Mike Cannon-Brookes

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Atlassian pledges $35 million to charity: Founders call on entrepreneurs to do more

4:31AM | Monday, 14 April

With Atlassian’s latest share sale valuing it at $US3.3 billion the Australian software company has pledged $35 million to charity.   Founders Scott Farquhar and Mike Cannon-Brookes set aside 1% of the equity in Atlassian to the Atlassian foundation when they started the company.   Farquhar told SmartCompany the foundation is part of the “untold” story of Atlassian and the latest valuation means it is now a $35 million foundation on paper.   Like Atlassian’s business plan, Farquhar says the company takes a long term view to its charitable giving.   “It’s really about education,” he says.   “Ideally in 50 years time we want to say we have really achieved fixing something rather than just patching over something.”   Farquhar says the Atlassian foundation concentrates on education rather than services such as homeless shelters which, while vital, don’t really address the root cause of the problem.   So far the Atlassian foundation has focused on charities such as Room to Read which works on educating children in the developing world.   “Their motto is that world change starts with educated children,” Farquhar says.   In addition to the $35 million in foundation stock, Atlassian has donated another $7 million to the Atlassian foundation and $3.1 million of this has been on-donated to Room to Read.   Farquhar says Australia does not have the culture of entrepreneurial giving like the United States.   “We want to encourage other entrepreneurs to pledge 1% of their equity early on when it’s not worth much,” Farquhar says.   “Then, like Atlassian, hopefully in the future it is worth more.”   This article first appeared on SmartCompany.

The long-term view is the secret to Atlassian’s success

4:04AM | Thursday, 10 April

Atlassian’s $US150 million ($A159m) share sale announced yesterday has rocketed co-founders Scott Farquhar and Mike Cannon-Brookes into Australia’s billionaire rankings.   Farquhar talked to SmartCompany from Los Angeles last night as news broke of the deal which values Atlassian at $US3.3 billion.   Farquhar and Cannon-Brookes are each believed to own close to 40% of the share capital and neither is selling down their stake as part of this sale, which leaves them with paper wealth of $1.4 billion each.   Farquhar says the deal was brokered by “inviting bids from a small number of select parties” and will assist Atlassian’s future growth through an injection of both capital and expertise.   “We have always been about thinking long term so the investors we get on board, like Accel Partners, help us set up the company for the next stage of growth,” he says.   “As we head towards an initial public offering we’ve now got one of the largest tech investors in the US on board and with their public market experience they will really help us set up.”   “It also allows our employees, some of whom have been around for 10 years to realise the value of their Atlassian stock.”   Farquhar would not be drawn on the timing of an IPO for Atlassian but it is “not in the next few months”.   The share sale is the latest move in a trajectory which has seen Atlassian soar to global prominence. In 2013, the business booked revenue of $US149 million up from $US111 million in 2012.   Farquhar says revenue is on track to be “north of” $US 200 million for this year. He attributes Atlassian’s success to “taking a long term view of everything we do”.   “At Atlassian, we want to be around in 50 years’ time,” he says.   Farquhar plans to grow the business further by expanding into multiple markets.   “As software development becomes an increasing part of every single business, our products actually become quite critical to every business,” he says. “That’s the area for growth of us.”   Atlassian plans to achieve this growth without hiring a single salesperson.   “We are not anti-sales; we are pro automation,” Farquhar says.   “We take an engineer’s philosophy to everything that we do. We are really about scaling the business.”   Although Farquhar concedes eventually Atlassian may have to follow a more traditional sales path if it wants to sell into large businesses at the top instead of going through the business’ developers.   “In the future we may have sales situations where we need to speak their language,” he says.   The biggest challenge at the moment for Atlassian is its stellar growth according to Farquhar.   The business has averaged 40% year on year growth for the last five years.   “We are growing fast. With that comes the inevitable issue of scaling, it sounds mundane but finding office space when you double in size every two years is hard.”   Atlassian’s move earlier this year to shift its domicile from Australia to the United Kingdom caused some soul searching in Australia’s tech scene but Farquhar insists Atlassian is still an Australian company “through and through”.   “We still collect all our revenue globally through Australia and the large number of people we are hiring are through Australia,” he says.   Farquhar says the move followed a global search to find the best place for Atlassian to be based “for the best interests of the company”.   Atlassian’s “back office people” analysed where Atlassian’s customers were, where the team wanted to live and settled on the United Kingdom.   “We looked at Singapore but the UK made sense because of the treaties between Australia and the UK it is easier and the global investor base is more used to investing in a UK company.”   But Farquhar does say the talent pool in Australia is limited.   “We don’t graduate enough computer science graduates from university,” he says. “That is the biggest constraint on our growth.”   “We have a unique company culture so we spend a lot of time on hiring for promotion and continuing that culture. I think half our staff have been here less than one year and four months.”   Atlassian has previously criticised the government for its approach to 457 visas for skilled employees and Farquhar says the program is essential because the Australian technology environment has more jobs than people to do them.   “Arrogance and lack of a strong industry in Australia meant we didn’t have mentors for a long time,” he says.   “Our argument with the government on these visas is that a lot of the people who could train us are highly qualified people we need to import from Silicon Valley.”   “Now we have mentors in our business and also on our board.”   This article first appeared on SmartCompany.

