The Atlassian IPO
Full transcript · Read the full conversation in order, with its original context.
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The other thing I was thinking about is do we want to do any follow-up on Alaska Virgin? Yeah, people hate follow-ups. Yeah, people definitely hate hot takes. I think they also hate follow-ups. Yeah, I don't think we need to. All right. Actually, maybe I'll just use this for the teaser quote. It didn't go well. Welcome back to episode 47 of Acquired, the podcast about technology acquisitions and IPOs. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. Today we are covering the Atlassian IPO. And normally we're hesitant to do episodes on such recent news unless we're like actually on the scene, weak of, can be one of the first takes you hear on it. And otherwise, ultimately, we don't have enough to reflect on to make a recent IPO or a recent acquisition, something that we should cover on the show. However, there's so much interesting story
behind Atlassian, and there's already been so much data to go off of in the last, what, two years? Two years. Two years since the IPO. Hard to believe it's been two years. Yeah. Yeah. In fact, when I was writing this little intro, I was like in the last couple quarters since the IPO, but really, really been two years that we we want to talk about it. And we think we have a good story to tell. Before we move on with the show, David, it's great to see you in person. Yeah, it's great to be here, Ben. Great to be on the show. So as I think most people know at this point, we've been doing most shows remotely because I actually earlier this year moved to San Francisco and I've been living there and working on something new. More to come on that later this year or early next year. But yeah, this is actually our first in-person episode of 2017. It's good to be back.
You look very similar to how you looked in 2016. Haven't aged a day. I appreciate it. I appreciate it. Well, it's good to be back in person and good to be back in Seattle. Look forward to being back often and doing more in-person acquired episodes. Sweet. All right, listeners. Now is a great time to tell you about longtime friend of the show, Vanta. So, David, I want to paint a picture that many founders listening will recognize. You're about to close your biggest customer yet. The product team has hit a bunch of milestones. The sales team built this fantastic relationship. Everyone at the potential customer is fired up. Your legal team has the contract done, but then an email comes in from the security team. Ah, yes. It's usually a very polite email asking something like, before proceeding, could you share your SOC 2 report? Or do you mind sharing your ISO 27001?
if you don't have one, that deal just went from closing this month to closing next quarter, maybe. Now you have to go find an auditor, go through every system, write the policies, and then prove that you follow them. Right. Or you could just use Vanta. They are the leading agentic trust platform, which means that you can connect it to your systems at your company, and it automatically pulls all the relevant data. And it tells you exactly what's missing for a SOC 2 and ISO 27001, or whichever framework your customer asked for. Vanta gets you through the audit and then it keeps going. It watches your controls every day afterwards, so the report that you hand to the next customer is still true. Yep. And even more impressive is the Vanta agent. It continues to run in the background so it can find the issues and draft the fixes. This is the work that eats weeks of an engineer's time before an audit,
and now it mostly just gets done before anyone has to ask. And the results are super impressive. A recent industry report says that Vanta's customers see a 526% return over three years and that it pays for itself within the first three months. If you've ever had one of these security emails stall a deal, you know exactly how that math works. More than 16,000 companies now run on Vanta. 16,000. Listeners, there were 2,000 when David and I started working with Vanta. That's incredible what they've accomplished. And these are companies from large enterprises like Atlassian and Snowflake to the NuGuard, like Ramp and Cursor. We've been fans of Vanta for years. And hundreds, like literally hundreds, maybe even at this point thousands of acquired listeners have become Vanta customers over that time. If you want $1,000 off, check out Vanta.com slash acquired. That's V-A-N-T-A dot com slash acquired.
And just tell them that Ben and David sent you. and listeners if you are not in the slack we're about to cross a thousand uh a thousand members you can go to uh acquired.fm and in the little sidebar or on mobile down at the bottom you can join the slack david you ready to take us in let's do it um so atlassian this has been a much requested episode pretty much for the whole life of acquired we're excited as ben said in the preamble to dive in. And I think this is actually, I was going through all of our episodes in preparation for today. And I think this is the first company that we're going to cover on Acquired that's been bootstrapped and gone, quote unquote, all the way. We've certainly covered other bootstrapped companies in the past, but none of them that have gone on to be kind of lasting, independent, large public companies without taking any venture capital
along the way. Yeah, it's pretty crazy. I mean, the be it for actual necessary reasons or because that's the de facto way that people build companies these days. Everyone just takes a round every 18 to 24 months. And that's often driven because your competitors are doing that or be some some timing reason why it needs to grow, grow, grow. But it's kind of funky seeing a company go all the way the old fashioned way. Yeah. And not quite. I mean, there's a round. Well, now they did. So So Excel invested and T. Rowe Price invested before they went public, but both of those were only secondary shares sales. So none of those dollars went to the company's balance sheet. The company never sold any shares to investors. It was only individual people, shareholders, both the founders and employees that sold along the way. So we'll get into it.
But this is, I think this is going to be a really interesting counterpoint to sort of the current, you know, wave, if you will, of companies that are out there right now and sort of the steroid era of startups with companies raising so much money. And here's Alassian, which is now almost $11 billion public company, one of the most successful tech IPOs of the last couple of years and never raised a dollar. Amazing. Amazing. so uh getting into it atlassian was founded in 2002 by mike cannon brooks and scott farquhar in sydney australia and i'm remembering back to our pa semi semi episode uh where we were joking about uh about australia and i said that uh because authentic was was founded in melbourne Florida and you thought it was Melbourne, Australia. Uneducated host over here. But it's funny, actually, I was listening to the most recent
earnings call today to prepare. And it's just awesome hearing them jump on the phone and the Australian accents. Oh, so good. And I think I commented in response to that, that Melbourne, Australia and all of Australia probably had a much more robust tech scene than Melbourne, Florida. And indeed, it does. There are quite a number of companies in Australia now. and Atlassian really is kind of leading the way. So Mike and Scott, they meet in college at the University of New South Wales in Sydney, where they were classmates in a sort of scholarship program major, a little different than the US system there. They had a scholarship into a very prestigious major there, which was in business and information technology. And they became close friends. I think there were about 40 or 50 people kind of in their class. Um, they became close
friends, even though they came from super different backgrounds. So, so Scott grew up in a, you know, very kind of lower middle-class family and Mike actually, uh, I believe his father was the head of Citigroup, uh, in, uh, the investment bank in Australia. Oh, wow. Um, super cool. Uh, so very different. Um, but despite that they became really good friends. And so they were in, in university kind of in the late 90s, early 2000s. It was the dot com, you know, go, go, go years, even in even in Sydney, Australia. So Mike, he, of course, being that that time frame and being in business and technology, you know, this prestigious major in Australia, he started a company while he was in school and it was called the Bookmark Box. And of course, this was this was in kind of 1999, nine, 2000, Scott wasn't involved. And so he had an exit. He sold the company to a dotcom fellow
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dotcom startup called blink.com. Wow. Only, only back in the late nineties. Uh, but this was in the year 2000, but before the crash. Um, so he had a, had a successful exit as like a, I don't know, a sophomore junior in college, serial entrepreneur, serial entrepreneur. So, so he had this experience And he and Scott were good friends. And most people in their program, you know, would go and work for consulting firms or investment banks like Mike's Mike's dad and other, you know, well paying, you know, prestigious jobs right after graduation. And they decided, especially Mike, having had this entrepreneurial experience, this was like the last thing in the world that they wanted to do when they graduated. So they kind of made a pact and they said, if we can do something that enables us not to have a job like that, but still earn the same amount of money per year.
