The Musicians of Atlassian

One of the great things here at Atlassian is we have some wonderful musicians. Here’s a window into this side of Atlassian life.

Matt Ryall, Soren Harner, and Jed Wesley-Smith playing in Sydney

Soren Harner runs all our software development. He also runs marathons. Somehow he finds time to be an incredible guitarist and what really pisses me off is he has a voice that makes women rip their clothes off. I have not actually seen women do this. I have, however, seen women consider it. Soren also makes playing music seem so natural and easy. He is one of those guys who knows 325 songs and can start singing one standing on his head. Or perhaps under pressure, with a gun held to his head for example (and with a woman ripping her clothes off). You get the point: this guy is talented.

We have considered shipping Soren MP3s with some of our new product releases, but you know the famous Software Company Problem: not enough time to do all the new feature requests. So his fans must wait. I am one of those fans.

Boots Wang

Boots Wang is in Technical Sales and is clearly the coolest musician at Atlassian. Being cool might be easy to do around a bunch of nerdy engineers who clip their nails at their desk in Sydney, but it’s not so easy to do in San Francisco. Boots wears hats you wish you owned. Boots name is even cool. Boots is in bands with cool names: “Nobody Beats” was one. Boots reeks Cool-dom, Coolness, Coolio-Feng-Shui.

To make matters even more cool, she is a drummer. When I went to music school, all the women played flutes or sang arias and danced in the moonlight. They were pussies. Boots, however, throws down. She hits stuff. She is our only drummer, and I bow down to Her Wicked, Bitchin’ Coolness.

Matt Ryall

Matt Ryall is a Confluence developer and a guitarist. Matt plays acoustic mostly and is the kind of guy who sings folks songs to women to get his way with them. I suspect he is extremely successful. You know: an Emo-kind-of-guy. The kind of guy that writes poems.

Matt is also one of those people who has natural musical abilities. My guess is he never practices. But somehow he whips out some John Mayer song and sounds great. He also lends me his guitar when I am in Sydney, which is terrific of him. Natural software engineer, natural musician.

Jed Wesley-Smith and me

Jed Wesley-Smith is a JIRA developer and a bass player. You non-musicians may not realize how essential it is to have a bass player. I can’t tell you how many bands are searching for bass players. That’s because only weird people play bass. Bass players are famous for lacking social skills. The bass is the Supreme Understated Instrument. It’s takes a certain Zen quality. Type-A, ADD, Hyper-active people like me cannot play bass. Mellow Dudes play bass, and Jed is an extremely mellow guy.

Jed is also a phenomenal musican. While some of us have played professionally, Jed has played concerts where people scream and dance until they have heart attacks or over-dose on something. Jed is also one of those rare white guys who can spell FUNK. Jed is a seriously funky player. Playing music with Jed is a pure joy.

Taras Naumenko

Taras Naumenko is on the Customer Service team in San Francisco. He’s in another league from the rest of us musicians because he not only went to music school, but he plays Classical guitar. The rest of play music to drink by. Taras plays serious shit. Taras, however, is full of surprises.

One day we were jamming in the office, and Taras starts playing “Californication” by the Red Hot Chili Peppers. Now I bet Yo-Yo Ma never played that. How many classical musicians play music from a band that shoots heroin? Anyway, Taras taught it to me, so he’s a real Stand-up Guy.

Morgan Friberg

Morgan Friberg is on our marketing team in S.F. and is the one Real Professional musician in the company. Morgan gigs regularly. In fact, his band, Arcadio has a website, they record regularly, and they even have Arcadio beer cozies, for Godssake. Morgan also plays multiple instruments: guitar, mandolin, ukele, and I suspect more.

Some day I’m going to come to work, and Morgan won’t be there because he was discovered and he hit the Big Time. I will buy every CD. I will even jump in the mosh pit.

Most of us Atlassian musicians are mere mortals. Then there is Jay Simons. Jay runs our marketing. He runs marathons. He does triathalons. He races in serious bike races for laughs. Jay does everything Full-Tilt. He is a spectacular piano player and has an incredible voice. In Jay’s case I am certain women rip their clothes off when he sings. Men might, for that matter. Jay is so talented, his dog is talented. Jay is also very funny and almost as funny as me.

