Atlassian's 5 Rules to Win When Competition is Everywhere | Atlassian COO Anu Bharadwaj

Point of any meaningful shift. The world that we operate in is a dancing landscape. The moments where you shift that window of thinking, that is where you play to win, not just to avoid losing. The one thing that we truly believe in is how we can make teamwork easier. We wanted to shift to a world where we were completely sass. The future will not arrive without participation. We needed to transform our company DNA and we needed to do it fast. We're a maverick of a company. We're 8,000 people and we still act like a startup. These are my people. This is my tribe. I belong here as a leader. My personal style is to be the activist. It's important to lead with courage. We want our customers to be where the future is. Great companies don't just cascade goals. The cascade purpose. Atlassian should be around for 100 years. That's really our dream.

So let's get right into it. We have a very, very exciting topic today. The building blocks to win when competition is everywhere. And we've outlined five things that we're going to discuss and dive into. So the first thing is enacting transformational change. You've said before that great companies must develop the muscle to transform if they want to last. Netflix and Microsoft are great examples of transformative changes over the last decade. And many giants have fallen because they didn't develop that muscle, like Blockbuster, Yahoo and Kodak. You say every transformation starts with a movement. What is a movement? Why should companies start one?

Yeah, that's a great question. Loid in general, transformation is something that we talk about a lot, even with our customers. Right. Over the last few years, we've heard lots of companies in the industry want to go through what we call digital transformation to the extent that it's now a bit of a buzzword. Everyone says that they do that. But just stepping back to first principles, what does a transformation actually entail? We work in an industry that's fast moving, where technology trends and waves come and go way faster compared to every other industry. So how do you stay on top of all of these trends and how do you ride these waves to success? I was saying in the video, I can't recall which talk it was, but I was talking about how we live in a dancing landscape. It's never quite stable place where you can just sit back, stay complacent and imagine that what got you here will get you to the next rung of success, which is simply not true in the world we live in. So every company, whether small or big, new or having established themselves for A few years have to constantly be on the edge of transformational change, because we always have to adapt to what's going on in the world around us. And having to enact transformational change really involves changing the hearts and minds of many people involved, not just the people who work inside your company, but also your customers. So if you're a category creation software company, you really have to go out there and convince customers, win their hearts and minds, and tell them how your product or your company or your business is seeking to define something entirely new, something transformational they've not seen before. Or if you're in an established company trying to adapt to a wave, you want to start a movement to convince all of your own employees to say why they should adapt to the new world and adopt new practices, and your customers to say, hey, here's the new thing we're working on in the company, and this is how it's going to transform your lives. This is how it's going to change the way you do business. So starting a movement is really the vehicle to enable transformational change. And typically we think about transformational change in the context of our own businesses and companies, but if you step back a little bit, you see transformational changes all around us. Typically, we've heard a transformational change in the context of social events like the civil rights movement or the LGBTQ movement. Basically, how do you change the minds and hearts of society at large? How do you transform people to adopt a new future, to adapt to a new world where fundamentally people react with fear, fear of the unknown. What happens on the other side of this transformational change? So there really needs to be a movement to take people from one side of that transformation, the other side, and a lot of tactics along the way to really help make that transformation happen.

Definitely. Now, when you think about movements, I think about, like you said, social changes, Gandhi, Martin Luther King, and you know, one thing is common amongst them is sort of a few figures that can evangelize the people and the mission and the vision and the purpose through constant communication. Right. How do you sort of build that within a movement like in a company? Because when you look at a movement that is a social movement, you have one or two central figures that are constantly out there and evangelizing. But how do you build that within a company, especially multi thousand person company?

