
Slack Closes $250M Funding Round at $5B Valuation - rayuela
https://www.bloomberg.com/news/articles/2017-09-17/slack-gets-slice-of-softbank-s-100-billion-tech-bounty
======
lisper
I'm sorry to be the hater, but I find Slack is a horrible productivity sink
for me.

I am currently a member on seven Slacks. Each one has a different username and
password combination. I have to log in to each one separately. AFAICT there is
no way to link them so I can log into all of them all at once. And then once
I'm in, every Slack has multiple channels. Trying to keep up with all of them
is hopeless. But if I'm not paying attention to a conversation in real time,
going back after the fact and trying to extract meaningful content is
difficult (it's hard just to find where a particular conversation starts and
ends). Trying to go back and make a contribution to the conversation after the
fact is completely hopeless.

Yes, real-time chat can be very handy, but I don't see anything that Slack
does that Adium or Skype doesn't do better IMHO. And for archival discussions
I'd much rather have a Google group. Keeping a threaded structure makes it so
much easier to go back and trace the conversation after the fact.

~~~
elliotec
>>> I am currently a member on seven Slacks

There's your problem.

I'm pretty surprised that you think Adium and Skype are better products than
Slack - neither are the same and they are pretty clearly much worse at team
communication, if you can call it that.

~~~
lisper
> There's your problem.

That's certainly one of my problems. But I work on multiple projects and every
one of them has its own Slack. So what exactly am I supposed to do about that?

I also don't think the situation would be much better if I were only on one
Slack. One Slack with multiple channels is more or less equivalent to multiple
Slacks (except for the multiple login annoyance).

~~~
jaredsohn
You can connect to multiple teams within the Slack client at once; it shows an
icon for each vertically on the left side of the client if running the desktop
client and lists them within a dropdown for the web client. Also, in the
desktop client you can press cmd-1, cmd-2, cmd-3, etc. to switch among them.

Screenshot found on Google image search:
[https://toky.co/img/integrations/desktop-app-
slack.png](https://toky.co/img/integrations/desktop-app-slack.png)

~~~
lisper
Oh, I know that. The problem is if I lose my connection then I have to log
back in to each one separately.

------
pm90
Despite all the detractors, Slack definitely made collaboration much easier
b/w teams. IRC was just too techy for tech and non-tech teams to collaborate.

However, I don't think the future of collaboration will be Slack. It is just
too expensive and quite buggy at the moment. I'm hoping there will be
competition that will either make Slack better or replace Slack with a
cheaper, less buggy alternative.

~~~
verelo
I struggle to agree, despite being the person who initially championed it at
the company. It feels like the worst of both IM and email: people use it
instead of email, so delayed responses are ok (although sometimes you want a
realtime convo and cannnot get it), but alike IM they also just don't respond
sometimes (this reminds me of how people sometimes treat iMessage/SMS).

I was thinking about the impact of taking it away again, if Hangouts supported
"channels" that people in the domain could join I think we would have a pretty
seamless departure. The channels feature is about all I've remained to love
after having slack for 2 years.

~~~
Swizec
> but alike IM they also just don't respond sometimes

Don’t people “just not respond” even more with email? Maybe I’m an outlier but
I probably reply to less than 50% of things that come into my email.

And if you need a realtime convo, come tap me on the shoulder or schedule a
time to talk. That’s the main benefit of slack (and email): async
communication. Async is good.

~~~
ryanbrunner
The thing is, Slack isn't really really good at async communication at all. If
I @mentioned someone and asked them a question, if they haven't responded to
it within an hour or two, the odds of them coming back and answering it are
extremely slim. People do miss e-mails, but not to that degree.

~~~
cloverich
I feel like threads + reply tracking could easily solve that. They already
have the concept of unread items and threads, they could just add a channel /
tab for DM's you haven't explicitly replied to (or acknowledged).

I feel like slack (and competitors) have a lot of room to grow still.