And the going rate apparently very specifically was was forty eight thousand five hundred dollars a year in salary. If they could earn that and not have to work for the man, for McKinsey or whomever, they would be happy for the rest of their lives. It's funny. I mean, number one, duh, like who doesn't? Number two, I remember making that exact same pact with my business partner. We made this app in college called Seize the Day, and it was getting a bunch of downloads on the App Store, and we were getting revenue from iAd. I think I probably talked about this on the show before. and I remember looking at our numbers and thinking what multiple of this would it need to be for us to get the same jobs that we would get at like a Microsoft or something and like you know in my case they never got there I think we were at like a quarter of what it needed to be or something and
then we both got jobs but I love that line of thinking. Totally well and clearly though you just didn't stick with it long enough because as it turned out Mike and Scott they fell pretty far short of their goal. They only paid themselves apparently $15,000 a year for the first two years versus versus 48. So like just about a quarter. And they they financed it on like 10 grand of credit card debt. So they they didn't raise as we've said didn't raise a dollar. They had credit cards, they took out debt, they got to about $10,000 in debt before they were able to turn a profit. But Ben, if you had stuck with seize the day a little longer. So Scott and Mike now are I don't know if they are the wealthiest, but they are like among the, you know, kind of top 10 wealthiest people in Australia. I blew it. You totally blew it. But now you're now you're a
co-host of acquired. So what could what could you ask for? What more could you ask for? So they they decide they're going to start a business and Mike's case started another business together in pursuit of this this goal of forty eight thousand five hundred dollars per year. and they they decide on a name for the business they're inspired by the greek myth the the mythical titan atlas who holds up the heavens and they they take that as inspiration they want to support their customers like atlas holds up the skies and so they call the company atlassian i like it i mean i i've liked the name i've liked the logo it's a good name i always wondered like recently the logo kind of looks like a man and apparently it looks like a man the old logo not the new logo but the old logo i always wondered like what is this what's the deal with this
apparently it's supposed to be atlas yeah i was i mean all the new branding stuff is really nice and really poppy and really you know fresh and clean their old logo was like so clearly identifiable like i hate when companies have like a refresh that takes some of the personality away from the brand yeah yeah so not a design podcast moving on moving on so they start the company in late 2001 early 2002 and they launched their their first product jira which is still i think their their biggest product beloved by by product managers worldwide beloved by product managers worldwide i i assume many if not most folks listening to the podcast right now have used jira yeah there's uh maybe using jira right now i used to follow some like parody product management twitter accounts and stuff and that i i think people just people like know the the
interface in their sleep and they have like both happy dreams and nightmares about filing tickets so they launched it in in april 2002 as we're alluding to it's it's kind of a it's an issues and bug tracking tool used mostly by software developers and product managers although it's now expanded to many more use cases than that but there was just kind of one problem when they launched it which was that um since mike's first company the the dot-com bust had happened it was now Nuclear Winter. And here they are two recent college grads in Sydney, Australia, that are starting a software company, an enterprise software company, no less, where they're trying to sell to other businesses. And usually the way you do that is you hire salespeople. But the thing about salespeople is they cost money. And so the way traditionally that you do that and you hire the
salespeople before you have the money is you raise money from venture capitalists or angels or whatnot, and then you use that to build your sales force. Well, there's no way that any VC was going to give money to these two kids, college kids in Sydney, Australia. And they didn't even try. And not to mention, you know, even if you could do a pay for performance basis. So we, we had Scott Dorsey on the, on the show for the exact target episode. And he mentioned that a lot of their, their early salespeople were working a hundred percent for commission. You, you kind of have to have an expensive product to make that work too. The thing about Atlassian, and we'll get into this, is super approachable pricing, very generous trial periods, a pay-as-you-go thing, a thing where you sign up with your own credit card, a kind of democratization of who's
buying and tying the buyer to the user. And like it's in many cases, it's a little different now, but in many cases, it's just not that expensive. So even if you're paying salespeople on a performance basis, still a long road. Yeah. Well, and let's not forget what we're talking about dollar wise in the company right now. Like their goal is to pay the two of them $48,000 a year. They only pay themselves $15,000 a year. That means they're making like $30,000. Like how many people are you going to be able to hire if the entire, you know, sort of capital balance of the company is $30,000? Yeah. Great point. Not a lot, but they're scrappy and they have to innovate their way out of this. And so what they decide to do is something that was fairly novel at the time, but not 100% novel. They decide to just sell the software on the internet. So rather than having
people sell it, anybody can just come and sign up and it's in the cloud. It's SaaS. And that's not, you know, like I said, it's sort of leading edge, but Salesforce is around at this point. The concept of SaaS exists. They, they hosted on their website and you can buy Jira from Atlassian, um, on the internet. And this is a little bit of a flash forward, um, to, to later in the show, but I was looking through the S1 and the, the term SaaS only appears four times in their S1. And it, I think three or maybe all four of the four times it refers to, uh, external partners. so it's interesting to sort of think about Atlassian doesn't view themselves as a SaaS company or at least they don't refer to themselves that way in their communication to investors. I was sort of trying to figure out what is that? Is it that they feel that they pioneered the
category so they don't need to say that they're part of the category or is that they want to sort of look at their numbers differently than a quote-unquote typical SaaS company would look at numbers? Or is it, you know, they also have this booming on-prem business where they're installing stuff on servers for companies that they, they predated the modern era of SAS in many ways. They did. They did. But so my hypothesis on this is I'm going to, I'm going to borrow from our coffee series here, uh, where we, we did the Starbucks episode. And then our last episode was on blue bottle. Uh, and we talk about waves of coffee, you know, the first wave of coffee is Folgers and the second wave of Starbucks. And the third wave is blue bottle and these artisanal hipster, uh, you know, coffee shops, I think Atlassian is the third wave, uh, was the first
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company of the third wave of enterprise software. And so if the first wave is kind of, you know, Microsoft and Oracle and SAP, you know, sort of these big on-prem software selling licenses up front, you know, you come and you install it and they have a huge sales force and it's really crappy software, honestly, you know, um, but CIOs buy it and it's a heavy sales process. the second wave is SaaS, right? And that's Salesforce. And they changed the business model to a subscription basis instead of paying upfront for the license. And it's delivered via the internet instead of on-prem. But at the end of the day, I mean, let's be honest, right? Anybody who's used Salesforce, it's still kind of crappy software. And I think Blue Bottle and the like, the third wave coffee shops would make the argument that Starbucks,