Yeah, it's always hard to go from status quo to a different point, because people tend to cling to status quo long after school has lost its status. It's not really human nature to say let's go forth into this completely new different world. And as companies get larger, it becomes even more complex because these are complex ecosystems where one team's work impacts the other team in complicated ways. And it's not always easy to remain connected to the mission of the company if you're working on one particular team that's perhaps far removed from the center. From my own experience, just to make this a little more real, Atlassian has gone through multiple transformations in our 20 year life. We actually are going to be 20 this year. Over our 20 year life we have gone through transformations like shifting our entire business from on premise to cloud, which we've talked about a lot. But before that, if I had to go back to the start, it was a transformation for us to go from. Originally we had the services selling thing that Mike and Scott, our co founders and co CEOs had started off and they pivoted into building products instead. Products that they had built for themselves that they thought, hey, we could externalize this and build a product business instead. And that was a transformation for a really small group which was simple to make. But then as we grew as a company, we said let's add another product to JIRA and make this a multi product company which is again is another transformation point for the company to go from a single product to a multi product company. And then another transformation was when we platformized Jira. So back in 2014 when I joined Atlassian, one of the first things I was struck by was how much JIRA was being used in non technical use cases. I came in thinking, well, JIRA is this project management tool for developers, right? But analytics showed that over 50% of our usage was from non technical teams using it for use cases that we didn't imagine. So that was signal that we need to transform ourselves from a product to a platform that supports multiple verticals. And then the latest one really is our shift as a company from on premise business to cloud business where we went from over 99% of our revenue being on premise to now well over half our revenues from cloud and well over 95% of our customers choose cloud products. To have those kinds of transformations happen, that looks different at different stages. But three key elements to keep in mind. One is it's important that transformations have a movement associated with them and that movement is led by leaders that can lead with courage and empathy. It's easy for us to think about transformation as hey, you got to get in there with a lot of courage and change status quo. But it's important to balance that with empathy and understanding about the people who are going through the transformation. What does that mean for them? Do you truly understand the impact on their lives? And how can you hold emotional space for them to make sure that they make past the milestones in that journey and you bring them along with you? And it takes courage to say, hey, imagine the world as it is going to be completely different from today. I talk about the Overton Window, which is used a lot in the context that you mentioned in social change, civil rights, etc. And the Overton Window basically describes a spectrum where in the center is an acceptable set of opinions that public at large holds. Take any issue, climate change, for instance. Most of us believe that, well, we got to do something about climate change. How much? How extreme should measures be? People typically differ, but there's a big distribution in the center, which falls on the moderate side. And then at the other end, there are people who think, hey, we don't really need to do anything about this. This is not an issue. And at the other end of the spectrum are perhaps people who think this is the defining issue of our lifetimes. And we've got to take really radical action. When you're trying to lead transformational change across that Overton window, typically most of the population will be in the center. As a leader, though, it's your job to illustrate that really one end of that spectrum is where we really want to go to enact transformational change. So how are you able to take the extreme, the radical change required and normalize that? As a leader, how can you actually show the courage to show that radical view? The radical change is required. That's where we should go. That requires both courage and empathy to understand that this is going to have an impact on people's lives. Second is to embrace the chaos, but make sure that you're headed in the right direction. Speed is important, but velocity is even more important than speed. The difference being velocity is you're making progress in the right direction versus speed is you're really running fast. But is the direction correct or not? So there's a good balance there to strike between. Embrace the chaos, because it's really hard to do transformation, so there are going to be chaotic moments. But do you have the direction set in your mind as to are you headed? Making progress in the right direction, choosing progress over perfection. Sometimes it can feel like two steps forward, one step back, but it's okay in the long run. We really have to push towards the arc of the right direction. And last, but not the Least I would say it's important to learn from others because you mentioned a number of companies that went through transformations, and as I have led transformations at Atlassian, I have always gone back and sought advice from companies that have gone through these kinds of transformations. It's always helpful to learn lessons, but it's important to be true to yourself as a company, as a business, as a leader, you've got to know what makes you tick, what makes you unique. And it's important to hold on to that instead of blindly emulating lessons from others. Because what worked for a company for transformational change may not work for your company at all, because every DNA is different. So while it's important to learn lessons, it's important to hold on to what makes you unique.

