{"id":39285,"date":"2023-10-23T07:00:00","date_gmt":"2023-10-23T05:00:00","guid":{"rendered":"https:\/\/strtgy.design\/articles\/with-975m-you-dont-buy-software-but\/"},"modified":"2025-04-06T19:02:53","modified_gmt":"2025-04-06T17:02:53","slug":"with-975m-you-dont-buy-software-but","status":"publish","type":"post","link":"https:\/\/strtgy.design\/en\/strtgy-notes-en\/with-975m-you-dont-buy-software-but\/","title":{"rendered":"With $975M you don’t buy software but…"},"content":{"rendered":"\n

Hey, happy Monday.<\/p>\n\n

For some it will have gone under the radar, but for others it is confirmation that there is a way of engineering growth that every company should seriously consider.<\/p>\n\n

Atlassian bought Loom for nearly $1 billion.<\/a><\/p>\n\n

And since the market is the place of the world’s happening (Galimberti) this is an important signal worth analyzing.<\/p>\n\n

I leave you with my notes on the significance and implications of this acquisition, rather than on the acquisition itself and Atlassian’s future plans (which no one knows about).<\/p>\n\n

A billion-dollar Growth Machine, how did they do it?<\/h2>\n\n

Atlassian certainly didn’t buy software to record and share screen video! That one is a commodity, there are many out there some with superior functionality or particular nuances in positioning. <\/p>\n\n

I’m sure their engineers could have built the same product and integrated it natively into the suite. Did you say Microsoft? <\/p>\n\n

Atlassian bought, in addition to the technology and the customer base–surely part of the assessment–one very important thing: their growth machine–as<\/strong> we call it at STRTGY –or growth loop<\/em> as they call it in Reforge.<\/p>\n\n

The beauty of Loom’s growth loop<\/strong> is that, in its simplicity, it has remained unchanged from birth to acquisition, supporting its evolution. <\/p>\n\n

Proving that once you identify your growth mechanics it becomes the most stable piece of your strategy!<\/strong> Below you will find two screenshots to the Reforge case study showing how the customer acquisition loop works and what they call Manufactured, i.e., purpose-built to support new business cases-they are superimposable<\/strong>.<\/p>\n\n

\"\"<\/figure>\n\n
\"\"<\/figure>\n\n

The loop works like this (source: Reforge):<\/p>\n\n

    \n
  1. Trigger<\/strong>: The cycle starts when a user creates a Loom video and shares it with a colleague or client.<\/li>\n\n\n\n
  2. Action<\/strong>: The colleague or client is asked to perform an action, such as playing or commenting on the video.<\/li>\n\n\n\n
  3. Reward<\/strong>: Every time someone comments on or views the video, Loom sends an e-mail notification to the user, providing a small dopamine injection. This reward gives the user a sense of accomplishment. <\/li>\n\n\n\n
  4. New Trigger<\/strong>: This reward triggers a new set of actions as the original user wants to create more videos, thus repeating the cycle.<\/li>\n<\/ol>\n\n

    The reason for this overlap comes from the fact that Loom not only has its own distribution channel but has leveraged integration<\/a> with other tools such as Gmail, Salesforce, Zendesk, Slack, and Notion just to name a few.<\/p>\n\n

    Their growth machine is not an isolated system that runs only in the controlled environment of their own organization. On the contrary, it runs wherever there is a need for asynchronous communication. Loom’s Growth Machine is ubiquitous.<\/strong><\/p>\n\n

    A front row seat for the future of work<\/h2>\n\n

    This acquisition is also particularly interesting because it also confirms another trend, that of the future of work being increasingly goal-driven and asynchronous<\/strong>.<\/p>\n\n

    Atlassian has gained privileged access into every team’s workflow. While before it could have done so only with its own suite, by acquiring Trello it has also won over those teams for whom Jira was the classic cannon to shoot a fly. Now with Loom, the user contact surface will be further expanded. <\/p>\n\n

    4 + 1 reflections on growth<\/h2>\n\n

    Companies using these growth loops:<\/p>\n\n

      \n
    1. They grow exponentially instead of linearly<\/li>\n\n\n\n
    2. They have stable mechanics on which to innovate that make them resilient<\/li>\n\n\n\n
    3. They separate the cost trajectory from the growth trajectory because at each turn the former decreases while the latter grows <\/li>\n\n\n\n
    4. They shift the focus from product sales to product design<\/li>\n<\/ol>\n\n

      One of the trends we will soon see is that Design-with a capital D-will be one of the most important skills ever, along with psychology and data analysis. <\/p>\n\n

      The role of leadership will increasingly shift toward being architects of the company rather than managers of people (and their robots).<\/p>\n\n

      Attend the Growth Machine Workshop and build YOUR own growth mechanics<\/h2>\n\n

      Over the past period, the MAKE PROGRESS method<\/strong> with OKRs<\/strong> has helped dozens of organizations build their growth mechanics. These include Mail Boxes Etc…, Leroy Merlin, Arrow, and many other startups and SMEs that have decided to embark on a path based on the ability to define and execute strategy with intentionality and precision. <\/p>\n\n

      I have reopened new dates to participate in the workshop in which we can work together to build your Growth Machine. The first available date is November 6, 2023.<\/strong><\/p>\n\n

      Consider taking part in the strategy workshop alone or with your team if you wish:<\/p>\n\n