
Slack confirms it has raised $427M at a post-money valuation of over $7B - Manu1987
https://techcrunch.com/2018/08/21/slack-confirms-it-has-raised-427m-at-a-post-money-valuation-of-over-7-1b/
======
maxehmookau
Still waiting for a native MacOS app that doesn't slow my machine down to a
crawl and runs the fans whenever I made a video call. $7.1B folks. $7.1
billion.

~~~
joelhaasnoot
And honestly, how hard can it be? Put a 5 man team on it and in a few months
it'll be done and workable. Few million down the drain but your software is
insanely more useable. I guess that doesn't sell the service...

~~~
fastball
You can think a 5-person team can build highly performant native apps for a
number of different platforms in a matter of months?

~~~
joelhaasnoot
Start with Mac, find some good metrics that indicate that a lot of your users
are on Mac and go from there. (parse your user agents for instance) Once it's
proven itself, you can try Windows and some other options as needed (probably
mobile).

~~~
paulie_a
Why would someone start with a minor platform? Mac is consistently 5-6
percentage of the market and has been for decades. They honestly have never
been a player.

~~~
toast0
You're absolutely right, but consider that most of the people complaining who
indicate their computer type are mentioning using Apple computers (perhaps
electron works better on Windows? Perhaps people don't name drop Windows as
much? Perhaps Windows users have lower expectations?). Also, consider that the
supported hardware base for a Mac app is much smaller than a Windows app,
which means fewer devices to test on, etc, and probably fewer operating system
versions to support too. It should be (but may not be) a lower effort project
than supporting Windows, and it will be easier to kill if it doesn't go well
('whoops that was a bad idea, but only 2% of our users used it' \-- nevermind
if that's 80% of their user base that could run it)

~~~
deusex_
Ever heard of selection bias?

------
tootie
It seems to me that Slack is very vulnerable. Their core product isn't all
that innovative and already has credible competitors who could probably beat
their price. In fact, I don't understand how they beat HipChat so soundly. I
wonder if their next tack will be to start digging a moat of proprietary
tooling now that they have a critical mass of adoption.

~~~
growtofill
Atlassian tried to beat them with Stride and failed.

~~~
debacle
HipChat, flowdock, yammer, etc.

~~~
ryanmarsh
I look at Slack and think, how hard can it be? Then I look at the graveyard of
crappy competitors and think, ok maybe there's something special about Slack.

~~~
randomsearch
Same. Critiquing easy, making hard.

~~~
dgritsko
This blog post is pushing 10 years old and it's about StackOverflow, but it's
still extremely relevant: [https://bitquabit.com/post/one-which-i-call-out-
hacker-news/](https://bitquabit.com/post/one-which-i-call-out-hacker-news/)

The whole thing is worth reading, but here are a few particularly choice bits:

>"There is a tremendous amount of spit and polish that goes into making a
major website highly usable. A developer, asked how hard something will be to
clone, simply does not think about the polish, because the polish is
incidental to the implementation."

>The next time you see an application you like, think very long and hard about
all the user-oriented details that went into making it a pleasure to use,
before decrying how you could trivially reimplement the entire damn thing in a
weekend. Nine times out of ten, when you think an application was ridiculously
easy to implement, you’re completely missing the user side of the story.

~~~
tootie
My point isn't that cloning is easy. More that it has already been done
multiple times and Slack has very little lock-in. And enterprise software has
less network effect. Our IT department could dictate use of Microsoft Teams
next month and it would probably be fine.

~~~
icc97
It had been 'done' by IRC 20 years ago, Google had already been heavily in the
space with their linking to Gmail and Hangouts and previous attempts with
things like Wave.

Yet somehow Slack has come in and taken a massive share of the market in a
matter of 5 years.

------
akeck
Hmmm. The story I keep hearing is companies switching from Slack to Teams, not
because Teams is better, but because it's more or less integrated into O365
and has various compliance certs already. 7.1B seems a bit high when competing
with MS.

~~~
chrismeller
Ugh. Have you tried using Teams? I’m forced to now and I want to kill cute,
fuzzy woodland creatures every single day.

Simply integrating with 365 isn’t enough to justify its use for anyone who
knows any better.

~~~
marcinzm
>Simply integrating with 365 isn’t enough to justify its use for anyone who
knows any better.

But compliance may be. For example, Slack charges a lot of money and requires
a lot of users for actual HIPAA compliance (as in signing a BAA, everything
else is marketing fluff). Teams, from what I can tell, comes with a BAA out of
the box.