------
mkhalil
For $200M ARR, in a non-fictional world I may have it as low as 600M valuation
and as high $1.2b depending on growth.

But in this world, it's valued @ 5B. The tech world (bubble) is amazing.

Businesses are now being appraised like houses: "Comparable businesses were
just bought for X dollars".

At the end of the day the valuations don't rely on businesses bottom line.
They are based on two factors:

\- How much Google, Apple, etc. MIGHT buy them for in the future.

\- How much investors THINK Google, Apple, etc. would buy them today for.

Speculative markets have never failed us. /s

~~~
alexasmyths
The 'existential' issue with Slack, is not their growth rate or multiples ...

It's the fact that they don't necessarily have 'vendor lock in' \- and
substitution is easy. And it's an easy thing to copy.

It's designed for small teams, and small teams can switch to the 'next, cool
thing' in a heartbeat.

At the end of the day _it 's just chat_. That's it. There's nary anything
special about it. They did a good job of it.

That said, brands to have sticking power, and if there is no reason to change
then why?

They have some new MS execs, who might teach them the ways of 'sinking their
claws in' :) and becoming incumbent.

I should add, the larger the company (even with small teams), the bigger the
switching costs. After about 500 people, IT kind of becomes 'detached' from
the people, and doing anything on one's own becomes harder, so tech becomes
entrenched.

This company is the next 'IPO pony' the VC's are building up, hoping to push
onto markets at high valuation to get a big bang.

~~~
owenwil
If you think there's no lock-in I don't know if you understand what's going on
here fully. Slack has lock-in from day one: as soon as people use it, it's
hard to move away. We're an organization of 50 people and ripping out Slack,
changing user habits and even getting all of our data out of there would be a
_massive_ pain – so we'll never do it. This absolutely discounts how high the
cost to your employees of continually switching tools is.

~~~
alexasmyths
That people use it and may like it, is not really 'lock in'.

Ultimately, it's an easy-to-reproduce experience, and there will be/are
competitors offering 'the same thing' \- and so there will be price
competition.

If you want to 'switch to an alternative' it would be a disruption, not a
'massive pain'. Your 'old chats' are not that valuable.

If Slack was integrated into other systems - or integrated with partners,
customers etc. - that is 'lock in'.

FYI - It may very well be the 'next cool things' comes along, and you find
small teams 'just using that cool thing' already.

Finally I would say that Slack is not even that optimal - there is a lot of
'noise' in those channels, and the value add I believe is not that high.

I consult for startups sometimes, they put me on Slack and it's total noise. I
ask to just use email, and it works.

I think 'best practice' is not in a tool, it's in behaviour.

Email, used properly, with the help of a simple chat app for teams, can work
just fine.

~~~
JumpCrisscross
> _If you want to 'switch to an alternative' it would be a disruption, not a
> 'massive pain'. Your 'old chats' are not that valuable_

This is the definition of lock-in. Switching would be a disruption so you
don't do it. I'm locked into Gmail. There are lots of competing products, but
everyone knows my Gmail address and all my old emails are on it. I don't
bother exploring switching because I know it will be a disruption.

~~~
alexasmyths
I disagree your definition of what 'lock in' is.

All new technologies and process imply some degree of disruption.

'Lock in' is existential disruption.

\+ You wrote your entire app in .NET - that's lock in. Changing it means
gambling the whole company.

\+ You went Oracle/SQL because of regulatory requirements - your app is
wrapped around SQL, you have SQL/Oracle exports on board, you're not going to
change that.

\+ SAP - your whole company is wrapped around it, it's integrated with a dozen
other systems.

\+ You went Cisco - it really only interfaces with other Cisco gear. Lock in.

Slack is a 'chat app'. It's not that big a deal to switch.

If Slack evaporated tomorrow - one could switch to an alternative instantly.
Teams would figure out a new protocol for communicating instantly. It's just
chat.

