
Slack Says It's Filed to Go Public - chollida1
https://www.bloomberg.com/news/articles/2019-02-04/messaging-platform-provider-slack-says-it-s-filed-to-go-public
======
certmd
Matt Levine on Slack direct listing from a few weeks ago...

[https://www.bloomberg.com/opinion/articles/2019-01-11/direct...](https://www.bloomberg.com/opinion/articles/2019-01-11/direct-
listings-are-a-thing-now)

~~~
hinkley
I didn't read the whole thing yet so I don't know if he covers this:

I think many of us (or at least a few loud members) in the tech community have
started to see underwriting as a bad form of cronyism. The point jump on
opening day becomes substantially about putting money in the pockets of a
favored set of investors. Half of that comes from frothing up the public, but
the other half comes out of the pockets of the pre-IPO investors and the
company. That's not okay.

We know that in a hot neighborhood you want to price your house a little low
to get a bidding war going. I get that something similar happens in the stock
market. But that's an art of shaving 5-10% off hoping you yield an extra 5-10%
over your original price point. We're seeing much, much bigger spreads than
that with IPOs, which I take to mean that everyone but the underwriters and
their friends are getting screwed.

~~~
samstave
And this is exactly why i immediately lose all respect for any company that
choses goldman as their handler in an ipo.

~~~
wilkskyes
_All_ respect? Really? And _immediately_?

If one inconsequential event like this warrants such an extreme reaction
respect will be in short supply everywhere.

~~~
sct202
I don't know if it's inconsequential. But Goldman definitely has a well
deserved tarnished reputation, especially in recent news of their actions that
involved the 1MDB fund.

------
nofunsir
Does anyone else here use Mattermost, an open source, self-hosted alternative
to Slack? I like it. We're not allowed to store communication offsite. I have
no experience with Slack, so I'm wondering how current offerings compare.

~~~
bitexploder
We tried Mattermost a while back. Slack is just way more polished, especially
the mobile apps. We use the API to interact with Slack a lot. Mattermost was
fine, just not nearly as nice as Slack.

~~~
Avshalom
I've never used Slack in a business context which leads to: what polish is
missing that actually affects your use case? You mentioned mobile for instance
but how are people using the mobile app while also being in an actionable
position?

~~~
ido
Not everyone is a programmer! I've had plenty of times when I was getting
messages on my phone that mostly required informing/connecting the right
people/departments. If I hadn't done it stuff would have eventually gotten
done, but a lot later & with more misunderstandings and miscommunications.

------
TheBill
Nothing is wrong with the market: Slack may have decided that this is the best
way for them to create liquidity. There is also a cap (2000) on the number of
shareholders a company can have before they have to abide by what amounts to
the same reporting requirements as a publicly traded company.

Slack also get the advantage of the usual market pop of acquiring companies
share prices that usually amounts to a significant % of the cash value of the
transaction.

~~~
Kiro
Stupid question but how do they create liquidity? Don't all the money go into
the shareholders' pockets who sell in the listing?

~~~
kgwgk
Liquidity means that people can sell/buy the stock easily. It has nothing to
do with the company’s financials.

~~~
groestl
That's one definition of liquidity (which applies here). In the context of
companies liquidity can also mean: assets to pay short-term liabilities (based
on the article, it seems Slack has no problems in that area).

------
cpursley
Hopefully they raise enough money to build a native desktop app.

~~~
amedvednikov
[https://volt.ws](https://volt.ws)

200 KB native Slack client. A polished public beta will be finally released on
Feb 7. Also supports Skype, Twitter, Telegram... almost everything.

It was delayed by 9 months. Sorry to thousands of people who have been
subscribed and waiting for news.

I'll release a detailed post explaining what I've been working on and what
caused the delay.

Also super excited about the language I created to develop Volt. Compiles 15
million lines of code per second and can be translated to from C/C++. I've
successfully ported DOOM and (almost) DOOM 3 while making build time 120 times
faster.

~~~
userbinator
200 KB, now that's more like what a chat client should take! Even excluding
the browser "runtime" I think Slack's JS itself is bigger than that.

I say this as someone who wrote a 20KB MSNP8 (MSN Messenger) client for
personal use many years ago --- it's not _that_ hard to keep your code size
down and performance up, even if you custom-draw everything so it looks like
the browser Slack client.

