The deadline's moved up, so let's work on getting this out this afternoon.
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These are dropping off.
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Slappy, seriously?
We still got a couple things just to polish this up.
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Any questions? [inaudible] Okay, let's run through the signup flow. I really like how clean it is.
Turns out when we're hitting our goals, nobody cares if we're wearing pants. We just need the right tools, our team stays a team. No matter what comes next, we know we can work better, do better. This is going to work.
Hi, everyone. Welcome to Asana Investor Day. I'm Catherine Buan, Head of Investor Relations at Asana. I know many of you know me already, I'm super happy to be a familiar face hosting you for the day. Before we begin, we have a couple of reminders. First, management may be making some forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results or performance to be materially different from those in the forward-looking statements. For a more detailed look at our safe harbor, please refer to the slide on the screen.
We may be referring to non-GAAP financial measures. These non-GAAP financial measures should not be considered a substitute for GAAP financial measures. A reconciliation of GAAP to non-GAAP is available at the end of this presentation. Most importantly, as you can see, we're broadcasting live from our San Francisco office. This office has been empty and our office is closed since we had to do work from home from the protocol for COVID-19. We just have a few members of our leadership team here and a small production company on-site. For the safety of all who's involved, we're following strict COVID protocols, including sanitation, temperature checks, masking, social distancing. The only time that we aren't in mask is when we're on the air. Okay. Well, let me show you who's here today.
We have Dustin Moskovitz, our CEO and co-founder, Tim Wan, our Chief Financial Officer, Chris Farinacci, our Chief Operating Officer, and Alex Hood, our Head of Product. We all have been wearing masks until this moment. All right. Let me provide a framework for today. Our mission at Asana is to help the world's teams work together effortlessly. We value clarity, and we prioritize the customer experience in everything we do. In that same spirit, we thought carefully about how our objectives for this event today would be. We have three. First, we know you need critical information about our company, our business, and our products. Second, we know you need Q&A. You want to get to know our management, understand what drives our decisions, and informs our strategies.
Third, we know you need it to be in a concise and engaging experience, because I'm sure you've been sitting in the same home office for 6 months, sitting probably in the same seat and engaging with the world through this video screen. From our Asana home office to your home office, thank you for joining us today, and we hope that this event will accomplish all of those things and provide you a great experience. Okay, well, let's take a look at the agenda slide. We have three major sections. First, the overview of Asana and our products. Next, we'll go through our go-to-market strategy and our culture. Finally, our financial overview. For each section, we'll have prepared remarks, we'll get some insights from our customers, and then, of course, we'll take Q&A.
Also note that during any point in the program, you can send a private chat to IR. There is a chat mechanism on the right side of your screen, and you can send me a note, you can queue up your questions, and you don't have to wait until the Q&A session to queue up your questions, so feel free to queue that up. All right. Well, before we start our first Q&A session, we'll begin with an overview of the Asana story from our CEO, Dustin Moskovitz, followed by a product overview from our product leaders, Dana Barrett and Alex Hood.
All important projects in the world have one thing in common. They all involve groups of people coming together to achieve a shared goal. My co-founder, Justin, and I started thinking about this idea while we were at Facebook. I was leading the engineering team there. We were both just consistently shocked and frustrated by how difficult it was to coordinate everyone. We were wasting an incredible amount of time in meetings and these long email back and forths. We ended up building an internal tool to help everyone track their work. The results were really great. Almost immediately after introducing it, everyone was much more on the same page about our plans. The time spent on the coordination itself, the work about work, dropped off a cliff.
We recognized that the problem is universal, we left Facebook and created Asana to bring the solution to the rest of the world. We launched the paid product in April 2012, we've been growing quickly ever since. Just eight years later, we've grown to over 82,000 paying customers, we serve millions of people across 190 countries. Last year, revenue grew 86% to $143 million. We've been helping to introduce the world to the new work management category, analysts have consistently recognized us as a leader in that space. If we succeed at our mission, the work we do here can make every one of those groups vastly more leveraged and effective.
To understand how to deliver that value, it's vital that we have an extremely well-functioning team ourselves. That gives us more credibility when we talk about best practices for teamwork in the market, and it allows us to intelligently integrate those practices directly into our product as we learn and grow. Of course, it helps us achieve our own business objectives, which is the same value that we're working to create for our customers. With that in mind, one of the most important values at Asana is clarity. We strive to ensure that everyone on the team understands their responsibilities, the tasks and processes that fulfill them, and how they relate to the surrounding work, and ultimately, to the strategy and mission of the company.
When we succeed, it means that everyone understands where they should focus their energy so they can stay in flow.
They work more effectively because they understand the plan, and importantly, they're more engaged with their work because they understand why it matters and exactly what's expected of them. That clarity is the keyway that we're able to move really quickly. We're proud that today Asana is often recognized as an outlier work culture. If we succeed at our mission, that means helping every one of our customers similarly become the best possible versions of themselves. Now let me tell you about work management. The biggest things slowing down teams today is the fact that they now spend more time coordinating work than actually doing it. This is a graph representing data from a survey of over 10,000 knowledge workers, and it shows that the average one is spending most of their time, about 60%, coordinating work.
That means they only have 40% of their time left to spend on the strategic and role-specific work that drives results for the business. Imagine how much faster the world's teams could be if we could increase that number. How did it get this bad? Well, in recent years, we've seen a huge increase in collaboration thanks to the introduction of powerful communication tools. Productivity has only increased very modestly in comparison. All this collaboration generates a firehose of information, but people lack clarity about what's most important and where they should focus their attention. This makes team leaders feel disorganized, and they worry about missing deadlines and having work fall through the cracks, and everyone on the team feels overwhelmed with requests. They aren't sure if they're working on the right things or if they're doing a good job.
We designed Asana to solve this problem. Effective team collaboration includes the three Cs: Content, Communication, and Coordination. Teams have invested heavily in technology for the first two categories, but in most cases, they haven't invested in the coordination layer. Coordination is all about clearly answering the question: who is doing what by when? Teams that haven't invested in that coordination layer have had to resort to makeshift devices to coordinate their work. Things like long status update meetings, shared spreadsheets, and sticky notes on whiteboards. Those solutions just don't scale. Spreadsheets were designed for financial modeling, not for team orchestration. Other teams have invested in traditional project management tools, but those require special training, and so they aren't usually used beyond professional project managers in a centralized part of the org.
More importantly, they're not connected to the underlying work, so they aren't up to date enough to be the source of truth about what's actually happening in a team. That's why we built Asana. Asana is one of the pioneers of work management, an entirely new category of software designed to give teams clarity of plan, process, and responsibility. We're solving the problem of team coordination and creating a living system of clarity for work by bringing teams' structured and unstructured work data together. We're helping our customers create a complete map for how work happens in their organization. Asana helps teams orchestrate their work. They use Asana to manage everything from employee onboarding to product launches, to marketing campaigns. Each team member can see the work in whatever view they prefer.
For example, a task list, a Kanban board, or a Gantt chart.
Asana provides a suite of features to help teams plan, manage, and automate their workflows. Finally, since workflows often span several applications, Asana serves as an integration hub with the other apps teams use to complete their work. We support over 100 integrations, including products from Microsoft, Google, Salesforce, Atlassian, Adobe, Dropbox, and more. The Work Graph data model enables our core differentiator, a complete, fully connected, accurate, and up-to-date map of the work happening in your organization. The Work Graph represents all the units of work, like tasks, ideas, goals, agenda items, information about that work, like relevant conversations, files, and status information, and how it all fits together. By keeping all that data in one place, you get a single source of truth about project progress, which means teams eliminate the work about work previously required to share information.
The big picture of our vision is to create a platform that combines human and machine intelligence to automate all the work about work that makes working together so difficult today. That means giving teams time back for the strategic and role-specific work that drives results. Our North Star for that vision is what we call the pyramid of clarity. We know organizations work best when everyone on the team has clarity on the company's mission, its objectives, the projects and strategic initiatives needed to achieve those objectives, and who's responsible for each individual task. Everyone on the team should know what their team is trying to accomplish and how their own work ladders up into those higher-level goals. We built Asana because the work people do together matters.
We're proud of how often teams tell us that Asana gives them the clarity to make their work today more effortless. We feel like we're just getting started.
Hi, I'm Dana. I'm the head of product marketing at Asana. I'm going to walk you through a product demo to show you how Asana gives teams clarity at every level of the organization. Meet Chris. He's a graphic designer at Portola, a fictional company. He used to struggle to keep his work organized, but since Portola started using Asana, coordination has become so much easier. This is the Asana home screen where Chris starts his day. It brings together his most important tasks and projects. From here, he can access My Tasks. Asana's Work Graph gathers all of Chris' tasks in one place, helping him stay organized. Here we see a task, the main unit of work. It begins with an assignee and due date.