~~~
JumpCrisscross
> _Slack is a 'chat app'. It's not that big a deal to switch._

You're over-constraining lock-in to its technical factors. Facebook has lock-
in for totally non-technical reasons. These are equally, if not sometimes
more, powerful than technical lock-in.

Lock-in means high switching costs. If it's more disruptive to switch than you
could hope to gain from switching, you won't bother even contemplating
switching and are, again by definition, locked in.

------
matchbok
Crazy to me. Slack is a constant distraction - 20+ channels makes it seem like
I'm in 20+ day-long, slow meetings.

Real-time chat rooms just to make productive teams, I've found.

~~~
z6
Totally agree. I work for a 2000+ people company and we have over 2000
channels. Slack just doesn't work well for that size.

~~~
cakedoggie
Why would you be connected to 2000 channels? Just use the ones that are
relevant to you.

~~~
unfunco
OP hasn't necessarily joined 2000+ channels, their company has 2000+ channels,
it's a similar situation in most companies I think…

I work for a 200+ person company and we have approximately 800 channels, maybe
20% of them are work related, the remaining channels are noise. There's a
channel wherein some people in the company pick up on grammatical and spelling
errors of others in the company and post them for others to laugh at, there's
another channel for the three people in the company that think they know latin
to make the same Monty Python joke (Romani ite domum) over and over.

For the current project we're working on, we've put in a no robots rule into
the channel (no Git/Jira/Travis notifications) and when one of the higher-up
managers in the company decided to join the project channel and make two joke-
like comments which added no value to the project, we had the project manager
remove him from the channel.

Slack has over-casualised our company, for work it sometimes works well, for
distractions it almost always works too well.

------
jaypaulynice
It seems like companies exist nowadays to raise funding. Not to be profitable
businesses. Say they go IPO soon after, where does the money come to actually
run the company? Is there a designated pool of shares for that? Do they buy
back the shares then?

~~~
natural219
Out of all the software this validly applies to, Slack has the most solid
business model I've seen in software since Microsoft Office. Almost every
modern organization is inclined to stress over whether $6.66 / user / month is
worth the price of the substantially enhanced collaboration Slack provides for
anywhere between small teams and 1000+ - person companies.

Not a Slack employee or anything, just love the software.

~~~
AstralStorm
The real question is: why buy Slack when relatively equivalent solutions such
as Mattermost or even Discord exist?

Seriously, the only thing that could convince a company is either lower admin
cost (vs Mattermost) and way better customer service when something fails. (vs
Discord) Pretty sure big co mc corp wouldn't like a potential competitor
running its comms.

Additionally a strong competitor is as always email. Perhaps enhanced with
scheduling and mailing lists. If you don't like to set it up, you could pay
Google for example. And both Google and MS are improving their chat/IM
offerings.

They can and will undercut such a start-up instead of buying it, unless they
see enough value in an acquihire.

~~~
owenwil
Because with Mattermost or Discord you have to maintain it yourself, and their
tooling isn't very good?

------
djhworld
I like Slack as a product.

I hate how a lot of open source projects have adopted it as the de-facto
community discussion forum, mainly because it's a product designed for
companies/organisations - not a disparate band of interested contributors.

In my password manager I have 8 passwords for different Slack "teams" that
I've joined, because you can't just have one account.

Being on some mailing lists, the most annoying spam is from people requesting
an invite to the community Slack channel. Every day you'll get at least one or
two people wanting an invite.