Google launches e-book celebrating the stories of Australia’s rising startup sector

4:46PM | Tuesday, 1 April

Google Australia has launched a campaign, armed with an e-book and video, to encourage Australians to take up coding.   Written by Fran Molloy, Start with Code shares the stories of the rising startup ecosystem, including startup founders including Noller, Peter Bradd, Marita Cheng and Mitchell Harper.   In the foreword, Communications Minister Malcolm Turnbull writes about the profound changes the internet and technology have wrought on the world.   “We need to improve the way we teach our kids; we need to inspire a generation of digital natives who are already avid consumers of technology to embark on careers as entrepreneurs and coders, in e-commerce and as engineers.”   The need to overhaul the education system to equip Australia with coding skills is something Atlassian cofounder Mike Cannon-Brookes also argues for in the book.   “At Atlassian, we know in the next 20 years we are going to have to hire a truck load of computer science people. We’ve got to start breeding them way earlier. We need to train them, at school, now.”   The investment in tech skills and the startup community, both key themes in the book, are argued for by accelerator founder and investor Niki Scevak.   “People call it a brain drain, I call it a brain boomerang, where they’re flying over but they’re coming back a few years later and bringing all that skills and knowledge they’ve had in Silicon Valley back to Australia.”   Google has also launched a video with the book, which celebrates Australian innovation so far and suggests learning to code is a fundamental step for any aspiring inventor today.   Check out the Australian inventions such as boomerangs, notepads, utes, wine casks and Wi-Fi in the video below.   {qtube vid:=THEpcW7vFkc}

Do you remember your first time? Twitter launches tool to help find your first tweet

3:45AM | Friday, 21 March

In celebration of its 8th birthday Twitter has launched FirstTweet, a tool that helps users find the very first message they sent.   We take a look at what some of Australia’s top startup folk had to say in their first tweet.   First off, here’s mine, clearly not aware of the location irrelevance of social media:   Anyone here from Perth, Australia?— Bronwen Clune (@bronwen) February 3, 2007   And StartupSmart journalist Rose Powell took the opportunity to be excited about being on Twitter:   @kirifarrell I know, I feel like this weekend went so fast. And looook, I'm on Twitter!— Rose Powell (@rosepowell) May 13, 2011   The Fetch’s Kate Kendall’s first tweet was in that awkward third person thing we used to do:   is being a night owl— Kate Kendall (@KateKendall) June 15, 2008   Atlassian cofounder Mike Cannon-Brookes tweeted about tweeting:   is making his first twitter post - and feels like a twit - albeit a connected one apparently!— Mike Cannon-Brookes (@mcannonbrookes) January 7, 2008   Muru-D’s Mick Liubinskas wanted us to know where he was:   Working from home in Woolloomooloo— Mick Liubinskas (@liubinskas) September 25, 2006   Canva Founder Melanie Perkins went for something fairly safe and vanilla:   Enjoying San Fran and all the exciting tech events it has to offer.— Melanie Perkins (@MelanieCanva) June 5, 2011   Twitter has asked users share their initial messages using #FirstTweet. 