This is the essential information every knowledge worker needs to be successful. To answer the question, who is doing what by when?
Further down, we can find details about what Chris needs to do to complete this task. All the content he needs is right there, thanks to our native integrations with services like Google Drive, OneDrive, and Box. Gone are the days of searching for files. Tasks are also where collaboration happens. Teams can discuss and share ideas to drive work forward. Now that we've seen how My Tasks helps each individual, let's move up the pyramid of clarity and see how teams use Asana for their projects. Meet Michelle. She's the marketing director at Portola. Michelle's team is working on this year's brand campaign. Here is the campaign project in Asana. Anyone on the team can see the different tasks for this project in the list view.
But this is just one of the views that the team can use to organize a project.
They can also see this project as a Kanban board. In this view, tasks are represented as cards. Each column shows what stage of completion each unit of work is in. Here is a timeline view. In this view, Asana helps teams see task dependencies. Before, teammates would need to schedule a meeting to update due dates and get on the same page. Now it's automatically done for them in Asana. In the calendar view, teams can easily see key dates and manage deadlines. With these views, teams can organize their work data in the way that best suits each project. This helps them stay coordinated and better collaborate. Conversations that impact projects can happen anywhere, in email, meetings, or chat, on desktop or mobile. Asana helps teams capture these updates so that information doesn't get lost.
Let's take this message that Michelle just got over Slack as an example. Michelle and her colleagues align on the assets the marketing team will need for the brand campaign. With Asana's integration with Slack, Michelle can create a task based on this chat and add it to the campaign project. Since this task also requires support from the creative production team, Michelle multi-homes it to both the brand campaign and the creative production projects. This multi-homing functionality is a unique differentiator that is enabled by Asana's Work Graph. Now, teams working in either project know next steps and can stay on the same page. Asana automatically assigns this creative request to a graphic designer, in this case, Chris. Designers like Chris do their best work when they can focus on their craft.
With the Asana for Adobe Creative Cloud integration, Chris can work in one of his favorite tools with important context on his current task right at hand. This means less time searching for details in emails and spreadsheets, and more time for the work itself. Once Chris has finished his work on the creative request for the brand campaign, he attaches the requested asset to his assigned task. Asana automatically kicks off the review and approval process. Let's jump over to Michelle, the marketing director, to see how this works. Asana gives Michelle everything she needs to review Chris' work, the image, collaboration history, and the ability to approve over any device, anywhere. With Asana, teams can have fun and can celebrate a job well done. Let's move up the pyramid.
Asana helps entire organizations align to accomplish their mission. To organize Portola's marketing initiatives, Michelle uses Portfolios.
Portfolios helps teams track the status and progress of multiple projects at once. Michelle can view resource allocations across the team. With a simple click and drag, reassign tasks to create better balance. Thanks to the Work Graph and Asana reporting, she has visibility into the status of all of the team's projects. With our integrations with advanced analytics tools like Microsoft Power BI and Tableau, organizations gather important insights that can drive business outcomes. This takes us to the top of the pyramid, where leaders can track company goals and all the work needed to achieve them. From individual productivity to company objectives, Asana gives teams a living system of record. With this, organizations have greater confidence and clarity so they can move faster and accomplish more.
I'm Alex Hood. I'm the head of product here at Asana. I lead the teams who are thinking about the future of work and how we can build it to really change the way that folks are working for the better. The majority of our R&D efforts over the last decade have been to build out the features based on the Work Graph technology. This core architecture allows us to offer benefits that others can't. Asana solves the problem of work about work in some unique ways. Number one, it's very easy to use.
If a team lead selects Asana, their team can get on board and get traction, create shared victories fast. Number two, we actually care about individuals, and there's a broad set of tools in there that allow for individuals to be clear on what they need to do and their priorities.
Number three, it actually helps link strategy and execution. Other work management solutions force teams to work in one particular way called the container model. That's where a project lives only one construct, a single Kanban or a single spreadsheet.
It only works for one project. That's a big inhibitor. At Asana, we have something different. We have a unique data structure called the Work Graph. The Work Graph does two things. Number one, it allows anyone to see how the project or projects are coming together in any view they want, timeline, Kanban, spreadsheet view. Secondarily, it allows a single task to live in multiple different projects. That just means that teams who are working interdependently can then have the information that they need in their own workflow, in their own form. Our product vision is in two phases. The first phase is what we've been working on to date. That is building the pyramid of clarity powered by the Work Graph. That means everybody knows who's doing what by when, up, down, and across organizations.
When that Work Graph is created, we're able to have our second piece of our product vision, that's to become the navigation system for organizations. That navigation system allows organizations to set their goal, get turn-by-turn guidance on how to get to that goal as fast as possible, then automate the core workflows that teams struggle with to get that work done. The great thing is that customers see value. You look on Twitter, you meet customers for real. They adopt Asana, it's changing the way they work, then they can't imagine going back to the old way. That, for me, is very satisfying, for our team, gets them fired up every morning.
I am Christina Campbell, I am a design operations manager at Slack. Slack is a channel-based messaging platform for the enterprise. I keep people informed by using Slack and Asana. I use Slack for communication, keeping people up to date, I see Asana more as our holy grail of information. It's where people can always refer back to for any project information. What is the brief? Any dates? Any helpful docs? We stick that in Asana. Asana usually gets adopted by design first because it's gorgeous, it's user intuitive. Of course, design is on it. They love it. Engineering was using a more traditional project management tool, once they saw what was possible in Asana, they really got excited. What was really exciting for them was ability to collaborate with other teams.
What used to take us one week to get all together and agree on a timeline, it now takes us two days. Before Asana, project management was kind of painful. Now that our team is on Asana Portfolios, I'm able to get them to look just in one place. The thing I really love about Asana and the way our teams are truly collaborating on one tool, it's not about launching more projects. It's about launching complex projects and really being able to see the issues ahead of time. When we're talking about launching global campaigns, that means not only are we talking about three teams, we're now talking about six teams. Then we're talking about different languages. We need to be able to look to one place and be speaking the same language.
I love Asana because it's made my life easier.
It's made my team's life easier. I've been able to really share efficiencies with teams and get them excited about process, which is very hard to do. Asana is the tool that helps me bring projects to life and then keep moving on to creating bigger and better and more complex projects.
I love hearing our customers talk about Asana, especially when they talk about how complexity is solved and managed and Asana enables them to make better decisions. All right, let's move to Q&A. We've got Dustin Moskovitz and Alex Hood here. All right. Okay. Our questions are queuing up. Dustin, the first question is for you. Why is work management important, and why is it mission-critical, especially in a tough macroeconomic environment?
Yeah. Thanks, Catherine. Our research shows that the average knowledge worker is spending 60% of their time on what we call work about work. If you think that that's just sort of an intrinsic part of collaboration, then you might not think something like work management is critical. That's just a tax that everyone has to pay. If you think we have any hope of chipping away at that pie, then there's an incredible opportunity to make your teams more effective and more productive. We really think that effective collaboration involves what we call the three Cs, so Content, Communication, and Coordination. In most cases, teams have invested heavily in technology for the first two categories, content and communications, but they haven't invested in that coordination layer.
Everybody has to do coordination, but without a product like Asana, they're just doing it in long meetings and email back and forth and shared spreadsheets, and it's not effective. When you're doing it that way, the other two categories can actually be counterproductive because all your communication channels and those documents that you're working on end up becoming part of the fire hose of information and disruptive notifications that distract you from your work. Once you add a product like Asana, then everything works really well together and really amplifies the power of each of those technologies, the whole becomes more than the sum of the parts.
We know what you meant.
Yeah.
Okay. The next question, actually another one for you, Dustin. You mentioned that the Work Graph is your key differentiator because it enables many different views and workflows. Can you elaborate on that? What makes Asana unique and different?
Sure. The Work Graph is really enabling what we think of as our key differentiator, which is a complete, fully connected, up-to-date, and accurate map of the work in your organization. The alternative to this is a container model, where work lives in silos and teams organize around discrete projects. The Work Graph isn't a concept in the product itself, so the way we hear this play back from customers is that it's really enabling the best customer experience, and it works for the entire organization. When you think about it, the most important coordination use cases are almost always cross-functional in nature. For example, to produce this Investor Day involved a huge collaboration between us, our marketing teams, the finance teams, and really a shocking amount of contribution from the legal teams as well, as you can imagine.
They're all working together, organized around the same work.
The Work Graph empowers teams to work well cross-functionally because it enables many different views and workflows to be built around the same underlying units of work. That means each of those teams was able to build the views that made sense for their workflows and their context. Asana itself was able to tailor the best experience for each constituent on the team rather than just optimizing for the project leader. That flexibility combines with a deep investment in interaction design to make the product experience really nimble and scalable. It's easy to use and adopt when you're getting started, but it also has powerful enterprise capabilities that a customer can integrate as they deepen their engagement.