Now, communication is a huge part of that as well, right? What are some tips you've learned or lessons you've learned in terms of communicating it? Because if you don't transparently and continuously communicate that vision and that purpose to excite and inspire people, then people sort of get lost in between, right? They think that, hey, some big mission was stated, but is it happening? Is it not happening? What is the update kind of thing? Like, how should founders and especially scaling founders think about communication as it ties to transformation and building movements?

Yeah, that's a great question. I love this Jeff Benner quote where he says the moment when you're tired of saying something, that's when they start listening. And out of personal experience, I can say every time I've had to drive transformational change in the company. Personally, as the leader heading up the transformation, I've had to constantly repeat myself in different forums, constantly reinforce the same message over and over and over to different groups, sometimes to the same groups at different time intervals. But it's really important. And as leaders, we often underestimate. And as I work with smaller scaling startups, smaller companies that are just starting out, I see this often with founders where it's a challenge that they know what they want to do, they know where they want to go, they've set their sights on what the destination is. But it can be frustrating to constantly repeat themselves to different people on their team to say, hey, here's what we're doing, and often get challenged with the same set of questions, same set of challenges, but it's important to keep that up. Especially as you scale your company, more and more new people are going to join. It's critical that they stay connected with the mission and the why of the strategy like we were talking about in the Video Great companies don't just cascade goals, they cascade purpose. And constant repeated communication is key to making sure that your company's purpose is center, front, right and center in the mind of all of your employees. Written communication works really well, especially in the case of distributed teams. We have a big writing culture at Atlassian, so do many other companies, like Stripe, for instance. Confluence really helps with that. And what I have found is as you scale, it's important to write down some of these key why are we making this change? What does the world look like when this transformation is complete? How are we going to get there? What are the milestones along the way? And. And have a constant cadence of updating those, both written and verbal cons. A lot of companies do all hands and sharing progress with their companies, their boards, etc. It's important to keep that steady drumbeat when you're going through a transformation such that you're constantly communicating both failures as well as successes, because it's important that people see what's working and what's not working. The thing that I'm often accused of in many contexts is that I. I change my mind pretty often. And it's important, especially as you go through transformational change, it's more important to be correct than to be consistent. So you want to make sure that you're listening to customers, you're listening to all of the signals around you, and you're trying different tactics. And some tactics work, some tactics don't. It's important to figure out which ones don't and replace them with the ones that do work. And it's crucial that you go back and close the loop and share with the rest of the team, here's what didn't work and here's what we learned from it. So a culture of openness really helps instill faith amongst all of your employees that, hey, we're trying this change. It's big, it's ambitious. We don't know what's going to work all the time. We can't really predict the future, but we do know that, hey, we're trying a number of innovative things, and here's what's working, here's what is not. And it's fine to learn from failures and move on.

Definitely the only thing constant is change, and it's really important to adapt. Now. How do you determine when to make a transformational change?

The transformational change can look different for different companies based on what stage of maturity they're in as a company. What's the mission you're trying to accomplish what's the dent you're trying to make in the world? But typically, transformational change can be driven by a few things. One, there is an external wave or an external trend that impacts your business, your product, your mission significantly, such that now you've got to adapt. For instance, the advent of mobile back when I was working at Microsoft, that was a wave that we were very conscious that we missed because an external wave is going to cause you to stop and think, oh my God, this is going to be a big sea change in my business, how do I adapt to this business? And that can often be the trigger for transformational change. Second, it can be an intrinsic reason. So for example, for us in Atlassian, the change from going to an entirely cloud business to a SaaS business, from an on premise business was triggered by an intrinsic change where we strongly believe that cloud is the future based on everything happening around the world. We could see that you really wanted to be a SaaS product if you had to reap all the goodness of the technology around us. We strongly believe that this was important for our customers to be on the platform of the future. Intrinsically, we decided this is going to be a big disruption to the company in the way we build, sell and support our products. But it's got to be a transformational change. We drive ourselves because it's important for us to transform ourselves as a company. So sometimes it can come through external technology trends, sometimes it can come through your own intrinsic changes because you have a strong belief that that's where the future is going.

