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Slack confirms it has raised $427M at a post-money valuation of over $7B (techcrunch.com)
132 points by Manu1987 on Aug 21, 2018 | hide | past | favorite | 201 comments



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.


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...


But once you get to that organizational size, there are 3 project managers and a VP with an agenda and designers and design managers and a QA department which is backed up “for a bit” and a PR team who wants to make sure we get a good Q2’19 “win with the developer crowd”.

So it takes a year, and $2.5M, to do what should take 3 months and $300k.

* not saying this is the case at Slack, it’s just often the case at Everywhere. ;)


Exactly. A completely rewritten from scratch product would probably take 1 year to finish. 90% complete can be ready in a few months, but the last 10% takes much more effort. Then there's the QA division you need to build out to test it on the platforms and OSes you need to support your enterprise customers. Then there's the management structure to track the project. Then there's keeping it up to date with the existing service's changes as it's both in development and production. Then there's the migration to switch users to the new client, and the phasing out of the old client over time.

It's doable, but it's non-trivial, and probably only buys you the accolades of a small percentage of users on slower hardware. (And incidentally, almost every video chat app I use today runs the fans and slows down my system, but I can deal with it)


Electron apps are for amateurs and small start up teams. Once you are into the 7b valuation range, you need to put on big boy pants, and make big boy software that runs as advertised. No video functionality even needs to exist for it to run terribly. I have never used the video feature, and it causes my entire 4-5 year old system to chug. I can't even consider using it on an old linux machine.

People shouldn't have to put up with the system crawl that ensues after firing up slack. It is absurd for the money they charge.


Nobody at the executive level is determining what application platform to use. The bigger your company gets, the farther away they are from this decision. In fact, from an executive level, the fact that people are using the app despite complaints shows they are doing something right.

The alternative for users is to go with a competitor that competes with everything Slack provides, in addition to improved performance. There are at least two such competitors out there, but people put up with Slack, even though they don't have to.


VS Code is an Electron app written by the $800B Microsoft. Maybe you've heard of them?


Yeh and don't look now but... its also becoming a bloated mess. Notepad++ is a native application and it blows vscode out of the water for speed. Though obviously it does not have ide-esque features of vscode. Furthermore, there is no paid version of VS Code, and if there were, and it ran like dogs ass, I would say the same thing. They need to put on their big boy pants and make a big boy native application.


> They need to put on their big boy pants and make a big boy native application.

for VScode, there's Visual Studio.

And VScode isn't slow by any stretch. It does take a bit of memory (as expected of an electron app). But it's well engineered, and has very little slow laggy UI parts.


To be fair, I'm sure if they added WebRTC to VScode it'd be slow too. (Plus whatever Slack is doing to receive notifications and messages in real time - not sure if that's also WebRTC or something like Web Sockets)

Edit: thought Skype wasn't in Electron, obviously I'm wrong: https://electronjs.org/apps/skype


The current Skype clients are Electron-based.


Guess I should have verified that before I opened my big mouth.. oops!


well they just raised $427, so yeah they should still probably be able to find the scratch.


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


Yeah, pretty amusing to hear all these arm-chair quarterbacks on how easy it is to build a rich, real-time chat app like Slack but with native tech. Not only do you have to have all the basic functionality, like emoji reactions, link preview cards, inline images, video, message actions, mention preview, threads, channels, avatars with presence, file attachment upload, etc but you also have to consider that Slack is a moving target. They can't stop shipping new features. They have Microsoft Teams to compete with, which is also an electron app by the way.

Sorry about everyone complaining about CPU, but Slack won the chat wars in part because they were early adopters of Electron, and got plenty of developer productivity benefits out of using the web stack to build on.


Do they have to do a DSM everyday and retrospective, backlog grooming, sprint planning and whatnot every two weeks? Then no.


Absolutely. Even faster if using some cross platform nicety like Qt.


Yes


Great! Now can you name an app where that actually happened?


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).


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.


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)


Ever heard of selection bias?


Because mac users have been the most concerned about native look and feel for decades, most windows users probably couldn't tell you what the native look and feel is because even MS don't don't don't follow one.


But they a still an incredibly irrelevant platform when it comes to userbase, if anything make windows top tier and Mac users can have the half assed version. Slack is typically a business application. You will use it if it's required and Mac users just are not that big in a corporate environment.


