Stories in SaaS and What you can learn from them — Part II
Pedestal Labs is a growth accelerator helping startups achieve growth through relevant interventions across Strategic Consulting, Product, Marketing, and Analytics.
We help brands adapt, experiment, and learn through relevant interventions and achieve growth, scale sustainably, and in the process build a great brand.
Have you ever been in a situation when you bank on a friendly advice of an individual (a total stranger) and decide to buy a product?
The first thought might be a strict NO. But dwell deep down and you would realize, amazon reviews may have nudged you towards buying a razor from brand X instead of Y.
In an alternate industry, you would see brands focusing on branding blitzkrieg right before the product launch to heighten the awareness and uplift their sales in this hype. It may work to create the right awareness in short term but how do you create sustainable & repeatable sources of growth.
How do you go about creating those same reviews and nudges which create a ripple down effect and turn into adding more to top-line without making significant dents on marketing spends.
In the previous blog of SaaS Stories we discussed about how Hubspot created a source of growth which gave them repeatable sales and higher customer engagement.
In this Part II: we cover Atlassian
Atlassian is best known as the proprietor of Jira, popular for helping developer teams track software bugs, though it also offers the BitBucket code-sharing service, the Confluence document-sharing tool, and other services.
It’s astounding to see, a staggering sales of $411+ million quarter on quarter with a sales team of under 100 people with over 150,000+ customers. Enterprise sales is often marred by long sales cycles, negotiations and a demand for customized features and doubling down on marketing channels.
In the last 18 years, Atlassian has had their fair share of stories to talk about but one which remains totally stellar is how they carved a different path instead of following the likes Microsoft, Salesforce by making a bet on their products, nurturing the products ecosystem and market dynamics.
When you keep your marketing close, but keep your product closer!
At the time of their IPO, only 19% of their revenue was spent on sales and marketing, a fraction of the spend of other companies of their size.
As you can see most of the incoming traffic is either through a brand search or directly to their website contributing to more than 78 percent of their overall monthly traffic ~ 14 million of 17.82 mn monthly visits.
Atlassian’s bet was on products which are loved by the developer community and nudge collaboration with ease focused upon the freemium sales and distribution model.
Atlassian went about developing products, early adoption through free features and nudges to purchase premium versions by keeping prices low. Thus, focusing on volumes.
This facilitated a dramatic shift from a supplier centric model and huge sales teams towards volume driven business, enabling end users to be decision makers rather than huge CXO driven negotiation deals and almost making it a B2B2C model to sell online.
The low touch sales model reduced decision-making barriers and helping Atlassian get quick feedback which they could feed in improving products.
Call Out: Atlassian created something which we now call Product Led Growth, making their products act as the primary driver of user acquisition, conversion, and expansion.
Make the Must-haves List and Acquire Them
Atlassian’s strategy for growth involves creating the product ecosystem for its users and elevating these products to the must-haves list of customers. In the last 18 years of existence has acquired more than 20 companies for approximately $1 billion, including recent acquisitions like AgileCraft, Opsgenie, and Trello.
Once acquired the focus is to elevate these platforms from design, usability, and integration perspective. This aligns with their overall vision of integrating people and teams. At the same time if a product in partnership is better there is a conscious effort to discontinue the other versions in similar space.
Consider this, Atlassian made an equity investment in Slack, at the same time Slack acquired the IP for Stride and Hipchat Cloud, which eventually will be discontinued. Thus enabling seamless migration for customers of these products to Slack.
At present, the portfolio of products is seen as the “must-haves” for enterprises.
Call Out: Your growth metrics have to be a focus on ways to achieve ARR (Annual Recurring Revenue), which can fuel different streams of growth. Atlassian’s early product adoption gave them a steady stream of ARR which fed their acquisitions with ease without too much strain on funds. The quick integration of products ensured that product ecosystems helped users more than just topline.
The most fundamental thing in your product development and adoption is how well you tie up your product with the customer experience and community of your customers.
In the part III of the story we would talk about Canva and how it disrupted the designers market with a novel SaaS concept.
Happy Reading!