The passion with which you talked about movements and transformation, I know definitely this is one of the top moats for Atlassian and I don't see any of your competitors speaking or behaving in this manner. So this is fantastic. Let's dive into product led. Product led is a big buzzword in 2122, but Atlassian effectively is one of the pioneers of product led growth. The most valuable companies of the past decade have been product led and Atlassian is at the top of that. How do you define product led?

Yeah, in many ways we are the pioneers of product LED model, except that we didn't really call it product led model and we didn't quite get there thinking, oh my God, we'll invent this completely new thing that's going to dazzle everybody. It has humble beginnings. So we started this company in Australia. The two founders, CEOs are from Australia and really they thought about how do we build a product, a business where we are in Australia and We don't have the ability to really go out there and send armies of salespeople to sell enterprise software the way it's traditionally sold. So they started from first principles and they said, how can we get to a point where this business is successful, but in an unconventional way, taking into constraint, taking into account the constraints we have by staying in Australia. So that's how we originally thought about jira, which is a flagship product. How do we build a product that sells itself? So the fundamental belief there is that software should be bought, not sold. I would say that's the root of how we think about the product led model. Traditionally, enterprise companies follow the opposite. The usual playbook is build something, validate with a couple of large customers that this really solves a problem for them, then go out, hire a sales team and sell that to a lot of large companies. And once you sell to a CXO in a large company, then they go off and make sure that their entire company adopts it. We flipped that around and we said, how do we build a product that can be bought, not sold? And what does a product require to be bought automatically? We thought about what are attributes of what a product LED model would look like. It would be easy for users to try and buy. It should be a very simple, frictionless process. It should solve a real problem that plenty of users face. So this is key to the product LED model. It needs to be high volume. The Atlassian Flywheel, as we call it, which basically describes our business model, continues to optimize for high volumes of users at a competitive price. So enterprise software also typically tends to be very highly priced. But we went the opposite route and we said, we want this to be accessible to a whole lot of users. We don't want to just serve the Fortune 500, which is what enterprise companies typically start with. We want to serve the Fortune 500,000. So we want to make a product that's accessible to a high volume of users. Companies of all kinds of companies of 10 people, 100 people, and now companies of 100,000 plus people. So the customer segment is going to be really large in the product LED model. And finally, the go to market motion for a product LED model looks very different than conventional GTM motions. So we don't really have salespeople who call up different companies and say, hey, have you heard of jira? You totally got to buy this product. Instead, really, our salespeople are focused very much on expansion. So it's pull, not push. It's not that we're making cold Calls to companies instead. Typically, how product led model expands inside a company is there are lots of different teams inside a company that adopt one or more of our products. We have 17 different products and each of those different teams typically adopts different products. And eventually a CIO looks at it and says, oh wow, there's a lot of Atlassian usage across my company. Perhaps it's a good idea for me to standardize and centralize and then they reach out to us saying how do we centralize and standardize this thing? At which point of time the sales team really helps them consolidate all of these. Again, that's the opposite of what typically happens in a traditional enterprise model. So I would say the three key things for product led model that as we think about in Atlassian, 1, is make the product really easy to try, buy and add users to to address a really high volume of users and companies and customer segments, not just a super targeted small vertical. And three, use a GTM motion that's almost the flip side of what traditional GTM motions look like where it's a pull, not a push.

Definitely. You said something which brought a quote to my mind is necessity is the mother of all inventions. The company was in Australia and couldn't build a big sales team, so they had to build this model or invent this model. Now how do you build a great team behind a product led organization?