Jay Simons

If software ceased to exist as a profession, some of us could go be professional musicians. But we would be end up playing in bars where people drink too much and have fights. Jay, on the other hand, would be playing cocktail piano at the fanciest hotel in town, dressed in a tuxedo, sipping a martini while women ripped their clothes off. Jay is Pro all the way.

For those musicians out there with some Software Chops, you might want to someday consider joining Atlassian. We need a bass player in S.F. badly, a drummer in Sydney, horn players, perhaps a great conga player… Oh, you get the point.

A Different Kind of Software Company: What Matters: Three Lessons

Getting in touch with my Inner Jazz

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Vinnie Mirchandani, fellow Enterprise Irregular was gracious to invite me to guest blog reflecting on Atlassian hitting a new milestone: $100 million in all-time sales since inception. It’s not about the milestone, as reaching 14,706 customers as of today is more fulfilling. It’s about creating a different kind of software company.

Vinnie asked me what’s been fun about the journey, and truthfully I failed and wrote this more serious, reflective post. I was able to scrounge up this photo from our last Christmas party which has become a mini-tradition where our San Francisco team enjoys great live jazz, sushi, and a few too many martinis. `

At Atlassian, we talk about creating something different. Not for the sake of it. Because we’re never convinced norms should be accepted. Even our own could change. At the risk of simplification, these are my Three Deep Lessons I have internalized over 3.5 years in this company.

1. Open Up Your Company.

Why do software companies hide prices? Why must I call a sales person to get them? Why must I fill out an order form to get a goddamned PDF of half-baked content? Why don’t more companies treat customers with respect and develop trust through openness? Sounds straightforward, but this is the cat-and-mouse game that enterprise software companies persist in.

We think open pricing, open license terms, open bug and issue tracking of our products, and licensing our source code are what people, like us, want. We ask ourselves: would we buy this crap? How do you want to be treated? That’s a good test for how transparent you are.

2. Affordable Prices

Mike Cannon-Brookes pounds on the table regularly about the price of entry. He is always trying to figure out how to make it easy for the next developer, the next IT manager, the next knowledge worker to not hesitate. Once we have a product we would use, then we have a fist fight over keeping the prices low. The low price principle was more striking when I met these two guys…

Mike Cannon-Brookes and Scott Farquhar

… as they were, let’s say, frugal Aussies. They had that shining spirit from Down Under which is an authentic Aussie practicality that was refreshingly unconventional in Silicon Valley. Funny thing is: even though the founders are no longer quite so frugal, our prices have rarely changed. Keep your prices low, Mister Software Man.

3. Anal-Retentive Analytics and Metrics

Scott Farquhar is our Super Metrics Warrior. Scott got us measuring Net Promoter Score (still running around 52%). Scott pounds on the table for so much detail and facts about the business, people leave the room dizzy and frustrated because they are starting to realize what they don’t know.

We don’t have the systems and analytics yet to measure up to some great large companies, but for a $40 million/year business with 185 employees, we’ve pretty damn good. We analyze the shit out of everything. We are constantly writing queries and dashboards on our internal Confluence wiki. This is our form of Lighting Business Intelligence, without any traditional BI software overhead. It’s also one of the hidden gems in our wiki.

Every team has a dashboard, but more important, every team is pissed their dashboard isn’t better. Continually unhappy with the gaps in our data, and searching for that Last Shaker of Metrics, we are on a Forced March for more data. This is a Mission from God I am still learning.

I could rant on about what we think a different kind of software company should be, because we’re still not there. We’re trying though.

RELATED POSTS

Susan Scrupski, another of the Enterprise Irregular clan, covered this milestone and trumped everyone with a video of Mike and Scott from Sydney.

Tech Nation Australia also interviewed Mike on the milestone.

Lessons from the Obama Campaign for the Software Business

Yesterday at the 15th Annual Stanford University Accel Symposium, I heard an energizing talk with Chris Hughes, Facebook, and Architect of Obama’s Digital Campaign Strategies, and Matthew Barzun, National Finance Team for Obama and Former Chief Strategy Officer, CNET Networks, Inc. on “Technology Priorities: Lessons from the Campaign”.