???

We're talking about a chat application for diverse corporate teams. If you don't have native apps for Windows/MacOS/Android/iOS at the get-go then you've missed the boat.


You don't even need good metrics. Just write some software that doesn't run like shit. That is the only metric that is needed.

If you build it, they will come. Especially if they don't have a choice. So build the new, deprecate the old.


Video performance is a LOT harder than you think.

At another company, I watched an five person team, half of whom had related PhDs, the other half over a dozen years of video engineering experience, make incremental improvements to the WebRTC stack.

After a year, was it better? The metrics said it was somewhat better, but the customers still complained all the time.


Ship a Mac client without video. Add video next year once you've proven that people actually use a native Mac client. Some companies call this 'agile' - it's a strange concept.


Video calls (with screen sharing) are the only reason I have the Mac client installed. Otherwise I'd just use the web app...


>Video performance is a LOT harder than you think.

But it's been done. Skype video calls worked on far inferior hardware and networks back in the day.


Lets assume well paid developers of $150.000 yearly, 5 man for 3 months is less than $187.500 is wages. Lets be generous and say we double that to account for other expenses. It's $375.000 for a feature that will be a reasonable sales argument.


Much as I usually try to understand the 'business end' of things, I have to say that I'm baffled that Slack hasn't done this yet.

I rather like Slack, and have good reasons to use it (it's pretty central to Elixir's community, for one), but even on my relatively beefy MBP (2015) I actively avoid having the app open because it's a heavy Electron piece of shit.

While of course I might be a bit of an outlier as a developer with a preference for 'lighter' applications (and comfortable with CLI stuff), surely I'm not that much of an outlier...


I think it's typical. The business-minded management folks at tech companies tend to measure success and failure purely in dollars. If the company's financial indicators are good, they assume their trajectory is correct and change nothing. They won't fix or improve existing systems unless an issue is measurably costing them revenue.

In the case of the enterprise shop I work at, our revenue increases year over year, and so technical debt doesn't get addressed unless it causes such trouble that clients threaten to leave. Development gets slower and costlier over time as cruft builds up in the codebase, but that effect can't be measured, so it doesn't exist as far as management is concerned.

In Slack's case, their indicator of success is the giant valuation they just got. Their desktop app is an annoying resource hog, but hey, they have tremendous market share, so it must not really be a problem for users. And if it ain't broke, don't fix it.


Let's throw these money and work hours to electron contribution! It will make every electron app faster


I think Google is already throwing enough money at Chromium for all of us (Electron runs on top of Chromium AFAICT).

In my opinion, Google's expectation is that you run one instance of Chromium per machine. Electron wants to run one per application. Hence performance woes.


Slack pays much more than $150k.


The average wage for a senior developer in silicon valley is $130-140k for 2018 (according to various sources on google). I have a hard time believing that a company so obviously business management focused as evident of how crap their application runs, willingly pay "much more than $150K". Nothing in their application requires it, and developers able to require "much more than $150K" wouldn't touch that with a 10ft pole.


> And honestly, how hard can it be?

Excuse me? You think 5 people can 100% replicate Slack natively within "a few months"?


That's not what they said. A significant fraction (probably the majority) of Slack's functionality is server-side, not client-side. Even if the client were to be rewritten from scratch, you would not need to replicate 100% of Slack.

But you also don't need to re-implement the entire client. You need to do a significant architectural change for performance improvements, not a complete overhaul. Reasonable people can disagree about whether or not that's feasible for five engineers already familiar with the codebase to do within a few months. Your incredulity at the idea is unwarranted.


No, it's pretty warranted. The 100% I was referring to _was_ just for the clientside. To rewrite that natively (since today it's in js on Electron) is not going to take a couple of months with five engineers.


I don't think it's entirely out of the realm of possibility that could be done, and a couple of months with five engineers was a conservative estimate. $375.000 for twice the devs or twice the number of months is still a shockingly low price to pay.

Hell, throw a few million at it and I can't see why Slack can't be implemented natively on at least iOS, MacOS and Android (especially if parts can still fallback on webviews).


It is entirely out of the realm of possibility.

