‘We shall remain great mates’, say Atlassian founders as Scott Farquhar resigns
From taking turns pushing out the bins at their first office to promising to never wear suits, Scott Farquhar and Mike Cannon-Brookes have called time on their epic work ‘marriage’.
Billionaire entrepreneurs, Scott Farquhar and Mike Cannon-Brookes have had a long standing deal.
If the two founders of Nasdaq-listed software giant Atlassian ever had a disagreement which could not be resolved through mediation, they would use the hand game of scissors, paper, rock.
As Farquhar told The Australian in an interview, this was always an incentive for him to settle a dispute as he always lost the game.
“I’ve lost every game of scissors, paper, rock that I have ever played,” he told The Australian.
Farquhar, the super smart IT nerd from Sydney’s western suburbs whose mother worked at Target and McDonald’s and whose father worked at a service station, has finally decided to go his own way.
The move brings to an end one of the most successful corporate marriages in Australian corporate history which has seen the two former University of NSW students work together for 23 years to build one of Australia’s biggest companies.
The surprising thing is not that Farquhar has decided to go his own way, but that the two had worked together so closely and successfully for so long.
The two come from very different backgrounds and have very different personal styles.
Farquhar has come a long way from his childhood to owning two of the most expensive properties in the eastern suburbs and using his influence to push for the prestigious Sydney school of Cranbrook to go co-ed.
He will step down as Atlassian’s co-chief executive in August.
Like any marriage, it has encompassed the plenty of glitz - with the duo featured on Nasdaq’s 37 metre high screen in New York’s Times Square - to the mundane.
“We used to take turns taking the bins out in our first office, so we’ve kind of done every job equally,” Farquhar said on Friday.
But from August 31, Cannon-Brookes will be helming the company alone for the first time - news which sent Atlassian’s share price falling 6.2 per cent to $185.99 in after hours trading in the US.
By any measure, Cannon-Brookes and Farquhar have forged a successful partnership, attracting praise from peers. Richard White, founder of another Australian tech juggernaut WiseTech, said he admired the pair’s conviction to “make the world a better place”.
“Scott has made a tremendous contribution to Australian tech, and indeed global tech. He is one of the most intelligent and logical thinkers I have ever had the privilege to know,“ Mr White told The Australian on Friday.
“Each time I interact with Scott, I come away with new perspectives. He has been very effective at delivering on his vision from both a technology and business perspective. Like many ‘overnight successes’ he, together with Mike, have worked hard over more than 20 years to make Atlassian the success that it is today.
“Scott and I share a number of passions and philanthropic interests, especially in growing Aussie tech and education. As a founder myself, I also understand that this would have been a momentous decision to step down from the co-CEO role and I wish him and Atlassian all the best going forward.”
Atlassian has a market value of $US51.47bn, with Cannon-Brookes’s and Farquhar’s relationship lasting longer than The Beatles – and many marriages.
Along the way they’ve been rocketed into Australia’s exclusive billionaires club before their 40th birthdays with an estimated combined wealth of about $50bn, ranking sixth and seventh respectively on The Australian’s List.
Their customers range from NASA, where their software has helped land the Mars Rover, to Dominos Pizza, generating annual revenues of about $US4bn.
“This company simply would not be Atlassian without Scott, and I’m truly thankful to have had him by my side every day for the last 23 years,” Cannon-Brookes said.
“In this next chapter, we shall remain great mates and trusted partners. And I’m glad that I can support him through this both personally and professionally.”
Farquhar had similar words to say, once telling The Australian: “Our ‘marriage’, for want of a better word, works”.
“I don’t think either of us could have created what we created alone. We have incredible respect for each other’s perspectives. In some ways it’s like a normal marriage. It is all about respect for each other. If you believe you can do better by yourself, then you are not going to last long in a marriage.”
This is perhaps why the market reacted negatively to Farquhar’s shock resignation on Friday. Those who work for Atlassian speak of the leadership of “MikeandScott”, the two names sliding effortlessly into one.
As Michael Turrin of Wells Fargo said Atlassian’s financial results are “quite strong in a still tough environment”. “I think the stock is initially reacting more to surprise news from Scott.”