Three powerful lessons leapt from the stage that certainly any software company trying to do something different should understand. These apply to any company who cares about their customer community and focuses on growing a large business.

Scale and Focus

Traditional software counts on hunting down customers and finding those willing to pay the large price tag. Kind of like traditional political fund raising where fund raisers seek big-heeled donors for the $5,000/plate dinner.

The Obama campaign’s New School thinking concentrated on creating scale and community. Instead of only mining a list for the 1-in-5 donor with the big bucks, they started asking 25 people to go out and each find 25 more to pay $25 to show up at an event. The first time they tried this, they sold every ticket. So they tried it again, and next thing they knew: 1,800-person venue sold out.

Thinking how to scale from a smaller list of initial supporters (Obama challenge) was very different than thinking how to divide-and-conquer the large list of potential donors (Clinton early advantage). Matthew said it required concentrating on metrics that really matter – a mantra within the campaign, lowering the barriers to entry for donors and supporters, while having high expectations for the ultimate outcome. Aside from this concentration on large scale, they were relentlessly focused on immediate outcomes: they had to win Iowa; there was nothing after Iowa. Matthew represented this new thinking…


Farming vs. Hunting

The campaign compared their marketing strategy to Seth Goding’s Farming and Hunting analogy. The new school campaign focused on farming a community versus only game hunting (Yes, they did both: about half small donors; half large.). The idea was to spread word-of-mouth, build a bigger community using the existing base of early passionate supporters.

The trick was multiplying the base versus the traditional 1-in-5 division game of hunting. Build the community through networking. Get 25 supporters to rally another for a small entry fee. This is how Matthew illustrates some of the early results…

Once the Obama campaign got this farming working, the multiplier trumped any notion of relying on the traditional approach.

Values Matter

Communities thrive on trust and respect. If you are serious about building a community of supporters or customers, start with asking how to treat people. Here’s the Obama Campaign Code they handed out for the Iowa caucuses: three simple values:

Respect
Empower
Include

At one caucus the Clinton people showed up with 13 supporters, which on a Cold Day in Hell in Iowa is a good showing. The Obama supporters on the other side of the room numbered 68. But the Clinton group was below the 15 count needed to participate. The doors to the caucus closed at a specific time, meaning no more participants. The Clinton team was potentially without a quorum.

Then after the rules allowed, in walk two more Clinton supporters, giving Clinton a quorum. This was against the rules. What did the Obama supporters say? Let them in. Include them. They deserve to be here. The spirit in the room was immediately more inclusive.

Software companies (all companies frankly) would do well to start by treating their customers with respect, treating them well, and concentrating on inclusion. A couple values we think apply to software companies is treating customers equally and fairly regardless of their company’s size or the size of their orders, and opening up information about your company (pricing, licensing, source code, bugs) so you build trust.

Applying new school marketing thinking and concentrating on scale, inclusion, and low barriers made a whopping 100% difference to what Obama raised. What would it do for your business, Mister Software Man?

Buying Software in this Economy

In spite of the delayed affect this economy seems to be having on technology, investors have no doubt, hence the market reaction. What does this mean for customers? What should one do differently when buying software? Part of my focus here is on Enterprise 2.0 and Web 2.0 software, but the advice generally applies.

Here are 5 tips for those buying during a weak economy…

1. Be a Cheap Bastard

Regardless of the economy, I come to the table biased: Software is generally way too expensive. Now, any bias doesn’t matter. Customers, who have budgets, will have greater buying power.

This is a story that repeats itself: Eighteen months ago the CEO of a new search technology start-up demoed his product to me. When I asked how much he would charge, he responded, “As much as possible.” This is a behavior that is commonplace; it is rooted in hiring expensive sales people and meeting unrealistic investor expectations. Today, this fellow would not get funding. Today, his VC would tell him to lower his prices and try a new marketing strategy.

Ingrained behaviors in enterprise software companies don’t die easily, so look for software where the value is compelling. This software may be all your CFO supports in the next year.

