SaaStr Annual Day #1 Recap: Lessons Learned from Public SaaS Companies

Inside Story Behind a $6B IPO

Jay Simons — Atlassian President

Started in 2002 in Australia, Atlassian went public in 2015 and is quite an unusual beast as it had 10 straight years of profitability before going public.

Path to IPO

• It took Atlassian 13 years to public, with 10 straight years of profitability.
• Before going public they spent a couple of years practicing internally “real” earning calls to create the discipline that public companies need to have.
• What were the main reasons for them to go public: 1- reward employees (shares) 2- as an amplifier for brand awareness, especially for bigger customers 3- to apply some pressure to operate their business 4- to be a long lasting company.
• It’s just a landmark, it’s not the end of the trip. Quite the opposite (see Facebook, Google etc…).

About choosing your sales model

• It’s more complicated than just opposing “traditional sales vs no sales”.
• It’s about understanding deeply your market and to adapt your strategy accordingly. Atlassian didn’t originally target big companies, they targeted the fortune 500k, so their sales model couldn’t rely on a costly salesforce.
• Key is choose your market, to build a product for them and to price it correctly (sounds obvious but again it’s not about traditional sales vs no sales).
• You need to constantly refine your sales process (whether it’s direct or self serve) to remove friction, one problem at the time. At the product and sales level.
• It’s an ongoing process. For example they keep spending a lot of effort to make sure that the trial experience continues to be great for users as it’s a key piece of their overall sales process.

New Relic: Scaling Even Faster the Second Time

Lew Cirne — New Relic Founder & CEO

New Relic in 2008

• First focus on the right market segment that you can dominate and expand later.
• They started by targeting Ruby on Rails developers. They were hyper focus on them and managed to win the mind share game by focusing on Rails influencers.
• They knew from the start that its was not a big market enough but a very engaged one from where they could expand later (to more languages).

New Relic sales models

• Had no freemium at the very beginning but adopting it really improved their top of funnel acquisition.
• Traditional sales: it’ generally something that developer focused companies don’t feel confortable with early on.
• They started it step by step and discovered that the sales function was very valuable to drive users to higher tiers.
• From a “culture” pov they had to be a little less “Canadian”: when they started they had few competitors but ultimately competition grew and they also went on spaces that were protected by existing bigger companies. They had to learn to be more aggressive and to protect their own market.

About the current public market

• They never thought of themselves as a “grow at all cost company” so they always kept what they spend under control
• New Relic fundraising history: they raised several small rounds rather than one or two huge ones = it forced them to think deeply about scaling their growth a “healthy way”. You can’t manufacture growth with money.
• Have this rule of asking themselves: “If the market totally crashes today, how long would it take us to profitability” => Always kept it to 90 days.
• They really like the current states of the public market because it forces overspending competitors to really think how to survive. This is not the case for New Relic.