Yeah. So product led organizations, typically if you look at Atlassian's own spend, we spend well over 35 to 40% of our budget on R and D and only about 15% on sales and marketing. Typically it's the reverse. Most other companies spend a large amount of their money on sales and marketing and more modest percentage on R and D. But one guiding principle for us is that if software is to be bought, not sold, you got to build great software. You got to build software that really has all of the attributes and the attractions that people want to use and buy. To do that, you really want to focus a lot more on R and D, on developing of that product, building an automatic distribution network that doesn't rely on traditional sales. So one is just look at the composition of your company. If you're trying to build a product led growth model, you will likely want to invest a lot more on the build side rather than on the sell side. Second, even on the build side, what kind of people do you really want on your team? You really want people who believe in serving the customer end to end. So typically one of the things that engineering teams suffer from is they tend to solve these little component problems or they tend to solve these cool technology problems without necessarily thinking about what's the impact of that on the end user's life? What problem are we truly solving? So you really want to situate your R and D teams in a place where it's very obvious what kind of value they're adding to the end users lives. So they're going to think about this as cool technology, cool ideas. How do you combine the two things to make sure that this is accessible to the end user? How do we always stay customer focused? How do we stay on top of customer problems and solving real world problems? So you want to recruit those kinds of people who are interested in solving customer problems and want to do the full end to end problem solving on your R and D side. On the GTM side, it's important to recruit innovative people who really question the model. So who aren't really thinking about hey great, this is what neighboring company X is doing. So I'm just going to copy those plays. For instance, our sales and marketing folks, they have a lot of really interesting and innovative plays. One particular thing is we've built a channel which is very much like our outbound sales team for us where these are channel partners of the people who are spread out in different geos around the world and who tend to to help large enterprise customers in each of these GEOs. Adopt our products, install our products, implement our products. So having a GTM team that's able to think from first principles, that's able to challenge best practices, so to speak and think outside the box in terms of how distribution works, how sales works is helpful. So overall as you construct your team and your company, it's important to think about the distribution across build and sell and taking a completely different vector and approach to serving.

Definitely now I want to get into building a community. I have this notion that if you build a community you won't become a commodity.

Right.

If you look at companies from Apple to Nike to HubSpot, they've all built massive communities and Atlassian has a massive community which is a moat in and of itself. How do you build and scale a community and seed it at the beginning and how do you sustain it for the long haul?

Sure. At Atlassian we have, we're lucky to have a really wonderful community. Community that's very passionate and all my life I've built products for developers and developers can be a passionate community. They either love you or hate you depending on the point of time in the day and how your product has caused them to react. So communities tend to be fueled by intrinsic passion. So you can't really make people care about you unless they really care about your products, about the impact they're having on your life. And Atlassian has a super engaged community right from the beginning. And much of it is a function of our product led growth model. So product led growth works only if there are passionate users that are helping your product organically spread amongst the customer base. And our community is a big, big factor in making or that our products get organically adopted and expanded into different teams. So for instance, someone who's a super user of JIRA in one company, quits their job and goes to this other company and they go to the new company and get JIRA and Confluence adopted there because they've seen this work really well in their experience and they know the ins and outs, they're power users. And that really helps carry the flag for Atlassian across many different companies. So we started building a formal sort of community website and user groups, et cetera, back in 2012, and now it's grown to this mammoth community for us. We had well over 20 million visitors on our community sites. And since the pandemic, a lot of the groups that were meeting in person have shifted to virtual events. And we've had well over 750 of these virtual events since the pandemic began, which just shows how much our community is engaged and interested in fostering those connections and growing them further. So we basically tried to fuel the community and try to build on top of it purely by providing opportunities to engage with our own team to make sure that they're connected with other customers, other champions amongst our community. So we run events like App Week, which is basically a week hackathon. We do internal hackathons, which are very popular inside Atlassian. Once a quarter we decided to extend that to our own community and say let's do app weeks focused on different themes. Each time that we run across our community, we run events like CodeGeast, which again is a way to bring together people from different users groups across our community and have them build on top of that license platform, give us direct feedback on what's working, what's not working. And we have the usual groups where we consult with them on new products, on new features. They're very vocal with us about what works and what doesn't. So it's not always hunky dory with the community and we rely on them to hold us accountable on some of the gnarly issues as well. But overall I'm really fond of how our community has grown along with us as a company. And many of them have been with us for 15, 20 years now.