the second wave like yeah you go drink it in the store you don't make it at home like Folgers but it's still pretty crappy coffee like it's all about same product different means of delivery different means of delivery right business model innovation but the product is still not that great and blue bottle would say like what differentiates us is the coffee is really good and I think at Lassie and like their culture and what they've tried to live up to and I think what has led to their success is the, this product has to sell itself. We don't sell the product. There are no humans that sell this product. Um, there never happened there. There are various flavors of people that market and help deliver it. Um, especially now that they're much bigger, but they don't sell it in a traditional way. And that means that the product has to be so good
that people will buy it anyway. Yeah. That is a really interesting insight that the transition to as a service happens in two steps. And one is the business model and the way that it's billed. And then the second is, you know, the product actually being very different and the product being delivered as a service. I worked on Office for iPad and Office for Mac. And on Office for Mac, we had this big release where we turned it into part of Office 365. So it was Office for Mac as a service. And like literally all that was different was the subscription stuff. And I'm like, but it's still the same bits that get shipped in a CD or, you know, DVD before. Like it's still desktop software that now just stops working if you stop paying on a monthly basis. And the initial iteration of Adobe Creative Cloud is sort of the same thing.
And the bigger incumbents are sort of moving toward more true service, you know, product as a service rather than the typical old product that is just billed as a service. But, you know, in thinking about sort of low end disruption theory, that's really where the magic happens of product as a service. The product is fundamentally different than the old sort of products. Yep. Yep. You got to remember, these are, you know, Scott, Mike are two kids right out of college. I don't think they necessarily planned all this. Like, this was their only option, right? If they wanted to pay themselves the salary that they wanted, they had to sell their product and they couldn't afford any salespeople. And even if they could, they're in, you know, Sydney, Australia. They're not going to go sell to, you know, Ford and Boeing and Tesla and all their clients now.
they have to make a really good product that people are just going to buy themselves over the internet and and sort of unwittingly they they really um they really were the first company of this third wave if you will of enterprise software that now includes slack that now includes github um that have the same selling motion we just make a really great product we're not going to go out and like take you to a steak dinner to convince the cio to buy this uh it's going to be adopted organically by teams and grow within within accounts. Let's put a pin in that steak dinner and come back to it. Put a knife in the steak dinner, a fork in the steak dinner. Yep. So that's how they start going to market. And the thing is, it actually works pretty well. So within that first year, 2002, even though even though Mike and Scott are only able to take
$15,000 each out of the business to pay themselves, it actually grows pretty amazingly. So so they do a million dollars in revenue in that first year. Now, of course, they're paying R&D. They're hiring people. They're hiring engineers. They're hiring product folks. And they are doing marketing. They're not doing sales, but they are doing marketing to drive demand and awareness to their website for for folks to to buy the software. So it does a million dollars in year one and even today. So this was 2002. If you're a SaaS company and you launch the product in the beginning of the year in April, and then you do a million dollars in that year, like that's pretty darn impressive. Yeah. Let's just say seize the day wasn't there. Okay. Okay. So maybe you did make the right decision coming to acquired instead. And it really just, it grows from there.
So in 2004, they released their second product, which is called Confluence. And that's a content collaboration software for teams. So sort of similar to SharePoint. You can see they really start to try and build the low-end better product if they will disrupt it to a lot of the Microsoft suite. Yeah, and in many ways, the thing they were competing with here, and they even referenced this in their investor materials, is they compete with open source. And I remember making a decision in 2008 at Cisco whether we were going to buy Confluence or whether we were going to just use MediaWiki and the engine that runs Wikipedia and use that open source piece of tech. And ultimately, there's enough.
I remember even in 08 as an intern, there was enough value creation from Confluence as a real sort of enterprise grade professionalized piece of software where it was worth paying for over the open source MediaWiki. Interesting. So you weren't really comparing it against SharePoint. No, we didn't think it was going to be a thing we were going to pay for at first. And then it was just so much better than the free stuff we were evaluating that we did it. Interesting. And you were at Cisco. Cisco. At the time, right? Like, I mean, that's a big company. And what's super interesting and is interesting about Atlassian and their whole sales model is they don't have to compete head on with the Salesforce's and the Oracle's and the Microsoft's. because of course, you know, those like Cisco, I'm sure is a huge Microsoft and Salesforce customer.
Totally. But the intern was making the buying decision on whether we were going to use Confluence because like it was a self-serve thing. It was below the amounts that, you know, I had to check with lots of authorization for. I just asked my direct manager and he's like, oh yeah, sure we can. It's really easy to do. It was the first time that employees were really empowered to make their own buying decisions. And we will get to this in tech themes. But this is when sort of BYOD, the bring your own device era was coming into full swing. And for the first time, the buyer and the user of software and the enterprise was actually being coupled. So this, this, this old era of, yeah, you know, if you're making B2B software, you just have to make it good enough for the buyer, not good enough for the user. Like you actually did have to start making it good
enough for the user. Yeah. And this is a really good point and worth spending a minute on. Steve Jobs had a great quote about this. Well, we'll try and link to it in the show notes, uh, at one of the, one of the all things D conferences, uh, that he did with Kara Switzer and Walt Mossberg. Um, and, and I think Kara asked him like, Hey, you know, why, why doesn't Apple do enterprise? Like, why do you only do consumer? This is back in 2009, 2010, uh, before Apple did do more in enterprise. And, and Steve says, you know, this is the thing about like in consumer, it's the quality of the product that wins because each individual person is making their own buying decision and they are the user so you have to make a good product and people vote kind of with their feet and their wallets either they buy it or they don't and we get that feedback but in the enterprise
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you're taking the cio to a steak dinner you know and convincing him to buy this whole suite of software but or him or her but they don't use the product the users are stuck with it and and been what you're identifying and what Atlassian really latched onto is software got so cheap and distributed so easily, um, that it was individual users who are now making the decisions. Total transformation. Total transformation. So, okay. So 2004, they launched Confluence, their second product, and they keep growing. Uh, a couple of years later, uh, they're on being in Australia, they're on a fiscal year and in June, not in December. Um, so in the fiscal, Because all the time is like, you know, times are upside down. Seasons are upside down. Yeah, exactly. Got it. Actually, I think most of, I believe most Australian companies do June 30, fiscal year end. Huh. I could be wrong there.