It began when Cannon-Brookes, the son of an English banker, who went to the up-market Sydney private school Cranbrook, and Farquhar met at the University of NSW in their late teens.
They quickly developed a bond, starting their business in the post dotcom bust haze, famously using $10,000 of credit card debt.
The goal was to never work for anyone, never wear a suit, and make at least $48,500 – what their friends in consulting made.
From their shared house in the inner-Sydney suburb Glebe, their business evolved from technical consulting to software design. Before long there were eight software engineers writing code and someone handling administration.
Atlassian tried three different products in its early days and one worked: Jira.
Jira was designed to help in project management and keep track of reported software bugs. They put the product online and soon found themselves with paying customers.
With no physical barriers to selling software, the product was global from the start. One of their first customers was American Airlines, which spent more than $1000 without speaking to anyone at Atlassian.
“We got to work on the heels of the dotcom bust and unbeknownst to us, we were kickstarting the Australian tech industry,” Farquhar said on Friday.
“We started what is now known as ‘product led growth’ by selling business software online with no salespeople, and 23 years later, we continue to innovate by leading the world as the largest company committed to remote work with Team Anywhere.”
Atlassian now has 11,000 staff spread across the globe and will hold its annual showcase next week in Las Vegas.
Cannon-Brookes and Farquhar were literally born worlds apart.
When Cannon-Brookes’ parents moved to Asia, he and his two older sisters went to school in Hong Kong for a while before going to boarding school in England.
Cannon-Brookes Sr moved to Sydney in the mid-1980s to open a Citibank office in Australia when then treasurer Paul Keating was opening up the financial system to foreign banks.
Young Michael bought his first computer using the Qantas Frequent Flyer points he’d clocked up flying between London and Sydney.
When his parents decided to settle permanently in Sydney, he moved back with them, attending Cranbook School, while his sisters stayed in boarding school in England.
He finished near the top of his class, winning a scholarship to the University of NSW’s prestigious business information technology course.
Farquhar, meanwhile badgered his parents to buy him a computer although he knew they couldn’t afford it; his father eventually relented and brought home an old Wang computer that never quite worked.
He attended the selective James Ruse Agricultural High School and also scored a scholarship to the UNSW BIT course. After an entry process based on interviews as well as high scores, he joined a hand-picked group of about 35 highly talented people studying at the height of the dot.com boom.
The two backgrounds nevertheless proved fertile ground.
“My general rule,” Farquhar told The Australian in 2018, “is that Mike should do all the work and I do all the interesting things.”
Mr Farquhar will remain on Atlassian’s board and assume a “special adviser” role at the company, so ‘MikeandScott’ won’t completely disappear.
Farquhar said it was a difficult decision to step away from his executive duties but the move would allow him to spend more time with his young family – he has three kids aged eight to 13.
Investing will remain a passion via his private fund Skip Capital. Farquhar is known for his enthusiasm for fitness, including running, swimming and ironman events and blending sport with business.
He backed premium bike company Factor bikes – which sell from $12,290 to $97,979 – in 2021.
Skip holds stakes in several Australian tech unicorns, including Canva, CultureAmp, SafetyCulture and Airwallex; along with overseas firms including Gong, Figma and 1Password
“I’m looking forward to spending some time with my young family, improving the world via philanthropy with Skip Foundation and Pledge 1 per cent, investing with Skip Capital, as well as mentoring other tech CEOs,” Farquhar said on Friday.
He was a founding member of the Technology Council of Australia and has mentored through the Australian Businesswomen’s Network, giving guest lectures on entrepreneurship to MBA students and undergraduates at his alma mater, the University of NSW. He is also known for offering informal mentoring to various start ups.”
While Cannon-Brookes said the company won’t be the same without his “mate” by his side, he is adamant he can continue to push the company world, the net income of which swung to $US12.8m ($19.63m) in the three months to March 31, compared with a net loss of $209m in same period last year.
“Scott and I have both worn every hat over the last two decades. So I’m confident in taking over full responsibility of the company.”
