Shortcuts / 19 May 2022
The life and times of Mike Cannon-Brookes
Mike Cannon-Brookes – the billionaire co-founder of tech company Atlassian – has been making a few headlines recently off the back of his attempt to buy Australia’s largest energy retailer AGL and transform it into a lean, green, power-generating and retailing machine. So in this Squiz Shortcut, we take a look at his early life, his career in business, and why he’s so keen on getting his hands on AGL.
Let’s start with some biographical details.
Sure thing. Michael Cannon-Brookes was born in 1979, which makes him 42yo. He was born in the United States and moved to Sydney as a child.
Who are his parents?
His dad Mike Cannon-Brookes Sr is English, and he was an international banking executive who was one of a big group of foreigners who joined the Australian finance industry in the early 1980s when international banks were invited to apply for licences.
What was Mike Jr’s early life like?
He was the only child growing up at home, as his 2 older sisters were sent away to boarding school in England. He went to Cranbrook School – it’s one of the most prestigious private schools in the country and he competed with another boy for dux of his grade.
When did his interest in tech begin?
The Cannon-Brookes kids were used to jaunting across the globe during school holidays and Cannon-Brookes bought his first computer using Qantas Frequent Flyer points. When he finished high school, he went on to attend the University of NSW, where he did a degree in information systems. That’s where he met his future business partner, Scott Farquhar.
Did the pair hit it off straight away?
They took a bit of time to warm up to each other, Farquhar says. They came from very different worlds – Farquhar was from a working-class family in Western Sydney. But in 1998, the pair landed in the same scholarship course in business information technology and they bonded over their shared love of computers.
Anything else to know about Cannon-Brookes’ background?
He married fashion designer Annie Todd and they have 4 children. He says she approached him in the Qantas lounge at the airport, confusing him with someone she knew. They got chatting and the rest is history. They live in the Southern Highlands in NSW and own a big property portfolio across the state.
Cannon-Brookes does look like a bit of a character…
Yep – he’s got the long hair and a beard, and normally rocks a simple t-shirt and blue jeans. One of the things he and Farquhar agreed when they set up the company was they would never wear a suit and they have certainly lived up to that.
And what’s with the cap?
He has a few in his collection, but he’s often spotted in a white one with a bunny on it. That’s because he’s a co-owner of the South Sydney Rabbitohs rugby league club after buying a 25% stake in November last year, alongside actor Russell Crowe and billionaire businessman James Packer. He also became the first Aussie to own a stake in an NBA team when he invested in the Utah Jazz in 2019.
So he’s got his fingers in lots of different pies…
He sure does, but business remains his key priority.
Speaking of business – how did Atlassian come about?
It’s the tech company that’s propelled Cannon-Brookes to fame and fortune. He set it up at uni and emailed his mates to get on board – and Scott Farquhar emailed back.
So they co-founded the company?
Yep – the co-founder model is pretty common in US tech companies. The Aussie pair are said to be in lockstep with each other and reckon they’ve never had a serious falling out. But if they ever have a difference of opinion, it’s settled through a game of scissors, paper, rocks – which Cannon-Brookes says he usually wins.
That’s one way to do it… Why was the company called Atlassian?
Cannon-Brookes must have had a big vision for it right from the start because it takes its name from the bronze Atlas statue in front of the Rockefeller Centre in New York City. His father says that when Mike Jr was in his early 20s, the 2 walked past the statue and he said, “the software we’re going to make is going to hold up the world”.
So what does the company do?
Basically, Atlassian creates software to help businesses and teams work better. It’s used primarily by software developers and IT departments and its products are known for being cost-effective. Its flagship product is something called JIRA, which is a project management and bug tracking tool used by thousands of companies and organisations including NASA and Tesla.
Is it any good?