May I ask, since I noticed your username, if you are Russian? It seems a lot
of other non-bloated tools I use come from Russian programmers...

~~~
amedvednikov
Yes, I am :) Might be a cultural thing. We like simple and efficient
solutions.

------
killyp
Serious question...

What are the benefits of using Slack over Discord? I know Slack has been
around longer, looks more professional and has more tie-ins with work flow
management tools but those seem like small advantages compared to how feature
rich Discord is. Just genuinely curious as I prefer Discord for communicating
with my coworkers about non-sensitive information but it doesn't seem to get
any love outside of video game and internet communities.

~~~
crescentfresh
Is that what Discord is (a Slack competing product)?? I've never found the
time to look up Discord but I hear it referenced a lot.

On the other hand I use Slack daily.

~~~
crowbahr
Discord isn't really a Slack competing product as much as it's a Teamspeak and
Mumble competing product... or at least at the start.

Initially it was just easy to use VOIP with rich text chat channels. Now
they've added in video calls and a video game store meaning they're more
gunning for Steam and even less for Slack.

I do not see them as being Slack competing. They're too casually focused to be
a threat in an enterprise environment.

~~~
killyp
I completely forgot they added the video game store. That would kill them as a
consideration for any kind of corporate environment.

~~~
_asummers
If they were targeting themselves to that space, that would be an
administrator toggle without question.

------
SketchySeaBeast
> The company is choosing the unusual method for going public because it
> doesn’t need the cash or publicity of an IPO, the person said at the time.

So why is it going public? Is there a benefit to a successful company?

~~~
nemothekid
To provide liquidity to employees and investors.

~~~
SketchySeaBeast
More than the cash it currently has? It's a grab for an even bigger pile of
money?

edit: Ah, missed the employees angle.

~~~
nemothekid
The "cash" _who_ has? The employees don't have cash - they have stock. You
can't pay rent with stock.

This is a good move by Slack to provide a return to the employees who have
stuck with them.

~~~
SketchySeaBeast
Ah, ok, so the employees will be getting money for their stock? That makes
sense now.

~~~
icelancer
They'll own stock they can trade publicly. It's their call now, rather than
holding on to a bunch of fictional dollars.

------
crispyambulance
I don't get it.

Why do they need or want to go public with revenue north of 1 Billion dollars
and ~1000 employees? (according to a Recode story from last year:
[https://www.recode.net/2017/6/15/15810088/slack-deal-
funding...](https://www.recode.net/2017/6/15/15810088/slack-deal-funding-
amazon-microsoft-buyers-business-communication)).

The got a good product, it makes money, lots of people use it. Aren't they
afraid of "winning" the market so completely that they can only look forward
only to a downhill ride?

Is it simply because they took investor money and now need to grow like
bejeezus to pay them back?

~~~
ethagknight
Look at it a different way, why do they need to stay private? Do they have any
strategic advantage to maintaining a tight market-counterintuitive initiative?
What's the reason not to put a bow on it and push it out the door? Probably
large part due to their early funding, but what's wrong with that?

~~~
Xelbair
Not having a bunch of shareholders, who are interested in their short-term
profit, directing your business decisions is one thing.

------
ergothus
...and my confidence that Slack will continue to be useful and a good
experience for me just plummeted.

Does this mean something is wrong with our market, or just my expectations?

~~~
6cd6beb
Well the general startup model is to figure out a revenue stream _after_
either an exit or going public, so you're probably onto something.

Yes, I know, you can pay for slack, it's absolutely a viable product for free
so most users don't. Does that sound like something a publicly traded company
would be happy with?

~~~
harryh
Slack figured out its revenue stream a long time ago: charing companies who
use it.

They were making $200M in revenue over a year ago:

[https://www.businessinsider.com/slack-200-million-annual-
rec...](https://www.businessinsider.com/slack-200-million-annual-recurring-
revenue-2017-9)

I'd imagine that number is significantly greater today.

~~~
jammygit
1.5 million paying users and 200M in arr is certainly impressive.

Thanks for the link

------
x1lo321
The privacy statement of Slack is horrible. I also wonder why so many
companies trust often highly sensitive conversations to what is essentially an
IRC forum that could be taken over by an evil company any minute.

~~~
iwakura
Convenience unfortunately seems to be higher valued than privacy by many. This
held true for a web agency I worked for. Getting things done, even with
proprietary tools, stood above all. The privacy policy was read later, or not
at all.