Now getting into building and scaling an ecosystem. I read on the Atlantician's website that giants let smaller companies grow on their fertile land, which leads to further expansion of their businesses. And Atlassian has a massive ecosystem of vendors, partners, developers building apps to extend their the software. And I also read that atlassian's marketplace did 100 million in sales within the first three years of its activity. How do you define an ecosystem and is it the same as a marketplace? What's the difference?

Yeah, an ecosystem, if you think about the origin of the word ecosystem, really an ecosystem describes a natural ecosystem where there are multiple different categories of creatures and components that interact to form a holistic system. And we generally think of ourselves as an ecosystem because the community plays an interesting role into how we think about ecosystems. I talked about platformization of the company. At Atlassian, a foundational belief is that we exist to unleash the potential of different teams. And not all of those teams are going to be served by only products that we build, right? So there's going to be a lot more product, a lot more teams that want to use a lot more products than we can possibly physically build ourselves. So really we think about how do we enable builders to build more software, to build more collaborative units for teams to unleash their own potential. So how do we really be the force that lifts up all boats, not just build our own products and serve our own customers with our products. So the ecosystem really we think of as there is a common Atlassian platform which gives you the Lego blocks to be able to then go build your own products, our own applications. JIRA Conference buildbucket Use the Lego blocks from the Atlassian platform to construct first party products. But we also have well over 1500 marketplace partners who use the same LEGO blocks and construct their own products. What they believe customers require and what they believe teams can use to make teamwork better. On top of that also third party companies, for instance, we have partnerships with Snyk, with Slack, who can then plug in into our distribution system and use those LEGO blocks because those LEGO blocks are used across 200,000 customers that we have so far. So that way we really want to expand the ecosystem to be not just our own first party products, but second party and third party products letting 1000 flowers bloom. So really our foundational thesis there is that if we provide the enabling platform services, we are going to be Able to serve the long tail of teams that have various different use cases, that have completely brand new things, that brand new requirements, that fully distributed world brings forth. And our marketplace, to answer your question of how is that different from ecosystem? Our marketplace is really the store where some subset of our ecosystem shows up. So the marketplace has made well over $2 billion in lifetime GMV, which basically goes back to your point about that lasting website saying we believe that if you're a giant, you have to have people stand on the shoulders of giants. So a lot of businesses are buil on our marketplace, which are really well worn, well built businesses in their own rights, that they are good large companies in their own right and they're built on top of our ecosystem.

Definitely. Now Atlassian has been intentional about not over monetizing the marketplace. What are your top learnings in incenting partners to build on top of the platform?

Yeah, that's a good one. So the marketplace for Atlassian has gone through three different transitions. So we originally had the on premise marketplace where really a lot of the businesses there were focused on plugging functionality gaps in our products. That's how it originally started off. And a lot of our channel partners are the same as marketplace partners that would offer our customers help and support for our on premise products. So taking care of installs and upgrades and stuff like that. But then we transitioned to cloud world where we took away much of that burden of infrastructure maintenance and upgrades. So the marketplace plugins really focused more on how do you enable collaboration cases inside of the cloud that were not possible in an on premise world and how do you really do cross app collaboration? For instance, how do you build automation across a JIRA instance and a Confluence instance? How do you plug in third parties Salesforce and Jira instance? How do you connect those things together? So there the incentives looked quite different in terms of hey, here's a new set of capabilities you can unlock in the cloud world. Now we are at a point where we've introduced Forge, which is an extensibility platform on cloud, where Atlassian takes care of the hosting storage. And really our goal with this is to enable our marketplace partners to focus on the core business where they can unlock even newer scenarios for customers in distributed teams. So the basic point there being Atlassian takes care of data management, things like enterprise readiness, compliance, how is your data governance being handled, which really frees up and offers an extra incentive for marketplace partners to reach a much broader swap. So we started off this conversation by saying Atlassian has built a customer base that's unique because we want to serve the Fortune 500,000 instead of just the Fortune 500. With Forge, we take care of enterprise readiness, compliance, all of these heavy lifts which are hard for companies to do for our ecosystem partners ourselves. So basically we now open up these Fortune 500,000 companies, both the SMBs and enterprises, to our marketplace partners. So really the incentive is strongest on Forge, such that they can reach and distribute to a customer set that's not possible with any other company. So either people typically tend to focus on small medium businesses or on the really large enterprises. And really large enterprises are expensive to serve. So we've thought about incentives as how can we do the most amount of work for our ecosystem partners such that they get the broadest opportunity to serve the broadest set of customers.