Finally, the Work Graph connects work top to bottom, from the atomic unit of tasks all the way up to the highest-level objectives and the mission of the company. That creates dynamic clarity for the entire organization and really connects strategy and execution for the first time.
Well, architecture does matter. Okay, the next question. Alex, can you talk about your integration strategy and how you work with other products and platforms?
Sure. As Dustin said, the best teams have three things. They have a place where the communications goes on. They have a place where their content lives. There's a coordination layer. That's where purpose, plan, and responsibility lives. That's what Asana is. It's critical, though, that the plan of record be deeply integrated where communication is occurring and where all that content and context lives so that people can do their jobs well. An example is our Slack or Teams integration. When there's chat going on amongst a team, there could be tasks that come up, or a plan of record might evolve. With one click, then that plan of record or that task gets swept over into Asana, and it becomes additive to the plan of record that everybody's looking at.
Asana ends up being very complementary to the existing tools out there where teams house their content and communications. I want to also give a slightly more technical answer. The Work Graph data model is the important infrastructure that powers our system. It does something uniquely well. It takes the unstructured data about work and makes it structured. Our integrations allow us to assemble much more of that unstructured data about work, which allows us to create a much more active real-time map of how work gets done in an organization, allowing the tool to be more powerful and ultimately intelligent.
Wonderful. Okay, Alex, one more question for you. What does your organization look like, and is there anything unique about the way you approach your productization?
Yeah, great question. There's two things I think I would mention about my organization makes it distinct. The first is customer focus. We have a robust user research team, and usually, that ends up being a service organization that lives under another organization like, say, Design. In Asana, product management makes the decisions on what we build. Design, which creates the experience itself, and user research are peers. That means that when the roadmap is being created, the customer and the most important insights are there, have a seat at the table, so we're making the right decisions on behalf of our customer. Second thing I'd mention is Design. We have a world-class Design team that's made up of folks from various backgrounds, but many have backgrounds in the best-in-class, best-of-breed consumer applications.
That's because Asana needs to be very easy to adopt, and we care about how the customer experience manifests itself. That's how we grow.
Actually, I see the next question, couple questions down, is actually a great follow-up to what you just said.
This question is about the individual experience. Alex, the first thing you always highlight, so they must have met with you before is how Asana prioritizes the individual experience. Why is that so important in an enterprise software business?
Yeah, great question. The individual experience, having the folks who end up using the product feel delight in using it, is really important. If the platform is meant to be real-time and the real-time source of truth across an organization, then it's got to be easy to use, and that's what fuels individuals to add their work to the plan of record. We are taking the great things that exist in project management offices, the ability to better organize work, and we're democratizing that for the world's information workers, right? That means that project plans, the plan of record, who's doing what by when, the context around tasks, that is co-created. It's really imperative that the individual feels like they get massive benefit from Asana. Secondarily, that focus on the individual experience drives growth.
When the individuals who are on a team, they get together, they have a shared victory. They knocked out all those cycles around trying to determine the plan of record, and they have a win. That brings them together, and they want to have a shared victory like that again. The next team that they're on, they use Asana or recommend Asana to other folks. That's the flywheel of our growth. Chris Farinacci, I'm sure, is going to talk about that more, but teams that succeed end up being the best marketing tool for Asana as we grow.
That's great. I actually see a great question that comes up pretty frequently when people are still getting up to speed on our business. Let's put this one out for you, Alex. How are you different than other work collaboration software tools, whether it's email, Slack, or any other tool that a knowledge worker traditionally uses?
Did you want to take this?
Yeah, I can start maybe, yeah. Yeah. I already said this a little bit earlier, but we really think collaboration involves the three Cs, so Content, Communication, and Coordination. Email and Slack really fit into that communication category. They're absolutely essential to collaboration. We use Slack especially very heavily ourselves. They don't help you answer the coordination question. Coordination question is who is doing what by when? What steps are left between now and accomplishing our next milestone? Who's responsible for each of those steps, and when are they expected to be done? Communication tools are great when you're discussing things, but you have to go through the entire history of your conversations in order to answer those questions.
It's really tedious, and it doesn't represent the current source of truth on what's actually happening with a project in progress. We really think that these things work really well together. In fact, you just heard from Slack in the earlier part of our investor video about how they use Asana to make their work more effective.
Yeah. This is an emerging category. Massive TAM, massive customer pain point, and some of the solutions are starting to emerge. Here's what we're seeing. We see that spreadsheets and email don't scale. There are a series of project management tools out there really made for single team, single project. The pain that we're solving in this category is cross-functional in nature. Those types of solutions don't scale well.
There's also industry-specific, functional-specific solutions out there, and those work very well for bespoke needs of organizations that are functional, say, software development or others. Those, while great for that function, don't enable that cross-functional drivership, cross-functional success, which is really how work gets done. The last piece is there is existing project management software out there, and that is used largely by project management offices, not by the folks who are really becoming more and more accountable for not only doing the work but managing the work and having accountability that the work gets done across their team. Even though they don't have authority, they have that accountability. To have the benefits of knowing who's doing what by when, to take that coordination layer off of the plate of maybe an accidental project manager, that's a new benefit that's differentiated.
That actually leads right into this next question. In fact, there's two follow-ups to your recent answer. One is, Is there always a project manager role in Asana, or can peers work without a project manager?
Yeah, well, often how technology emerges is that humans do work, and then technology understands the benefits that those humans are creating and augments that, right? Project managers have a great function because they make sure the trains are running on time. They create clarity of who's doing what by when. We keep saying that phrase, the purpose, plan, and responsibility. We're democratizing that. A project manager certainly can use Asana and have a lot of success with their team. Often, our biggest advocates are project managers who want to scale up their ability to have impact. Also, a project manager is not required for Asana to be successful. Teammates are co-creating that plan. They're getting that work done. They're seeing the bird's eye view.
They have their own distinct views of the plan, they can see how their pieces fit together without a human who's helping them do that. That's really the benefit that we're offering.
Makes sense. This next question is actually a double-click into your point about the capabilities in cross-functional capabilities. This question is: Can you explain what multi-homing is and how someone uses it?
Sure. Do you want me to take it?
Sure.
Multi-homing is one of these like aha, delightful moments in the product. When you're using Asana and you experience it for the first time, that's the, "Oh, I see what they're doing here." We describe it as the Work Graph data model. That's the technical version of it. What it really is, say, a marketing team has a cross-functional project that they're running. They've got a task, which is to get a website done as a project. There's tasks in there around design. Because they're creating those design tasks in the marketing team's construct on their pages, in their domain, in their workflow, that means that the design team has to come over to the marketing team's place and work within their workflow.
That's a source of friction in work about work. What often happens is that the design team's like, "You know what? Let's just make a copy of all those tasks that live in the marketing team's domain, and we'll put that into our own design workflow." Then you get those version control issues, work about work, and friction just manifests from that, right? Multi-homing is that same task around designing the website is in the marketing side and is clickable, available in the designer's workflow, too. Same bit of data, same exact task lives in two workflows. That technological innovation there, that data structure that we started with here at Asana is enormously powerful because the world's projects are cross-functional. The biggest pain points are around handoffs, things not falling through the cracks.
That's an example of how the Work Graph data model delivers clarity.
If I may add on to that since I think this is really important. Once you've broken out of that container model, you also have the opportunity to multi-home that in as many places as you want. In addition to the marketing and design team, the designer might multi-home it into a meeting agenda with their manager so they can discuss it when they have their one-on-one. Additionally, Asana has, we talked earlier about the importance of individual experience. There's a great sort of personal, individual work management tool built inside Asana, for every one of our users. This is something that is really quite unique to our product, and it's basically another version of multi-homing. Not only is it in the project, but it's in your personal workspace, organized your way.
You can say, "This is the stuff I'm going to do today," or maybe, "This is the stuff I'm going to do next time I'm in a certain location." That's really powerful and gives people a lot of control over how they organize themselves.
Oh, yeah. The personal view is a very unique view for us. That's right.
Yeah. That personal view is just, there's the Kanban view and the calendar view and the portfolio view. It's basically the same underlying data that's painted across unique bespoke views for every individual, is the power of the Work Graph.
Fantastic. Okay, well, Dustin, you mentioned that Investor Day was an example project, so I think that this is where this question comes from as well. Dustin, as you prepared for this Investor Day, were your outside partners able to work with internal people on the Investor Day project? Are you using Asana for the direct listing project?
