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Atlassian's $5.5 Billion User Onboarding Magic


When the Atlassian team rang the opening bell on the NASDAQ last week, investors around the globe had the opportunity to park their savings in another public SaaS company. But look deeper and investors will find that the Australian software makers behind popular workplace products like JIRA and HipChat is not just another SaaS business.

A few highlights from Tomasz Tunguzs astute analysis of the companys financial performance:

While the median SaaS company spends between 50-100% of their annual revenue of sales and marketing, Atlassian has spent between 12 and 21% of their revenue on customer acquisition in the last three years. These metrics simply unheard of.

Atlassian spends aggressively in research and development, investing more than 40% of revenues of late into improving their products, optimizing the funnels which fuels the growth [its business model].

Atlassian has grown to $320M in annual revenue with virtually no sales team. Damn.

Anyone in SaaS can tell you that theres only one way of doing that: a low-touch funnel that converts new signups to paid users at a ridiculous rate.

So how did Atlassian do that? What do they know about user onboarding that the rest of us dont? Is there a silver bullet, afterall?

Curious, I signed up for 4 Atlassian productsJIRA, HipChat, Confluence, BitBucketto find out how Atlassian is onboarding new users. What I found may surprise you.

A quick primer:

At the risk of disappointment, there are no paradigm shifting tactics used in Atlassians onboarding flows. This isnt Slack or Duolingo or any of the other best onboarding experiences. There isnt anything that will be sensationalized by the tech community.

On the contrary, each of the Atlassian products start with a simple workflow that explains how the product works and drives users to start cranking.

What Atlassian Does Well

Try before you buy

Each of the four tools is free to get started and does not require a credit card to sign up. JIRA and BitBucket both charge based on seats and are free for the first 5 users. HipChat also charges based on seat but instead offers a freemium version with no user limits and a paid version with gated features like video chat and screensharing.

Confluence, on the other hand, does not have a freemium plan and instead offers a 7-day trial. I suspect this is because sharing logins for Confluence was far more common than for other Atlassian applications where a users identity is more core to ongoing product usage.

Simple Sign Up Process

One of the benefits of not having an inside sales team is that theres no need to collect qualifying information upon signup. Atlassian doesnt ask a new user for bounce-causing information like phone number, team size, geographic location, etc.

Explaining key parts of the interface

Jargon can overwhelm new users and prevent them from fully understanding how to use the product. And niche workplace tools like those offered by Atlassian are oftentimes the worst offenders.

On several occasions, Atlassian uses jargon-y naming conventions that are highly specific to the product use case. Rather than risk confusing a new user, however, Atlassian knows when to pump the breaks and give more prescriptive instruction.

Take this example from JIRA:

While this may seem like its adding friction rather than reducing it, it provides the right amount of hand-holding to ensure users will be successful with the application. And for power users, theres the option to skip.

Driving users to take meaningful action

Within minutes of signing up for each product, users are driven to start acting within the tools.

See each of Atlassian Apps' entire user onboarding sequence

What Atlassian Could Improve

Eliminating email confirmations

When signing up for JIRA, Confluence and BitBucket, users are asked to confirm the email they just used to create an account. Email confirmations are one of the biggest momentum-killers in user onboarding.

Awkwardly long loading screens

These loading screens took anywhere from 46 to 60 seconds.

Redundant sign-in screens

After a new user has already created an account, confirmed her email and made it through the awkwardly long loading screen, they are welcomed by another login screen that seems quite redundant.

Not prompting users to invite colleagues

HipChat is the only Atlassian product that has a dedicated onboarding step for inviting users.

Since collaboration is so core to each of Atlassians products, Im surprised more of them do not have a similar experience as above.

A quick caveat: We dont have access to any of Atlassians data. For all we know, perhaps there is zero dropoff rate due to email confirmations or long loading screens. Perhaps colleague invites are still off the charts. These just seem like improvement opportunities from an external vantage point.

So how has Atlassian grown to $320M with no sales team?

Atlassians onboarding flows are not head-turning. The company doesnt seem to have any onboarding magic that the rest of us dont know about. They have simple and straightforward flows that are intuitive, but could still be improved.

So if Atlassians onboarding experience leaves a lot to be desired, how is it that they have scaled to $320M in recurring revenue with no sales team? How is the company only spending 12-21% of revenue on sales and marketing while other SaaS businesses are spending 50-100%?

Product simplicity.

In an alternate universe, you could imagine an Atlassian that had bundled its various tools into a heavier workplace solution in the same way Salesforce or Marketo pack so much functionality into a single product. And for some organizations, having HipChat, Confluence, JIRA, BitBucket, etc. all within the same interface would be an ideal solution for which theyd be willing to pay far more.

But had this been the case, Atlassians go-to-market strategy would have fallen flat. In the bundled example, which meaningful action should users take first to get started: writing a knowledge article? adding a JIRA ticket? syncing an existing code repository? sending some messages to your team?

The fact of the matter is, as product complexity increases so too does the amount of effort it takes for a new user to get the most out of the product. When products are complex, different types of users sometimes have very different value propositions.

To accommodate this, software companies like Marketo or Salesforce augment their products with Sales and Account Management teams that interpret a prospect or customers motivations and needs and ensure they use the product in the correct way.

With this level of complexity, replicating the role a salesperson plays with an in-product experience is a daunting, if not impossible, task.

As Atlassian designer Benjamin Humphrey wrote, the best onboarding is an inuitive product. The company clearly understands this: each product is simple, has a clear value proposition and orients around a specific Job-to-be-Done. So while they may not have sexy onboarding flows that the entire tech world wants to talk about and emulate, Atlassian does have an incredibly effective no-touch funnel that fuels its growth. Atlassian wins.

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