That is fantastic. Now, coming back to the last piece of our moat and most companies I talk to, they don't think of people and employees and leading with empathy as a part of the moat. But with the Great Recession and people leaving companies in droves, people value experiences more than just a job and a paycheck these days, right? And ultimately people build companies, not the other way around. If you treat your people with love and help them grow, they're going to treat your business with love and help your business grow. Now, a lot of companies talk about the importance of empathy in building a healthy company or a product. Speak a little bit about why you think empathy has caught on as such a key business value for Atlassian and how exactly it drives tangible results.

Yeah, it's a funny thing. When I joined atlassian back in 2014, I was interviewing for the role and I thought, hey, they're telling me a lot about these company values, but that's just some marketing bullshit. Every company says this to prospective candidates, so I didn't take it that seriously. But I went to Sydney to meet the team and I was really struck by how much the team lived those values day in and day out. This wasn't just some marketing thing they put up on a website, but the tone was really set at the top, from the founders all the way to the engineers and product managers and salespeople working on the product. So at Atlassian, it has always been a core foundational value for us leading with empath. This is not just something that came up in like the last few years, but has really been the foundation of the company starting from the founding moment. And I've been very lucky to have found Atlassian and to work at Atlassian for this long. And I stay because my Personal values match really well with the company values around leading with empathy. Over the last few years, as the world has been hit with multiple crises, this has become more important than ever. So we hear a lot people talk about this, about leading with empathy, and also it has become a lot more important and differentiated. So for Atlassian, what does this actually mean? A good example is Team Anywhere. Team Anywhere is really a program that Atlassian launched back in 2020 when the pandemic broke out and most companies were thinking about what happens next. When we shut her down offices at Atlassian, we thought about this as, hey, what's going to be the best thing we can do for the business, for the company, for our employees? That's going to create a win win situation. And we leaned in instead of leaning out and announced that employees can now go work out of any location remotely, permanently. We said, we're not going to announce policies that say you have to come back to work two days a week, three days a week, or something like that. But we offer you the flexibility to go work out of anywhere for perpetuity, which was a big deal. It was a big change. And really the decision was made with empathy at the core of it because we heard employees telling us, hey, we want the flexibility to really be able to make these decisions over the long term. If you tell us, do this for just two months or three months, and then I have to move and come back, my kids are in school year, how do we actually deal with this? We basically said, let's lean in and make this perpetual decision. And this has worked really well for us. So over the last two years, we've hired 3,500 employees and over 42% of our global new hires are remote hires. When we say remote hires, we mean people who don't stay, who don't stay less than two hours of commute distance to an office, which means they're working from home all of the time. And now we have well over a quarter of the company as remote hires. There are 8,000 people at Atlassian growing fast and we expect that percentage to grow. But really this was an example of how we put employee well being at the center, because honestly, it's good business decision making because like you said, it's ultimately people that build the business. And if we don't take care of our people, who else will? And if we don't take care of our people, the business automatically suffers and the results show.

Right? There's a comment here on the chat which effectively says Atlassian's churn has been lower. Employee churn has been lower than others during the Great Recession. And they also ask any other concrete things Atlassian has done besides some of the ones you stated?