------
userbinator
Two comments predicted this on the discussion about Slack's redesign a few
weeks ago:

[https://news.ycombinator.com/item?id=18923809](https://news.ycombinator.com/item?id=18923809)

[https://news.ycombinator.com/item?id=18924347](https://news.ycombinator.com/item?id=18924347)

------
herpderp3dtwerp
You thought the real-estate was bad in SF now... we have AirBnB, Uber, Lyft
and now Slack all going public in short order.

~~~
andrewmcwatters
I wonder why they're all going public right around now.

~~~
paulmd
Trying to get it done before the economy tanks, I think. We're vastly overdue
for a downturn, the economy was already over-juiced due to excessive tax
cuts/etc, we just put five million households out of work for a month (most of
which are contractors and will not even be getting back pay) and will be doing
it again in less than two weeks (now that the Superbowl is over and we're not
messing with FOOTBAWW we can get back to our regularly scheduled shutdown).

The US economy is extremely likely to slide into recession in the next 2-6
months. And when they do, it'll be a lot harder to get $7 billion for a
knockoff IRC client.

------
1290cc
When hacker news shits on a tech company IPO its definitely time to buy.

------
neom
The interesting thing about these direct list IPOs is that if you have
confidence your investors will hold, you don't need the bank for stability,
you have stability as a result of such low volume. I'm no pro but I think the
real risk is introduced when you don't know your investor base well, hence
traditional underwritten IPOs have worked well. If the company doesn't need to
raise money, seems like a fine way to let the little guys find liquidity. Will
likely follow a similar chart as $ESTC.

~~~
drewr
Not sure if the comments were supposed to be connected, but just to be clear,
Elastic NV (ESTC) did a traditional IPO. Spotify was the first to do this
direct IPO and Slack would be the second.

~~~
neom
Yah sorry, I started my thought about small cap IPOs that I think have similar
revenue and then made a disconnected point, thanks for clarifying.

------
thewizardofaus
Hate to say it but I believe this will be a easy short long term.

~~~
raiyu
If you look at their revenue growth the past several years and projections I
wouldn't assume immediately it's a short.

Their revenue growth has been very solid, so while the valuation may seem a
bit high, if they hit their numbers for this year and demonstrate good
visibility in to 2020 based on hitting projections it's no where near a short
based on the value of other cloud/SaaS companies currently.

Now it would be great to look at the S1 to see the costs associated with the
business but I don't expect it to be an upside down story as much as Box was
at the time of their IPO.

Additionally you still have companies like MongoDB growing slower, from a
smaller revenue base, with some very large costs and no where near
profitability and still trading at quite a high premium, so based on their
revenue and growth and assuming their net loss is below or at 50% of their
revenue base it will still trade well based on current comps in the market.

------
sidcool
Microsoft Teams does almost everything Slack does, and some things even
better. What vision would Slack provide to the investors to convince them that
they would not just be wiped out by Microsoft or Google?

Personally I feel Slack was a huge missed opportunity by Google. Their
enterprise woes would have reduced a bit

------
dawhizkid
I find myself increasingly preferring email over chat

------
edgarvaldes
My use case for loving IRC is this: I like to chat with other people while
learning a language/framework. What do you guys use these days to do the same?
Are there public channels on discord or slack, so to speak?

~~~
lmm
There's a bunch of programming Discord servers yeah. Also some Slack ones but
those always seemed to involve some awkward hack where you put your email into
github to get an invite or some such.

Gitter is also pretty popular for that kind of thing.

------
enriquto
I can't help but interpret 'Slack' as an abbreviation of 'Slackware', always,
in whatever context. This leads to some curious confusions.

------
erikpukinskis
For my curiosity:

Is there any mathematically optimal algorithm for doing an open initial
offering? Some sort of auction I guess where at the end there’s just one price
and 100% of shares are sold?

I know Google did a Dutch auction... is that considered the state or the art?
Are there variations that wouldn’t have the same problem?

I suspect ICOs have done all manner of experimentation here.

------
dangero
This is tangential, but a couple of years ago I market tested the idea of a
slack competitor that limits interruptions. I could not find demand and
ditched the project.

~~~
MacroChip
Ever tried [https://twist.com/tour](https://twist.com/tour) ? I've always
thought it looked interesting, but my company uses Slack. The main difference
seems to be that it's thread focused rather than channel focused. Which makes
me wonder if it's basically just modern email (which is fine).

------
raiyu
For those that are thinking of the product rather than the company Slack -
theinformation ran a great piece on Slack's financials:

"Slack had revenue of $221 million in the year ended January 2018, and was
projected to grow by 76% to $389 million for the year ending January 2019,
according to the early 2018 documents. Revenue was expected to grow by 64% to
$640 million in the year ending January 2020. The financial details haven’t
previously been reported."

Link / Paywall: [https://www.theinformation.com/articles/slacks-financials-
ah...](https://www.theinformation.com/articles/slacks-financials-ahead-of-
listing-plans)

------
gavreh
No mention here of MS Teams? I suspect many companies will be switching from
Slack to MS Teams over the next 12-24 mos.

