to build the foundations of their core offering alongside Jira.

As they grew, Atlassian made a number of strategic acquisitions, most notably below, cementing their arrival as a software powerhouse for teams and enterprises alike:

• Sourcecode hosting provider Bitbucket (2010)

• Collaboration tool Trello (2017)

• Incident alerting management tool OpsGenie (2018)

• Agile planning software Agilecraft (2019)

• Analytics and visualization companion Chartio (2021)

• Video messaging provider Loom (2023)

• AI-driven meeting recorder Rewatch (2024)

At the time of this post, Atlassian is valued at around $58 billion and is forecast to continue growing its revenues at approximately 19% for the full fiscal year 2025.

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Solving the Right Problems

When Atlassian established, they started by solving the pain points the team personally identified from their practical experiences on the ground, such as inefficiencies with bug tracking and project management for software teams.

The fledgeling founders had a clear advantage as they were the users of the products they were developing and held a deep understanding of the challenges their peers faced, which were not suitably addressed by incumbent software providers.

Continuous Customer Feedback

To continue developing their offering, Atlassian’s Product teams proactively engaged customers and wider interested parties to help shape feature priorities. This involved many avenues including conversational feedback and insight from real-world customer use to validate their ideas about what to prioritize and build.

This direct user interaction allowed Atlassian to pivot fast when they needed to, and build a clear understanding of what users truly wanted, versus what the team may have thought users wanted. Without this approach the team at Atlassian would not have achieved market fit and the level of accelerated adoption they enjoyed.

In this instance Atlassian were nimble and agile in their development, which reflected in the product itself. This was even more important, as much of Atlassian’s software was created to help teams work with more agility.

Growth at No Cost

Rather than hiring a large salesforce to interact with prospective clients and sell them the benefits of their products, Atlassian took the contrarian route of developing a self-service model, allowing the product to speak for itself. For this to work, the products had to be easy to start using and useful enough for team members to tell others about, creating a network effect of user adoption.

The on boarding process was quick and easy, starting with a freemium model where teams could start to use the service immediately, and increase the level of adoption as their confidence and needs increased.

Whilst the user-driven self-service model for adoption appears commonplace today, it was considered novel and potentially risky at the time.

Although adoption of the product accelerated at a high pace, this did not necessarily imply that Atlassian would embark on a mass recruitment drive. In fact they remained conservative about recruitment, ensuring they hired only when necessary and kept a relatively lean workforce as they grew. This approach enabled them to apply more focus on making their customer on boarding process as frictionless as possible, to achieve a higher level of revenue per employee compared with many competitors.

Embrace the Toughest Customers

Atlassian paid significant attention to addressing the needs of what they considered “high-expectation customers“, allowing them to pay attention to users with nuanced needs and extremely high standards, which in turn enabled Atlassian to enhance the quality of the overall product. Taking this approach meant that the needs of the less demanding majority of users were not only met, but exceeded.

The word-of-mouth championing of their software by customers, coupled with their approachability allowed users to build trust, recommend to others and be part of the product development process through regular feedback loops.

Users knew that Atlassian were listening to feedback and would act on it to the point where the software was able to solve their day-to day problems, with the expectation of improving even further over time.

This approach helped to reduce the cost to acquire customers and in turn enabled Atlassian to undercut more established players, whose propositions started to appear more expensive and less useful by comparison.

Whilst the co founders may have started with a set mindset and culture to start the company, it would never have developed into the success it is today without building a scalable culture that helped the company to hire the right teams and organize themselves within the culture.

This required setting the company culture from the outset and ensuring they only hired and retained talent who could embody it. So what were the differentiators behind Atlassian’s culture?

Transparency

Some companies appear to thrive when they are shrouded in secrecy with a brand to protect. Apple is the first that comes to mind, as they keep their product roadmap secret to protect the feel of a magical and flawless experience.

Atlassian on the other hand makes it clear that their product is on show for all. They are open about their product roadmaps and the need to continually seek feedback, as this is the way they ensure their products meet and exceed user expectations in quick succession.