It's silly, but I don't see what the alternative is - Slack has built a
product that people like, it's just it doesn't gel well outside a corporate
environment in my opinion

~~~
scrollaway
Discord is actually fantastic for open source communities. React uses it. We
use it at my company. It doesn't have the "8 different team accounts" issue
you mention and there's this fantastic cross-protocol bridge called
Matterbridge you can use to do n-way mirrors:

[https://github.com/42wim/matterbridge/](https://github.com/42wim/matterbridge/)

------
aresant
Something interesting

On their last raise @ $3.7b it was thought they were doing around $64m/year -
so a 57x of revenue!

On this round they're raising @ $5b with $200m/yr - a ~25x of revenue
valuation.

(1) [http://www.businessinsider.com/thrive-leads-slacks-round-
of-...](http://www.businessinsider.com/thrive-leads-slacks-round-of-financing-
at-a-37-billion-valuation-2016-3)

------
darksim905
This is awesome & good news in every way. A lot of the comments here seem to
really circle around how people treat instant message communication vs e-mail
and/or being inundated with being a part of multiple Slacks.

If you are blocking co-workers like one person mentioned or muting them, you
have other issues (yes, you can mute a user)

If you're demanding or need instant communication with someone, just call them
from Slack. Or, alternatively, make sure you '@' them properly & force a send
notification. The issue I see is that not everyone is all about real time
comms -- some people put Slack on their phone or on multiple machines. Some
don't.

Some people claim it's buggy -- I've had far more issues with HipChat just
when it comes to displaying on two monitors than I have ever had with Slack.

I saw a few people complain about productivity sinks but the reality is if you
want to be a part of a certain group to keep up top of what's being discussed,
that's the pulse & one way to do it if you have a large amount of brain power
in the room.

Meh. I'm excited.

------
meddlepal
Wow I'm quite surprised at all the negativity towards slack on here... My team
hasn't experienced most of these issues and we love using it.

~~~
pdimitar
So your mobile notifications work without fail? On Android I receive one out
of 20 notifications. The desktop app is horribly laggy -- and my computer can
handle _a lot_. I have 2x 75Mbps internet links that stream 1080p effortlessly
so it's not my net either.

And you're pleased with the lack of granularity of the notification settings,
too?

~~~
TremendousJudge
>The desktop app is horribly laggy

Just try this out on linux (maybe works on other OSs): open a system manager
with a real time CPU usage chart. Open the Slack desktop app (or a session in
Chrome, it's the same). Open a channel (#random should work). Scroll up. Watch
usage of all your CPU cores skyrocket. Stop scrolling. CPU usage goes back
down.

They to hog all of my cores just to scroll up a list of messages.

BTW, this doesn't happen in Firefox: scrolling up doesn't cause CPU usage to
go up measurably

~~~
pdimitar
Check out my other comment so I don't pollute the thhread with copy-pasting:
[https://news.ycombinator.com/item?id=15279602](https://news.ycombinator.com/item?id=15279602)

------
abhij89
With Microsoft’s Teams catching up, i think Slack need more than just funding
and valuation. I have been using it for while and doesn't see much of the
development happening. Only thing they have introduced is "Threads", and
nothing else which is noticeable. I would love to see few of these in Slack:

\- Video calling \- Storage \- Private Sharing \- Guest member \- Meeting
rooms

~~~
drcongo
Depending on your definition, it has all of those things.

~~~
abhij89
I don't see meeting rooms.. i don't see guest member feature.. i don't see
functionality where i can share stuff privately with someone outside of
slack... storage?? where is it that feature, i desperately need that..

~~~
Artemis2
This should cover guest members for you: [https://slackhq.com/new-improved-
ways-to-manage-guest-accoun...](https://slackhq.com/new-improved-ways-to-
manage-guest-accounts-in-slack-892d4741d984)

------
skizm
Can you please just make the mobile app work correctly now?

~~~
rishabhparikh
I don't understand how people can continue to use it even though the
notifications are extremely unreliable. Unacceptable for any chat-based app.

~~~
DaiPlusPlus
I haven't had any problems with missing notifications over the past year on
the iOS client, and I'm signed-in to three different teams simultaneously.

My only complaint about the iOS app is its RAM consumption (it's not an
Electron app on mobile too, I hope?) as iOS seems to suspend it and thaw it
whenever I switch to another app. Oh, and it's still kinda slow, switching
between teams takes 3-6 seconds.

------
zaroth
Did I read that right - they currently have $200M ARR?

Keep in mind the $5B "valuation" probably is based on share price of the
preferred share times total number of all shares. In other words, fiction.