Yeah. So we've had specific well being focused programs. In fact, just yesterday we put out a blog on my team where we've introduced several programs. Like one, we have an app that is focused on employee well being that offers suggestions to employees, that offers flexible time off, that offers time with therapists and counselors that they can either engage with virtually or not. We also have, like most other companies, we have this pulse check which kind of helps us get a sense of how our employees are doing at large. But the way we use that pulse check is also different than most other companies. We don't just look at that as in isolation, as a set of numbers that we need to hit goals on, but we really dive deep into in specific geos. What's the impact that for instance, our European employees are obviously a lot more distressed at this point of time. So we think about what can we do to help people in specific GEOs. In Australia there was flooding which required us to really open up our offices to make sure that employees had refuge from natural disasters. So we take a very tailored approach to different GEOs. And in addition to that, we make sure our workplace experience team, I have to say, is the most superstar team I've seen on this. They make sure that new hires are onboarded, they're welcomed and they feel well settled. Because this is one of the biggest challenges of a fully distributed team building connection. How do you feel like you're part of the same team? How do you feel like you're part of the company? Building belongingness is harder. So we think a lot about how to do that in a virtual setting.

What are one or two things you've done to create that connection? Especially for new hires that are remote?

Yeah. So for new hires we've taken a flexible approach there where there are some locations where it's safe for people to gather outside of office. And even when they gather together as a team, we insist that don't gather together as a team to go do a bunch of business strategy work, but really get to know each other, spend social time, connection time together. So we encourage people, wherever it's safe to really meet in person in more of an informal non work setting. In terms of virtual events, we've had several team wide virtual connection events. We've had people use Airbnb experiences to really bond together rather than just sit around in a zoom meeting and do more of wine sipping or coffee kind of meetings. And we have, we use Donut, which is an app where you connect based on specific interests. So we have book clubs, we have urges, we have user resource groups focused on specific themes, people interested in astrophysics. I'm a bit of of an amateur astronomer, so I find it a really great place to connect with new people who share an esoteric interest and you can build real human bonds through that.

I'm going to try that Donut and Airbnb experiences. I actually having done like 200 plus virtual events, I feel that anytime you incorporate more than two senses in a conversation, we're sort of sight and sound. But when you incorporate taste, touch, smell, anytime people are holding hands and breaking bread together, you build more genuine connections. Now I want to take a few audience questions here. Can you describe how GTM is defined at Atlassian and how teams are composed? Is it clustered by product area and led by product or is it more centralized and led by marketing? Curious how you've orchestrated this as you've grown, especially when faced with pure play, best of breed competitors.

Yeah, just answering the spirit of that question. There's a lot of details in terms of the organizational evolution of gtm, but roughly we think of GTM as our marketing and sales department. Some parts of IT are embedded and stay close to each of the product businesses. So product marketing, for instance, how do you market Jira software? How do you market BitBucket and Trello? Those product marketers work really closely with each of the business units and the product product dev teams. Our sales team is centralized because like I described, we are unique as a company in terms of how much emphasis we have on the sales team and the motion that the sales team plays, which typically tends to be multi product. So we don't have embedded sales teams within each business units. And over time as we have scaled, we've kept the marketing and sales team centralized, but we've taken some functions of marketing and embedded those more and more within of our business units to help support the PLG motion from Bottoms Up.

Fantastic. Now Atlassian has added modest price increases this year. How do you do this right? How often can you increase prices? Will inflation influence how SaaS vendors think about this in 2022?

Yeah, I did an investor conference last week and this came up a lot. I'm sure it's top of mind for a lot of you right now. Fundamentally our pricing philosophy is to remain the highest value offering for the largest set of customers. And I say that repeatedly because that philosophy is going to guide how many price changes you make, in what direction you make those changes, all of that stuff. And our product line has grown a lot. So we started from an on prem product line of three products and now we have 17 plus products across four editions across two platforms. So that's kind of like a multiplication combination. Therefore, our pricing decisions have become more complicated, but they're all driven off of the same philosophy. So in terms of how many changes can you make, what elasticity is there? We basically follow the philosophy of remain the highest value offering for the largest set of customers. But the areas in which we make those price changes can look different over time because we have 17 products across four editions across two platforms. For each of you who are company builders thinking about pricing yourselves, the best piece of advice I can think of is to make sure that you define your pricing philosophy clearly and you stick to it. It's easy to do knee jerk reactions based on what's happening in market right now, but that just delivers an overall worse customer experience at the end of it. So you want to make sure you define your philosophy and stick with it through thickening.