Atlassian is the icon of PLG, valued at $40B. It keeps one of the 📉 lowest sales & marketing expenses in SaaS: ~16% of revenue. How?
“Sales through indirect #channels comprised approximately 40% of total revenue for fiscal year 2022.”
To make thing even more impressive, Atlassian is growing low to mid 30% every year for 20 years!
💪 Atlassian's low S&M spend is remarkable, especially at $3B+ of ARR and 250K+ paying customers
In fact, Atlassian has had 15-20% S&M spend from the very early days.
This is in contrast to average #SaaS that spend ~80-120% of revenue on sales and marketing during their years 1-3 and then plateau at ~50% at year 5 forward.
Salesforce today invests ~45% of revenue in sales and marketing, for example.
💹 What Atlassian is doing differently to be so efficient and consistent?
To begin with, the company is very innovation-driven. Relative to other enterprise software companies, they invest significantly in R&D.
🎯 Atlassian optimized for one-to-many strategy in everything
CRO Cameron Deatsch: “We made a decision very early on - we're going to try and optimize for one to many in everything Atlassian does. Instead of doing a demo for just one client, let's record a demo and post it on YouTube, so everyone can see the demo.
If people want one-to-one hand holding, we'll introduce them to our partners.
This allowed us to have that balance of just immediate scale, but also …
if you want to talk to someone there were people out there that represented Atlassian.
That really helped us grow in the first decade."
🙌 Atlassian has been building Partner #Ecosystem from the early days
“We believe that in today’s technology landscape, it is a strategic imperative to leverage open platforms and work with partners to extend our platform’s functionality to use cases and customers which we could not reach on our own…
We plan to continue to invest in our partner programs to help us enter and grow in new markets, complementing our automated, low-touch approach.” (2022)
Today they have 700+ solution partners in 84 countries.
🗽 Atlassian was one of the first to built a large marketplace
They discovered that integrations make their product 2X stickier.
“When customers add at least one app or integration in Jira Software, dollar churn reduces by approximately half”.
Today Atlassian has 5.3K apps and integrations from 1.3K partners. In the last decade they booked $2Bn+ in marketplace sales with $1.5Bn being transferred to partners.
Sources: Company, SaaStr