There is absolutely no way in hell that even ten engineers for a couple of months could replicate all of Slack's functionality. Even ten times that much would be a stretch.

They could maybe make a decent chat app prototype in that amount of time. If they are very talented, they might even be able to make a decent chat app MVP that would get some actual users, but there is absolutely no way that they could replicate all of Slack's functionality.


To be clear, we're not talking about replicating all of Slack's functionality. Performance improvements aside from a complete move away from Electron can be considered.


Does improving performance require a rewrite? Is this the best you can get from Electron?


He proposed rewriting Slack natively. Natively implies not javascript. Since Slack is entirely in javascript, a native implementation is by definition a rewrite.


With a 7b valuation, I'm pretty sure they can hire some talented people, don't you?

I agree it will take longer, but Slack owes it to their customers to hire people and put out a better product.


> I'm pretty sure they can hire some talented people, don't you?

Even the most talented construction workers could not build the Empire State Building in a week. It's a little silly to think that these people are like magicians.

Have you looked at Slack's competitors? Slack is arguably the best chat app out there, especially with their UX and the quality of their integrations. It's so presumptious to then tut-tut them suggesting that they "owe their customers better". They're doing very well!


I honestly think slack is a terrible product. IRC is better in every way if you take a few moments and institute logging. Just because they are doing well doesn't mean they are doing well to their customers. It is insanely overpriced, imo.


And a lot of people honestly think that IRC is terrible platform. And that slack is not "insanely overpriced".

Guess which opinion is more popular.

Now think again about this "doing well to their customers"


On the contrary, Slack's clients are thick, complex applications and they are non-trivial.


No need! Everyone is already so happy with the electron version; why would they waste more money improving your experience?


Because not everyone is already happy with the electron version?


(I was sarcastic!)


But Electron man. Electron. (sarcasm)


Their video offering is laughably bad but I'd bet that isn't because of electron. Otherwise I'm surprised people hate the electron app so much, on my 2014 mbp it works just fine.


I don't know about "just fine". I think its benefits outweigh its problems. I need to stay in touch with my team, and I need those integrations.

But even simple stuff like "send when internet connection is back" isn't there, like what WhatsApp has.

It also doesn't load very fast for something that you'd think is mostly text. Change teams and you see the spinner a lot. Also when you've come back to WiFi it seems to take ages to get your updates.

A lot of these things seem to be "fixed" by killing the app and restarting, which is something of a smell.

Also seems to use a lot of memory. Not a huge problem on my machine, but I like elegance.


Agreed. To support that point, Discord's videocall functionality is probably the best I've seen, despite using electron as well.


Counterpoint: I've found it to work better than Google Meet. But maybe that's not saying much.

(Is there any video conferencing software that doesn't suck in some way?)


Zoom has been my best experience. Plenty of features, smooth video for the most part. Enough that I use it exclusively for business at this point.


Jitsi Meet just works for me: https://meet.jit.si/


BlueJeans. Always great.


Which is something that people complain about, but isn't enough of a motivator to get anyone to switch. Skype for Business fits the bill of a lean messaging platform with similar features but it's just terrible. Mattermost is pretty cool but it's self-hosted which makes it a non-starter in shops that don't have IT staff. And all the other competing products are basically just Slack clones with less features.

So Slack is going to continue eating all your resources, because anyone who cares will switch to a leaner Slack client before they switch away from Slack.


Or one that doesn't drop 5 seconds of call audio when I open a new tab in Chrome. Yes, really.


And one that doesn't use >1GB ram when idle


I'm guessing they don't care so much because most of their paying users are captive audience. If your work decides to use slack, it's not like you can't opt-out.

So they focus more on server-side features that ensure they'll be chosen in the first place.


Heck, I'm still waiting for Photoshop to be able to launch and display a static 50KB image in a reasonable amount of time.


Same for windows, and linux. I refuse to install it and instead use the web app as if it were email. Fortunately, I don't have to use it for work.

IMO, the only thing slack does really well, is the threading. But I've ever only been a part of one group that actually used that feature. Every other group uses it like a chat room.


I think contributing to open source and making electron better/faster/lighter will benefit everyone and i prefer it over making a native app


Unfortunately it’s also vastly less likely to bring the same speed ups in even a 4x time frame. It’s not like the Electron devs are caring about speed at all atm.