Is portfolio investment theory friend or foe to entrepreneurs?

1:19AM | Tuesday, 28 January

Atlassian co-founder Mike Cannon-Brookes and Artesian Ventures managing partner Stuart Fox debated the impact of portfolio investments approaches, where an investor backs many start-ups with smaller amounts in the hope one or two works, at an event in Sydney last week.   Cannon-Brookes, who also called for Australian start-ups to stop selling their companies so early, described portfolio theory as problematic for start-ups.   “I want portfolio theory to be on my side, not on his side. Even at Blackbird (a start-up investment fund), the problem with a lot of investors is they want the portfolio theory on their side and I don’t think they should. Stay away from big corporates, they can get you into all sorts of trouble,” Cannon-Brookes said.   Fox shared Artesian’s plans to invest in between 500 to 1000 start-ups in the next five years and how portfolio theory was key part of their approach.   “If we’re going to invest in 1000 start-ups and they’re all billion dollar exits, we’re going to double the market cap of the ASX so that’s not probably going to work,” Fox says, adding the approach was likely to increase in popularity as new investors join the angel community.   ‘If we want external investors, we need to make this look attractive to investors who, no offence, are going to have a portfolio approach. They’re going to price it against not just the people in the room, but also against other asset classes.”   Cannon-Brookes added technology investors make most of their money on the one-in-a-hundred companies.   “You need to believe you’re the one in a hundred or you’re starting a different kind of business,” Cannon-Brookes says. “The greater proportion of the returns flow to the winner and that’s it. In almost any kind of technology, the winner takes it all and everyone else is well who cares.”   With this in mind, portfolio theory leaves underperforming start-ups more vulnerable. Fox explained they were quick to get rid of start-ups that have started to fail.   “Our sh-tty ones we turn the oxygen off. I don’t want to be harsh, but we turn the oxygen off. We’ll hit an idiot bid first but that’s the same,” Fox says.   “If anything comes out of my view, it’s that we’re not prescriptive. We want to get in really early on a lot of things,” Fox says, adding Artesian is backing got a couple of great companies who aren’t looking at maximum value of $20 million.   Artesian Ventures has also recently launched VentureCrowd, a crowdsourced equity platform that will open in February. Fox said it should open up further funding opportunities as it will have a lower cost (minimum $1000) to access than an angel investment ($10,000 and up).

Leading accelerator program Startmate opens applications for fourth intake

10:26PM | Monday, 7 October

Designed to turn Australian technical founders into successful global entrepreneurs, one of Australia’s first start-up accelerators Startmate is now open for applications.   The program will run next year from January to May. Companies will spend three months in Sydney and two in San Francisco.   Startmate is seeking around eight companies, which will receive $50,000 in seed capital, in exchange for 7.5% equity.   Startmate co-founder Niki Scevak told StartupSmart they’re seeking founders with big dreams and plans.   “Beyond the very product centric technical team, we’re looking for people with large ambitions, the crazier the idea the better. We really want to work with teams who want to make a big difference in the world, so the scale of the ambition is what we’ll be selecting,” Scevak says.   He says they’re committed to approaching each pitched idea with an open mind, adding that being the hundredth start-up to tackle an idea didn’t hurt Google, Facebook or Atlassian.   “Anyone doing anything in an incredibly crowded area will be taken as seriously as brand new ideas. The ideas may sound incremental, but it really does matter why the founders have chosen to pursue this idea, and if they have a unique insight into it,” Scevak says.   “It’s about why they care about their customers and if they have an authentic connection to the market. We look for what in their lives have driven them to this idea.”   The program includes an impressive line-up of mentors including Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar; Tjoos co-founder Bart Jellema; and Spreets co-founder Dean McEvoy, as well as several partners from Square Peg Capital and Blackbird Ventures.   This will be the fourth intake for the program. Previous participants include BugCrowd and NinjaBlocks.   Start-ups can apply via Angel List.