~~~
chrismeller
Slack charges what, $12/user/month for the full version with compliance and
auditing included? Yeah, that's $12 more than you were spending, but companies
that care about compliance really shouldn't be that cash-focused (I know, I
know).

It's hard to deny Teams when it's already bundled with 365 that we're spending
$25/user/month on, but if anyone has ever used both it becomes _immediately_
obvious that it's worth the money. That's the whole approach MS is going for,
and something that's very very hard for Slack to combat.

~~~
marcinzm
>Slack charges what, $12/user/month for the full version with compliance and
auditing included?

The $12/user version does NOT include a signed BAA which means it is not HIPAA
compliant for all intents and purposes. Like I said, anything without a BAA
that says it's HIPAA is useless marketing fluff designed to confuse people.
Only the Enterprise Grid product is eligible for a BAA and I believe even then
there's some large minimum contract fee.

------
mechazawa
How come Slack is worth $7.1B? I can't imagine they produce that much value or
have a high enough revenue to warrant this valuation.

~~~
Cthulhu_
Their base product is bringing in $5/month/user, and they'll often get dozens
to hundreds to thousands of users for each company that joins, whose employees
are usually already using the free version of slack, as a sort of grassroots
movement within companies. It's been the primary means of asynchronous
communication for the last ~5 customers I've worked at, and I've been in slack
channels of 30 to 300 users - in total, an easy 500 paid accounts, and that's
just from my network.

Anyway yeah it's a risky investment and a precarious valuation, there is
plenty of competition out there right now, yet somehow nothing seems to be
able to come out as better than Slack. Maybe if a party actually spent those
millions in investment funds to create good non-Electron apps.

~~~
swozey
One of my Slack channels (not servers, no idea how many are on this workspace)
has, no exaggeration, ~45k users. It's a hosted FOSS project so they're not
making money on those users, though. I'm curious what the largest Slack
instance is if it's not k8s.

------
rkrzr
If self-hosting is an option for you, I can highly recommend looking into
Mattermost as an open source Slack replacement.

We have been using it for the last 2 years and it has been working pretty much
flawlessly for us. Upgrading it is really painless too, since it is just one
Go binary that automatically applies DB migrations when it detects that you
moved to a new version.

~~~
eapartridge
Interesting! How do you find Mattermost does in terms of integrations with
GitHub etc? I see that there seems to be a bit of a community around it, but I
wonder how stable / reliable / usable they are?

~~~
rkrzr
Mattermost's webhooks are actually compatible with Slack's data format[0]. We
use this e.g. for the Travis CI integration, which is working well.

I don't know about other integrations, but I think most Slack integrations
should work out of the box with Mattermost, since the data format is the same.

It's also easy to add your own webhooks to automatically post to a specific
channel. We e.g. use this to announce deployments via Ansible, where the
deploy script simply POSTs to that webhook what is being deployed and by whom.

[0] [https://docs.mattermost.com/developer/webhooks-
incoming.html...](https://docs.mattermost.com/developer/webhooks-
incoming.html#slack-compatibility)

------
a-b
Switched whole organization from slack to
[https://zulipchat.com](https://zulipchat.com) \- so much happier!

------
bumholio
This is one of those recent tech success stories that just leave me scratching
my head. I simply can't understand the value Slack is bringing and why would
anyone pay for an absolutely metoo product. They are either deviously smart or
the market is in full bubble mode.

~~~
ryandrake
After Facebook and Instagram I pretty much gave up and stopped trying to
figure it out. Maybe I’m a dinosaur but I don’t get the appeal of most
software products that have come out in the last decade. It seems the formula
is simply:

1\. Spend investor money faster than your competitors.

2\. Don’t worry about the product quality, just make sure it has chat and that
the chat is incompatible with the 200 other chat apps out there.

3\. Load up on hype, marketing. And buzz/PR.