2. Focus on Project Teams and Content

(This is where I piss off the social media and Web 2.0 crowd). In the Enterprise 2.0 software space, a lot is made of social networking. Andrew McAfee‘s definition of Enterprise 2.0 includes the word “social”. Yet when times get tough, the core work is all we’ll care about because we’ll have fewer people to do the work. The core work is not my social network, it is my project, and the content we build every day. By core, I mean: what I need 90% of the day that leads to a real outcome.

Ned Lerner of Sony Playstation said something interesting at Enterprise 2.0 in Boston last June, he said, “We don’t worry about getting the next person motivated to join the large corporate social network, we worry about great tools for our project teams.” He focuses on how to make his projects productive.

When the chips are down and budgets are low, this type of practical thinking will dominate, because all CIOs and CFOs will care about is whether or not a tool really increases productivity, and helps the next high priority project.

It’s not that the social aspects of this new software are useless. Quite the contrary. It’s that the Doubting Eyes of Skeptics in your company will glaze over if you trumpet the personal pages and social connections in this wonderful new software. Your ability to search on who uses certain tags won’t get people jumping up and down.

As an example, you instead should be demonstrating how project teams can produce documentation for customers on the web site without any expensive software, and (if you like) customers will be able comment on it, or (if you like) edit and improve it. The difference is the focus on content.

3. Focus on Killer Apps – Obviously Useful Tools.

Email and Word processing are considered killer apps because their benefit is obvious and they spread rapidly. Obviously Useful Tools don’t need a Return on Investment (ROI) analysis. They don’t need a seminar on adoption. A $100K piece of traditional enterprise software rarely is a killer app because adoption invariably requires considerable work: convincing users, training, roll-out projects, and the Famous Dreaded ROI Study.

Blogs have been so popular, they are a killer app. I would classify blogging as a Tier Two Killer App simply because they are nowhere near as pervasive as say, office apps. Nonetheless, blogging has proved an extremely useful communication vehicle.

Wikis also earn this distinction. Thousands of people in companies are now using wikis, without training courses, management edicts, and ROI studies. The value wikis play in communities, collaboration, and knowledge capture is clear.

A practical test: ask how concrete or vague is the description of the software. I still don’t know what a Collaboration Platform really is, let alone a Scalable Enterprise one. If a vendor concentrates on the concrete usefulness at a tool level, then you have a) a better chance of understanding it, and b) eliminated a blizzard of marketing bullshit.

If one takes as a given that securing a new budget for a large software purchase will be hard for many CFOs to swallow in this economy, then concentrating on inexpensive, highly useful tools is the way to go.

4. Ask the Vendor a lot of Hard Questions

Although Oracle’s financial strength won’t be doubted, half or more of Silicon Valley should be. VCs take enormous risks, but is your CFO interested in this type of risk right now?

I am not advocating shutting out small companies. Instead, if you focus on truly useful tools (Tip #3) and you are a Cheap Bastard (Tip #1), then you are most of the way home here. How much can you lose on a $1,000 or 3,000 system?

Still, ask hard questions about the company’s performance and about their approach to doing business. How transparent are they? Transparency removes doubt about with whom you’re dealing. The honest, open small vendor with a useful, inexpensive tool might serve you better than the (seemingly) safe, expensive, traditional, Cloaked-in-Confidential-Price-Lists traditional vendor.

5. Did I say: Be a Cheap Bastard?

Oh yeah, in case I forgot. Now’s a good time to be a World-Class Tightwad. I spend time regularly in Sydney and Amsterdam, homes of the Dutch and Australians, both world renowned for seeking value (I am being polite). Right now, make a practical Dutchman your role model when you belly up to the Software Bar. Cheers.

Tips on Recruiting Executives Part II [On Atlassian]

Daniel Freeman who runs product marketing and Jay Simons, new head of marketing, chatting with Mike Cannon-Brookes (back) in our new SF office. That’s Jay’s weimaraner named Sydney, also a great API developer.

In May, we completed the search for a vice president marketing which I wrote about last year. I promised to blog about the search when it was done, so here’s Part II on tips for recruiting executives and senior people.