~~~
LandR
We use MS Teams.

It's always having to reconnect, the history doesn't work well, notifications
are unreliable.

IT's just terrible IME

~~~
sngz
that's been the opposite of my experience. You described slack for me and MS
Teams UI was much more friendly to use.

------
Jedd
An application that lets you chat to other people from your computer is valued
at a quarter of a company that puts stuff into space.

(Yes, I appreciate it's not a unique observation, and that reality is slightly
more nuanced than that, but nonetheless, prima facie crazy.)

~~~
duderific
I personally don't get a lot of productivity gain from putting stuff into
space. I do, using Slack, and I suspect a lot of other people do as well.

~~~
dingaling
_You_ get immense prodictivity benefits from putting stuff into space. You
just don't personally notice unless it breaks.

Did you check today's weather forecast specific to your location?

Compared to what the 2,000 active satellites enable, Slack is just chatter.

~~~
buboard
ULA does that, not spacex

and spacex doesnt plan on going public

and technically it's russian engines that launch them

in any case company valuation is not based on aspirations

~~~
stanleydrew
> in any case company valuation is not based on aspirations

It kind of is though. Valuation is based on future discounted cash flow.
Aspirations inform how much future cash flow a company can generate.

~~~
buboard
but are satellite launches a growing market? there is only so much space up
there. Mars is a different beast, but that's quite a few decades ahead before
it starts bringing "cash flow"

~~~
TaylorAlexander
I’m not sure if you’ve checked recently, but there’s a _lot_ of space up
there.

~~~
shaklee3
Not really. Geosynchronous orbital slots are filling up very quickly. They
tend to space them about 2 degrees apart due to interference.

------
a-dub
shit. startup idea: "encyclopedia dramatica for work"

------
sys_64738
The world is mad. Launch an IRC server then make billions.

~~~
mruts
There's a long history of taking things that are marginally hard to use (like
FTP servers) and making them marginally easier (like Dropbox). I kind of
understand why it works, but it's still seems a little disappointing that you
can make billions off of a technology that was invented eons ago (for both
FTP, and IRC).

------
lfaoro
Why filing only now? Trying to get a piece of fools money while facing fierce
competition?

------
tanilama
Better late than never.

------
edoo
After 30 years the market is finally prime for a managed IRC service.

~~~
IshKebab
Managed and _modern_. Seriously show me an IRC client that supports images,
threads, emoji reactions (yes they really are useful), painless file
transfers, etc.

Hell IRC doesn't even let you browse history. How can you people not see that
Slack is vastly superior to IRC (apart from the openness of course).

~~~
Jordrok
> _emoji reactions (yes they really are useful)_

Fun, sure, but useful? Ehh...I dunno. It seems like you have some specific use
in mind and I'm curious, so if you don't mind me asking, what do you use them
for?

~~~
zck
They're useful to see support of a message, without requiring the responder to
say "I agree with $MESSAGE_FROM_SOME_TIME_AGO".

This is both useful for weeding out mostly-pointless "I agree" statements, and
for encouraging people who would not otherwise send support to do so.

Compare this, without emojis:

    
    
      user1: I think we should try $THING.
      user2: Yes, that's useful.
      user3: But what about $OTHER_THING?
      user4: I agree.
      user3: See, $USER4 agrees with me.
      user1: $OTHER_THING is too pricy for us right now.
      user4: No, I was typing at the same time. I agree we should try $THING.
      user5: $OTHER_THING is my preference!
      user6: I've used $THING before and loved it!
    

to this, with emojis:

    
    
      user1: I think we should try $THING. (5 :+1: emojis)
      user3: But what about $OTHER_THING? (1 :+1: emoji)
      user1: $OTHER_THING is too pricy for us right now.
      user6: I've used $THING before and loved it!
    