What about getting those video calls to work on iOS?


Same here but for Windows...


I'm still very curious what combination of variables leads to these complaints about Electron apps. I have never experienced any of these issues, and I have heavily used Electron apps like Slack, Discord, and Visual Studio Code for years on both high-end and modest Apple computers.

Electron apps appear to be one of the biggest pain points for people in tech and the HN community, and I find it so bizarre that I relate to exactly zero of those complaints.


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.


As a former hipchat customer atlassian just totally missed the mark.

The updates they put out for Hipchat during slacks rise were new emojis.


> digging a moat of proprietary tooling

You mean, like disabling XMPP and IRC integrations? https://www.theregister.co.uk/2018/03/09/slack_cuts_ties_to_...


We used Hipchat a lot back in the days. I remember the biggest frustrations for us was that there was no multi-team support, so co-workers were doing crazy workarounds with multiple copies of the same application on different icon and bundle ids. Additionally HipChat was down quite a lot from what i remember.


As someone who was a huge hipchat fan that got moved to Slack. It's integrations, bots, and a delightful UI. They figured out UI better than any chat. Sometimes it's just building the right product.


Aren't the bots and integrations of those already moat-like?

Even if a lot of those exist elsewhere and you're not using custom bots, hooking everything back up is a pain point. Along with having to export/import data, getting everyone to sign up and get used to a new service, etc. I think it's probably going to take something that's not just a little better, but significantly better and different.


Atlassian tried to beat them with Stride and failed.


HipChat, flowdock, yammer, etc.


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.


Same. Critiquing easy, making hard.


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/

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.


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.


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.


Flowdock was better than slack, just couldn't compete.


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.


My experience with MS Teams contradict what I've mostly seen on HN.

Coming from a Linux background, I had lost touch with the Microsoft ecosystem for the most part of a decade and would actively avoid Microsoft related stuff.

When I got a new job, I had to use the whole SharePoint/O365/Teams stack, instead of Slack, in medium-sized teams. It feels much more lightweight and responsive, chat history and search works way better than Slack (for now, at least), and is miles ahead of Skype in terms of not dropping messages, and you know, actually allowing you to chat and call.

I'm not using the O365 integration extensively, and generally view/edit documents as they're supposed to (files), but in the cases I've needed to make some changes in an Excel file, I didn't have any issues.

Of course it suffers from all the problems that an ephemeral, short-term memory chat application does in an organization, but that's to be expected.

Edit : Not affiliated with MS in any way. If I can answer any questions, let me know.


I've been using teams since launch, it's a step up from Skype for business (mostly, they have for some reason decided to drop support for talking with regular Skype). I would say tho that they are still lacking a lot of important features. You can see a lot of examples of this here:

https://microsoftteams.uservoice.com

They can also be very slow getting around to fixing things even if they are very important. They only just recently fixed so status works and notifications stopped working for more than a week without getting fixed (patched this week).


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.


>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.


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.


>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.


to be clear, Teams comes with one of the lowest O365 packages at a meagre $5/user/month (if i'm not mistaken on the price)... that's a big difference against Slack.


I missed the part where you detailed any of your problems with it.


Hold on to your butts...

1. Click the icon to open it. Flip to another app. Multiple times during startup it will steal focus as I'm trying to do other things.

2. Flip back to another app during #1? It'll sit at "Loading Teams..." for. F'ing. ever. You won't get any notifications during this phase. You will not show up as online.

3. When it does load, I'm always 2 months back in chat conversation and have to spend 2 minutes scrolling down to the current time to see if there's anything new.

4. There is no way to skip to latest...

5. Notifications don't integrate with anything, they are custom. They are quirky and peculiar. There have been times that _none of them_ come through - no badge, no notification, no mobile push notification, no nothing - if I hadn't flipped to the app I would have no idea I got any messages at all. And yes, these are direct messages that I have notifications turned on for.

6. Uploading files is annoying as F. Drag and drop into the message. I have to click into the message input box to even start adding any other text (seems like an obvious transition to me)... when it finishes uploading you might get kicked back out of the text box because it wants to ask if this is the same file as you uploaded before.

7. When focusing on the app I'm never, read _never_, placed into the input box, even if I just saw a notification (miraculously!) that I'm trying to reply to. (Skype also has this same problem.)