1. The best candidates are referred by friends.

Our new head of marketing Jay Simons was referred by Kathleen Reidy of the 451 Group, a really bright industry analyst I had the pleasure of meeting last year. Analysts can be a great source of information because they frequently get briefed. James Governor of Red Monk gave me advice more than once.

VC’s are another good source. Some are protective of their network, so it helps to have good relationships. A VC we trust referred our director of product marketing Daniel.

All but one of our best candidates came from referrals. One came through Linkedin. Your network matters, but it requires more than blasting referral emails out to hundreds of people.

2. Use Linkedin as chum.

Think of Linkedin as a big bucket of fish heads, or chum. Chumming is when you throw a big bucket of fish heads and guts in the water to attract fish to your boat. You probably won’t find the candidate through Linkedin, but it’s a great way to announce your intentions. Kathleen Reidy learned of our intentions through my Linkedin email blast.

We received 50-75 resumes for each ad. The problem is filtering these is rough: marketing people are Pro Bullshit Throwers, and their resumes look very professional. Reading these resumes requires a healthy dose of Mike Cannon-Brookes-style skepticism.

I targeted a few candidates by doing People Searches on Linkedin and sending blind emails. I targeted some companies that were in transition. Always be thinking of companies who might be going through a transition. Coincidentally Jay came from BEA/Plumtree, which was being eaten by Oracle. Munch Munch.

3. Best athlete trumps best functional fit.

It’s easy to get wrapped around the axle about candidates meeting all the tick boxes on your list. Silicon Valley executive headhunters can be obsessed with candidates meeting every functional requirement, and to a fault. One problem with executive search is that because they get paid so much, they have to do this to earn their pay. Within reason, of course, you don’t.

The best candidates were not necessarily the best on paper, and did not meet every wish we had. For example, at Atlassian finding business people who have experience with highly technical products like our developer tools is tough.

An analogy is when an American football team goes into a draft looking for a Tight End [Tall guy that can catch passes and run short routes]. If presented with a top athlete in another position and who could be a game-changer, it may be foolhardy to pass. Coincidentally we ended up hiring the youngest of all the best candidates.

4. Interview intensely and spend considerable time.

You can’t spend too much time interviewing key hires. I sat down with the best candidates three times or more. Once I interviewed for a CEO job in a six-on-one interview format that lasted over two and a half hours; CEOs should be able to handle this. Any critical hire should. We interviewed one candidate three-on-one in Sydney.

In another case, Daniel who now runs our product marketing took three of us through a case study of another company to determine any lessons for Atlassian. Not a typical interview format, yet a great way to learn how someone thinks.

5. Source your own references, and get the most senior ones.

Find out who were the VCs on the person’s board at his or her last company. Always ask to talk to the CEO. Board members and CEOs tend not to suffer fools. Start checking as soon as you start to like a candidate, while carefully observing the person’s confidentiality. This may mean checking former execs at the company, or someone you know and trust. If the person is in a senior business role, find out what the senior engineers thought of the person. Good business people should command the respect of technical staff.

6. Always have an executive search backup.

There’s a reason why VC firms use executive recruiters. They don’t want to waste time. If you find yourself wasting time, be ready to hire a strong executive recruiter. I had one on alert from the start.

The Goal: Our Most Important Metric?

We’re debating at Atlassian what’s the most important metric. Our Chief Metric God and CEO Scott Farquhar thinks Net Promoter score might be it. He has threatened to take a few months off to think about it. While we mere weak-minded mortals spend far less time on metrics, Serious Metric People such as Scotty devote lifetimes of thinking to what to measure and why.

Atlassian’s culture is fun, but it’s also about metrics. So, we decided to start measuring our Net Promoter score. Experts such as Fred Reichheld, a fellow with consultancy Bain & Company claim that companies with high Net Promoter scores far out-perform in growth and have far lower costs of sales. It’s seems intuitive given Net Promoter is all about word of mouth, a subject dear to my heart.

