This week Asana–which operates a platform for project management–pulled off its direct listing on the New York Stock Exchange. On the first day of trading, the shares shot up about 37%.
The roots of Asana go back to 2008. The co-founders were Dustin Moskovitz (the the co-founder of Facebook) and Justin Rosenstein (a former employee at Facebook and Google). They got the idea for their startup from their experiences at Facebook. When the company was growing at a breakneck speed, it was extremely challenging for teams to get things done. Often there was too much time spent on meetings and long emails.
But Moskovitz and Rosenstein thought that a cloud-based system could help solve the problem. This would allow for ease-of-use and wide access. The subscription model would also be affordable for customers.
No doubt, the vision has been spot on. As of now, Asana has 1.3 million paid users and recorded revenues of $142.6 million for fiscal 2020, up 86%. The market value is about $4 billion.
OK, how did Moskovitz and Rosenstein pull this off? What are some of the lessons? Well, Moskovitz and Rosenstein included a shareholder letter in the IPO prospectus and it provides an insightful playbook.
Here are some of the highlights:
Build Software That Customers Love: In the enterprise world, the applications are often complex. There is also usually a need for much training to get adoption.
So yes, Moskovitz and Rosenstein knew that a rethinking was required: “’Enterprise users’ are just consumer users—or, as we like to call them, ‘people’—at work, with the same desire and appreciation for high-quality design and delightful interactive experiences. We want our customers to love the product we’ve built and to feel more connected to their teammates and their organization’s mission by using it. This is why we’ve set out to design and build products that rival the best consumer software.”
Yet this is not to say that the functionality is given scant attention. Asana certainly works hard on stability, security and compliance, all of which are critical for enterprise-grade applications.
Technology Foundation: A key advantage for Moskovitz and Rosenstein having worked at Facebook was understanding the importance of building a scalable IT infrastructure early on. To this end, Asana has a “work graph,” which is a data model that tracks users, tasks, goals, projects and so on, and the proprietary Luna2 application that allows for rapid development. By having such a strong foundation, it has been easier and quicker for Asana to implement next-generation technologies like AI.
The Team: Asana has invested heavily in talent acquisition. The goal is to hire “capable, mission-driven, and values-aligned” people as well as to focus on diversity.
Moreover, Asana considers its culture to be a competitive advantage. Here’s how Moskovitz and Rosenstein put it: “We leverage our value of mindfulness to regularly and intentionally improve our business engine, customer support, onboarding, recruiting, internal processes, and everything else about our own organization. Just like we continuously improve the Asana product, we aim to continuously improve Asana’s culture and processes. We strive to be unswervingly self-aware and have built processes at various organizational and time scales to periodically take stock of how well our actions—and their results—match our intentions. This surfaces areas that need improvement, which we call ‘culture bugs.’ We then co-create concrete plans to address these bugs and improve our culture during the next period of work.”
The Long-Term: Asana is a mission-driven organization. This is what powers the culture. According to the shareholder letter: “Like all companies, we intend to create great returns for our shareholders. That outcome, however, is a byproduct and catalyst of our ultimate purpose: the fulfillment of our mission. We are also deeply committed to benefitting all our stakeholders: our customers, our employees, our partners, our communities, the environment, and humanity. We, the founders, are individually Asana’s largest shareholders, and will receive a large portion of the financial proceeds from the company’s enduring success. Both of us pledge to use 100% of the value of our Asana equity for philanthropic purposes.”
Tom (@ttaulli) is an advisor/board member to startups and the author of Artificial Intelligence Basics: A Non-Technical Introduction and The Robotic Process Automation Handbook: A Guide to Implementing RPA Systems. He also has developed various online courses, such as for the COBOL and Python programming languages.