
Is Slack Really Worth $2.8B? A Conversation with Stewart Butterfield - dkasper
http://bits.blogs.nytimes.com/2015/04/16/is-slack-really-worth-2-8-billion-a-conversation-with-stewart-butterfield/
======
staunch
> _" I don’t feel like there are any serious vulnerabilities in the
> business."_

No one in technology should ever find themselves uttering these words. It's
like asking for it.

If the tech world remains relatively unchanged Slack is easily worth $3
billion. All they need to do is get a few million workers on there chatting
away and they've got ~$10/month * millions, which is hundreds of millions per
year.

They should probably sell to Microsoft and let them take on the risk at this
point. There's a good chance the tech world will change around them and the
whole thing will come tumbling back down to earth. Or they could try to become
the new Microsoft.

~~~
mikeg8
> There's a good chance the tech world will change around them and the whole
> thing will come tumbling back down to earth.

What supports this claim? Yes tech and the tech world changes quickly but some
of the core functions of running a business, such as effective team
communication, will not go away any time soon.

~~~
ethanbond
And yet Slack was able to seize large portions of the market. Did
communication just recently become a need?

~~~
artursapek
There have been many before them, see Flowdock, Campfire, IRC, going back as
long as we've had the Internet. What sets Slack apart is they've executed it
better than anyone. They took the industry by storm overnight, it seems.

~~~
ThomPete
Thats not really en explanation.

There are several reasons why they are doing well and they have much less to
do with execution than with the right people getting involved.

~~~
volaski
"right people getting involved" IS execution

~~~
ThomPete
With the right people getting involved I am talking about the investors. That
has nothing to do with execution but to do with access to distribution and
press.

~~~
artursapek
Have you actually used Slack? Where I currently work, we have gone through two
other chat products in the past two years: Campfire followed by Flowdock. They
all fizzled out and died - people just stopped using them for some reason.

Then we tried Slack, and it's the first time the entire team has adopted 100%
and maintained it. Slack mobile has even replaced text messaging/GroupMe for a
lot of us as well.

Don't hand-wave away their success by giving credit to investors. It makes you
sound bitter and insecure, or at least uninformed. They've done a great job
building their product and deserve the position they're in. Whether or not
$2.8B is an accurate valuation is beyond me, but it does seem like they're
minting money over there.

~~~
fps
Campfire and Flowdock are both pretty awful compared to Hipchat (the previous
market leader) and Slack. I think Hipchat is feature-wise mostly on par with
Slack, but has a much more approachable interface. Hipchat is also learning
from slack on how to make integrations easier to install and configure. Slack
surged into the space by marketing to companies that were using nothing - not
by winning people away from competitors. I'm not sure that Hipchat can take
the space back from slack without a major new killer feature, but Slack's
marketshare is hardly guaranteed.

------
unoti
My team just gave up on Slack today, because push notifications seem too
unreliable when we're on our phones. Paradoxically, we've found it works
better when the app is not running than it does when it is running. Most of us
are using Android phones. I couldn't find anyone else having the same problem,
and I couldn't find any answers googling around, other than the obvious "turn
on push notifications"\-- push notices were definitely on.

We may go back to Slack at some point, if we can get it to work effectively
for us.

~~~
secabeen
Slack only sends a notification if you're offline or away:
[https://slack.zendesk.com/hc/en-
us/articles/201895138-Notifi...](https://slack.zendesk.com/hc/en-
us/articles/201895138-Notifications-overview)

The assumption is that if you're actively in the channel, you saw the item
already and don't need a duplication notification on your phone for the item
you just read.

~~~
clarky07
To expand on this, the desktop clients keep you active for much longer than
say the web client. I was also having these issues so I asked for a
clarification from their support.

I stopped using the desktop client for this reason and now I have a separate
window open for the web client. Push works much better for me now.

------
zmmmmm
Slack is one of those curious tools that seems to take off despite doing
nothing particularly new or innovative. We started using it due to some
colleagues who raved about it. I haven't come across a feature yet that we've
used that hasn't been part of IM / IRC clients for more than 15 years. The
main feature of it seems to be that it's new, so when you first start using it
only the 5 other people that you are collaborating with right now are on
there, so it starts off feeling more productive and focused than other tools.

But then, I thought the same thing about Twitter (how is this not worse that
every other IRC / IM service I've ever used?) and look what happened there.

~~~
rezistik
Honest question, outside of writing your own bot are there any real IRC
integrations for even half of the services Slack integrates with? It's really
useful to set up monitoring services in a dev channel where we can not only
read errors, but share code snippets with pretty formatting, Github
integration to let us know when a PR has been opened to fix the issue, and
then Trello to manage features too.

Not to mention the integrations outside of developers. I haven't worked in
enough large companies, and never as a nontechnical employee so I'm not sure
what sales teams were using for communication but I doubt IRC was their cup of
tea. I imagine they used a lot of email, maybe some CRM communication but
that's still not as useful, or rather I imagine it's less useful than Slack.
Having a single place to discuss Stripe purchases, hiring with Breezy,
MailChimp et cetera that isn't a gigantic email forward sounds seriously
useful and I don't know that anything like that exists on IRC.

There are alternatives like HipChat, but they clearly didn't it the mark the
way Slack has.