What is a Net Promoter score? Customers are asked “How likely would you be to recommend our product(s) to other people” on a scale of 0 [Never] to 10 [Definitely]? Then you divide the responses:

• Scores of 9 or 10 are promoters; divide the total number by the total surveyed to get a percentage or score.
• Scores of 7 or 8 are not promoters; ignore these responses.
• Scores of 6 or less are detractors; divide the total number by the total surveyed to get a percentage or score.
• Subtract your detractor score from your promoter score to get Net Promoter Score.

How We Stacked Up

We surveyed 500 customers, chosen at random, and our Net Promoter score was: 52%. Although this puts us in great company with the likes of…



… we’re now obsessed with the comments we got back on what we need to fix. Imagine the kind of customer loyalty Harley Davidson has! How does one achieve that?

How We Surveyed Customers

We learned something simply about how to survey. We made it clear we only required answering one question to participate in the survey. The other three questions were entirely optional:

• “If you wish to elaborate on your response, do so here…”
• “Is it OK for us to contact you?”
• “If so, what’s your contact information?”

I felt it important that we reduce the survey to the smallest possible, even to the point of editing out superfluous words so each sentence was concise. I hate surveys that say “This will take 10 minutes” instead of “This survey has 10 questions”. I absolutely hate surveys where I never know when the end is coming. Always state how many questions!

Other Lessons from the Net Promoter Survey

The survey had a 40% response rate, and 20% of the customers said it was OK to contact them. Given how busy people are, we were pretty happy with these statistics, but while these stats compare well in marketing circles, that’s not our goal. Our goal now is understanding what we have to do to get better.

What Are We Doing About it?

First priority is personally calling every single detractor [who agreed to be contacted]. I am again obsessed on this process: one person needs to conduct these calls so the information is properly assimilated and understood. Passing support problems to support and product problems to development loses this vital analysis.

Second we are thanking everyone who participated and is willing to contacted.

Third, we are working out a process for contacting the promoters and the “middle” scores. As this is our first time, we have much to learn, and most important, apply what we hear.

The Pizza Strategy: 5 Tips for a Successful Business

A Coffee shop opened on the corner near our office. What they are doing to launch their new business amazingly applies to most companies. It’s brilliant and common sense. The Coffee shop illustrated to me lots of attributes of how to think about starting a new business, and how not to do it…

1. The New, New Thing vs. the Pizza Strategy

Mistake #1 in Silicon Valley is the obsession with the New, New Thing. The opposite is the Pizza Strategy. It’s practical, you could eat it every day (if you work with engineers), it’s both lunch and dinner food. It serves a lot of purpose, but it’s common and a bit boring. Innovation is wonderful, yet not enough technology companies go after crowded industries where an unmet need still lies.

Coffee Bar, which opened last month in our neighborhood is an excellent example of my kind of entrepreneurialism. They opened one block away from Starbucks. People asked why they would do that? Dumb question. Starbucks is an Unholy Blasphemous Sacrilege to those of us religiously devoted to the Sacrament of Coffee.

I call JIRA our Pizza business. It’s the sincerest form of flattery because Mike and Scott chose a software product with tons of competitors yet found an unserved need: a useful, practical issue tracker for $1200 – $4800. Five years later, it still sells like hotcakes. There were lots of pizza shops, but JIRA pizza has a strong following.

2. Marketing vs. Product

It’s not that marketing is bad. Hell, I’m recruiting for a VP Marketing. The question is: what do you lead with? If you can’t win folks with the product first, pack it up.

Coffee Bar has sitting next to their menu a ranking of all the best, generally boutique coffee shops in San Francicso. This takes cojones because San Francisco has some great coffee shops in the North End that are historic with the Beat Generation. Coffee Bar ranks #1. The point is: they are proud of their product and determined to be the best. They lead with Great Product.

Coffee Bar does something else we try to do at Atlassian which is give customers fewer choices, but give them good ones. We apply this rule to pricing to keep things simple. The first time I heard about Coffee Bar’s food, Jonathan Nolen said “The menu is limited but everything is great.” Bullseye. Apple figured this out a long time ago: compare the number of add-on options available on a Mac to those on a Dell. With Dell, the choices are agonizing and confusing.

Lead with product and keep things simple.