We decided just to use spreadsheets for the direct listing. We're using Asana very extensively, including with our external partners, like our video production agency. They're able to just join as guests inside our workspace and collaborate in the same project views that we're using, as well as create their own if they'd like to. It works really well, both internally and externally. For the direct listing, we've been working on this for six or eight months already and have a number of projects and a number of Portfolios dedicated to this project. It made it seem, frankly, much more straightforward. I've never had the opportunity to do this before. Very few people have done direct listings at all. We were able to just lay out the plan, know exactly who's responsible for each piece, and get to work.
Perfect. Let's see. Another one from the audience. The Work Graph model is a terrific concept, but does Asana really have the right or best perch within the enterprise to actually assemble and manage the flow?
Yeah. Well, I think traditional enterprise software is sold tops down. That is sold to folks who may not ever use it. Asana was created starting with tasks and projects. That means it was really created for people trying to get work done on the ground, individual contributors working together, maybe with a team lead. Asana is adopted bottoms up by teams themselves. That positions it perfectly because the rest of the organization then relies on that information about the work going on that's added to the Work Graph by individual contributors. You can have bird's eye views across maybe matrix organizations. It's all different views of that same work that's going on. If you started at the top, you need to have a lot of folks running around assembling that information. That's work about work.
By starting at the bottom, you're positioned to have the map of how work gets done, the Work Graph actually created and co-created by teams. That's what makes it enormously powerful.
Wonderful. I think we have time for two more questions. What are the top two or three product-related selection criteria that customers have?
Yeah. Good question. When folks try out Asana, they need to be convinced pretty easily that their team's going to have success in it. That's why we focus so much on design, the customer experience, and ease of use. Because if a team lead is trying something out, they're kind of putting themselves on the line a bit, like, "I'm taking a risk to get my team to adopt this thing. I only have so many chips to wager to ask them to do things. And I'm going to put my chip on Asana." That means that Asana needs to show benefit quickly for all the team members. Team members need to be able to see, to really have the chaos of how they worked before turn into clarity.
They need to be able to see work get done, maybe see their first nag-free project completion or task completion in the program. Then they need to see the results. Like, "We got this done easier, more quickly, with less work about work because of Asana." That adoption experience, ease of use, ends up being a competitive differentiator and a must-have for those who are shopping in this brand-new category of work management.
The world's not just top-down, it's changing bottom-up.
Exactly.
Wonderful. All right. I think we have one more question for this last section. This is really a good one to end on. Dustin, what keeps you up at night from a competitive market dynamic standpoint? What are the things that give you a sustainable competitive advantage?
Great. Thanks. We talked some about the fact that our addressable market is really 1 billion knowledge workers globally, and the vast majority of them are still doing coordination through the status quo of long email threads and meetings and shared spreadsheets. What keeps me up at night is less actually our direct competitors getting to that market first and more of this idea that the status quo keeps getting a little better. Emails and documents are a lot more powerful than they were 20 years ago, and I think there's somewhat of a risk that this lulls potential customers into a sense of complacency because they see some of their coordination pains getting solved, and they lose the motivation to seek out what could be radically better.
I've definitely worried about that less and less over time as we've seen the category develop, and we've had more time to tell our story. Nonetheless, that's the thing I tend to think about the most. In terms of our direct competitors, what gives us a sustainable advantage is the fact that we have a deep, highly differentiated vision built around the Work Graph model that we've been talking about. The flexibility of that model means that we're capable of scaling from small teams all the way up to large enterprise organizations. It's easy to use and adopt, but it's also extremely flexible, customizable, and powerful. We've been building and strengthening that advantage over the past 10 years as we've invested hundreds of millions of dollars in R&D.
Customers love the Asana product experience today, and they rely on it for critical workflows, so it's extremely sticky. We have a large and quickly growing community of Asana evangelists all over the world that help us drive awareness and adoption. The ones that have been with us for a while can see that the product keeps getting better and better. We have the credibility to keep building and delivering that vision for the long run.
Thank you. That's great. That's actually a perfect segue since our product and our go-to-market strategies are married together. Let's segue into the next section. Thank you, Dustin. Thank you, Alex. Let's go to some prepared remarks from our team, starting with Chris Farinacci, our Chief Operating Officer.
My name's Chris Farinacci. I'm the COO at Asana, and I'm responsible for running the business. I've been in enterprise software for 28 years. Most recently, I was at Google, running marketing for their cloud and education businesses. These days, I think everyone realizes they don't have clarity, particularly post-COVID. They spend all their time trying to solve it with emails and sticky notes and meetings, instead of knowing you don't actually need to do all that stuff. You could spend way more time on your craft. Asana has a large and diverse customer base globally across regions and countries, from early adopters into mainstream verticals, and also broadly across use cases and functions within a company.
Our customers span from really small companies to the world's largest. Asana has more than 82,000 paying customers, many with multiple teams and some with hundreds of teams using Asana.
That's on top of a base of more than 3.5 million free activated accounts. We have more than 1.3 million paying users. Regionally, 40% of our revenue comes from our customer base outside the U.S., and we have users in 190 countries. Let me tell you about some of our amazing customers. Autodesk creates software for people who make things. They use Asana for general work and project management across sales, marketing, and operations. The Global Customer Events team tracks all their event timelines and requests in Asana, so everyone's working off the same information. Viessmann, headquartered in Germany, is a leading manufacturer of heating and refrigeration systems with over 12,000 global employees. Their CEO, Max Viessmann, initiated a company-wide digital transformation initiative to bring team agility to the whole company, with Asana as its foundation.
We're also wall-to-wall in companies like Fireclay Tile and G2. Fireclay Tile, a leading tile manufacturer, uses Asana to centralize and manage all their work from strategic planning to team meetings. G2 is a leading B2B software review site that uses Asana company-wide to help them hit their revenue, review, and website traffic goals. We reach and support our customers via an intentionally hybrid self-service and direct sales business model. This is a bottoms-up seed, land, and expand experience across the customer journey. Seed corresponds to our self-service business, where we see high volumes of small, free, and paid teams adopt across companies of all sizes. Our land and expand motions then correspond to our direct sales business.
Hi, I'm Dave. I'm the Head of Marketing.
Hi, I'm OJ. I run our sales and partnerships teams.
Our self-service and direct sales models work together, and it's how we reach millions of teams all over the world and turn them into successful customers. Self-service is our high-velocity engine. Every month, millions of visitors come to asana.com, and hundreds of thousands of people sign up for the product. Anybody can sign up for a free trial and get started within minutes. Teams pay us a subscription, which is priced based off of the number of users they have and the level of service, and that determines what features they have access to. The beauty of our model is as teams collaborate, they add more people. As their needs get more complex, they need additional premium features, and their investment with us grows.
Our lead scoring algorithms use that data to identify which teams and which companies represent the best opportunity to land and expand through our direct sales motion.
Yeah. The self-serve model gives us a massive edge in market development. We can bring in our regional sales and marketing and customer success teams to actually accelerate Asana's presence in those markets. Our direct sales model is built directly on top of our self-serve model. Which gives us a great advantage because by the time we engage with customers, our customers are already using Asana. We have a two-phase selling model, land and expand. Typically, we land in organizations by powering critical workflows in a few departments. Departments such as marketing, design, operations, and account management. During this phase, we not only develop internal case studies of success with Asana, we also develop a network of champions who advocate for the product on our behalf. Comes the expand phase.
In this phase, it's very common that adjacent teams start to hear about Asana through word of mouth, or they're invited directly into the product. Once we reach a critical mass of users, it's very common then, and increasingly so, as the work management category is maturing, that companies are looking to standardize on one platform. We're very well-positioned in those situations. Let me give you an example of a customer life cycle. One of my favorite customers is a Fortune 500 insurance company. This is a company that came to Asana as part of a bigger digital transformation initiative. The initial teams organically found Asana, and our internal algorithms identified that this team and this account was starting to have some momentum in their success of using Asana.
We immediately connected this customer and this specific team with a customer success manager and helped them onboard their workflows into Asana. Very, very quickly, a word-of-mouth effect took place, and what started with one team ended up being hundreds of teams also migrating their workflows into Asana. We were very, very well-positioned in that situation because we had already developed a network of champions. We had a number of case studies, internal case studies of success, of how this company was able to deliver and execute on Asana. Ultimately, the customer signed a multi-year Enterprise agreement with us, and more importantly, our customer was able to launch a brand-new product, ideation through execution, all in Asana. IT teams love supporting the usage of Asana because it's so easy to use. The deployment is seamless. It's hands-free.
The IT department rarely has to get involved, if at all. That's another big reason why people choose Asana. I just gave you an example of just one customer. We see a massive opportunity to expand in our customer base.
One of the metrics that we look at on the health of our expansion is how many customers are paying us more than $50,000 per year. Our direct sales model has been really successful at growing that number every single year.
Last year, we grew the number of 50,000 spend accounts by 250%. We expect that number to continue growing.