~~~
zmmmmm
You make a good point about all the integrations. I might be in an minority
situation, but none of the people who are enamoured with Slack that I work
with are using any of that stuff. It's just instant messaging with a sprinkle
of file sharing to them. It seems to me the biggest thing, as others have
pointed out, is the polish and the native apps. For example, Hangouts does
most of it, but Google has killed of their native apps and the in-browser
experience is really suboptimal. Having a simple, dedicated, well designed
native app really makes a difference.

------
hurin
Unlike switching VM's or databases, switching from one front-end for a pseudo-
irc-client to another is essentially simple, the migration is probably
significantly less painful, there are no proprietary formats in the way (.pdf
.dwg).

The actual costs / complexity involved in building a similar product are
magnitudes less than the high valuation would suggest.

So I'm not sure how much early success is really worth in this market.

~~~
mikeg8
Switching databases is significantly more painful for a _small_ portion of an
organization. Getting a large organization to switch messaging platforms
across all team functions probably wouldn't be a seamless as you'd like to
imagine.

~~~
SatvikBeri
Even at a 100 person company I knew, half the organization used gchat and half
used jabber/webex connect. Each side had champions that spent a ridiculous
amount of time trying to convert everyone to one platform, and last I checked
they still hadn't succeeded.

~~~
hurin
There are gui clients that support both protocols (i.e. I think Pidgin does) -
why not just write a plugin that allows to cross-communicate between the two?

~~~
nemothekid
As time goes on I get more and more disillusioned with solutions that begin
with " _why not just write_ ".

Nothing excites me more than having to think about supporting yet another
codebase deployed to non-technical people who will undoubtedly cause more bugs
than thought possible and open more JIRA tickets about it with increasingly
vague title names.

At some point Slack or [integration of choice] is cheaper than having an
internal engineering team to write half-baked communication solutions.

------
error54
Slack is good but it's nothing revolutionary that would merit the valuation.
My main argument against their crazy valuation is that there's no lock in so
it'd be easy for teams to move on to the "next big thing." Also, see
[http://getkaiwa.com/](http://getkaiwa.com/)

------
PublicEnemy111
The problem with trying to kill email is that you're never going to have
everyone migrate off of it. It's going to have to be some type of layer on top
of IMAP that then moves to a more sophisticated protocol. Google has done such
a great job with NLP/AI/ML that spam from facebook, twitter, etc. are all put
into a separate tab that I only see when I want to. When I click on an email
about a flight, it gives me updates on the status of the flight. Gmail also
makes it seamless to share docs. I could make a clean interface for email
groups using the Gmail API and have the same product as slack. What am I
missing here?

~~~
drinkzima
Probably just that you haven't done it yet. VC's are paying anything for
growth and Slack has got it, seems as simple as that.

------
shah_s
Slack is a great product but I do not think it's worth $2.8B. Hipchat has a
much bigger company behind it and people switched to Slack pretty quickly
because for the most part it is a better product. The reason for that switch
is because the cost of switch is relatively minimal. Any competitor can come
in and take that away from Slack. They are only worth this much if the tech
landscape is static, which we all know it isnt. Just my 2 cents.

------
amelius
The value is not in the actual product, but in the lock-in that this solution
creates. I find this outrageous, and I hope that soon a better and open
chat/communication standard will emerge.

------
paulsutter
Slack is really a nice application. People have been saying email overload is
a problem for years, and Slack has really put a dent in it for work/office
use. Yes it's a simple app, but so is email, and simple done better is genius.

[1]
[http://old.ycombinator.com/ideas.html](http://old.ycombinator.com/ideas.html)
(pg, 2008, see number 28)

------
antihero
> Replace e-mail

Ah, because I would only _ever_ want to talk to people within my specific
team...

------
ianstallings
Slack's valuation will make a lot more sense once they delve into the video
chat and conferencing world, making their way further into the enterprise.

People need to understand that investment is a vote of confidence in the team,
not just the product. What can this team accomplish with that investment?
That's the question.

------
UUMMUU
We recently switched from Hipchat to Slack and at first I hated it, now I'm
only mildly disgruntled because I did a few modifications:

1\. Bubble when I get a direct message. 2\. Leave all but about 3-4 groups.
3\. Tell images to not default display (have to click on them) 4\. Star
important channels (The star is next to the #channelname at the top and it's
only visible when hovered) That big star on the top right is not to star a
channel.

5\. and probably most importantly was to switch to the compressed mode so all
the chat spaces are as tightly compacted as possible.