Friends in high places: The rich listers investing in Australian start-ups

10:50PM | Monday, 7 October

It takes many things to get a business off the ground.   It takes a flash of insight, plenty of drive, and good advice. It takes savvy staff and helpful networks. It also takes something few start-up founders have to begin with: money.   Australia’s venture capital industry is growing and maturing. But the funds to finance start-ups don’t just come from high finance. Increasingly, a generation of Australian entrepreneurs who made or grew their fortunes over the past decade are investing their money back into start-ups, either directly or through niche venture-capital firms. Through this, they’re helping build a start-up ecosystem able to support new, growing start-ups, using the spoils of yesterday’s success stories.   Here are just a few rich listers putting some of their money back where it came from.   James Packer   In many ways the trailblazer in this regard was James Packer, who made a fortune investing in companies like SEEK and Carsales.com.au a decade ago.   While by no means a successful start-up leader (Packer inherited most of his money), he has nonetheless grown his fortune through savvy start-up investing, a passion that doesn’t appear to have ebbed with time.   Packer bought a 25% stake in SEEK for $33 million in 2003. When the business listed, Packer’s stake was worth $150 million. By the time he sold out, he had made $440 million from his investment.   He was also an early investor in Carsales.com.au, putting $100 million for a stake in the company that sold for $500 million a few years later.   Those were some of the best dot.com investments ever made in Australia, and, perhaps spurred by his early success, Packer has continued to invest in start-ups with potential to disrupt their industries.   One of his most recent investments was last month in taxi app goCatch, which could radically disrupt Australia’s cab companies and Australia’s Cabcharge monopoly by allowing passengers to book a taxi by directly liaising with the driver.   Paul Bassat   Packer is joined in his goCatch investment by Paul Bassat, a cofounder of SEEK who’s since left running the business to his brother while he focuses on investing.   Bassat is the cofounder and joint chairman of Square Peg Capital, a newly minted venture capital firm that’s already put money into a heap of start-ups like beauty-box business Bella Box and design start-up Canva.   “First and foremost, we want to back fantastic people who are smart, passionate and high integrity,” Bassat told StartupSmart when Square Peg was formed a few months ago.   “For businesses that have been around for a few years and have a bit more traction, the question of if they’re solving a problem has been partially answered. If it’s an early stage business without a track record, we want to know exactly what the problem you’re trying to solve is if you’re actually solving it, in a unique and differentiated way.”   Bassat is also a mentor at Startmate, which offers mentoring and seed financing to online and software start-ups.   Mike Cannon-Brookes and Scott Farquhar   Bassat isn’t the only rich lister to volunteer his time mentoring young companies.   Scott Farquhar and Mike Cannon-Brookes, who cofounded Atlassian and for two years have topped the BRW Young Rich list, are also mentors at Startmate.   Last year, Cannon-Brookes also invested in Shoes of Prey, which gives shoe lovers the chance to customise every part of their shoes online and have a unique pair created and shipped.   Both Atlassian cofounders put money earlier this year into Ninja Blocks, a Sydney start-up that builds devices that let people link their devices to physical things in their homes (‘SMS me when the washing is done’, for example).   This story first appeared on SmartCompany.