Our customer champions are super important. They bring on additional teams both inside their company and outside. That creates a virtuous cycle, which really takes us back to the beginning of the customer journey. They also join our Asana Community, which is incredibly vibrant. I think it's that customer advocacy that has helped us reach teams in 190 countries. Our business is incredibly global. Over 40% of our revenue now comes outside the U.S. One of the beauties of our model is we can see where there is traction within our self-service model, which is a good indicator of customer demand, and that is our guiding light to where we put a local presence.
That's why we decided to open up offices in strategic countries like Sydney to cover Australia, Tokyo to cover Japan, Munich to cover Germany, London for the U.K., and also an inside sales office in Dublin because we had already seen so much traction in those regions, and we wanted the opportunity to execute a more localized sales marketing strategy in those regions for us to continue expanding in those accounts and in those geographies.
That moment when you no longer have to send an email or look at a spreadsheet to know who's doing what by when is the magic moment, and people are converted.
Our competition is the status quo of emails and spreadsheets and sticky notes and status meetings. We believe that the vast majority of information workers don't yet have work management tools, so it's a largely greenfield opportunity. We see large levers for growth in front of us along many vectors. In many ways, we're just getting started. First, we're focused on acquiring new customers. This is an emerging category with the vast majority of the world's information workers suffering from lack of clarity. We have more than 3.5 million free activated accounts to focus on converting to our paid product. There's a large expansion opportunity in our existing paying base of more than 82,000 paying customers, where we're less than 3% penetrated today.
Here we're growing our direct sales team, roughly doubling them year on year, and developing solutions to address this white space. Lastly, we see a huge opportunity to provide cross-company clarity use cases, starting with integrated goals and OKR management.
My name is Anna Binder. I'm the head of people here at Asana. There's a lot of things, a lot of ingredients that go into the recipe of a culture. Let's start with some of the most important things. People want to know that they're working on something that matters. They also want to feel like their work matters. One of our goals is clarity, and what that means and how it manifests for us as a company is making sure that people understand how their day-to-day work, every little task, connects up to the objectives of the company and ultimately the mission. If you think about Asana the product and Asana the culture, you can't have one without the other.
The way that I think about it is the product allows us to make sure that everyone is clear on who's working on what by when. It's not enough to just have the product. You have to have a culture that supports it, that reinforces it, that makes people committed to using the product and ensuring that everyone is collaborating well through that clarity. From the very beginning, our founders invested in culture. They saw culture as a key driver of our business outcomes. It was never an afterthought. It was never this secondary thing. The work that they did very early on helped us set the foundation that we now, as a collection of employees, build upon.
The ultimate validation of that investment in our culture is our business results and the fact that our customers can better achieve their own missions.
Of course, we love the external industry validation that we get from places like Glassdoor, Inc., and Fortune Magazine. One of the things I'm particularly proud of is our Glassdoor rating. Both the company culture and the CEO have really high ratings there, and of course that matters because it gives people externally an understanding of how employees feel. The reason that our employees give us such high ratings externally is because we create space internally for people to participate, for people to voice their concerns, for people to identify the bugs in the culture and work and co-create the solutions to those bugs. We've got people that stay here and are committed for the long term because they're bought in. They're bought into a way of working. They're bought into a product that impacts the way people work.
They're bought in to co-creating this culture with us. That's why we're going to be successful.
I'm Ashlee George, and I work at Impact Justice. I'm the associate director, and I lead our Restorative Justice project. Impact Justice is a nonprofit organization that centers innovation and research in order to seek a system of true justice and accountability. We have two headquarters, one in Oakland, California, one in D.C., and we also have several employees that work remotely. Working at a nonprofit organization, we're strapped for resources, and it's really important to be mindful and very thoughtful and strategic about how we use our resources, our financial resources, and our human resources. It's important because the work is so large, we could be working all day, all night, that it's clear on how much work that we're able to do in a specific amount of time, given the limited resources we have.
My team, we run pretty much everything on Asana, from hiring to our check-in meetings to our big department goals. We use it to communicate, we use it to see the progress of what we're doing, and we also use it to create templates and to create opportunities for things to be replicated. We've had people who've come onto the team who have never used Asana before, pick it up pretty quickly. It's really fun when you find out new features, new tricks, and we share those new tricks with the team. It's been pretty intuitive. Even for folks who were like, "I'm not really sure, this new platform," once we start doing it and incorporating into our processes, it just becomes second nature. During COVID, it's been super helpful because we don't have as much face-to-face contact.
The conversations that you would have where you just stop by someone's desk, you're not able to have. Having a platform where you can send a message, you can create a task, a project, create the description, the timeline, that's going to be the starting place for conversations that may have usually or typically have happened when we're face to face. I cannot stress how important it is to have all of your information into one central place. Asana, we use it as a tool to capture all of our documents, to capture our notes, to capture our next steps, so that if anyone on the team were to transition, we were able to keep consistency. We're also able to then inform our new hires.
We have our whole onboarding process where they go through the whole Asana things, and there's all these tasks, and they do their readings, and they still have meetings with different people, but all of this is laid out beautifully in Asana. It allows us to be welcoming and inviting and also be effective in getting stuff done.
I love that. I love how organizations like Impact Justice are using Asana to change the world. We support actually a lot of organizations that are mission-driven, and it ends up doing good is good for business. That's a good segue into our next Q&A session with Dustin and Chris. All right. Okay, this is a really good question to start with because everybody wants to know this answer. Chris, can you answer, what are you seeing in the competitive landscape? Given the pandemic, has anything changed in the competitive environment? Who do you see most frequently?
Yeah. As you've already heard, this is a large greenfield market opportunity. Most of the world's information workers don't have work management tools yet, and they suffer from lack of clarity, and the business imperative for this problem we solve is only accelerating. With that as a backdrop, our largest competitor by far in that context and going after that opportunity is the status quo, as we already mentioned, of spreadsheets and emails and sticky notes and meetings. That's sadly the way that most of the world is trying to get clarity and trying to coordinate these days, and that's mostly what we're competing with and what we're replacing. I think you asked, when we do see work management competitors in deals, which is a minority of the time, we don't see one in particular.
There's not one that sort of we see more than the others.
Oh, interesting. Okay. How about, next question that comes up, how do you think about Microsoft, friend or foe?
Yeah. When you look across our customer base, most of our customers, just almost all of them, are either Microsoft or Google shops for core email management and calendar management, and more often than not, for managing and creating documents. They turn to Asana for clarity and coordination and work management. Because of the customer base, we have lots of integrations with different products from Google and Microsoft. In the context of Microsoft, we actually have a really strong partnership. This past quarter in Q2, we shipped a new and improved integration with Microsoft Teams between Asana and Microsoft Teams, where Asana provides the capabilities around organization and coordination, Microsoft Teams provides the capability around communication. We've seen really strong pickup and interest from that integration in our base.
That's interesting. This is actually a pretty good follow-on too, and people ask this often. Can you talk about the customer journey? I guess they really want to know about how the customer adopts it and how that feeds into our hybrid self-service model that you talked about in your prepared remarks.
Sure. We talked about this a little in the video. We have a very intentionally hybrid business model and go-to-market model of self-serve and a direct sales business that's built directly on top of that, and they go together. That directly maps to the customer journey, how customers find us and adopt us and then grow with us over time. Typically, almost all customers start self-serve. Self-serve is that business is all about acquiring small free and paid teams across companies of all sizes. Then our direct sales business sits on top of that and corresponds to land and expand motions. Land typically looks like when we see signal in that self-serve base of strong adoption and strong demand. Land typically looks like finding a champion and establishing and deploying in a critical workflow or two within a department.
Expansion typically is when we grow beyond that, typically cross-functionally, engaging with IT and other decision-makers to expand more broadly.
Wonderful. Thank you. The next question, I like this next question. It means somebody probably picked up the S-1, which was just updated yesterday and has clearly been through it. In sales and marketing, where are you investing? Are you investing mostly in direct sales? How many reps do you have? Maybe we should just peel that one apart and just first talk about where you're investing in sales and marketing.
Sales and marketing. Okay, sure. As I mentioned, we have an intentionally hybrid business model and go-to-market model. We are absolutely investing for growth in both, and they feed each other. Again, that direct sales business as we move upmarket and expand within companies is built on top of that self-serve business. Self-serve is all about this huge market opportunity we talked about with over 1 billion information workers. It's really focused on acquiring new free and paid teams. Small new and free and paid teams globally. There we're investing in marketing, in top-of-funnel, and the self-serve engine to drive growth and acquisition of customers. Our direct sales business, we're investing as well aggressively.