Microsoft actually does too, or at least did when I was there. Yeah, that's right. That's right. I think they still do. And so by fiscal year end, June 2006, so four years after the company's founded, they're doing 15 million in revenue, which is really nice scaling. continue growing 2010 they acquire a product called bitbucket um which is also very interesting and the the parallels between atlassian and and slack and github as we we mentioned are um are very very apt and bitbucket is a competitor to github um so they acquire that they offer they add that to their product suite in 2012 they acquire hip chat uh and this is before slack but HipChat was really Slack before Slack. Yeah, man, it's making IRC better, giving it a nice little web interface. Now, of course, the Yammer guys would argue that Yammer was HipChat before HipChat before Slack. Yammer was Facebook and Twitter
mashed together for the enterprise. Like this is chats, you know, synchronous communication, baby. It's the way of the future. So they add that to the product portfolio. 2013, they launched another product, Jira Service Desk. So this is really for IT departments and other service-oriented groups that are taking in tickets and responding to them. And this is like a Zendesk or a Help Scout or something like that. So they really, you know, Atlassian kind of becomes this suite of all of these modern, you know, bottoms-up enterprise software packages, if you will. And along the way, as we've said, they just keep growing and growing. In 2010, back in 2010, they do do the first secondary sale that we talked about in the beginning of the show. Excel, uh, the venture capital firm, uh, buys $60 million worth of, worth of stock from the founders and employees. None of that goes to the company. Company doesn't
issue any shares. Still, still an amazing investment by Excel. Oh, incredible. An incredible investment. Um, I believe, uh, if I remember right from the, uh, from the IPO prospectus, Excel owned about 15% of the company. Yeah. It's, uh, um, I've actually got the little graph right here. It was 15.21. Just thinking about what that means, the company is doing so well that it puts the founders in a position where they can say, look, we would love to give you some shares. The company actually doesn't need any of your dollars to grow right now. Like we're not going to plow that back into the business because everything is humming along so nicely and the growth rates that we want, we're getting just without any investment capital. But you can have some of our shares. Yeah. And the founders, you know, talk about this quite a bit. You know,
part of it was getting some liquidity for themselves, but also part of it too was having some sort of signifiers of professionalism on board as they're starting to sell to, again, not sell with salespeople, but be part of and have accounts with large organizations. Thinking like, who are these guys? Right. And, you know, having Excel, one of the, you know, best VC firms in Silicon Valley behind them helped a lot. Yeah. And you have to imagine, too, the psychology behind that. Like, obviously, the founders. So at IPO, the founders, Scott had 39 percent and Mike had 39 percent. Still a ton of skin in the game. So that's not really a concern. But having a bunch of liquidity from all your hard work, the psychology of it, I mean, it has to free you up to think bigger because you're no longer playing not to lose.
Not that they were playing not to lose before, but like there's very little about you that's playing not to lose. You kind of never have to work again. Your life is good. At this point, it's all about like really go big or go home. Like how big can we carry out our vision and stay true to our principles? And it gives them sort of that breathing space to, you know, see how big their original vision can become. Yeah. And, you know, to your point about incredible investment by Excel, if you do the math on that investment, they valued the company at $400 million. and uh and a few years later well five years later in 2015 they'd go public uh we'll get to this ultimately at a four and a half billion dollar and now it's north of 10 and now it's almost 11 billion dollars so great great investment by excel they do also then raise another almost
200 million dollars uh from t-row price in 2014 but again it's not raising uh they were buying I believe that was mostly from employees. And that was, I believe, T-Row bought about 6% of the company. So that implies an over $3 billion valuation. So again, for Excel, even in just a couple of years, they're getting marked up from $400 million to over $3 billion. But it's merited by the growth of the company. So fiscal year and 2013, so June 30th, 2013, they do just shy of $150 million in revenue. The next year, 215 million in revenue. And then 2015, so the fiscal year ending right before they go public, they do over 300 million in revenue, 320 million. So just incredible growth. The flip side of that, which is interesting because you just so rarely see this in Silicon Valley companies these days, but I think is really a heritage of how the company
was built and grew, they were profitable and not just like marginally profitable. But in that last fiscal year before they went public, they generated almost a hundred million dollars in operating cash flow. I mean, I don't know. I don't know any private company today is generating a hundred million dollars of profit. I mean, I know a lot of private companies that are generating negative a hundred million dollars in operating cashflow right now. Um, but really, really impressive. Um, so November, 2015, they do file to go public in the U S and really we'll get into narratives here in a minute, but, um, it's really in a lot of ways, a coming out party for them with the investor community. I mean, um, they were somewhat under the radar, but these numbers are incredible.
And even more so, again, because of the heritage of the company and their sales model, they're only spending, when all this comes out in their IPO prospectus, they're only spending about 20% of revenue on sales and marketing to grow that fast. I mean, your average SaaS company is spending anywhere from 50% to over 100% of annual revenue on sales and marketing just trying to grow not even as fast. yeah i mean it really speaks to the the quality of the product and it speaks to the audience that they're speaking to i heard literally three times in the last week an engineer tell me if i have to pick up the phone and call your sales representative i'm not buying your service and it's so funny thinking about um how that was just the expected norm for so long we're seeing a return of it again in a lot of particularly analytics companies that are that are moving to a more enterprise sales
model but like for this demographic you know especially the the engineering demographic like that's that's not how to win them over being really easy to integrate with without any human interaction is a really great way to win them and what's really you know for a number of years especially since atlassian's been public and people have realized hey this this model of no traditional sales can work part of the knock on it by people who are advocates of a traditional sales model is well exactly what you said ben like this works for this demographic will it work for other demographics no you probably still need to do the steak dinners and whatnot and and we're knocking steak dinners here that you know that can be a very viable way to build a company too and there it is important to build relationships with the people you're selling to
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but with slack emerging in the last few years and slack penetrating teams of all types in every type of organization you know they have the atlassian type sales model here there are no there are no sales reps uh going around for slack to the new york times or whomever is uh you know are their big customers yeah very few in fact i think slack actually may have more than atlassian but i think atlassian still has like actually none yeah pretty crazy one thing that you have is a channel and and I actually don't know if Slack does as well. But the channel is super helpful because some customers, especially large ones, just aren't going to buy software unless they do have someone they can talk to. And so what Atlassian said is like, OK, great, we're not going to do that ourselves.
