headshotJaySimons

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For the past few months, in our Dancing Giants series, we’ve been writing about something that most people in the startup world think is an oxymoron: innovative big companies.

No doubt, plenty of tech companies have lost the ability to think long term and act quickly. But increasingly we are seeing stronger public companies in tech than ever before. They are fueled by outrageous sums of cash, a willingness to swallow up would-be competitors no matter the price, and intent to invest in new markets. Above all, they are afraid of turning into Yahoo and Microsoft.

In the Dancing Giants series we’ve shared stories about Samsung, SAP, GE, Intuit and more. The series has been sponsored by Atlassian, a software company that’s expected to go public at some point but isn’t exactly a spring chicken. As a teenager of the cloud software movement, Atlassian is well aware that newer companies are already on its tail, as much as its about to get its public market moment.

The company has tried numerous approaches to remain innovative. President Jay Simons told us what worked and what hasn’t in this sponsored Hot Seat post.

You are still a pretty young company, why did this become a priority?

Every software company focuses on a rapid pace of invention. Software itself lends itself to fast iteration. Computers are the bicycles of the mind and for the most part the limitations of software are the limitations of the imagination. If you can think of a problem to solve or a thing to do there is a team of engineers who can do that.

Our two founders are both engineers and they are both deeply product people. The culture is built around that propensity to iterate quickly and try new things. Now at 800 people, a lot of our experimentation and our playfulness around trying new things still comes from Scott Farquhar] and Mike [Cannon-Brookes] They still code. They still compete in our quarterly “Ship it” [contests.] It’s a cultural plank of how we innovate. It’s a rite of passage to compete with the founders. I routinely lose by the way.

We are close to 400 engineers and when they see two CEOs and founders stopping what they are doing and breaking open laptops and doing something it sets a tone. Imagine if Larry and Sergey did that? It’d be pretty inspirational for the developer just getting out of college.

Is that the best use of CEOs’ time? Most founder CEOs who are coders just stop doing that after a while for good reason.

They balance it, we’re talking about short bursts of time every quarter. But one of the most important things a CEO can do is be an inspiration for the people under his or her charge. In a software company, continuing to tinker and hack and invent is probably one of the most valuable things a CEO can do. And it’s probably an itch they need to scratch.

Beyond culture, let’s talk about tactics. What hasn’t worked?

20% time did not work for us. [Simons is referring to Google's famous policy that 20% of engineer time can be used on new stuff.] For the most part it fails because everyone has so much shit to do, it’s hard to say 20% time is my birthright here so I’m only join to work on important stuff for days a week. People feel pressure to get done what needs to get done. Other people are dependent on you getting your stuff done.

Also, not everyone is good at using 20% of their time in innovative ways. It’s a myth that if you give people one day a week to invent they’ll just come up with something to change the company. Only certain people an do that. Those people will probably do it anyway without 20% time. Most people don’t use it productively. For us, it failed.

Instead we found “Ship It” days. It was a different designated time and the whole organization stops simultaneously. It relieved the pressure of trying to innovate when you have to get all this shit done. It created a different environment.

Ship It days are kind of like a hackathon for new Atlassian products as I understand it. Is it more about the actual stuff built or the cultural reset towards thinking about new stuff, the permission to go outside the normal product lines?

All of the above but more the latter. It’s a lot more about people being spontaneous and trying things they wouldn’t otherwise in the course of the day. Sometimes people on one product team will spend a whole Ship It Day fixing something that had been bothering them about another product line. Kind of: “No one has addressed this, so I am.”

Routinely inside the company you hear, “That can’t be done” or “That’s too hard” and Ship It is a time to say “Well, why can’t it be done? I’ll give it a shot.” That’s broken this taboo of “can’t” that just existed in the company because of human nature. But a lot of people wouldn’t normally try to fix those things because it’s not their job.

We have a couple examples of interesting products that have come out of it, but not Gmail level.

Does “innovation” always mean new products?

No, sometimes it’s rethinking the ones we already have. There will be Ship It products where people think about performance improvement. It sounds boring and they have a hard time winning, but if someone increases the page load by 35% there’s a higher percentage of that actually shipping versus a new product.

How do you think about how proximity and offices affect innovation? Since you are spread around the world?

Even though we are globally distributed our teams are mostly co-located. If you sit next to someone you can walk up to their desk more casually and it’s way more efficient and effective than getting on chat or IM or some other asynchronous impersonal conversation. We do use a lot of video conference for teams that have to connect between offices. It helps that our products are about helping teams collaborate.

It wouldn’t speak very well for your products if it didn’t work internally.

Collaboration software is tough, though. It has less to do with the software and more to do with the culture adopting the software. That’s the hurdle to all great collaboration software. That gap between “Oh wow! I could totally use this!” to actually getting people to use it. At Atlassian, as a new employee you have no choice.

Atlassian famously doesn’t do traditional enterprise sales. Typically sales gives engineers a feedback loop with customers. So how do you stay in touch with what your customers want?

We definitely support a wider audience of customers. Most enterprise software companies our size are in the hundreds and we are in the hundreds of thousands. We do a net new thousand of customers a quarter. So we have a different type of customer intimacy without a sales person in the middle of it. In some ways it’s a more authentic one. Sometimes a customer driven organization can get warped when it goes through a sales culture. Largely their motivation is to close a deal because their compensation is based on it. They want to do what’s right for that one particular customer to close that one particular deal. Sometimes that competes with the broader needs of how the product should evolve for the market.

It’s like, your real estate agent doesn’t give a shit about you. They want you to spend as much as possible on the house.

We listen really carefully to customers and math. No one person can influence our direction. Our largest customer has the same influence as our smallest customer. That can seem backwards but when you are building software for tens of thousands of companies, it’s important. It’s deeply ingrained in our DNA. Sales people would change that.

[Photo credit: Atlassian]