8. Defaults to emailing you _for every F'ing thing under the sun_. It's an F'ing chat app, why are "you're missing the conversation!" emails the default?

9. Navigation is a clusterF. Three layers of vertical panes of navigation (ala Slack). Then add on top of that horizontal navigation _in every single one_. And not just a fixed number of tabs as navigation, you never have any idea what it's going to look like because...

10. "Integrations" is just BS. All they mean in Teams is a new tab you can add to the horizontal navigation in #9.

11. Any of their logic regarding recent conversations, recent groups, etc. and what should be displayed in the left navigation is crap. I've only got one team that I use, but I have to expand that single team to get the other "chats" in it? You've got thousands of pixels of vertical real estate here, why do I have to constantly expand the _one thing_ in the list?

12. The "wiki" has no navigation by default, you have to try and figure out (amongst the 15 different layers of navigation) where to expand to find the pages in it. Hardly a wiki, and even the editing tools are quirky and annoying - things disappear and reappear at random.

And that's just off the top of my head. This is seriously the _worst_ chat app I have ever used in my life. Some random team at MS took Skype and decided to take the worst UX features of it and make a Slack clone. The fact that they started pushing this to businesses as part of 365 should involve mass firings.

Edit: Formatting and a word... and a number.


I have used slack, hipchat, irc, and many other chats over the years for dev teams. Joined a new small company and we are struggling really hard with MS Teams.

Teams is unique in how it "ticks all the boxes" but has enough small flaws and unfinished implementations that it makes for a really, really awful tool. There are fundamental problems with the software. To name a few:

- The notifications are wildly inconsistent - sometimes I'll get 5-6 email notifications for a single message that I already saw, sometimes I'll get email + app notifications for messages I am currently viewing, sometimes I'll get no notifications via email or app, for stuff that happened when I was offline. - The way every message is like a new "post" and there can be replies - this is a unique idea, but just really bad to use in practice. When people reply to a post, it gets bumped to the bottom, so posts end up out of order. Also, all the replies to the post automatically get collapsed, making it really annoying to find anything. - The mac app decided to stop displaying new messages (for WEEKS) in certain channels including our service errors channel - I finally gave up and can only use it on the web. - the O365 file integration regularly crashes the browser and mac app. We share a lot of spreadsheets and this just sucks. Sharepoint sync on the mac breaks all the time. It spins and fails to track updates. - O365 collaboration in the browser is brittle, especially disappointing compared to where Google Docs was 5+ year ago. - The Teams search cannot find documents by name. - The messages seem to be backed by email files in sharepoint, which makes a mess in sharepoint (not that it isn't kinda a mess already).

After using the google suite at many companies for many years, and having the standard on-prem microsoft stuff, I have to say Teams is not a viable solution for a software team. Teams "ticks all the boxes" but the execution can't compare to Slack.


We honestly tried to like Teams but ended up with Slack, I think partially since everyone (including me) was already using it for other projects.

Remember MS tried to push Yammer to businesses as well, so not everything they do works out.


The potential for deep Github integration too.


What does a deep integration between a chat app and a vcs provider mean?


I've already had a slack channel at most companies I've worked for that had our CI spit out information about pushes and pulls on GitHub, and I always mute those first thing.


At least three more powerPoint slides about synergy when selling to bosses.


Integrations with O365 might be a feature for some but a lot of people have abandoned that ecosystem entirely. I can't think of a single person that uses it professionally or personally.


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.


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.


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.


Tool integration and automation with Slack are things that people have come to depend on. There’s not much unique to Slack in that regard but they have the momentum and many products will either be Slack-first or be integrated exclusively with Slack. There’s a lot more out there in terms of APIs these days so people can, and do, develop their own integrations for other chat platforms but that’s not quite the same.

I don’t know about 7 billion but based on how technical and non-technical teams alike use and depend on Slack I can easily see 1 Billion or more. But 1 and 7 billion are really far apart. If I were a Slack employee I’d be thinking about my stock. If it sold for 2 billion would I be shit out of luck? Legitimately asking, I don’t know how stock preference works when the VC investment comes after stock has been issued to an employee.