But we will work with third party value added resellers who can effectively be that synthetic sales touchpoint for buyers who need that. So they have invested a lot in that. And that does take both marketing dollars and people headcount within Atlassian who help empower the channel to make those sales. So it's unfair to say that there is absolutely zero sales effort. But it's just not the same traditional, like, we have a sales force with, you know, territory managers and reps and a VP of sales in the same way that, you know, Oracle or Salesforce or, you know, any other enterprise or SaaS company does. Yeah, if I had to foreshadow a little bit later of my sort of open questions, I think it's a risk to the business that, I mean, most of their revenue comes from Jira and Confluence. Those are mostly aimed at engineering organizations or product management organizations.
you know there's probably a saturation point on those where you have to start trying to sell all this suite of other products that integrate really well and generate significantly more of your revenue mix from those other products and those don't sell themselves as well as these products do so i think you know the margin that we're seeing um from uh from atlassian probably decreases in the coming years as they have to start adding more of these other products to the mix. Interesting. Well, and certainly their other product lines have more competition than Jira does, which is a big part of it too. And when you have competition, then you may need to sell more or put more effort into sales, so to speak. All right, listeners, now is a great time to thank our longtime friend of the show, ServiceNow. So David, here's a question that I do not think
most enterprise CIOs or CEOs could actually answer today if they were asked. How many agents actually run inside your business? Yes, I don't think anybody really knows. And of course, then there's the harder questions like, what can they access? And who gave them that access? And is any of this paying for itself? ServiceNow has an answer to all those questions. the super intelligence control tower. As friend of the show, CEO Bill McDermott says, it's the one place to see, secure, measure, and help govern your agents' models and workflows across your entire business, no matter who built it. Yep. So for example, it finds the agent that someone in procurement spun up on their own and then tracks what it's doing and its ongoing cost. When the CFO inevitably asks whether any of this is working and if there's ROI, you'll be ready with the number. And importantly, if something goes wrong,
it can detect and revoke access immediately. There's even a kill switch built into the product. And ServiceNow is uniquely positioned for this because they've spent the last 20 years building the operating backbone of the enterprise from IT to HR, sales, service, and cybersecurity. They know how work gets done, helping support over 100 billion workflows a year across more than 90% of the Fortune 500. The world's most complicated businesses, like many that we've covered here on Acquired, already run on ServiceNow. And now they're running their AI there too. If you're trying to turn AI ambition into real outcomes, just go to servicenow.com slash acquired and just tell them that Ben and David sent you. Well, to wrap up the history and facts, November 2015, as we said, they file to go public. December 10th, they price their IPO at $21 a share or just about $4.4 billion market cap.
That translates to. So again, nice return for Excel there. And the founders are billionaires officially at that point. And then on the first day of trading, they close up at $27.48. So almost $6 billion market cap. Really incredible. And since then, well, a couple of things have happened. So one, uh, they've always been an acquisitive company themselves. They acquired Trello and added that to their product suite in January of 2017. And this is worth pointing out. So they, they sold about 10% of the company. They raised 462 million in the IPO. They bought Trello for 425 million. Interesting. Interesting. You know, they're generating cash though too. So So they have really all options at their fingertips. Yep. Recently in September, 2017, you know, we've mentioned Slack quite a bit and HipChat and HipChat was Slack before Slack as Atlassian would have it.
They're actually, they've completely reimagined HipChat. They've renamed it Stride and are trying much more directly to compete with Slack. Built from the ground up. Built from the ground up. And with more features than Slack, David. did you know you can assign tasks you can do lightweight project management there's which is true there's that makes sense given jira and yep their heritage it is attractive but on the other hand like the stickiness for these products like how many teams who have started on slack now are gonna switch like yeah not to mention network effects of uh non like outside your organization it's super easy for me now to add another slack to my life there's zero chance i'm gonna also have what is it stride running on in addition like what is it again i have nine yeah that's that's that's slack's marketing message right there what is it again try slack yeah or you know stick with
slack but no honestly like i have nine slacks i'm not gonna have nine slacks in a stride yeah there's no way you're not gonna keep another app open also can we get more creative on the names like five letters starting with s and i mean slack's guilty of it too because they in many ways were replacing skype so you know yeah well it is it's kind of a low blow right like kudos to microsoft for teams indeed uh kudos to microsoft so despite the struggles in the chat communications part of their product suite, the company has pretty much killed it. Like Alassian continued 50% year over year growth. Uh, this most recent earnings call that I was just listening to their stock price jumped 25% after the earnings call last week, this, uh, days ago. Well, it was a few days ago. And, and as we said, now the company is valued, uh, their market capitalization is almost $11
billion, uh, which is really incredible. Casual for, you know, not having casual, just casual you know, add another couple of bees to the bank account, literally for the founders. But again, zero venture capital. Amazing. Pretty incredible. Well, I think we've talked about the narrative around the IPO or at least alluded to it quite a bit, but to switch to that, I think this is our first narrative section where I would argue that the narrative when the company went public was like, wow, here's this pretty amazing company in Australia that is showing up all these venture backed companies in Silicon Valley and has built a really innovative new way to sell enterprise software. And I think that's true. Yeah. And to illustrate that their S1 was incredibly straightforward and did not there was nothing hiding in there behind. Well, we only have to
show X, Y, Z. So we're only going to show X, Y, Z. They had a full cohort analysis in their S1. And that, I mean, that's not the cohort analysis, like a newer way to evaluate businesses. And that's not mandated by the SEC, but you can see revenue growth by cohorts since their founding date in the S1. And you can see a lot of things in their S1 where they've just got an organically really great business and they're just telling the story. And honestly, I think you look at Blue Apron and you look at some other IPOs recently, it's a little confusing reading the IPO because you're not actually sure even after you read 50, 60 pages about the business, including risks and including all their financials, how is the business doing? It's quite clear when you read Atlassian's it's doing great. Yeah. And oh, and this is, you know, when I said a minute
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ago that this is our first narrative, what I meant was it kind of matches up. Like what Atlassian was telling people was the same thing that people in the press and in the investor community were believing when they read the S1. And in practice over the last two years has played out. And compare that versus some of the other ones we've looked at. We haven't covered the Blue Apron IPO, but we covered the Snap IPO. And the jury is still out. But there was a huge disconnect between Snap positioning themselves as a quote unquote camera company, that being their narrative, and the investor community saying, wait a minute, Instagram just kneecapped your growth. Yeah. And in the opposite direction, this IPO happened within a month of the Square IPO. Square also had an incredibly solid fundamental business on their hands. If you go back and