There, we're roughly doubling our sales team year-on-year to take advantage of this global growth opportunity, ensure we have the coverage to do that, especially with quota-carrying reps. It's worth calling out, as we move upmarket, and we see cross-functional collaboration, we do tend to find sweet spots where we see really strong adoption within companies, typically departments, in some cases, cross-functional use cases. We began over the last year and a half to offer solutions there. Departmentally, we've launched Asana for Marketing Creatives, Asana for Sales & Account Management, Asana for Operations. More recently, this summer, we launched our first-class solution providing cross-company use cases and solutions for the whole company with goal management that's integrated to the Work Graph that Dustin talked about.
Wow. Okay. The investments are really across the entire go-to-market chain.
Yeah.
Wonderful. This is actually a natural next one. In terms of adoption, what drives adoption at the free to paid decision point?
Yeah. Okay. We're foundationally a freemium business, and we have a large base of free customers. In fact, we have more than three and a half million free activated accounts since inception, and it's growing. There's a huge opportunity for us to eventually move those customers or a lot of those customers onto our paid products. We've been steadily improving the conversion rate and doing that over time. Let's see. The primary reasons that customers move to our premium product, our base paid product from the free product is a number of things. Primarily, it's functionality that teams need at work for individual projects and processes. For us, that's things that are popular, like timeline capabilities or custom fields.
They're also sometimes running into the team limit. We have a team limit of 15 free users, beyond which you need to use the premium product. Also it's things like controls, roles and privileges, and the ability to better control who sees what when.
That makes sense. Here's a natural follow-on to that. What drives the adoption from Premium to Business and Enterprise?
Yeah, sure. As we mature in accounts and we see stronger adoption, we see movement to our higher-tier offerings, to our Business tier and our Enterprise tier. Our Business tier is largely about when we get to the point of cross-functional, when we see companies and departments or teams wanting to manage across projects and processes. For example, they want to leverage portfolio capability to manage and track who's doing what when across projects, or they want advanced automation capabilities, departmental solutions. They want to manage the workload across and make sure people aren't burned out and work is covered, those kinds of things. Our Enterprise tier is largely about providing the security and controls and support that the enterprise or the IT organization requires.
Yeah. That upgrade's been doing really well.
Yeah.
To the next tier.
I'm talking a lot.
I know. Let me give you a break. I'll give you a break.
Sure.
There's actually a culture question for you, Dustin.
Great.
Let's see. Clearly everyone's paying attention here. Anna talked about culture as a recipe. How has your recipe changed since COVID? For example, they try to explain this a little more, many companies have been doing things to help the culture with the onset of COVID, like the way they handle meetings, the more town halls. Is there anything that you're doing differently?
Yeah. I think what I would emphasize is a lot of our cultural practices just became even more important after COVID. For example, one of our cultural values is called Be Real. It's all about being willing to bring your whole self to work, be a little vulnerable, connect with people on a human level. One of the ways this manifests is at the beginning of meetings, especially if it's a one-on-one with me and a lot of other cases, people start with just the simple question, how are you feeling? four times out of five, you get, "Doing great, no problem," and you move on with the rest of the meeting. The fifth time, you sometimes get a really substantive answer there, and it becomes really important to check in, understand what's going on.
If you fail to do that, people aren't just sort of checking their emotions at the door. That's still going to come into the conversation, make it easier to lead into conflict or to make bad decisions. I was actually listening to a podcast just this morning about a study where they primed teachers to sort of put themselves in a bad mood or a good mood, and if they were in the bad mood, they actually graded papers two full letter grades worse, just because of that factor. That comes into the workplace as well. Of course, in a post-COVID world, you can't check your emotions at the door because there is no door.
Our home life is just our work life. You may even have, if you're a parent, you may have kids actually wandering into your space, and there's no barrier there.
We think it's even more important that we're willing to drop in and connect at that level and really understand what's going on with our team and making sure that we're understanding each other and we're helping to support each other. Part of that support as well, just more from a sort of company and process standpoint, we've really developed more benefits around mental health support so that people have resources if they need more engaged professional support. We've really had to encourage our team to more proactively take time off because, sort of goes without saying, nobody's really going on vacation. You really have to think like, I'm actually just going to actively not work today for no reason. We've seen a drop-off in sort of natural voluntary PTO.
We've had to really encourage people, and we've also established, like some other companies, a few coordinated Asana holidays.
That's great. No, it's true.
In addition to our normal schedule. Yeah.
It is very much part of the culture here. COVID accentuates it, but hasn't really changed our culture. We just have more of the same. Chris, you're not off the hook yet. Let's go to you for another question. Are you seeing organizations make standardization decisions? If so, what drives it?
Okay, good question. Because we see such viral growth and word of mouth, once we seed or land in a company, because we see such viral growth, that tends to engage us with IT. What I'm seeing in the category is not necessarily like Fortune 500 standardization on one tool, but a lot of companies, small, medium, and large, a lot of tools are sort of coming in self-serve. We are starting to see some standardization, maybe on a couple tools in some cases, or in some cases we've seen standardization on Asana purely. The driver for that tends to be a few things. Companies or IT are looking for centralized billing. They're looking for enterprise capabilities like I talked about.
Last, but probably should have mentioned first, they're looking to embrace what's already working, embrace the tools that their users and teams already love and are thriving with, and they want to offer that more broadly. When standardization decisions tend to happen, we tend to be a beneficiary because of the sort of strong adoption and sort of NPS or referenceability I mentioned earlier, but also because the tool, I think Dustin or Alex mentioned this earlier, is so horizontal and so cross-functional.
Makes sense. Actually, that opens up a bigger question, which is, you've talked a lot about our go-to-market strategy and movement into the enterprise. Where are you on your enterprise journey? Where is Asana on our enterprise journey?
Yeah. I'm going to presume that sort of means large enterprise and large customers.
Right.
I think. Okay. Yeah, so it's interesting. As I mentioned earlier, our direct sales model is built on our self-serve model, and it's a little different than things I've experienced in the past. Meaning, self-serve is not just about SMB. I just want to reiterate, self-serve is about landing in teams and companies of all sizes and always has been. We've been seeding and growing in large companies as long as we've been seeding and growing in small companies. We've matured quite a bit in that, and we're doing that very intentionally, and we're growing up with our customers. Our aspirations are absolutely to someday be wall to wall in the world's largest companies, but we're doing that in a very intentional way and growing with our customers.
If you just look at the stats today, we are about 2/3 of the Fortune 500 have free or paid Asana. Some of the world's most valuable customer or companies, excuse me, are some of our largest customers. The way that we sort of think about that intentionally is we're scaling with our customers. On the product side and the go-to-market side, we've been roughly doubling our largest deployment each year. I think last year our largest deployment was 6,000 paid users, and we intend to keep doing that.
Interesting. Okay. Are there certain industries that are best suited to Asana?
It's interesting. Good question. Because of our bottoms-up model, adoption by industry, we've gone past early adopters. We're certainly into mainstream verticals now and mainstream companies. There's an incremental interesting thing about a characteristic of our business, and I think it's related to the category and to Asana's business model, where within companies, we see functional adoption curve, right? A lot of the stuff we already talked about, marketing, sales, design, product teams, operations teams, they tend to adopt before, say, legal and finance teams within companies. We're now sort of mainstream in terms of industry adoption. We also see broad adoption and an adoption curve within companies that's more functional.
Okay. Maybe we do two more questions.
Sure.
How about the profile of the kinds of customers where you tend to be widely deployed versus other vendors in the space? Can you speak to some of the tangible ROI from some of your largest customers? There's kind of two questions in there, sorry.
Sure. I think I'll answer both.
Okay.
Thank you. Let's see. On the first one, as I mentioned, we're a very horizontal tool, so our self-serve engine, as new teams come on board and get acquired, we're used incredibly broadly. Across all functions, strengths for us tend to be cross-functional and external collaboration. Collaboration and coordination or clarity with suppliers and partners and customers and that kind of stuff. Some of the competitors out there kind of specialize maybe in developers or finance or in verticals that are different from us. We tend to see really broad adoption, but we see particular adoption in where we've started to build out solutions that I talked about, in marketing and sales, on the business teams and operations. More and more, we're starting to see this traction cross-functionally. I think the other question was about ROI?
Yes.
Is that right?
Yes.
We hear played back from our customers all the time, the primary benefits of Asana are clarity, but the way that it gets expressed in benefits is time. Time back, wasted time, across their employees that gets deployed back towards their mission and goals, and that's what gets us up out of bed every day. I mean, what's a more sort of inspirational value prop to be able to help customers with? They play back to us. They can be 10%, 20%, 30%, 40% more efficient with Asana. Some of our customers, I'll just throw out a couple examples. One of them has saved an hour and a half a day per employee through the elimination of status meetings. Number one. Another one can launch new products to market 3x faster with Asana, as examples.