Because their value isn't from the product itself. It's from being able to dig into the data being transferred with the product.


They have a deal with Corsair and Micron.


Because lots of companies pay for it.


Have you been living in a cave for the last decade? This is modern business, whatever is hot and gets a lot of users, gets a ridiculously unrealistically high valuation. Also, you never need to be profitable, as long us ure hot you can just keep doing more rounds of funding.


[flagged]


No. Businesses whose success depend on network effects are not automatically Ponzi schemes.


Who said anything about network effects?


The comment you replied to is (snarkily) saying that as long as a company is "hot" (i.e., it has a lot of users) then investors will keep coming. That's totally reasonable; a product doing well that grows as a function of the number of users using it is a promising investment (especially when those users are paying!). That's not a Ponzi scheme.


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.


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?


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...


Switched whole organization from slack to https://zulipchat.com - so much happier!


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.


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.


> 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.


Facebook and Instagram make money and have lots of data.

I thought the $100bn valuation for them was low and turns out that was right because they had acquired all this data for free. Data which at the time no one valued (and even today don’t value enough) but was worth a lot.

Slack has lots of data, but if they try to monetize it, I suspect they will lose a lot of their users (the data they have is what people would consider private, while the whole point of the data shared on Facebook/instagram is to make it public). And I suspect their avenues for making money are closing out. O365 users get Teams for free, and it’s only a matter of time before Google includes something equivalent in Google Apps for Work.

I suspect Slack’s best bets for justifying their valuation is hoping Google buys them out or includes Slack in a Apps for Work tier, or if they’re really lucky, Amazon decides they truly want to make a play for the enterprise communications market and buy Slack as the centerpiece for that.


I can understand Facebook and Instagram, they can make money by using strong network effects. It's essentially the same thing Microsoft did, monetize a common platform and exploit the lock in effect.

But Slack largely lacks that. A startup might setup a free Slack instance, then run into its limitations and pay for extra service. But aside from some institutional inertia, nothing stops a company from switching. You don't need Slack to reach your public, unlike say Facebook. It's a chat tool, an average one, and you can easily migrate out of it. As a repository for essential business knowledge, Slack is not a good solution and could even be harmful compared to things like a wiki or documents stored in a revision control system.

And as a pure SaaS offering, there is no way in hell Slack is worth $7 billion. You can replicate its functionality for less than $100 million, and get native, fast apps. There must be something else, but I just don't see it.


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)


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...


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


I use both and I find Discord to be much better, I don't understand why they don't release a "corporate" paid version that would basically be the current version but with a different skin and without all of the gamer nonsense.


A corporate version of Discord, ideally on-prem, would make a lot of sense. Their current data retention policy for the public discord servers would violate many corporate data retention policies.


Discord is MUCH better than Slack. But since it's primarily aimed at the gaming community it doesn't get the same audience.


I used Slack at work about a year and a half ago.. I have recently setup a Discord server for one of my own games. Discord seems to, have more features, work more reliably, and be a lot easier to administrate.. Also its free!

Maybe Slack has advanced in the past year and a half tho..


We use Discord instead of Slack for work. It works well, most of the time. But it's not a perfect solution, and some bots / things that are just a few clicks away in Slack we've had to build out manually. That said, prefer it to Slack anyway.


I use Discord in place of Slack for hobby/non-professional projects.

The problem with Discord tbh is I've found it to be less reliable than Slack in terms of uptime/push notifications. It also has fewer devop functions prebuilt which means building them out.

Not a big deal if you are a hobbyist, is a big deal if you are paying people $100+/hr to do it.


Discord feels less polished to me. I find push notifications way less reliable, and often if I do get a notification the app won't refresh for a few minutes to show the message. I think there's no offline handling at all for notifications, so if you're offline when a message it sent you're never notified about it. Search is basically unusable if you want context, they only let you see a few messages after your search term. Also they don't have outgoing webhooks which make bots more awkward.

It is nice that it's free and unlimited of course, it's a no brainer compared to free Slack, but for work I'd prefer to use Slack.


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.


> 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.


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.


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?


Cut them some slack.


I've recently made this switch. If just for the sheer performance difference (mostly startup time), Discord is worth it. The free search, file uploads, and audio/video chat really makes it, though.


Clearly not enough money for that IRC bridge...