listen to that Square episode, one of the insights that David and I sort of uncovered from talking to some friends there is Square has a 30% return on marketing spend, basically on every single cohort. Every cohort is revenue churn neutral. So they basically, you know, can, can just keep spending money, getting additional customers and some of those drop out, but the other ones make up for the ones who dropped out. Yeah. I mean, extremely predictable business. And the story that was spun in the press about that IPO, about it being a down round, about a lot of the external factors of the business, like just, just didn't pay attention to how solid that business was. And when you look at the ensuing days since that IPO, the couple of years that have gone down by, it was a great stock to buy. And the business kept doing exactly what it was
doing before the IPO, after the IPO. And yet every story in the press was that the sky was falling. Yeah. And I mean, I know you guys hate, uh, hate follow-ups. So this is not an official follow-up, But since the Square... You give a guy some survey feedback and he takes it way too far to heart. He takes it way too far. But since we did our episode on the Square IPO, which is still one of my favorites, because this dichotomy between the narrative at the time of the sky is falling for Square and the reality that it was a great business, it's like the opposite of what you would expect. Square has killed it even since the episode. I mean, they're now trading, I think they were up after earnings today, I think close to $35 a share. and remember they IPO'd at under 10. Wow. Yeah. Crazy. Well, I think that probably does it for
narratives. Yeah. Um, what, what would have happened otherwise? Yeah. Okay. So, well, here's a question. Um, one also that we've talked about on this show quite a bit is relevant in the tech world right now. So I hesitate even to ask it because I think companies should go public, but why did they go public? They, they didn't need to, um, the founders owned the company. Yeah. So the quote that they gave to a news outlet was that Atlassian will use proceeds from its IPO for corporate purposes, including capital expenditures and potential acquisitions. Like Trello. Like Trello, that many people are speculating they overpaid for. There's a great case to be made for why they bought it. they spent about the same amount of money on Trello that they raised in the IPO. Their cash balance after the IPO was hovering around $500 to $700 million for the quarters after the IPO.
So the IPO did add a material amount of cash to their war chest to do things with. I guess it gave them option value in an increasingly competitive landscape to be a lot more acquisitive. They haven't been as acquisitive as they could have been. and trello to date hasn't meaningfully added to their business i mean it's added a lot of users i don't know how the cross sell is going i don't know um you know if they're starting to monetize trello at all but or more than they were but i think it bought them option value and it was pretty cheap option value for you know a little over 10 of the company yep now again to play devil's advocate though now they're a public company now they have to report every quarter
But I do think like, as we've been saying all episode, this is a really good company with very solid fundamentals and very predictable growth and customer retention and behavior and acquisition. If you have a good company, there's kind of nothing to be afraid of, of going public, right? Yeah. Gosh, I forget who said this. It might have been Zuckerberg. I think it was Mark Zuckerberg. The discipline forced by going public is a really good thing for your business. Yep. Yep. And it seems like Atlassian had their house in order beforehand, but they got the benefits that come with going public and having to report. And in that easier to make acquisitions, both for cash and stock. Yeah. But I think also like there's, you know, I wonder if in listeners that have listened to multiple episodes of ours probably know where we fall on the spectrum here.
But people in Silicon Valley recently over the last few years have been very, very negative about the public markets, saying it's all short term focused. You know, the stock market is a voting machine, not a weighing machine and whatnot. But I think if you look at, you know, the IPOs that we've covered on this show, the Facebook IPO, the Square IPO, now the Alassian IPO, and on the other side of the ledger, the Snap IPO, I think you could make a strong argument that the public markets are actually a weighing machine for tech companies in a way that the private markets right now seem to be a voting machine. I would say we certainly haven't covered a company yet that has IPO'd where the short-term outlook of the public markets shot down their share price and hurt the company without the company's product having the majority of the blame there.
Yeah. Well, Square, but I think Square was the Square IPO was a fault of positioning and really Goldman, as we talked about. Yeah. Yeah. But I guess I mean, post IPO. Yeah. Post IPO. No. You could imagine a scenario where I would say, I don't want to take my company public because the public markets will lose faith. Everything will actually be great at the company. We'll have to do stupid stuff to keep the stock price up. if we want to have a long view we won't do the stupid stuff and then our stock price will drop and thus employees will be under compensated we won't be able to you know hire well we won't be able to we will have um you know all sorts of problems that arise from a low stock price but we haven't seen it well we haven't covered it yet we not to say that it doesn't happen but um you know we have a number of data points now and including the amazon ipo i mean talk about a
company that, you know, was able to innovate probably arguably more so than any other company in history as a public company and be very long term focused for years and years not generating a profit. We have a lot of data points on this show that being public exactly to your point, Ben, can enforce a discipline and a rigor on companies and management teams that you're not going to get otherwise. Yeah, I think the only thing that would have happened otherwise is maybe they wouldn't have bought Trello, but I still think they probably would have. They had twice as much money in the bank as they raised in the IPO. Question on, do they need to be more acquisitive? Like one thing I was thinking through as I was reading the criticism that Atlassian's highest selling products are for engineers, so they can be sold in the self-serve way. Like, are they saturating the market? Like, do they need to branch out
because there's not much more growth left in their core core businesses well it's interesting they they certainly now position themselves as a as a company that makes products for teams um their nasdaq ticker is team is team yes and uh what i what i don't know didn't research enough and and is hard to tell on the surface is whether that's always been their positioning or in the past were they developer tools and now their teams because they're trying to expand their market as they've perhaps saturated the developer and product manager market. Well, that's interesting. I mean, they've had these values for a long time in their S1. They have these values that they state. And those are their open company. And I'll keep it nice for kids. Open company, no BS. Build with heart and balance. Don't F the customer. Play as a team. Be the change you seek. None of those are really
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developer focused. Nope. And, you know, play as a team that's, and it's actually, it's a nice little, it's play comma as a team. So nice. Um, you know, I think this is their, their vision for a long time. It certainly gets a little rewritten and quite a bit shored up over time as every company's does. I'm sure snap wasn't started as a camera company, but I'm on board with it. You raise a fair point though, that it is far from assured that, uh, Atlassian will have the kind of success that they've had with Jira as they expand into other market segments too. I just don't know that many people outside of tech that use Atlassian's products. And that's kind of fine because everything's becoming tech and software is eating the world. And there's still plenty more. I mean, if you look at what Microsoft sold enterprise software to, Atlassian still has a lot of headroom above it. Very true.