3. Free Trials vs. Hassle

What’s the biggest problem with test driving a new car? The hassle from an annoying salesman. Why do software companies do this when all you want is a whitepaper…

Why don’t more companies just let you try their products with the least intrusion and hassle? During lunch when I normally don’t have coffee, Lindsay at Coffee Bar asked me if I wanted to try the coffee for free. Just the act of offering me a free coffee warmed me to the place. When I asked for a double espresso, she said, “Perfect”, because she wanted me to taste the undiluted essence of the core product: coffee. She handed me the espresso with a pride and belief in her product. She expected nothing in return.

The more questions you get asked when you evaluate a product, the more you ought to run for the hills. Businesses need to be willing to trade bad customer information for engendering trust.

4. Marketing vs. Word of Mouth

When I told Lindsay at Coffee Bar lunch was excellent, she asked if I could tell my co-workers. I was more than happy to oblige. Lindsay led with great product, she has visible pride in her restaurant and product, she is happy to be a few feet away from the Starbucks, and she understands my recommendation is much more important than an advertisement.

Ask yourself what can you do to promote word of mouth? Advertising is no longer what it once was.

5. Branding only matters so much

Too many tech and Internet companies obsess over names. Granted, consumer companies have a greater challenge. If you are taking on, say Coca-Cola or Cheerios, I would support an intense effort on naming.

What I like about Coffee Bar is that it is imperfect but it works. It stands for Coffee in the daytime, Bar at night. “Oh, that’s cool”, was my first thought. I’ll remember that. Is it a boring, generic name? Sort of. But so what if the product is excellent, and they concentrate on what customers really want?

There are a few common, useful rules for naming from Rob Gemmell, a friend and Marketing God:

1. Own-able — The name is unique and you can own it. “Accenture is ow-nable; “Pacific Lumber” is not. Any name becomes own-able over time if you either spend a lot of money on marketing, or you establish a large market of customers who know you.
2. Spell-able — The one weakness of the “Atlassian” name. Sometimes related is Pronounceable, which is another Atlassian imperfection.
3. Memorable — Related to uniqueness, but very different: will people remember the name?
4. Relevant — “Reliable Roofing” is highly relevant: it includes the benefit. It is relevant to the customer. “Apple”, on the other hand is completely arbitrary and not relevant. It’s cute, but it’s not relevant to the customer. “International Business Machines” was extremely relevant at the time.

The other two useful, secondary rules are: 1) Start with a letter high in the alphabet, a strength of Atlassian or Apple, and 2) Try to keep it as short as possible.

“Coffee Bar” is imperfect. Once you understand it, it might be memorable. But it is too generic to be own-able, without a lot of marketing money behind it. It doesn’t matter as much as the product, the customer service, the ambiance, and of course, a motivated, smart owner like Lindsay.

Why Radiohead Should Price Your Software

If you are the typical software company, I have a hot tip for you. Call the guys in Radiohead and try to hire one of them to fix your pricing. I doubt they have the time, because they just did something that is turning the music industry on its head. As you probably know the recording industry is in serious decline, and it’s likely to get worse before it gets better. The record companies stuck to high CD prices like stubborn pit bulls for so long, iTunes became the only interesting game.

Pay attention to Radiohead’s new album pricing: users pay whatever they want from zero on up. I haven’t heard the album yet, but they deserve $25 for having the creativity and moxie to do this.

What does this have to do with traditional software pricing? A lot. Although the software industry is in much better shape than the recording industry, it has never been the same since the bust of 2000 – 2003. Enterprise software sales is a fundamentally broken model: it’s too expensive. I met with friend, and fellow musician, Fred Harman at Oak Investment Partners this week, and Oak has avoided software startups for years largely due to this phenomenon. Oak concentrates on larger growth investments to avoid the high cost of sales inherent in most software companies.

When I talk to experienced, traditional software sales and marketing people, invariably I get asked why Atlassian’s prices are so aggressive. “You’re leaving money on the table”, is the common refrain.

But it’s the high price tags that invariably command a squadron of Suits whipping out their Powerpoint presentations and flying all over the place. That’s expensive, and customers are tired of it. Tired of the high prices, tired of the secrecy behind pricing on websites, tired of having to register to get a white paper or request a sales call, tired of the whole process.