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.


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.


I expect we'll start to see a wide variety of integration disappear as they begin locking their customers into the product.


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!


> 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.


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.


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


Have you considered Discord? Kidding...


it is $7B after all.

There's no actual $7B involved here. At least, not in the 'buy the Angkor Wat and turn it into a data center' sense.


> There's no actual $7B involved here.

Valid point.

Thankfully buying a few regional servers is manageable with $437m. :)


Not sure the investor said anything remotely looking like : "Here is nearly $500m, please use this money to install tons of servers in a region that generates a small percentage of your revenues because their infrastructure is subpar."


Which is nonsense I get 50mbit sec to a server I host in Chicago from Hong Kong. 165ms latency.


It's a reasonable case to be made that the wide adoption of Slack despite its issues contributes to their perceived valuation. This tells me that:

1. Slack has tapped into an energetic market 2. People will use the product even if it sucks, or can be compelled to use it by their company's management and IT. 3. There's money on the table for anyone who can build Slack-like services at a better level of quality.

There's also a spiritual similarity in this gripe to the gripe about Apple being a $1T company despite their descent into software and dongle hell—people are buying it despite its flaws because the marketing and the appeal is overwhelming.


Is that what the deal is?

It's so terrible I just make people Skype me.


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.


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


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.


"It really is a nice product, but it feels like a 'First-To-Market' success story."

If I tried to write down all the other corporate-focused chat products that preceded Slack, there would be no way for me to write them all down. To say nothing of the chat products that weren't necessarily corporate focused, but could easily be used in a corporation. They were not first to market; they came into a crowded space, but one where nobody seems to have quite put all the pieces together the way the market wanted, and proceeded to dominate.

If I would have any concern about Slack as an investor, it would be that they don't have a terribly great moat, in part precisely because there are so many companies sitting on a code base that has 90% of the hard technical work done. Personal chat products had a certain amount of stickiness because you had to be on the service that your friends were on. A corporation can simply move wholesale by executive fiat, and the bigger the customer, the bigger the savings number will be and the less connected the buyer will be to the people demanding Slack in particular. I would expect Slack to be facing some pricing pressure in the medium-to-long term as the abundant field of competitors starts essentially copying from Slack what works and starts tweaking their products to fit.


Integrations serve as a moat. Anything that sends notifications to your chat platform, anything that adds slash-commands which become part of people's daily workflow, all of those become requirements which need to be replicated in a migration. For companies with non-trivial numbers of integrations which do non-trivial things for their users, it becomes more and more expensive to contemplate a replacement. For products, in particular, with such wide-ranging use within a single enterprise, replacement requirements will be defined by committee, and will be so long as to de-facto prevent migration.

And besides, the field of competitors is getting smaller, not bigger. See: Atlassian throwing in the towel on HipChat and Stride.


"Integrations serve as a moat."

The depth of those integrations serve as the depth of the moat. If your integration is basically "I send and receive textual messages", which from what I see the vast majority are, you've got an integration which could be ported to a competitor in less than a week. A lot of the integration work is in the thing being integrated rather than chat-system specific things.

As you use more Slack-specific features the moat gets deeper, but you do have to stretch a bit before you're really "slack-specific". Rich text formatting, conference rooms at a basic level, etc. isn't "slack-specific".

(Be sure to read that first sentence of mine a couple of times before replying. It does not say "integrations are always trivial to port and are thus irrelevant", for instance. If I wanted to say that, I would have.)

"Atlassian throwing in the towel on HipChat and Stride."

I strongly suspect that Atlassian threw in the towel not because it was hopeless, but because a highly profitable company has a business imperative to avoid things that will merely be sorta profitable to them, or where profit will be harder than their other highly profitable activities. It's why Google doesn't simply do everything; put over-simply, for something to be worth Google doing, it has to be more profitable than putting another engineer on AdWords. When a company is valued at $7.1B, it validates the market, and even if there was no competition today, there most assuredly will be in two years!

(I work for a company not quite as high as Google in the "necessary profit per engineer" metric, but we've also divested "merely" profitable businesses because they were basically a drag on the rest of the company, and lacked sufficient strategic value to overcome that disadvantage.)