~~~
swyx
25x sales - high but seems reasonable for high growth b2b saas with network
effect. you were expecting more or less? not clear from your qtn

~~~
zaroth
Managing to create a network effect for corporate chat rooms _is_ impressive.
But it is a bit depressing that centralized unencrypted chat for corporations
is a billion dollar product.

~~~
bkanber
The chat room isn't what's worth a billion dollars. The fact that they
basically own the productivity chat market is.

~~~
somehnreader
"productivity chat market" <\-- whats that?

~~~
bkanber
"Work chat"

------
zizek23
There is always a 'pragmatic' silence about PHP on slack discussions here.
Wikipedia, Facebook, Slack. PHP has unquestionably delivered on scale.

~~~
pdimitar
Yeah, pressing Enter and waiting 0.5 to 1.5 secs for the message to appear is
indeed an unquestionable progress!

(I have a machine that can run 5 virtual Linuxes and 2 copies of a full HD
game on 60fps, _simultaneously_ , and can stream 1080p from my net, so no,
it's definitely not my setup.)

Have you used Miranda 10-13 years ago?

~~~
dbbk
What are you talking about? Posting a message in Slack? It's instant for me.

------
ringaroundthetx
oh look at that, 5% of the float is dictating the entire valuation. Might be a
new low for Silicon Valley, by low I mean percent of cash raised to made-up-
on-the-spot valuation.

If they want to go public and keep that valuation with that constricted of a
supply, S&P/Nasdaqs/NYSE won't list you, but Hong Kong will love you,
alongside the other 1% float unicorns.

~~~
chopete
>> S&P/Nasdaqs/NYSE won't list you Whats the cut off?. Is there a link you can
suggest to read more about % of cash raised/valuation?

~~~
ringaroundthetx
They all have minimum listing criteria that you can find, a private industry
solution to curb what they considered abuses.

------
alexashka
Can somebody explain the expenses/need to raise money?

From what I can tell the major competitor to Slack is Basecamp - a profitable
company with 50 or so employees?

What is Slack doing with all this money? The slack I used at work was an html
version of irc - is there more?

~~~
phamilton
Hipchat is the main competitor I'd say.

From what I've heard, Slack hit a pretty big infrastructure wall when it came
to big organizations. Teams just didn't scale past 1000 people. So they've had
to rebuild significant parts of the product in order to target large corporate
customers.

Looking at some of their latest API updates, you can see glimpses of
enterprise support. (eg moving away from handles to user ids likely enables
active directory integration).

Back to the question: Why raise money? Because enterprise whales are a much
more solid backbone than thousands of 20 person startups, and they still have
some eng investments they need to make to handle someone like Walmart in an on
premise installation with 10s of thousands of users.

~~~
daok
\---

~~~
detaro
The parent is talking about the size of Slack teams, not the Microsoft product
"Teams" which you seem to be talking about. (Why would Slack have to rebuild
anything because of MS?!)

------
kentt
I've stopped trying to understand why such a buggy product with horrible UX is
praised as the opposite. To me it seems the takeaway is advertising/hivemind
is still much more powerful and good product.

~~~
d23
A couple of years ago I was praising them as the most perfect product I had
ever used. Every single UX element was on point. Two years later, it is one of
the most buggy, frustrating pieces of software I have ever used. Clearly
somewhere along the way their priorities shifted.

~~~
justinzollars
Imagine that. They had a lot less staff and funding two years ago.

------
ben_jones
Thought experiment: how much money and how long would it take you to build a
product with complete feature parity to Slack?