~~~
ssmoot
We switched from Hipchat (buggy in the beginning, smooth and ideal at the end)
to Hall (a buggy, slow, awful mess) to Slack (also slow, but not buggy, and
awful UX).

Hipchat gets notifications right. Slack and Hall seem to have (in)sane
defaults, and not quite right customizations.

The web-view of Slack is slow and stupid.

It's picky, but I loved the vim/sed style substitutions in Hipchat. Slack FTL.

But the biggest annoyance by far: In Hipchat you could reorder your chats
however you felt like. In Slack they're fixed. And team chats are arbitrarily
(feeling) broken up into groups and channels. Which is a completely useless
distinction for most I think.

Hipchat had @all and @here. Which seem pretty self explanatory. Slack has
@group, @channel, and... I guess that's it. No version of @here AFAICT, and
depending on what sort of "room" you're in, the @all equivalent changes.

The iOS app also makes something that looks like a room picker and instead
makes it some other menu I forget. And notifications will happily occur on my
laptop, computer, iPhone and iPad all at once if I don't catch it at my desk
in time. Here's a hint: If you decide to notify my phone, don't notify
anything else at that point. No cat picture or CI build notification deserves
Def-Con 5 treatment.

But it has themes? And useless giphy integrations? Honestly I don't get the
love at all. Form over function at it's worst. I _really_ dislike it. :-p

~~~
nemothekid
Maybe our settings are set correctly, but HipChat's notifications seem half
baked. I've been trying out Slack on another org, and I noticed the biggest
issue in the way we use Slack is that most of our communication is person to
person.

This seems to come about because any HipChat message to a room you are in
notifies & alerts the whole room on OS X. Because of this, most communication
happens in private person to person rooms which defeats the purpose of having
public rooms for transparency. I haven't been able to get any of the rooms
feature to stick and so what commonly happens is two people discuss things on
chat, then repeat those conversations to everyone who should have been on it
in meatspace.

All of this because HipChat still doesn't let you set per-room notifications.

~~~
ssmoot
I'm 99% sure that's not the default and you've turned on some option to notify
everything.

Otherwise there'd be no point of @all and @here if you were going to be
notified anyways.

------
applecore
Amazing insights in this article. This will prove a remarkably prescient
interview.

~~~
jeffreyrogers
Yeah, people are focusing too much on slack in particular and less on what the
interview reveals about how VC and the tech industry actually operates. I'm
really impressed by the way this guy thinks. These are things I haven't heard
from other people.

------
khorwitz
There seems to be a booming market for Slack integrations lately. This is
great because Slack just = text, and so building prototypes can be fairly
easy. Our product ([http://focusr.co](http://focusr.co)) actually started
purely as a Slack integration, and evolved into something else.

------
sakri
> _Acquisitions would be one. We might have to defend ourselves against
> predators._

Soooo time to create a Slack clone and sell it to Slack for a few million?

------
crafty78
Is it me or does Microsoft just need to get a decent persistent group chat in
office365/lync/skype for business along with a decent api for integrations. As
small business/startup running office 365 the reason we started with slack was
due to the lack of persistent chat rooms in office365. (yammer is just not
usable and not sure who it's aimed at!)

~~~
brazzledazzle
Lync's lack of persistent rooms is such a downer.

------
memossy
The funny thing is that Atlassian, whose HipChat had a few years lead on
Slack, was only (?) valued at $3.3bn last year for their whole suite of
products

[https://news.ycombinator.com/item?id=7554904](https://news.ycombinator.com/item?id=7554904)

------
stillsut
For over a decade, the most important question for any enterprise data tool
was:

    
    
      Does it import/export to Excel?
    

The potential value of Slack is to ask that same question about any B2B
software an exec is considering. Slack's a "king-maker", not a king.

------
tuke
"no"

(And go use Flowdock.)

------
jingo
Butterfield: "It is because people say it is."

------
synaesthesisx
SSShhhhh.....people need to stop questioning these high valuations, seriously.
People might suspect a tech bubble, or something...

------
dmitrygr
Betteridge's law of headlines says no

~~~
georgemcbay
Simple economics says Slack is worth whatever they can find a
sucker^H^H^H^H^H^Hinvestor or buyer to value them at.

~~~
fredkbloggs
Don't confuse price with value. A corporation is worth the discounted present
value of all the dividends it will ever pay. That figure may not be knowable,
but it does exist and in this fevered dream world can safely be assumed to be
zero for almost everyone. The price, however, can be pretty much anything,
reflecting what at least one person is willing and able to pay for it.

~~~
meric
It'd probably be a bit more than zero. You can buy the company, fire all the
engineers, set the price to $10 per user immediately, watch 95% of users
leave, remaining 5% paying $10 per year, and then discount and sum over that
cash-flow, and you could probably end up with a value of several hundred
thousand dollars in the minimum.