> Be sure to read that first sentence of mine a couple of times before replying. It does not say "integrations are always trivial to port and are thus irrelevant", for instance. If I wanted to say that, I would have.

Off topic, but when you write something like this the message you’re sending is “I’d rather insult the reader than take the time to communicate in a way that can be properly understood.” Hopefully that’s not the intention.


What it actually communicates is "I've been communicating over text on the internet for 25+ years and I have a pretty decent idea exactly how someone is going to aggressively misinterpret me."

There is no other way to communicate nuance that I've found. If you claim that "some types of X are Y", you'll get angry replies about how some X aren't Y, angry replies about how terrible it is to claim that all X are Y, and on more than one occasion, angry replies about how some types of X are Y.

If you're insulted, well, then, it's not targeted at you. But abundant experience says it does have non-zero targets. And it's getting worse, not better, as more and more people are convinced(/programmed) to believe that reading people as harshly as possible and then being as angry and offended as possible is a virtue rather than a vice. As these people get more power, it's becoming simply self-defense to make sure you underline your point.


"it feels like a 'First-To-Market' success story"

Can you say why you feel this is a first-to-market story? When they started my first reaction was "This market is too crowded and they will have a tough time gaining traction." At that time, I used Basecamp for project management, and so I thought Campfire was excellent for team chat.

I also worked at one company that used Yammer, and that seemed fine.

Also, obligatory, I worked at a company where the tech team used IRC.

Back in 2004, I worked at a company where the dev team used Yahoo chat. It was surprisingly good. We would be logged into video chat for hours, talking over problems with each other.

I like Slack, but I've never understood why developers made such a big deal with it. I wonder if it caught some generational shift? It arrived on the scene just as the economy was recovering from the Great Recession, and it caught the eye of the next wave of founders who were building startups in the new era. But I don't think it is an example of first-to-market. It is actually more interesting than that. It is an example of late-to-market-but-still-successful. That's rare. But I still don't understand why it has been so successful.


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?


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


I care. It's slow and terrible for accessibility.


Instagram at the time they sold, Instagram today would be worth billions more than that.


I always count these by Star Wars franchises. Is slack worth the rights to almost two Star Wars sized franchises? No. It's not.


depends on which ones!


It's used by companies to not only communicate, but also used by management level employees to pry on conversations/gossip. Personally know of a well known company where a group of managers used Slack for snooping on those they manage(d), and subsequently fired those they found criticizing them/higher-ups.

Not saying that this is surely what makes it valuable, but could see a management team deciding to use it as a means of improving productivity, where they could take logs and tie them into a system for gauging sentiment. Not saying it's right at all, but could see the value others could see in that



> and instead focus inward on performance and migrating to a more stable platform

Very unlikely , I'm not aware of Slack being an Innovation Driven company. I've seen nothing from them in the Open Source World.


A lot of people said $1B for Instagram was overpaying and were proven wrong.


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.


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



If you have just a few users, Rocket is very easy to install and has always worked well on a $5 DO instance. My preference is for Zulip, as it's easier to track multiple discussions, but I don't have an incentive to switch now that my Rocket instance is running.

I have no experience with more than a few users. If you want a hosted solution, I have seen reports that Zulip works well with a large number of users.


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


He asked about slack, not Whatsapp. ;)


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


I've used Riot as a Slack replacement and setup notification bots. Its effective for the task and I could use the IRC bridge for a similar function.

Only reason I moved over to Discord was too many chat apps and the hobby users were all on Discord anyway.


Riot is more slack-like than whatsapp-like. We use it at work instead of Slack now.


Discord is great. Pitched to gamers, but could easily function in a work setting.


Mattermost.


Came here to say this. Mattermost runs really well on a small-ish box, self-contained, has never gone down, and we've been able to grow organically to hundreds of unique users a day all inside the firewall. Pretty much a no-brainer for me.


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.


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


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.


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.


How much of that valuation is your data?


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.


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:/...


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.


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?


> In previous rounds, Slack’s CEO and co-founder Stewart Butterfield has said that the company raises “opportunistically.” That is, it doesn’t have to raise money because it’s already making money and still has some in the bank, but as long as VCs are knocking, it’s worth taking the funding if it’s coming in at good valuations because you never know what might lie ahead.


> 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.


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.


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.


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


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




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