In 2016, Atlassian generated $458 million in revenue. And to make lots of money, you need big customers. Therefore, everyone in the company needs to make money. The company needs to grow its business by 30% per year. Atlassian wasn’t a first mover.īut there is a bigger reason than the missed first-mover advantage.
Therefore, if Atlassian would even create its own version of Trello, there’s no evidence to suggest that product would succeed. Companies that entered the market first were six times more likely to succeed than those that entered later. Atlassian failed to build its own Trello.Īccording to Clayton Christensen, leadership in disruptive technology has been very important. Atlassian’s share price went from $25.03 on January 9th (the date of the announcement) to $28.03 January 23rd. Because Trello was on trajectory to kill Atlassian! But Atlassian’s CEO secured their jobs and salaries by buying Trello. In their minds, Trello is a shitty product compared to Jira. I’m sure many of Atlassian’s employees don’t understand this decision. Every industry is being fundamentally altered by software.
#WORDPRESSCOM TRELLO INTEGRATIONS SOFTWARE#
In an interview, he said:Īll companies fit into one of two buckets: either becoming a software company or being disrupted by one. Instead of trying to fight the disruptive technology, he accepted it and bought Trello. But I know how it feels when disruptive innovation meets a 15-year-old company. That’s why Trello became the biggest threat to Atlassian’s future. It will happen in the project tracking industry too. It happened to other industries, such as disk drives and mainframe computers. This is how disruptive innovation overtakes established products. When it crosses the blue line, Jira’s mainstream customers will switch to Trello. That’s how Atlassian became vulnerable to attack from competitors with cheaper, simpler, and more convenient products.īy adding more features, Trello will also move upmarket and cross the mainstream market needs (the blue line). But its mainstream customers would accept fewer features for better pricing. This is what Trello did.Īt the same time, Jira became expensive. By moving upmarket, Atlassian created a vacuum at lower price points into which competitors with disruptive technologies could enter. While the company’s revenue grew, its product became overly complicated and difficult to maintain. By adding new features, they sought to capture new customers. They listened to their customers, and created a better and more complicated product. Its managers did everything according to the books. It seems that Atlassian is a well-managed company. Its value proposition is collaboration and simplicity. Trello brings a different value proposition to the market. Products based on disruptive technologies are typically cheaper, simpler, smaller, and more convenient to use. But why did Atlassian pay so much money for Trello? Because Trello disrupted the project tracking space. It was Atlassian’s biggest acquisition ever. This essay explains why! The rationale behind Trello’s acquisition.įog Creek launched Trello in 2011, and six years later sold it for $425 million. If you want to build a $400 million startup, build something simple. That’s why Google and other companies make similar acquisitions. Atlassian bought Trello for $425 million not because of its brand or its user base, but because Trello was a big threat to the company’s future. If you deal with disruptive innovation, the first mover takes everything. Why? Trello is a classic example of a disruptive innovation. So, how do you build the next Trello and get rich? By not building a Trello clone.
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