If I can add on, one way of sort of describing the last two of Chris's answers is that the commonalities between teams across industries are more important than the differences between the industries. If you have a marketing team in one industry and a marketing team in another, the kinds of problems that they face, and their propensity to adopt new technology to solve those problems is really the driving force that makes Asana successful, and the relative differences of industries are less relevant.
Thanks.
Thank you. Well, that's great. This is a perfect segue into our next section. Thank you so much, Dustin. Thank you, Chris. Now let's just move to the prepared remarks from Tim Wan, our Chief Financial Officer.
As you've heard from our team today, Asana is a leader in a new category of software that helps teams orchestrate their work. With over 1 billion information workers in the market today, this opportunity is enormous and only in its early stages. Now with more teams working remotely, effective collaboration and clarity around who is doing what by when is more important than ever. This is how we plan to do it. First, we'll continue to establish our leadership position. We've earned our position in the market today because of our focus on the customer experience. Thanks to this focus, customers immediately get value from Asana through our self-serve model. We'll build on customer acquisition.
One measure of success in this category is the ability to acquire customers efficiently and increase adoption. With our bottoms-up model, we're able to attract new customers across a wide set of industries who then adopt Asana for a variety of use cases. We will leverage our differentiators for expansion. Our product architecture enables unique and robust capabilities that scale with the needs of complex workflows and cross-company collaboration. Lastly, investing to scale. We have a predictable recurring subscription revenue model with strong growth rates, high gross margins, strong dollar-based net retention rates, and compelling unit economics. Given our leadership position in this emerging category and the large addressable market, we have the foundation for durable long-term growth.
Let's turn to our financial metrics. We've been growing revenue rapidly, reporting $143 million in revenue in our fiscal year 2020, growing 86% over the prior year.
In the first half of our fiscal year 2021, we delivered approximately $100 million in revenue, growing 63% over the same prior year period. Our success is a reflection of our constant innovation and our devotion to the individual and team experiences, which are key to adoption. Our go-to-market engine maps to the customer journey, combining a self-serve model for new teams, combined with a direct sales model for customers who want to take their usage and adoption to the next level with larger deployments. This growth has resulted in a customer base of over 82,000 paying customers and over 1.3 million paid users globally. We have users and customers across 190 countries. Our international revenues were approximately $59 million, or about 40% of our total revenue last fiscal year. Our customer growth is a reflection of the value we deliver.
In a recent Asana customer survey, 74% of customers surveyed agreed that Asana helps them accomplish tasks more quickly, and 83% agreed that Asana improves their job performance. As organizations increase their adoption and footprint, Asana becomes their system of record for work. Whether they're working for a small business or a Fortune 500 company, teams can easily join Asana and get started. Oftentimes, teams are replacing spreadsheets, email, or the status quo to better collaborate and track their work in Asana. Many teams start small and over time increase both the number of users and use cases on Asana. Our dollar-based net retention rates reflect these dynamics and show the stickiness of our platform. As of January 31st 2020, our dollar-based net retention rate was over 120% across our entire customer base.
As customers increase their usage and adoption, we generally see a corresponding increase in their net retention rates. For the same period, customers spending $5,000 or more with us on an annualized basis had a dollar-based net retention rate of over 125%, and customers spending $50,000 or more with us on an annualized basis were over 140%. Let's now turn to our pricing model. Our pricing strategy helps enable customer expansion. Pricing is based on the number of users and subscription levels. We offer four levels of service: Basic, Premium, Business, and Enterprise. Basic, which is our free tier, has simple features to introduce users to Asana and limits up to 15 users. A small team might use this tier to track their weekly team meeting agenda, along with deadlines and task owners.
Premium offers a more robust set of functionalities for larger and more complex projects, like launching a new sales office or a product marketing campaign. Business is where we've seen the most recent uptick in demand. With Business, customers can set goals, manage Portfolios, and monitor team workload across departments. Our Enterprise tier builds on the Business tier with more robust IT and administrative controls, stronger security features, and higher support levels. Our higher-priced tiers, Business and Enterprise, are gaining significant traction, representing 46% of our revenue in the first half of fiscal year 2021, up from 24% over the same period from a year ago. Our Work Graph enables critical and differentiated features such as Portfolios and our recently announced goals function.
The Work Graph enables our customers to move up the value chain and increasingly take advantage of the strategic nature of the platform.
Our expansion strategy is already yielding positive results as more of our revenue has shifted to larger recurring contracts. In the first half of fiscal year 2021, customers with $5,000 or more in annualized spend represented more than half our revenue, about 56%, up from 45% for the same period a year ago. On a revenue basis, this segment of customers grew over 100% year-over-year. We continue to scale our business effectively with more than 82,000 paying customers and a large install base of activated domains and registered users. We have significant opportunities to expand within our existing base. We're still in the early stages of penetrating a very large market, and we have an ambitious vision for the category. Maximizing the opportunity and investing for growth is our focus.
Let's turn to our investment model. There are a few things I want to point out here.
First is our gross margins. We have sustained high gross margins in fiscal year 2020 and the first half of fiscal year 2021, reflecting the efficiency of the business. Next is R&D. We intend to continue to invest in making Asana easy to adopt and more powerful for teams and organizations of all sizes. I also want to call out our continued investments in our sales and marketing. This investment reflects our commitment to our hybrid go-to-market approach. Our self-serve model allows us to efficiently see what teams across different industries and companies of all different sizes. Our direct sales motion enables us to land and expand and upsell once an organization adopts and requires more robust functionalities. We've increased our investments in sales and marketing over the last two years.
This comes in the form of performance and digital marketing spend and increasing our direct sales organization on a global level. We're building Asana for scale, and our G&A spend reflects the investment we are making in people, processes, and systems as we prepare for being a public company. Our investment philosophy reflects a disciplined approach. One measure of that is the payback on our sales and marketing investments. Our rapid growth is coupled with strong payback periods. Our payback period for the 12-month period ended July 31st 2020 was under 13 months, demonstrating the effectiveness of our investments. We recently completed our second quarter of fiscal year 2021. Here are the highlights from that quarter. Despite the impact from COVID, our results continue to reflect the resiliency in the business.
We reported strong growth with revenue of $52 million, growing 57% over the prior year period.
Gross margins were over 86%. In terms of the impact from COVID, there were both headwinds and tailwinds. Our overall dollar-based net retention rate of 115% reflects the disproportionate impact on smaller businesses and segments that were particularly affected by the pandemic. However, our dollar-based net retention rate for customers who spend over $5,000 and over $50,000 with us on an annualized basis remained stable at over 125% and over 140%, respectively. At the same time, we have seen strong interest at the top of the funnel. Work from home has accelerated the need for teams to stay aligned, focused, and productive. In general, we believe the current macro environment will help accelerate and bring more awareness to this category.
We're not immune to the short-term impact of COVID, the response from the market and our customers overall makes us more confident in our long-term strategy, our product position, and our vision. We believe that this is the right time to be investing in work management and to define the future of work. The growth opportunity is tremendous. Let's turn to our financial model and how we plan to approach our investments. Growth is our top priority at Asana. Keys to deliver on durable growth are the following, bringing our product vision to market and continuing to make Asana easy to adopt and powerful for organizations and teams of all sizes, and investing in our go-to-market functions with a disciplined approach, as evidenced by our payback metric.
With the shift to remote work, we believe teams have a greater need for collaboration and clarity. With our Work Graph and our product investments, we're in a position to unlock new and unique functionalities that will make work better for everyone. Given our high gross margins and strong unit economics over the long term, we expect to realize operating leverage, which we believe will enable us to generate free cash flow margins north of 30%. With our strong growth rates, high gross margins, and commitment to innovation, we're building Asana for scale. We hope that you'll partner with us in this journey.
Viessmann is well known for our heating systems. We have three business areas. One is climate solutions, refrigeration solutions, and industrial solutions. Our core business is really in Germany, Austria, Switzerland. We have also a big business in the Nordics, in Finland and Norway and Sweden. We are also going to the south of Europe, where we have some entities in Spain and Portugal and France and also the U.K.
We are now acting in more than 50 countries globally with almost 30 manufacturing plants worldwide. We see each other as a large family here at Viessmann. As we call it, we have 12,300 family members.
I mainly see the challenge that we need to get people working in one place. That means they use the same tools, they work the same way, and they know how to coordinate in a very structured way.
Before we used Asana, it was quite difficult. We never had a common store where you can place all files. It was a huge IT demand if you want to create a folder where every project member could access easily. We thought, okay, it would be nice if you could have a tool where you can have discussions about the topics, where you can really communicate in there also regarding responsibilities and deadlines, so the key things of a project. It was like I had a wish list, and then Asana came and tick, tick, everything was solved.