~~~
c-smile
I personally can do UI of Slack client in 5-8 months (so 5-8 man/months) +
one/two backend developers needed. And it will be almost native client with
client distribution less than 5mb.

As a proof, it took me 2 months to make this application:
[https://notes.sciter.com/](https://notes.sciter.com/) (and site for it in
that time too).

~~~
askafriend
That's the easy part. The hard part is scaling, marketing, and building a
business/platform around the product so that you take it worldwide.

Several people have built Slack clones and there's even multiple open source
projects out there. Building a company and business at a scale like Slack is
the incredibly difficult part and nobody has managed to replicate that.

~~~
c-smile
That's true. My personal educated estimation is that only 5-10% of income is
spent on R&D in established companies.

------
DoofusOfDeath
Maybe _now_ they'll have the budget to support Github style markdown / code
formatting.

~~~
unfunco
Why should Slack support GitHub's implementation of markdown, why shouldn't
they just use the common markdown standard?

~~~
scrollaway
Is that really a question? For convenience of course.

Also, [https://githubengineering.com/a-formal-spec-for-github-
markd...](https://githubengineering.com/a-formal-spec-for-github-markdown/)

~~~
unfunco
It's only convenient for users of GitHub, there is surely a large number of
users that use both, but there is also a common standard.

~~~
scrollaway
But you realize that there _isn 't_ a common standard, right? Markdown is a
language which has no official spec.

CommonMark is as close as it gets to one and that one does include github-
style code fencing, so I don't know what you're even on about.

~~~
unfunco
It was CommonMark I was thinking of, it just seemed to make more sense (to me
at least) to implement that reference, rather than one that seems specific to
GitHub (nothing against GitHub flavoured markdown, I use it and I like it's
simplicity)

------
h4pless
All this and I still can't use Screenhero on Ubuntu? Way to destroy a useful
platform for the open source community, Slack.

------
cpursley
Congrats. Please allocate $1 million to build a native (i.e., non-electron)
client application.

------
DiThi
Nobody mentioned matrix/riot.im as potential open source alternative?

~~~
aloisdg
Glad you mentioned it! I use it for most of my chat nowadays. You can use it
with bridges to irc, gitter, slack and more. No problem for me. They plan to
improve the native experience with more native code (Qt or GTK).

~~~
voxadam
I'll definitely be on the lookout for a better, more native desktop client as
I personally find the UI of Riot to be painful. Maybe I'm alone but I find the
amount of screen real estate the Riot requires to be obscene.

------
JesseObrien
Surprised no one here has mentioned Twist.
[https://twistapp.com/](https://twistapp.com/) We're currently evaluating it
in lieu of Slack on our team of ~10 people because of the vast array of issues
Slack has. I don't know if it's something that could be considered for larger
organizations, but the way it puts together channels and threads is very
intuitive, and cuts out a lot of noise for individuals.

In terms of Slack's misgivings, I don't think I've used a more incredibly
bloated, buggy, slow electron app. Multiple team logins with no centralized
account is _insane_ to mange across teams, this single point frustrates me and
most people I talk to a lot. Not to mention the more teams you have, the more
your electron app slows to an absolute crawl. The notifications leave a lot to
be desired in terms of granularity per channel. They've done a really terrible
job on "threads", the UI around it is messy and confusing, and the concept
doesn't inline well. Those are just the most apparent daily gripes.

~~~
snarf21
Slack is basically the "open office" of communications. It has become almost
mandatory even though most people seem to hate it (at least some of the time).

~~~
i_live_there
I wish Slack had some features that Discord has...

* Text channel 'voice' restricted by user level. Eg: a read-only channel

* Dark mode

* Option to mute someone in voice channel

* Push-to-talk

------
noddy1
Slack lacks a truly broad network effect. Already loads of competitors with
equivalent or better products - lots of people seem to be using telegram now.
Whatsapp rooms are just as good too. They are really going to struggle to
aggressively price such a commodity product.