Well, put it this way: tech developers aren’t the only ones who rave about it – shareholders do as well. That’s because the company is valued at US$48 billion. It’s listed on the NASDAQ – which is the American stock exchange focused on tech stocks – and Cannon-Brookes’ personal wealth is said to be around $18 billion.
So he’s a very wealthy man…
Yep, but he says accumulating wealth isn’t really his thing. In recent years, Cannon-Brookes has branched out into different projects, particularly in the renewable energy sector. It was in 2017 that he announced his interest in the sector by joining forces with Tesla boss Elon Musk.
In 2017 Cannon-Brookes was scrolling Twitter and saw someone from Tesla claiming South Australia’s rolling power outages could be solved with the company’s industrial solar batteries.
Long story short, Tesla promised to install the battery within 100 days of a contract being signed.
Where does Cannon-Brookes come in?
He bet Musk that he couldn’t do it within 100 days, but Musk came back and promised that if Tesla couldn’t make the deadline it would give Oz the batteries for free. And central to the saga was Cannon-Brookes’ lobbying of then-SA Premier Jay Wetherill to get him on board. At the time, the battery was 3 times bigger than any in the world.
Does Cannon-Brookes have any political aspirations?
He was asked a while back if he was interested in joining a political party and his response was an emphatic ‘no’. He says he needs to have a good relationship with Canberra in order to get things done but he’s not interested in being part of that process.
Fair enough. What other renewable energy projects is he involved in?
All up, he and his family have contributed $1.5 billion to green investments to counter climate change through their private investment firm, Grok Ventures. That includes a $78 million stake in green energy lender Brighte, more than $100 million in driverless vehicle developer Zoox, and Sun Cable – a $30 billion project that aims to supply power to the Top End and Asia.
That sounds pretty ambitious…
Yep – essentially, the plan for Sun Cable is to build a giant solar farm in northern Australia – it will be 12,000 hectares of panels and storage, which is a bit smaller than the city of Brisbane. And the idea is that a cable will be laid to get the electricity from the farm to Darwin, Indonesia and Singapore. And then most recently, Cannon-Brookes has put in a takeover bid for energy retailer AGL.
What’s the deal with that?
He partnered with Canadian asset manager Brookfield to make an $8 billion takeover bid in February. Cannon-Brookes reckons there’s an opportunity to remove its coal-fired power plants from its lineup by 2030 – a long time before the expected exit date of 2045, and a move expected to cost about $20 billion.
How was that bid received?
AGL rejected it, saying it undervalued the company and wasn’t in the best interests of shareholders. And PM Scott Morrison spoke up against the move, saying that phasing out coal early would force energy prices up.
But Cannon-Brookes disagrees?
Yep. He says renewable sources are generating cheaper power and more of it would ultimately drive prices down, not up.
So who’s right?
It’s complicated… There’s currently an issue when it comes to renewable energy and reliable and dispatchable power – which is what coal-fired plants produce – but people who are excited about renewables say the technology is getting better all the time, including battery storage and dispatch.
What happened after Cannon-Brookes’ bid fell over?
He came back for another go, buying 11.28% of the company through Grok Ventures, making him the biggest shareholder. And his first order of business is to stop the company from splitting into 2 divisions.
What’s that about?
AGL has proposed dividing the company into 2 parts – a new entity called Accel Energy would house the coal power generation business, and AGL Australia would do the retailing.
Why does Cannon-Brookes want the company to be kept together?
He says the company’s success will rely on moving away from coal as quickly as possible as it becomes a drag on their profit and reckons market forces will make AGL step up to faster action to address climate change.
But AGL disagrees?
That’s right. Its CEO Graeme Hunt has accused Cannon-Brookes of trying to drive down the share price so he can get control of it on the cheap. Ultimately shareholders will decide – the vote on splitting the business is scheduled for 15 June – and it needs the approval of at least 75% of shareholders to go through.
So that’s something to look out for…
It’s definitely one we’ll be watching closely.
An article on Atlassian’s approach to remote working
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