Tinkler out but most made a killing: Secrets of the Young Rich

9:01AM | Thursday, 19 September

It often surprises casual observers that the annual BRW Young Rich edition counts the 100 youngest self-made entrepreneurs under 40.   After all, in most industries, awards for ‘rising stars’ and the like cut out at 25 or 30.   The reason BRW has to give people 40 years to shine is simple: hardly any businesspeople make a killing by 30. A list cutting off there would be dominated by sports stars and celebrities. And for a business publication, that wouldn’t interest its readers as much.   Almost all of the Young Rich 2013, unveiled in the magazine’s flagship edition out this morning, are aged from 30 to 40. The youngest person on the list, MotoGP rider Casey Stoner, is aged 27.   SmartCompany spent a fascinating morning dissecting the latest list. Here’s what Australia’s youngest millionaires have in common.   Life’s work   Most of the Young Rich are entrepreneurs, who started companies and over years helped grow them.   Apart from the sports stars and celebrities, there are few employees on the Young Rich.   Thanks to Nathan Tinkler dropping off the list this year, there are now two more. Todd Hannigan and Tom Todd made their $84 million joint fortune by leading Nathan Tinkler’s Aston Resources before it listed. In 2011 they lost their jobs, but were given six months’ pay and a whole lot of stock in the process. They sold their stock before things got rocky for the sector.   This must be especially galling for Tinkler. BRW doesn’t think his assets exceed his debts. He didn’t make the $18 million cut-off, leaving him entirely off this year’s list. Around this time in 2011, Tinkler was valued at $1.13 billion.   Most of the Young Rich have had a good year. Exactly half increased their wealth this year, while only 16 lost wealth. The rest were more or less steady.   Tech tricks   The full Rich 200 list, for which there is no age limit, is dominated by property developers. But the Young Rich has few of those.   Over one in three (34) of the Young Rich made their money in technology, of which 22 were web entrepreneurs. In the top 10, eight started technology companies.   These include Atlassian founders Mike Cannon-Brookes and Scott Farquhar, steady at number one with a joint fortune of $550 million. They were pegged at $480 million a year ago.   The fastest-rising names in the top 10 are Ruslan Kogan, of Kogan.com, who more than doubled his fortune to $315 million, and Freelancer.com chief Matt Barrie, who’s risen into the top 10 with $185 million (he was pegged at $50 million last year). Both companies are looking at listing on the ASX in the near future, which could see their founders get a lot richer if all goes well.   Reinvesting the profits   If so, they’d be some of the few Young Rich-listers to turn their business success into serious disposable income. For most of the Young Rich, their wealth is ‘paper money’. They own large stakes in highly successful businesses. If those businesses list or are sold, they can cash in some of that ownership.   Until then though, many of the Young Rich are fanatical enough to keep most of their wealth tied up in the one thing.   For example, at Kogan.com, the online electronics retailer, shareholders Kogan and David Shafer reinvest the profits every year. Shafer told BRW their remuneration was on an “as needs” basis.   “Building something is much more exciting,” he said.   Perhaps this need to reinvest profits is driven by Australia’s low venture capital spend. According to a recent PwC report, there is less venture capital available in Australia, relative to our population, than in Israel, the US, Norway, Switzerland, Demark,  Britain, or France.   When capital to expand isn’t readily available, revenue can be the best source of funds.   Slim pickings for women   As always with Australian rich lists, there are few women wealthy enough to make the cut-off.   Only seven women make the Young Rich, of which the wealthiest is Carolyn Creswell ($55 million), of Carman’s Fine Foods. The next wealthiest is Erica Baxter ($40 million), who is in the process of finalising her divorce from rich list-fixture James Packer, which could see her secure another $100 million according to recent reports.   Other women on the list are Lilly Haikin ($40 million held jointly), who bought chocolate café chain Max Brenner to Australia, PageUp People founder Karen Cariss ($25 million held jointly), golfer Karrie Webb ($22 million), MyBudget founder Tammy May ($20 million), and model Miranda Kerr ($18 million).   This story first appeared on SmartCompany.

New findings reveal which Australian universities are creating the most entrepreneurs

