To paraphrase venture capitalist extraordinaire Marc Andreessen’s seminal statement, software is eating the AFR Young Rich List. For the sixth year in a row, Atlassian founders Mike Cannon-Brookes and Scott Farquhar have topped the list of Australia’s richest people under the age of 40.
The Atlassian pair came in at numbers 17 and 18 on the overall Rich List for 2017, with a combined $6.05 billion estimated to their name. They are the highest placed tech-based entrants on the overall list, with the list continuing to be dominated by the perennial big players in the traditional industries:
- #1 Anthony Pratt, $12.59 billion, manufacturing
- #2 Harry Triguboff, $11.43 billion, property
- #3 Gina Rinehart, $10.41 billion, resources
- #4 Frank Lowy, $8.26 billion, property
- #5 Ivan Glasenberg, $6.85 billion, resources
These entrepreneurs would be able to tell you in detail how much technology has changed their industries in the past decade or two, but perhaps reflecting the underlying nature of the Australian economy, each has acquired and maintained their fortune principally through involvement in one of the big traditional drivers of the Australian economy.
However, if you look at the just-published Young Rich List you’ll see quite a different story. Of the top ten on the junior list, nine have ostensibly made their fortune from involvement in tech-related businesses. Of the 100 on the list, 38 have made their fortune through a tech-related enterprise.
If you’re unfamiliar with what Atlassian does, it is an enterprise software company that develops products for software developers, project managers, and content management. Real meat and potatoes stuff for business services in the digital age.
Numbers three and four on the list are Dave Greiner and Ben Richardson, co-founders of email marketing company Campaign Monitor. At number five is the property developer Tim Gurner.
It’s worth going back to the first year the 37-year-olds from Atlassian took out the top spot, in 2012, when they displaced the now bankrupt mining magnate Nathan Tinkler. Cannon-Brookes and Farquhar had been fourth on the list in 2011 before rocketing to the top the next year. Tinkler has since sunk into bankruptcy and ignominy.
The Atlassian duo were worth a combined total of $480 million in 2012. The Atlassian IPO on the Nasdaq in December 2015 raised US$462 million and put the company’s valuation at more than US$6 billion. The pair became billionaires overnight.
It’s interesting to view the rise of Atlassian through the broader lens of the rise in dominance of tech companies overall. This goes back to Andreessen’s now much-cited statement about “software eating the world”. The new hubs of wealth creation are very much tech-centred. Very few industries or businesses are untouched by technology. As Andreessen wrote in his 2011 essay:
“My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy…
“More and more major businesses and industries are being run on software and delivered as online services — from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.”
This is very much the story of companies like Atlassian, as well as Campaign Monitor. The two Australian companies have managed to ride the software wave internationally and at scale. It is also what’s powering the ascent of the other young entrepreneurs in the Young Rich List top 10 like Owen Kerr of online forex trader Pepperstone, Ori Allon of property tech firm Compass, and Cyan and Collis Ta’eed of online creative marketplace Envato.
Hopefully it’s a story we see more of in this country in the coming years.