4\. Once you have a critical mass of users, lock them in.

~~~
phailhaus
> 2\. Don’t worry about the product quality, just make sure it has chat and
> that the chat is incompatible with the 200 other chat apps out there.

You are fooling yourself here. For all the snarky hate Slack gets around here,
it's far better designed than any chat app I've had to use so far. It's for
work, it doesn't have to be compatible with other chat apps (in fact, that
would be a security issue). Searching through your history Just Works,
integrations Just Work, and user-friendly features like reactions make it more
fun to use (and prevent cluttering up chats with unnecessary chatter). The
fact that Slack was able to destroy its established competitors should give
you a hint that they're doing something right. People like using slack. My
friends have made their own workspaces with it just to keep in touch, because
it's so well designed.

------
dawhizkid
Slack refuses to sign BAAs for healthcare cos (for HIPAA compliance) & does
not offer an on-prem solution (which Hipchat did but Slack will sunset in 6
months or so)

------
mrchess
Someone tried to run this investor scam on me during Slack's funding process.
Replace Google with Slack, and the scam was nearly identical in execution. Be
careful out there! [http://mobile.nytimes.com/2004/05/10/business/con-artist-
exp...](http://mobile.nytimes.com/2004/05/10/business/con-artist-exploited-
eagerness-for-google-prosecutors-say.html)

------
everyone
Has anyone considered using Discord instead of Slack? They seem very similar.

~~~
mechazawa
Discord has a huge image problem. I won't touch it with a 10ft stick or even
mention it in a professional environment. Besides that it's very annoying that
it's a complicated mess that has no real focus.

~~~
deadbunny
> Discord has a huge image problem. I won't touch it with a 10ft stick or even
> mention it in a professional environment.

Because it's aimed at gamers?

> Besides that it's very annoying that it's a complicated mess that has no
> real focus.

It's a chat and VOIP system, seems to do those both very well. Not exactly
complicated.

~~~
mcintyre1994
It's also been latched onto by a lot of articles about the alt-
right/Charlottesville, they were apparently using it for a while before they
got banned there - and Discord have been subpoenad and things. Nothing that's
Discord's fault (actually I don't think it's even encrypted?) but I can see
why it'd get a bad look professionally based on that sort of coverage.

~~~
deadbunny
That is ridiculous. As you say they got banned. If them being on the platform
annoys you that much didn't Discord do exactly what you wanted?

------
scruffyherder
Clearly not enough money for that IRC bridge...

~~~
tapoxi
They onboarded the early adopters onto their platform with a promise of
openness, got them to switch their company, and now that they're locked-in
it's time to tell those early adopters to eat shit.

It's deceitful, but its standard operating procedure for SaaS and we've seen
it before with Twitter.

I wouldn't be surprised if IMAP is deprecated from GMail in a few years.

~~~
scruffyherder
Sometimes I'm surprised I can still send and receive email via SMTP.

Having lived through the hell that was x.400 I'm almost amazed there isn't a
billed tier for businesses to go back to those dark days. Although I think we
almost were there with exchange/Skype federation.

------
pentae
Amazing how they are a $7b company with hundreds of employees and the issue of
it still taking _minutes_ to upload an image from the mobile app is happening
years after they acknowledged it for the Asia region.

We pay hundreds a month for Slack and they are worth 7b but with all their
money and hundreds of employees they just can't figure out how to get a photo
to upload in a reasonable time. Just can't figure out how to do it!

~~~
lukeqsee
> for the Asia region.

Depending on where you are in Asia, this is a hard one. I run a company with
geo-distributed systems, and even having a few Asian-base servers it is still
difficult to reach the whole region. You almost need to have datacenters in
every country to make it work effectively.

Not saying it's an excuse…it is $7B after all. That buys a few servers in many
different regions. :)

Edit:

To continue my thought. Here are a few of the issues you're facing:

    
    
        - China has the GFW. 
        - South Korea has very subpar links to anything outside South Korea.
        - SE Asia is tons of undersea cables with limited capacity.
    

This issue is very likely to be somewhat outside their control, since it
sounds very much like a bandwidth issue they may not have the ability to
rectify.

~~~
pentae
Its strange, we have a solid fibre connection in Thailand and have ~20mbit
upstream to Singapore. It's not like we are in a shack on a mountain in Peru
on a dialup modem. Slack is the only service we use thats ridiculously slow
for us and we use a lot of US based services.

~~~
scruffyherder
I can deathmatch fine in Quake 2 on a US server. but slack? Yeah no.

~~~
doyoulikeworms
Have you considered Discord? Kidding...

------
EpiphanyMachine
I wish they never bought screenhero and effectively killed it. The version of
it in the slack app is less featured and significantly less preformant.

------
sitepodmatt
I wonder if any of investors are backed (indirectly maybe) by memory makers
Kingston, Samsung, Micron VC arms etc.. Just a thought..

------
Pinbenterjamin
That's a crazy evaluation, is that company really worth 7.1Instagrams?

It really is a nice product, but it feels like a 'First-To-Market' success
story. Especially since it's built on top of electron, which I'm still trying
to accept as a real platform for application development, and not the '3d
printer' of the software world.

I hope they don't use this money to feature-swamp the app, and instead focus
inward on performance and migrating to a more stable platform.