8:37AM | Tuesday, 20 August

Data released this week by US tech database CrunchBase has found the University of New South Wales produced more technology entrepreneurs in the past 15 years than any other Australian university.   The data was based on the CrunchBase dataset of over 170,000 companies, including 169 Australian entrepreneurs. CrunchBase is a free database of technology companies, people, and investors where anyone can upload information on start-ups.   Australians on the database included Dean McEvoy from Spreets, Tess Walton from Aruspex, Mike Cannon-Brookes and Scott Farquhar from Atlassian, Alicia Navarro from Skimlinks and Eddie Machalaani from Bigcommerce.   The University of New South Wales was ranked number one in Australia and is credited with launching the careers of 16 entrepreneurs.   UNSW had more than double the number of entrepreneurs produced by the University of Technology Sydney, which took second place and clocked in with seven entrepreneurs.   Monash University, Queensland University of Technology, University of Queensland and University of Sydney shared third place with six entrepreneurs.   Swinburne University, Melbourne University and the University of Newcastle were credited with four entrepreneurs each.   Josh Flannery is the student enterprise manager at the University of New South Wales entrepreneur program and commercialisation arm NewSouth Innovations.   Flannery told StartupSmart while the results were recognition of their commitment to encouraging entrepreneurship, he believes UNSW and NewSouth Innovations are about to reach a tipping point and start producing even more successful start-ups.   “It’s been an experiment really, but we’re at a tipping point now. I’m speaking to 60 to 70 individual students who are working on start-ups at the moment,” Flannery says.   UNSW runs entrepreneurial and innovation-themed subjects in every faculty and has a variety of internal programs.   “What’s maybe different is our NewSouth Innovations commercialisation approach. We now give 100% of the equity to the students. That’s not the case in every university yet but it’s becoming the trend,” Flannery says.   He adds that universities play an important role in encouraging young entrepreneurs and can do more to boost the start-up ecosystem.   “Universities play a very important role in nurturing entrepreneurial students, but also something I’ve found that we’re doing, which is relatively new, is almost offering the entrepreneurship career route as an alternative to the safe route as a consultant in a big firm,” Flannery says.   “The way we’re doing that is encouraging students to have a go at something entrepreneurial right now, when they have the least expectation on their shoulders than they will at any point of their life.”

‘Just outraged at the insanity of Julia Gillard’: Tech start-ups hit back in 457 visa row

3:39AM | Friday, 15 March

Key players in the Australian tech start-up scene have lashed out at Prime Minister Julia Gillard’s suggestion the 457 visa program is being abused by the IT industry.

Blackbird Ventures rolls out $30 million start-up fund

3:09PM | Thursday, 14 March

Blackbird Ventures is determined to offer Australian start-ups much-needed Series A funding rounds, after announcing the formation and first close of its $30 million venture capital fund.

Star-studded event series helps entrepreneurs face the Startup Grind

2:40AM | Wednesday, 27 February

The US-founded Startup Grind event series continues to grow in Australia, with the Sydney and Melbourne chapters set to host the founders of Atlassian and Zendesk respectively.

Independent eftpos provider Tyro surpasses $3.5 billion in transactions

3:27AM | Monday, 11 March

Independent eftpos provider Tyro Payments has vowed to step up its fight against the big banks, after revealing it surpassed $3.5 billion in credit and debit card transactions in 2012.

Shoes of Prey joins David Jones to launch in-store sales booths

3:25AM | Monday, 11 March

Local online retailer Shoes of Prey has taken a step towards the bricks-and-mortar world, teaming up with department store giant David Jones as the two companies explore new ways to boost sales.

Atlassian rolls out second ‘Hack House’ for budding techies

3:05AM | Friday, 15 March

The first class of Atlassian Hack House graduates have highlighted their achievements since participating in the program, after the second class began work yesterday.

Why VC firms now take start-ups seriously

12:33AM | Tuesday, 4 December

It appears that the ‘lean’ spirit of modern entrepreneurship has finally inspired the Australian venture capital industry to invest in early stage start-ups – a trend is set to increase due to the accelerator boom.

Five start-up lessons from the Young Rich List

9:16PM | Thursday, 27 September

This year’s BRW Young Rich List may be striking due to the dip in overall wealth of the top 100, including a $700 million plummet by mining mogul Nathan Tinker, but there are encouraging signs for start-ups.

2012 BRW Young Rich List – eight standouts from a tech dominated year

9:05AM | Thursday, 27 September

The 2012 BRW Young Rich List has a strong start-up and tech flavor, with Atlassian founders Mike Cannon-Brookes and Scott Farquhar heading the rankings.

THE NEWS WRAP: Tinkler tumbles as Atlassian pair shoot to the top of BRW Young Rich List

9:18PM | Wednesday, 26 September

Mike Cannon-Brookes and Scott Farquhar, founders of tech success story Atlassian, have toppled miner Nathan Tinkler to head BRW’s Young Rich List.

‘No-nonsense’ Web Directions South event to launch start-up workshop

9:07AM | Thursday, 6 September

Entrepreneurs can now register their interest in Web Directions South, a conference aimed at new tech companies, while Startup Weekend is to return to Adelaide for a second time.

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