But this is kind of the thing about Slack though, right? Like there are people of all types and all levels of technological, um, you know, uh, familiarity who use Slack. I mean, the New York famously one of Slack's first, you know, real first customers that really made at least the investor community take notice about this might be something really special and different was the New York times newsroom started using Slack. Uh, you know, this is not just developers that are doing this. Yeah. It's a great point. All right, listeners. Now is a great time to talk about one of our favorite companies, Lagora, the agentic operating system for legal work. Yes. Most of you have dropped a contract into a chatbot by now. But as a lawyer, how far can that really take you? It's never seen your firm's precedents. It doesn't respect confidentiality, and you can't check where its answer came from.
So Lagora's founders approached this the way that great founders do. Early on, the team moved into the office of a big law firm in Stockholm and learned, for months, how the work actually gets done. A couple of thousands of enterprise customers and 100,000 users later, they still work that way. They employ 100 legal engineers on staff. These are lawyers sitting inside of firms and legal departments to deploy Lagora onto live situations like the deal closing this week or the policy review due Friday. The product has gotten very powerful in a short period of time. A year ago, the goal was a good answer from a chatbot. With the Lagora agent, you hand it the work and it comes back with a plan. Tasks like running diligence on a data room or reviewing a new vendor contract get completed inside the tool you use every day like Microsoft Word and against your own precedents and playbooks.
Every finding is sourced, the lawyer directs the work, and signs off before the system executes any steps. Every legal team can get access to the same AI models, so the models themselves do not give you an edge. What you can do with your own data, people, playbooks, that's the whole game. Today, over 100,000 legal professionals at more than 1,800 law firms and in-house legal teams in over 50 markets use Lagora. And when Legora goes head to head with its top competitor in a pilot, it wins 70% of the time. A demo is one thing, but what matters most is an associate who reaches for it at two in the morning during a closing or whether a general counsel trusts what it says before the board meeting. So if your legal team wants to check it out, whether you're at a firm or in-house, go to legora.com slash acquired and be sure to tell them that Ben and David sent you. You want to move on to tech trends?
Let's do it. Cool. Before we start diving into these, I think we've covered a lot of them. There was one chart that was really interesting to me. They have this great deck on their investor site where you can kind of look at what their general positioning is to investors and why they're a good stock to buy. And one of them is that their R&D as a percentage of revenue is like head and shoulders above a bunch of their competitors. So they're at 37%. And working on down from that is Workday, Tableau, Twilio, Box, Zendesk, New Relics, Splunk, on down. And a lot of those that are way further down are like intense technology companies. And you never, I mean, at least I never really think about Atlassian as, boy, they do hardcore tech. like for tableau i'm like wow that that's a heavy lift to do that data visualization and on the
server and you think about um you know splunk like analyzing log files and the the incredible sort of computer science challenges involved in handling all that data and all the lookups and all the writes and reads atlassian must pour a lot of cash into like security availability uptime because those are called out in a big way in their s1 as risk to the business you know if if our customers ever stop trusting our reliability or security, then we're in trouble. And I think they probably pour a lot of into the user experience. But I definitely, in preparing for this episode, you know, I've been trying to figure out like, why is, why is Atlassian spending so much on R&D relative to other seemingly more technical companies? I think they, they argue, and when you listen to them talk about it, that this is part of the nature of their model. Like they're not
spending on sales. They don't have a sales force. And what that means and what the founders and other folks in the company talk about in practice, that means that the sales force of the company is the product itself. And the product, not just that the product has to be good, but it also, it does, but also the product has to literally sell itself. Like there has to be a lot of, um, thought and, and effort and work put into, you know, the conversion funnel and, and tracking it and, and analyzing it along the way and making sure that because again, there's no, there's no human, the way they talk about it is that like, when you, when you have a sales force, you're using humans to solve problems about adoption of your product, uh, which is fine, but that's just what you've chosen. They've chosen to use product to solve problems about adoption. And so I think
that they would argue that all of the R&D that they're spending is sort of what they have to do because they don't have a sales force. Right, right. It's like if you're not spending on sales, then either you're applying it toward product or you're actually just applying it toward your margin. But in order to sell at the volume that they're selling at, they need to apply to product. Yep. Yep. Really what you also need is word of mouth, right. And virality. And, and part of that's natural, a lot of it, but you have to do a lot in the product to make that happen as well. And so I haven't dug in enough to know or, or use the product or referred enough people to know, but like, are they giving referral bonuses to people, you know, if you, um, which, which many consumer companies do, right. I mean, that's like kind of the playbook for growth. Yeah, I haven't seen it. I've poked around a lot.