A new software company in the developer tools space approached us about a partnership recently. The CEO is a fantastic guy who I could easily see as a friend. When I asked what his software would cost, he said with big smile, “As much as possible”. I smiled back and said, “That’s exactly the wrong strategy.” Innovative companies like his will continue to struggle with faulty pricing strategies.

“This is the industry’s worst nightmare.” said music industry writer Bob Lefsetz about Radiohead’s bold and brilliant move. Although we certainly don’t think of ourselves in these terms, we do think there’s a _very_ different way to do business, to price, and to treat customers.

Microsoft Response to Google Gets an A

The most interesting aspect of the Google Apps and Cap Gemini announcement was not the announcement. It was Microsoft’s response. Regardless of your opinion of Microsoft’s products, this was world-class competitive positioning. Whoever wrote this deserves a raise:

• Google touts having enterprise level customers but how many “USERS” of their applications truly exist within the enterprise?
• Google’s primary focus is on ad funded search. Their enterprise focus and now apps exist on the very fringe…
• Google’s apps only work if an enterprise has no power users…
• Google’s tech support is open M-F 1AM-6PM PST – are these the new hours of global business?…
• Google says that enterprise customers use only 10% of the features in today’s productivity applications which implies that EVERYONE needs the SAME 10%…

Now here’s what surprised me. It was not an official response. This was an internal response that was leaked. What a shame. I would like to think Microsoft is proud to produce this quality of a response to Google. I’m still impressed.

The Goggle announcement itself is terribly Ho-Hum. As fellow Enterprise Irregular Dennis Howlett pointed out on ZDnet, Cap Gemini is not a top 10 systems integrator in the US, where Google Apps have to be successful, if they ever will be. Also the desktop outsourcing business, which is what this announcement is about, is a bottom-feeder business with low margins. Why do you think Accenture concentrates on applications?

I would like to expect more from Google, but it’s not an enterprise software company, as Microsoft relishes in pointing out. Nevertheless, I would not underestimate what Google plans next.

Why Atlassian Acquired Cenqua

Yesterday we announced the acquisition on Cenqua. I have already received nice, congratulatory notes from friends at Johns Hopkins University, British Telecom, and Accenture who already use Cenqua products. Here’s why we made this move:

• Developer tools are 60% of our business. Confluence and the 2.0 market are hot and exciting, our Confluence license sales are growing at a faster clip than any of our other products, yet JIRA and our developer tools are a great business.
• We want to build on our strengths. JIRA, our issue tracker and project management tool, is our strongest brand, and already occupies a solid position in the developer tools market. The Cenqua products are a great way to build on this.
• The new products are highly complementary. On a scale of one to ten, the strategic fit is a ten. All three Cenqua products — Fisheye, Crucible, and Clover — allow us to create interesting new features and capabilities for developers through the combination of products.
• The Cenqua team. The hardest assets to get in the software business are great engineers and product. The Cenqua team is flat out one of the best engineering teams we’ve seen. And they are an excellent complement to our culture.

What are the benefits now to customers?

• For openers, Cenqua’s 2,000 customers receive improved global support and resources. The Cenqua engineering team gets freed up to concentrate on developing new features by leveraging Atlassian’s team.
• The overlap in customers means we can simplify things for customers and give them the stability of a 100-person software company located in three cities around the world.
• We can start to give our developer community new and interesting features. JIRA is about project management and workflow and adding Crucible code review to it would be a natural at some point. Already we have a plugin so you can click on Fisheye within JIRA and see the commits made against an issue. But there’s a lot more we can do to strengthen the combination of dev tools without forcing customers into a tightly integrated suite that is cumbersome. Our long standing philosophy remains: let people pick the individual lightweight tools they favor.
• Simpler pricing. Atlassian believes strongly in great products at attractive prices, so we have already lined up the Cenqua products to mirror our simplified, low pricing.

What does this mean to Confluence and our wiki business? It means we are passionate about both collaboration and developer tools. We think a diversified software business is a stronger business. We have big plans for the wiki business too, but that’s another blog…