~~~
growtofill
Comparing Slack (B2B) to Instagram (B2C) doesn't seem correct to me. Slack
wasn't the first-to-market (there's been Hipchat), but to my understanding,
Slack was radically better, that's why it became so successful.

As for using Electron for its desktop app: do end users really care?

~~~
naibafo
Yes, I have stopped using both, the Slack app and the rocket.chat app at work
since I was definitely seeing the effect of them in my RAM usage.

I don't use an application tray in my desktop, so having browser windows open
for the chats is basically feature-equivalent and saves me RAM

------
cntlzw
We went from Hipchat to Teams and now Slack.

Hipchat was solid. App was great to use and did not consume many resources.
Integration with other tools was ok. Of course things like Atlassian were
nice. Webhooks, API worked for me. Even writing simple notifications worked.

We then switched to teams because we already use Office 365 and the guy in
charge likes MS. Enough said. Teams and Office 365 has weird UI experiences
and it feels sluggish. Did not like it t all.

At the moment we use Slack. You can switch from workplace to workplace. Slack
is viral. You need to have it. All the integrations. UI is more polished than
Teams but overall I am not a fan. It feels sluggish like Teams at times.

------
forthispurpose
What is the good alternative to Slack now? Cheaper / OS / self-hosted etc?

~~~
wut42
There's Matrix and Riot. it's still a bit rough on the edges but overall it's
very cool projects.

~~~
namibj
He asked about slack, not Whatsapp. ;)

~~~
anderspitman
Riot has inline Markdown, so I'd argue it's actually superior to Slack for
serious work.

------
paulpauper
So much for that inevitable/impending Web 2.0 'bubble burst' that the
financial and tech media has been predicting since 2012. Nothing has changed
from now and 4 years ago .same high valuations.

------
carlsborg
Can slack messages be considered "personal data" under GDPR?

~~~
wglb
Only if they contain information that personally uniquely identifies a person.

The information in the individual slack account is most likely PD under the
GDPR.

------
QML
I've been having trouble coming up with an analogy until now: my main gripe
with Slack is that it brings over the concept of open office from meatspace
onto digital space. I don't think I'm the only one with this sentiment; it's
harder to concentrate on work when notifications go off; even if its not
pertinent to me, I feel an urge to stay in the loop on things.

------
sschueller
How much of that valuation is your data?

~~~
lukeqsee
If you want to commit corporate espionage. . .

just become a Slack employee?

I hope they have very, very good security and encryption measures on all
levels.

~~~
mrep
Not really unless they changed their systems recently. They were mostly a php
stack last I heard and they even got hacked in 2015 [0] which is why my last
company refused to use them.

[0]:
[https://www.google.com/url?sa=t&source=web&rct=j&url=https:/...](https://www.google.com/url?sa=t&source=web&rct=j&url=https://techcrunch.com/2015/03/27/slack-
got-hacked/amp/&ved=2ahUKEwia-pD-
q_7cAhWq5YMKHboaBG4QFjAJegQICBAB&usg=AOvVaw1BRViEcNbxVbUsREYuupsb&ampcf=1)

~~~
tomschlick
Being a PHP stack has nothing to do with their security.

Also, almost every large company has had a data breach at one point or
another. What counts is how they respond to that issue and mitigate for the
future.

------
acconrad
I'm new to venture deals (just read the book of the same name) and I have a
question:

Slack seems to be in peacetime: aggressive growth, buying things like HipChat.
If they're dominating the market, why would they need to raise money?

~~~
gkanai
> why would they need to raise money?

The thinking is that the more a hot company can raise, the longer they can
stay public.

In the current cycle, IPOs are more rare than in previous cycles (partly
because FAANG are acquiring more companies and partly because companies are
waiting longer to IPO) so having more cash on hand gives the company that much
more runway.

~~~
acconrad
Did you mean private?

So even if they are a market leader, give them more cash? I get why Uber does
it because they have serious commoditized competition with Lyft, but Slack
does not seem to have even a close 2nd place.

------
jahaja
What is the lowest acceptable number of employees that a company that's
planning to go public can have? Sometimes I wonder if this rapid inflation
phase is just a check boxing exercise.

------
aviv
Now they can afford the Dialpad.com acquisition they have been after.

------
shaan7
Will that be enough to do a dark theme? :P