Asana as a tool is open to the whole organization, to all family members around the world. We are quite happy that from a C-level down to each and every individual contributor of a company, everybody uses it. Asana supports us in being faster in our decision-making. Decision-making reflects down towards sales, down towards manufacturing, towards engineering products, and so on. On the other side, it increases the transparency for decision-makers to make better decisions because we say that you can only make the right decisions if you are context-wise. It's increasing our productivity.
Here at Viessmann, we use Asana with more than 6,000 people. They create more than 250,000 activities per day, and all this is managed by just two people in my team.
Asana is the enabler for us to be aligned and to unlock the opportunities that are around us as an organization.
Before, there were just tasks flying around, and everybody was doing his things on their own. I felt like a little gear, but I didn't have any effect on any other gears. With Asana, I have the impression that we are working so close and so smooth together, and we're like an engine. We work together, every gear in the other.
Wow. I cannot think of a better way to punctuate how Asana is a map of all your work, and as they say, make decisions better and faster. Let's go over to Q&A with Dustin and Tim. All right. Let's jump right into it. Dustin, first question, what is your philosophy on balancing growth and profitability?
Sure. Thanks. First of all, I like them both. I don't want to choose between them. As a CEO, when I think about profitability, I'm less focused on the ratio of operating expenses to revenue, and more focused on the unit economics. We know that we have really great gross margins today, and we don't have any particular reason to see that changing in the foreseeable future. Just a direct consequence of that is we know we can be profitable if we choose to stop investing in growth. Fundamentally, the business is efficient. There's also a really big market opportunity.
We've talked about the enormous TAM, and these are really important years in the formation of the category. We think it's really important to play to win and be aggressive to invest in growth. I think that we'll continue to try and make progress towards profitability, but we're also going to continue to invest when we think that we have growth levers that we can pull successfully and be profitable in the future.
It's great to have a good model. All right, Tim, we're going to jump right into net retention rate.
Okay.
Can you share more color on the net retention rate for all three of your segments?
Sure. Our overall net retention rate did drop from 120% at the beginning of the year to 115%. As I mentioned in the video, most of that impact was really disproportionate on smaller teams, our sub-$5,000 spend customers and those impacted industries. Now, if you step back and look at the other two cohorts, the $5,000 annual spend customer as well as the $50,000 spend customer, those net retention rate remained the same at 125% and 140%.
Perfect. You know what? This question is going to come up. What was the impact of COVID on the business? Yeah, what was the impact of other impacts of COVID on your business?
Obviously, you saw it in some of the metrics in terms of the net retention rate. Let me talk about some of the tailwinds that we saw. Some of the tailwinds, one, were we saw record traffic to our site and sign-ups for both the free and the paid. Now, it will take some time to kind of see how those free and paid customers monetize over time. That was a really nice tailwind. Generally, I think when we step back and look at remote work and the need for knowledge workers to have clarity and alignment now more than ever, we think we're really leaning into this secular tailwind.
I would just add, to be transparent, there's also a short-term headwind there that was a partial contributor to the drop in net dollar retention. It's just a reality that a lot of our customers are going through economic hardship. Some of them, unfortunately, went out of business. Others had to do layoffs. That does have a direct consequence to revenue.
Yeah. Of course. Let's actually go to your last slide.
Okay.
Tim. That's like the money slide, right? How are you thinking about.
Yeah.
This column that you had called the growth phase?
Yeah.
How do you define the growth phase?
No, great question. I think it's really important to kind of step back and really echo what Dustin just said. The category is relatively new and it's emerging. There are over 1.2 billion knowledge workers, and the vast majority of them don't have a platform to manage their work. We have 3.5 million activated accounts that we have access to. We have over 27 million registered users that we have access to. The category is still new and there's a lot of runway for durable growth. With that said, we recognize that we're not in that growth phase today, but we will grow over time into that phase. We're not going to talk about exact timing today, but with our gross margins at 86%+ , we have a lot of flexibility to invest.
The fact that our unit economics are really strong with a payback of less than 13 months. We know that the investment that we're making in sales and marketing will return over time. As long as we continue to demonstrate strong growth, we'll continue to lean in and invest in the business.
Absolutely makes sense. I think many investors are really familiar with the SaaS financial model. That leads us to the next question. Can you discuss the improvement in gross margins you've seen in the last couple of years? What drives that, and is there anything you want to tell us about that?
Yeah, I would really attribute it to two things. One, the scale of the business. We grew 86% last year, and we grew 63% in the first half of this year. One, really just the scale of the business. Two, the architecture and the investments that we've made in R&D has really enabled us to take advantage of the efficiency on the platform. We've done a really good job there.
Perfect. You also talked about, well, both of you actually, on your presentation, and Dustin just recently talked about it in his opening question. Can you expand more on how you think about your unit economics of your business?
Yeah. I think, obviously, we're very proud of the fact that they're under 13 months, and continue to be strong. It's a metric that we monitor very closely. As long as that metric stays pretty close to our expectation, we'll continue to invest.
That makes sense.
Yeah.
Okay, just a couple more questions here.
Okay.
Because I know we're going long. We're trying to get everybody's questions in.
Got it.
Tim, one for Tim, one for Dustin.
Okay.
Tim, can you talk about growth from your new customers?
Yeah.
Versus customers that are either. Like three questions here: New customers who are expanding the number of users or upgrading to higher tiers. How would you look at those growth trajectories, those growth vectors?
Yeah. I think if you look at the growth over the last couple of years and the metrics that we provided in the S-1, you'll see a fairly balanced growth in terms of both on the customer side. We grew from 75,000 at the end of our fiscal year last year to over 82,000 now. If you look at our seat, we started the year with 1.2 million paid seats, and now we have 1.3 million paid seats. If you look at ACV, you'll see about a 20%-30% growth year-on-year in ACV. You'll see this natural progression in terms of customer growth, seat expansion, and then customers moving from Premium to Business and then to Enterprise. Fairly balanced.
Perfect. I know we're running out of time, we have to get two more questions in, Dustin. Where do you see the company, Dustin, in the next 5- 10 years, what do you think could surprise you to the upside?
Sure. In thinking about this, I first go back 5- 10 years. When we were first starting the company, it was sort of an open question still about whether this would be a category at all, or if in fact the status quo of email and documents would end up being the way that the teams coordinated forever. As we've had more opportunities to tell our story, it's become clear that this is really a thing. Now in 2020, there's a real analyst category around it. There's quite a lot of adoption of Asana as well as other work management products. Yeah, it feels much more like this is the future. We're still in sort of the early adopter, maybe late early adopter part of the Geoffrey Moore adoption curve.
If you think about 5-10 years in the future, we should really be getting into more of the mass market adoption of work management and should see a lot more penetration into that available TAM of a billion knowledge workers. That's one thing. A lot of it is just developing the category and getting Asana distributed to a lot more customers. There's one thing I was going to say about that.
How about surprises? What could surprise you?
Yeah. The thing that could surprise you about that is really just all of it happening a lot faster. 2020 has been a catalyst year for a lot of collaboration products. We've seen a lot more inbound interest in adopting work management. Maybe this is the start of a decade-long movement. All of that could happen really quickly. The other thing I would just say about 5-10 years out, so in July, we held our Future of Asana event. We talked about our vision for what we thought of as the next several years of product development. I hope over this long a period, 5-10 years, we should be able to really manifest quite a lot of that vision, and a lot more.
I'm really excited to see it come to life and be able to deliver all that value to customers.
Wow, that's amazing. Okay, last question of the event. This is a good one. Dustin, you could spend your time and energy on a lot of different things. Why did you choose to dedicate your time and energy to Asana?
There are a lot of different things that I could've worked on. Could've worked on trying to mitigate climate change or improve healthcare, improve government. When you think about it, any important project in the world really has one thing in common, a group of people coming together to achieve a shared goal. All of those groups of people suffer from the pains of coordination that we've been talking about today. By working on Asana, it's really an opportunity to work on all of those different missions and more. It's really what I like to call the ultimate meta problem, and just this enormous point of leverage to create progress in the world.
When we first started, my co-founder, Justin, and I used to talk about, what if we could make these teams 1% effective, 2% more effective at achieving their goals? Already today, customers sometimes tell us we're making them 20% more efficient, 30% more efficient, and we're really still just getting started. There's so much more we can do. Yeah, just really excited about the potential for this part of the ecosystem.
Wow, what a great message to end on for today. Thank you so much, Dustin. Thank you, Tim. Just to close out for the day, I want to thank everyone here for joining us. We had a lot of information, and there's more information on our website. Please feel free to see the recordings of this event on our website. Remember that there is a Q2 earnings report September 22nd at 10:00 A.M. Pacific Time, where we will report our Q2 and provide guidance for Q3 and the fiscal year. In the meantime, feel free to contact me, and we'll talk to all of you again soon. Thanks.