Innovation

Employees are given 20% of their time to experiment and innovate new ways to solve problems or potentially new solutions. This freedom enables creativity and thinking time, which is something I often see as lacking in other businesses due to talented individuals being overworked and focussed on firefighting, which in turn leaves no time to innovate.

Atlassian team members are encouraged to acknowledge failures and learn from them quickly, rather than cover up failures or become too conservative that failures never happen. A culture of no failure tends to result in limited or slow innovation.

Customer Centricity

It’s surprising to learn how may companies do not focus explicitly on meeting actual customer needs. Being customer centric involves getting close to the customers and understanding their actual needs, rather than implied needs. For example, the key differentiator that powered Amazon’s growth was their extensive focus on being “customer obsessed”. This required Amazon to ensure the customer was so delighted with the service that they would repeatedly use the service and tell others.

Similarly, Atlassian relentlessly focussed on knowing their customers and going on a product journey with them side-by-side.

The Work is Never Done

Atlassian apply an approach of continuous discovery, coupled with continuous delivery. This form of agility enables new insights to be continually prioritized and implemented, even when development is in-flight and a product is considered mature. The result is a product or service that continually improves over time.

A focus on cross-functional organization without silos helps Atlassian to get internal decisions made faster, empower teams to perform at pace and promote timely responses to changes.

Agile methods are applied vigorously at Atlassian, who are major supporters of regular iterative deployments, ensuring high quality without sacrificing speed. Team members must have a mindset of regular value delivered to users alongside monitoring and iterating, based on feedback and quantitative metrics.

The Greatest innovation is to Make Something out of Nothing

Atlassian were able to gain their first significant level of financial backing in 2010 after they built out a business on a shoestring for 8 years. By the time they gained external investment, they were already achieving $50 million annual recurring revenue.

If I were an investor, my confidence would have grown considerably with the fact that my money would be put to good use by a team who had already achieved a lot with limited resources. The resourceful nature of the early Atlassian team was arguably their greatest innovation, which led to a future ability to raise the capital needed to expand even further.

The relentless focus on efficiency and high returns on invested resources enabled Atlassian to expand at a greater pace than they otherwise would have.

There’s no Time Like the Present

Atlassian started in the aftermath of the .com bust, during a time where appetite to build software startups was low, and funding was almost non existent.

Even challenging market conditions can be the right time to launch a new product or service, as long as there is a market for the product or service. Periods of low market confidence can be the right time to get started on a new innovation before competitors have the courage to do so, giving you a head start that’s difficult to catch up to.

Gaps in a Market Can be Bigger Than the Market

So many products have been launched by identifying gaps in a seemingly mature market. On the surface, nobody needed another project management software at a time when incumbents like Microsoft owned the playing field, however, Atlassian’s founders identified the need for a more cost effective and intuitive way for teams to deliver their initiatives, which was met with open arms.

Your People are Your Greatest Asset

The 20% innovation time Atlassian affords their people can be seen as an overhead with little return, as it seemingly limits productivity to 80%, however, the greatest ideas typically come from those on the ground who understand day-to-day user problems. When these individuals are given the freedom to think and experiment, they can identify exceptional ways to solve meaningful customer problems.

Some of the greatest innovations in businesses were created from staff members arriving at an idea, which were taken to senior management who eventually backed them. Such examples include Amazon Prime. In the case of Atlassian, the Confluence Whiteboards product was derived from employees pointing out the need for a visual collaboration tool.

Word of Mouth is Powerful for Exceptional Products

In this age of fast moving technology, there is still a place for word of mouth, especially when the product or service is exceptional.

There are a host of companies who shunned marketing and relied on word of mouth for their success.

• WhatsApp - in it’s early years grew exponentially with no marketing spend and focussed on users inviting other users to fuel it’s expansion.

• Tesla - Initially grew with no traditional advertisements, instead relying on word of mouth, referrals and media coverage.

• Dropbox - Grew by adopting a user referral program coupled with a freemium model, which allowed users to adopt quickly with minimal friction.

• Five Guys - The fast food chain has continually grown with a heavy focus on fresh, never frozen beef, hand-cut fries and a host of other deviations from traditional norms. The proposition was clear and simple, which enabled them to rely on word of mouth from customers to feed their expansion.

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