Business

The secret to making acquisitions stick

Don't just throw spaghetti against the wall and see what sticks

Above: Don't just throw spaghetti against the wall and see what sticks

This is a guest post by the president of Atlassian Software President Jay Simons

The secret is…there is no secret. Mergers are hard work. They take a bunch of careful planning, all the right follow-through, and have an incredibly low success rate. For many companies, M&A remains an important source of growth. Technology, customers, revenue, new markets, and most importantly, employees are key pieces of an acquisition strategy.

Surprisingly, employees — the brains and horsepower that create all that desirability — are often undervalued in an acquisition (outside of the Valley’s appetite for acqui-hires, where companies are targeted specifically for the collection of talent they bring to the acquiring company).

My company Atlassian has made nine acquisitions in the past seven years and of the 14 founders that joined us through the process, 11 are still building collaboration software with us. So how did we keep such a high percentage of founders happy and fired up around our shared mission? Three simple rules.

Rule 1: Believe in the same thing

Most acquisitions start with a heavy courtship around the perfect union. There’s plenty of talk about “a whole greater than the sum of its parts” or “1+1=3″ math that defies reality. At my company, we tend to focus on a simple question: Do we believe in the same thing, and can we chase that vision together?

Nearly all of our acquisitions have been technology or product strategy partnerships, where we believed, along with the founders, that we were effectively running the same race and should probably run it as a team. It’s not easy to do. It takes time, and thought, and a willingness to work through each other’s perspectives. GreenHopper, a company Atlassian acquired in 2009, shared a belief in how modern software teams work and how technology could make them more efficient.

Rule 2: Celebrate both the union and the unique

We spend a lot of time and thought integrating a new company into Atlassian. We want them to simultaneously feel like Atlassians and still retain the heritage and history they created on their own. Again, not easy.

We put all acquired employees through the same new-hire orientation all Atlassian employees go through, which includes a buddy system not dissimilar from what you find as an undergrad at a number of universities. We usually add a few veteran Atlassians to the team early to exchange DNA in both directions. And we continue to celebrate who they are and where they came from. When HipChat, a real-time group chat service Atlassian acquired in 2012, reached their first anniversary as Atlassians, we celebrated their birthday with the entire company, and surprised them with a HipChat-shaped birthday cake.

Rule 3: Get out of the way

Smaller companies often move at a different pace because they can. There are just fewer gears to grind, less people to convince or cajole and less friction along the path from A to B. When smaller companies join bigger companies they can quickly become frustrated by all the new speed bumps they never had to drive over before — a checklist here, an approval step there.

We spend a lot of time understanding up front where we can add value to an acquired company — recruiting, infrastructure ops, support and customer service — and then we work hard at getting out of their way.

We usually add an employee to their team who can help with whatever noise they get exposed to, or help them navigate the new waters they need to sail through. But their speed and efficiency is what usually attracted us to them in the first place, and we want to keep that humming. Bitbucket’s development team tripled in size in the first year of the acquisition, and other Atlassians took over many of the back office and operational functions like support, customer service, billing and infrastructure management so developers could focus purely on building a better product.

The company we are today is a wonderful mixture of talent and technology, dreams and ambitions, many of which joined us along the journey from different paths. We couldn’t come this far without them, and we’ll need others along the way to pursue a mission as bold and ambitious as helping software teams in every company advance humanity through the software they create.

286085v2-max-250x250Jay Simons is the president of Atlassian Software. Prior to Atlassian, he worked as the vice president of marketing at BEA Systems, and a vice president of product marketing and strategy at Plumtree.

Follow him on Twitter @jaysimons


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