
Even with 49% up sales and a 46% drop in expenses Slack still cant turn a profit - LinuxBender
https://www.theregister.com/2020/09/09/slack_q2fy2021/
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mywittyname
I struggle to see where Slack is spending all of that money. It's a chat
application with a few million active users at any given time. Even with
absurd AWS bills, they should still be raking in profits.

~~~
ericb
Typically in a SaaS business you would avoid profitability until the last
possible minute and plow back every bit of cash into customer acquisition
(sales and marketing) until you reach a point of market saturation.

So long as retention is good, and your unit economics are profitable, it is
like running those dollars into a money-printing press by buying an annuity
that will pay out for years.

~~~
Thorentis
The issue is that slack has passed the point of market saturation. There are
lots of competitors now as well as a shift towards decentralised options. I
think slack should have entered that next stage already if they ever want to
have a chance at getting back enough money.

~~~
ericb
The definition for saturation isn't "is there are lots of strong competitors
and other options?" or even "a given percentage of the market is our
customer."

Instead, the rule is more like: is CaC sufficiently lower than Customer
Lifetime Value so that each customer is profitable. This ratio tells you if
your money-printing machine is working. As the low-hanging leads dry up, CaC
gets higher.

Your argument might be rephrased as "their customer lifetime may be shorter
than they think." Possible. There's some amount of switching cost (lost
history, webhooks and integrations) there, though.

~~~
Thorentis
I disagree. Market saturation is absolutely determined partly by competition,
and partly by how much consumers are , well, able to consume.

In terms of competition, we've seen plenty of alternative pop up recently such
as Mattermost and MS Teams, both of which have gained popularity.

In terms of consumption, it is only feasible to really have a single chat
application at a time, maybe two if one is being tested. Having more than 1
defeats the purpose of having an org wide chat. Maybe individual teams will
choose their own in large companies, but the general assumption is you try and
sell your chat solution to the company, not to the individuals. And so we have
a situation where the presence of strong competition directly effects the
consumption of the product (Slack's offering).

My opinion is that Slack was previously somewhat synonymous with company chat,
but that is no longer the case. They peaked, and now that Discord, MS Teams,
Mattermost, etc. are viable alternatives, their market saturation is on the
decline. They let their grasp slip away, and they will pay for it.

~~~
johntash
> In terms of consumption, it is only feasible to really have a single chat
> application at a time, maybe two if one is being tested. Having more than 1
> defeats the purpose of having an org wide chat...

I know you're talking about within an organization, but this made me realize
how long it's been since I've used a client like Pidgin/Adium/bitlbee that
could handle multiple chat protocols all from one client.

I'm pretty sure the majority of the protocols I used to use in these apps
aren't even around anymore (other than irc and xmpp).

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kfk
In big companies I just don’t see the point of Slack over MS Teams as they are
quite similar and Teams is very low friction as it integrates with the rest of
Office 365. Slack has better API and that’s great but what would be other
serious competitive advantages? It almost seems to me that if you want to
target big companies you need a competitor for the Office 365 platform and not
“only” a competitor to one of its apps.

~~~
ponker
Teams is utterly devoid of charm. If your goal is to "send this string to Jim
Bob" then Teams works just as well as Slack but if you want an application
that's enjoyable to use for multiple hours per day, Teams is not the droid
you're looking for.

~~~
foepys
I don't care about charm in my chat application. It is supposed to deliver
text and media to one or more recipients in real-time. I don't need stickers,
emojis, reactions gifs, or memes. A chat is not my main application, not even
in my top 10.

If it doesn't work as expected, I will try the next. There is literally 0
loyalty involved in my company.

~~~
cwsx
My core problem with this comes down to UX. I don't think that falls under
'charm' but Teams feels horrible to use in comparison to Slack.

As an example, when switching to Teams to reply to a message why does it focus
the search bar instead of the chat window? How often do users search (as their
first focussed action) in comparison to using the chat window?

Teams seems to be full of these minor UX annoyances that all add up to make
Teams a chore to use. Slack has done a much better job on UX (in my opinion).

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tiffanyh
The stock market is so odd.

We have 2 cloud communication companies with radically different stock results
(Slack vs Twilio).

Slack, who has ~50% revenue growth and haven't turned a profit and their stock
is ~0% flat YTD [1].

Then you have Twilio, they too are having 50%+ growth and have never turned a
profit, yet their stock is up ~130% YTD. [2]

The stock market is a funny beast.

[1]
[https://finance.yahoo.com/quote/WORK?.tsrc=applewf](https://finance.yahoo.com/quote/WORK?.tsrc=applewf)
[2] [https://finance.yahoo.com/quote/TWLO?p=TWLO&.tsrc=fin-
srch](https://finance.yahoo.com/quote/TWLO?p=TWLO&.tsrc=fin-srch)

~~~
missedthecue
Twilio is in a league of their own while Teams is looming over Slack.

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rdtwo
I think Microsoft is basically giving teams away because it’s such a piece of
Shiite. Our school district is using it and everyone hates it. Hard to compete
with free though

~~~
gamblor956
In contrast, most of the medical workers I know use Teams for telehealth...and
they love it.

It's a better app than Google Whatever (Hangouts? Meet? Duo???) and Cisco
WebEx, though Zoom is much easier to use for larger meetings.

~~~
prepend
I think Teams is my favorite video app, but I find it lacking in persistent
chat.

My org uses Teams and I’m now a member of probably 30 teams with lots of
channels each. I ignore them all as there’s too many.

Slack is different because I just join specific communities.

Also text search is bad right now in Teams, but is handy in Slack.

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maxharris
I stopped using Slack because they use Electron, and I want native apps
because they don't drain my battery the way Slack does.

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ivraatiems
This headline (as in the original on the site) seems unnecessarily editorial.
From the article:

> CFO Shim said Slack expects "to be free cash flow breakeven for the year"
> and raised revenue guidance to a range of $870m to $876m, a jump of 38 per
> cent at the midpoint. The next quarter is expected to grow 32 per cent at
> the midpoint of a range of $222m to $225m.

It's true, they can't turn a profit, but this still sounds like a development
in that direction. I'd say check back next year and see.

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cblconfederate
Well at least IRC isn't _losing_ money

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klmadfejno
I didn't watch the show in depth but I recall a character on Silicon Valley
confessing that she chose not to invest in Slack as proof that she wasn't a
perfect VC (or something to that effect). Maybe she was.

