Australian tech company Atlassian valued at $3.5 billion despite having no sales staff

YOU’VE probably never heard of them but these two uni mates have become Australia’s latest billionaires thanks to a great idea and a bizarre business model.

IT’S the biggest tech company you’ve never heard of.

Ever since they started in a Sydney garage with some servers and $10,000 on a credit card, Atlassian has been quietly climbing to the top of the tech scene.

Now the founders have become Australia’s newest billionaires, after a $150 million share sale to investment firm T Rowe Price valued the company at $3.5 billion.

It’s a fact made even more remarkable by the unconventional business model which includes no sales staff, has as little to do with bankers as possible, and gives away one per cent of profits each year.

Life is good for Atlassian-co founder Mike Cannon-Brookes, pictured at his office in Sydney.

Atlassian co-founder Scott Farquhar told news.com.au over the phone from their San Francisco office they’ve developed their business model to prioritise good products.

“If you look at how the world used to work 10-20 years ago the most important part of selling is the distribution model — it’s how you get products to market. Products themselves are secondary,”

“We’ve almost inverted the model and spent more on building products … we can now afford to build a great product and word of mouth spreads. [It’s about] getting out of the way of the customer.”

New staff members man the drinks trolley to help get to know others.

Mr Farquhar founded the company, which provides software development and collaboration tools, along with fellow student Mike Cannon-Brookes back in 2002.

Now aged 34, the pair count companies like NASA, eBay and Deutsche Bank among their 35,000 clients and have more than 800 staff around the world with offices in Sydney, San Francisco, Amsterdam, Yokohama, and Manila and Austin.

More: The story behind Australia’s rich young stars

The pair were valued at $550 million when they topped Australia’s Young Rich List 2013. However the latest move puts them both in billionaire league as they own a majority stake in the company which is estimated to be as much as 78 per cent.

Atlassian founders Scott Farquhar and Mike Cannon-Brookes said simplicity is at the core of their business.

Mr Farquhar said neither of the co-founders sold shares in the recent sale which was designed to provide an opportunity for staff to capitalise on their stake in the company.

Under the deal T Rowe Price bought shares from Atlassian employees rather than directly from the company in a move known as secondary financing, according to Reuters reports

It was done via an unconventional “closed envelope” process where they whittled down a list of five or six firms they would like to have a “long-term relationship” with.

“Simplicity is core to our business. Where people engage bankers and get bids, what we did is effectively a one-shot closed enveloped bid process,” Mr Farquhar said.

Company staff spend one per cent of their time each year doing charity work of their choice.

It’s not the only time the company has decided to make their own rules.

They also donate one per cent of profits, products and employee time to charity each year and hold an annual “ShipIt” where staff build and ship a new idea which has led to some of their best innovations.

Mr Farquhar said while they plan to publicly list their shares at some point, there is no time-frame for this yet.

For other entrepreneurs looking to make it in the tech space he said it’s crucial to remember not to hold on to a bad idea.

“So many talented people get caught up in mediocre businesses ... If it hasn’t been a spectacular success, find something else. Sometimes ideas just aren’t the right idea.”

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