Note that in my example, people were more chatty than they normally were, but
not everyone who responded with an emoji in the emoji version even responded
with a message in the no-emoji version.

~~~
u801e
> They're useful to see support of a message, without requiring the responder
> to say "I agree with $MESSAGE_FROM_SOME_TIME_AGO".

Messages on this websites have a number of points associated with them based
on the number of upvotes and downvotes they get (if any). But we can't
directly see the number of points a particular post has (though we can
indirectly infer it by how it's sorted compared to its sibling messages and
whether the text is grey rather than black).

But, even without this information, the vast majority of posts and responses
are informative and have some substance. For example, I didn't just post a 2
word response to your post saying "I disagree".

Forums that didn't have voting or emoji reaction support didn't have problems
with "me too" posts. Neither did usenet.

~~~
_asummers
As a counter to that, GitHub had a very bad problem with that before they
added emojis to issues/PRs. There were hundreds and hundreds of issues with
countless "I agree" messages across major projects.

~~~
u801e
In that case, some moderation (manual or through automated tools) could be
used to address the issue.

On that note, I noticed that my original post was downvoted. I personally
think that it would be more useful if the person who downvoted it had posted a
reply instead and detailed the reasons they disagreed with what I posted
earlier (like you did). The latter contributes to the discussion. The former
doesn't really provide any useful information other than someone out there
disagrees with me and I have no insight as to why.

------
andrewmcwatters
"From 1980 through 2001, if you had bought the average IPO at its first public
closing price and held on for three years, you would have underperformed the
market by more than 23 percentage points annually."

~~~
mruts
Ignoring the huge black swan event in your data (the tech crash), the point of
getting in on an IPO isn't for you to hold it 3 years.

You get allocated shares that you then sell before the lockup period for
everyone else expires. It's just risk-free money for the people that are
friends with the underwriters.

I don't have the data on me, but I bet if you got into every IPO from 1980
through 2001 and then sold after one month, your returns would be pretty damn
good.

~~~
andrewmcwatters
"And finance professors Jay Ritter and William Schwert have shown that if you
had spread a total of only $1,000 across every IPO in January 1960, at its
offering price, sold out at the end of that month, then invested anew in each
successive month’s crop of IPOs, your portfolio would have been worth more
than $533 decillion ($533,000,000,000,000,000,000,000,000,000,000,000) by
year-end 2001."

"Unfortunately, for every IPO like Microsoft that turns out to be a big
winner, there are thousands of losers."

"You could have earned that $533 decillion gain only if you never missed a
single one of the IPO market’s rare winners—a practical impossibility."

------
dawhizkid
Anyone else thinking of jumping on buying a condo in SF bay area soon in
anticipation of this wave of IPOs? I'm looking at a few properties with the
rationale that prices will only, at least, stay constant if not increase with
additional demand all this new liquidity might bring to the market.

~~~
austenallred
I don't think they're particularly cheap right now if that's the question

~~~
dawhizkid
Agree definitely not cheap, but newfound liquidity for thousands of tech
workers should, in theory, keep prices high or higher than they are today.

~~~
judge2020
If remote work continues to catch on (ironically almost always using Slack)
then the rate of price increases will likely stagnate.

~~~
dawhizkid
SF is so screwed up though that even if that's true there will, for the
foreseeable future, more people that want to live here than there is housing
available...

------
asien
Fascinating how « Good » apps turn to utter shit when they are touch by VC
money.

Slack really follows the same pattern as everything that exist in the valley :

\- Create simple software that people love to use

\- Raise hundred of millions

\- Stop innovating / fixing bugs / adding new features and solely focus on
customer acquisition

\- Go Public ans Cash Out

\- Leave the company and ignore millions of frustrated users

\- Repeat

~~~
s3r3nity
Are the latter points true? I mean, I personally do not like using Slack at
work, but I have to admit it has a lot of really smooth UI and Product
features that seem polished. I don't think I encounter bugs on a frequent
basis at all, and my coworkers don't seem frustrated by using it.

But I guess I'm just one point of anecdotal data?

~~~
itslennysfault
I can second this, and I have a bias against it. When it came out I couldn't
wrap my head around why people were excited about it. I've used IRC for like
20+ years and I didn't see it as much of an improvement from IRC.

However, I currently use it every day and honestly have no complaints. I still
don't know why a chat app is worth so much, but it does what it's supposed to
(lets me talk to others in my company in a single place), and basically
everything you could think of has an integration for it. I haven't had an even
remotely annoying user experience since the early days, and as a "slack hater"
I've been actively looking for things to complain about.