Maybe I may have missed it. But yeah, quite honestly, I think it's if you get used to one of these types of systems and then you're starting a new software project on a new team or going to a new company, like it is a big mental switching cost to learn a new system. A little aside. So recently for Taunt, we launched our alpha. the entire product management and product roadmap for that lived on a gigantic whiteboard. It was a, you know, it's an eight foot tall by probably 16 feet wide thing that we taped off with swim lanes and we had hundreds and hundreds and hundreds of sticky notes. And it's an incredible way to do project management. Like to be able to visualize every moving part all at once outside of a monitor is like the best thing ever. But unfortunately you have to grow up at some point and you have
to scale at some point. You have to actually start estimating hours and doing triage and putting things to buckets. And, um, when the decision comes to, to decide as a team, what are we going to use? You almost never pick a new tool. It's always, what does somebody know really well? And it's usually what does the person who's going to be spending the most time in it do really well? I don't think they need referral bonuses. I just think they need to provide a good experience for someone once and then they got them for a long time. Well, maybe, you know, in a couple of years when AR and VR become a thing, you can have the best of both worlds. Honestly, I think that's a killer, killer app for, for VR and AR because I think a monitor is just not nearly enough space to visualize work items and tasks. I totally, we, you know, uh, I went through a period in my,
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my new venture uh where we had a whiteboard and then unfortunately we we we moved offices and and then we didn't have a whiteboard and then now we have a whiteboard again and like it's night and day being able to just physically visualize your plans and what you're working on um is so different than than doing it on a on a screen yeah i mean maybe that's uh maybe that's the killer jira app of the future is AR, VR, MR. AR, VR. Well, we'll leave that to the future. Um, I think all my tech themes have been covered as well. Yeah, I got, I got nothing. Should we move on to grading? Let's do it. So our definition of grading on this show is, um, for an acquisition, you know, how beneficial was it to the, how good of a decision was it to the acquirer to acquire the acquiree and similarly for ipos how good of a decision was it to do the ipo what it allowed
them to do it allowed them in practice what they've actually done almost nothing it gave them option value it gave them credibility to sell into the enterprise and they you know they were doing a great job of that before but on the you know what did it cost them not much i mean it's They only sold 10, 11% of the company. Lots of people who needed liquidity got liquidity. It was a nice reward for lots of employees, for presumably Excel. Let's not forget here, too, this company at IPO, 80% of it was owned by the two founders. This was a very personal decision. like uh so does that mean they still like at some point if they decided to sell a bunch of stock they have to do that super slowly right because they're if they ever wanted to liquidate that would flood the market with supply yeah uh i'm sure they do it over time yeah um in in structured
sales over time but um but i i think that's got to be a big reason right is like they uh and especially Scott, who didn't come from a, from a wealthy family, like they were, they were paper billionaires until, um, until this point. And, uh, and at some point you probably want, you know, uh, your, your, your billions to be real, not, not paper. Yeah. I mean, the way I look at it, literally nothing bad happened. Uh, only potential good things could have happened and some good things could or did happen. BB plus. The funny thing is the story behind the company is great and reviewing the company and, and, and talking about how well positioned it is and their journey is awesome. The actual IPO itself is like, we have a hard time. I have a hard time grading it cause I'm emotionless about it. Yeah. But isn't that like, this is kind of
the dream, right? Like this is what, uh, uh, like what your, your teachers in like, you know, IPO and company building school tell you is like the IPO should be not a big event. I want, I want the cowboy situation though, where the Facebook you're, you know, you're, you're, you're riding hard into the ground. You need the capital infusion. It happens. You pull the e-brake, you turn around, you got all this new cash, you use it. And then you ride off into the sunset and this, you know, flame of glory where you're suddenly on your King again. Like that's an A, that's an A plus to me. This is, this is, this is like, uh, just, this is being really responsible. it's funny i was i was reading an interview um oh shoot i'm blanking on the name of um the guy who's the chairman of the board now was the founder and ceo of great plains software um
and uh he was talking about how you know these two kids came to him this isn't preparing for the ipo and adding to their board and getting you know a public company ready board you know and asked him to, to be, to be on the board and ultimately be the chairperson. And he was like, they're like way more responsible and risk averse and conservative than I am. I'm supposed to be the adult supervision. I feel like the cowboy. Um, yeah, I don't know. I'm completed here. Like, I agree with you too. Like you, everybody wants to see the, you know, the James Bond movie, right? Like, but, um, but this is the right way to run a company. Yeah. So I'm going to give it an A. There you go. There you go. Well, that Atlassian is who your parents want you to marry. Yeah, totally. It's not the exciting company. They make developer tools. Like they call it team collaboration, but like, let's be real here.
It's, you know, developer tools. All right. We'll take that A. I mean, but you know, it might not be the company your parents want you to marry, but you know mike and scott are like perhaps the wealthiest people in australia right now so they're they're having a pretty good time it's true it's true i i do want to go on a little tirade right here if you're going public please god name your company name your stock ticker the name of the company like it is i get it yeah there's like a trend of this right now i get it like tableau data like i get it that you get to make a point about like this is what we're all about but like it's just annoying this is one of those things that's not going to age well like this is going to be like a 2010s thing that when you know people look back at like ridiculous stuff from the 90s or whatever like this is going to be one of those things this and and you know
chest length beards it's just not going to age well no anyway i just wanted to get that out So carve outs. I feel like I'm behind on this, that everyone else read this book last year and then that made the rounds and it got raved about, but oh my God, is shoe dog good. Oh, it's so good. It is. It is, uh, for listeners who, who haven't heard of it, it's the, uh, the Phil Knight book and Phil Knight was the founder of Nike. I have never read a biographical nonfiction. Supposedly it's a business book that was so compelling, like thriller type page turning compelling. And I read the context around the book, the meta story of, I guess, Phil Knight went back to Stanford and took a creative writing class. He audited creative writing after being the CEO of Nike to like write this memoir. And he personally researched a lot of the things rather than relying on his memory because he
knew they would conflict and he contorted stories over time. So he's, there's points of the book where he says, I remember it like this, but everyone that I've talked to and all the records say it actually happened like this. It's the, the, the meta story is almost as good as the actual story itself, which is glorious and exciting. And there's so many inspiring and there's so many lessons to be taken. So I don't care what you're interested in. You will find something amazing about this book. Oh, so good. You've probably forgotten. This was my carve out, you know, like 20 episodes back. Well, okay. So I told, I told this then, but I'll repeat it now. I'm smiling so much. So my graduation from GSB, from business school at Stanford, Phil Knight was our graduation speaker. And the speech was essentially like the draft of Shoe Dog.
It hadn't come out yet. It came out a year or two later. And he came and gave the speech and it was Shoe Dog in like 15 minute graduation speech format. It's so good. I should listen to back episodes. So good. Uh, well, I can't top that, but, um, but I have a similar carve out, uh, either on the last episode or two episodes ago, my carve out was a NPR interview with Bruce Springsteen and, uh, inspired by that. I am currently reading, uh, not done yet, but the, his autobiography born to run, uh, really, really good, very different from shoe dog, but also great. You know, I think what, uh, Bruce and, uh, and Phil Knight, you know, have in common is just like, they were so obsessed with their trade. Like there was nothing else 24 seven. All they thought about, all they did was, you know, for Bruce, it was being, you know,
a musician and a songwriter. And for Phil, it was running a shoe company. Um, it was everything to them. Uh, and, uh, it's really inspiring, inspiring to read. Yeah. I, there's just this great quote where Phil says, all I could think about all day, I'm paraphrasing, was my cash, my liabilities, my equity, and shoes. That's obsession right there. That is obsession. All right, listeners, now is a great time to talk about one of our favorite companies, Statsig. Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale. Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly
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you learn what changes actually created value for customers and how fast you can use that signal to guide what you ship next. This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved. So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com slash acquired to get started. Well, should we wrap this up? Let's do it. Listeners, thanks for tuning into this one. If you aren't subscribed and you want to hear more, you can subscribe from your favorite podcast client. If you feel so inclined, we would love a review on iTunes. We really appreciate both the feedback and what it does for helping new listeners to discover the show.
Tweet about it. We are at Acquired FM, and you can join the Slack at Acquired.fm. I think I'm forgetting, David. I think that's it. All right. You want to go get dinner? Let's do it. Night.