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Slack Says It's Filed to Go Public (bloomberg.com)
500 points by chollida1 13 days ago | hide | past | web | favorite | 322 comments

Matt Levine on Slack direct listing from a few weeks ago...


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

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

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

Part of the problem is that an IPO is not really a fundraising event, often, in practice. Selling shares is just a necessary part of listing. They may not be interested in funds at all.

Instead, the company wants liquidity for existing shareholders or sometimes liquid shares to use as m&a currency.

That tilts the balance in favour of paying a "brokerage fee" in exchange for de-risking and simplification. Occasionally IPOs go badly, and the potential disruption is worrying.

Like with a lot of high finance, competition is weak. So, the "price" of these services is (perhaps, idk personally) high. Also, CEOs run companies, not IPOs. Its just not really a cost you optimize and the market isn't there to optimize it by default.

> company wants liquidity for existing shareholders

Do they? Aren't existing shareholders usually bound to hold their shares for some time (e.g. 6 months after the IPO)?

Have to start that clock sometime

Underwriters only get to keep shares if the IPO is undersubscribed by the public. A bigger part of the problem is that many retail brokerages don't allow IPO participation or require huge account balances to do so, so people can't, or think they can't, buy shares until a new offering starts trading on an exchange.

Tangentially I suppose.

> The story is that there was a big old legacy business that comfortably sold a standard package of features for a lucrative price, and then a bunch of tech startups came in and questioned everything; they unbundled the service so customers could get what they wanted rather than what the legacy players wanted to sell. It’s just that the tech companies didn’t do it as competitors, by offering the disruptive unbundled product, but as customers, by demanding it.

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

All respect? Really? And immediately?

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

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

Slack chose Goldman to lead the direct listing process. They also hired a Goldman senior research analyst to lead the investor relations arm, and likely to then move him up quickly in the finance group to higher exec positions.

Thanks for sharing. I swear, if you want to understand Wall Street, all you really need is Matt Levine. It's more informative than seemingly anything else out there.

Agreed. Levine has a unique ability to peer deep inside the underlying mechanisms of modern finance and explain them clearly. Levine's writing reminds me somewhat of John Brooks, although Brooks was perhaps more interested in personas than mechanics. (If you've never read the Business Adventures collection, it's worth picking up!)

I don't think I've ever come across any written material on the internet that's better than Money Stuff. Matt Levine is a hero (and clearly very smart and measured in his thinking).

great read. levine points out that lockout periods are basically a condition for traditional IPOs by the lead investors, and isn't required in a direct listing. assuming direct listings become a thing, inevitably there will be a big firm that does it and doesn't require a lockout period. i cannot wait to see what happens in that case.

Oh, I love lockout periods so much!

About 20 years ago I worked for a company that went public, and for a while my shares were worth 1.2 million dollars. But I was locked up for 180 days.

By the end of the lockup my shares were down to $10,000. A bit of a drop from the exciting heights of imaginary paper money I had earlier that summer.

But hey, $10,000 I wasn't expecting is better than nothing, right?

Well... Just before they went public they informed me that I needed to come up with $30,000 within 24 hours to exercise my options. So I maxed out my credit cards and got them the money. A few months later they told me, "Oops, we had you in the wrong category, you didn't need to pay us that $30,000 after all, so here's a check for your money back." With no interest, of course, while I'd been paying credit card interest on that money the whole time.

Of course the executives and investors weren't locked up at all, and they got to take quite a bit of money off the table while the money was still good.

Yes, I love lockout periods!

Spotify skipped their lockout period, with pretty boring results.

Wouldn't "boring" results be good for Spotify? Rather than having tons of people selling right off the bat?

Spotify seems to have gone up in the months following IPO, which suggests there is enough liquidity on the market to absorb stock sales by employees and a lockout period is unnecessary.

hard to say with just 1 event. i could see interesting things happening if uber were to direct list without a lockout. there's a lot of hype, value, and losses.

ahh, neat! i assumed they didn't because i assumed levine would have said that in the article. maybe i just glossed over that part.

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

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

Yeah I don't get why so many other commenters seem to think a direct listing means the company's all of a sudden about to die or its product is all of a sudden going to turn to crap. If this is the best way to achieve liquidity, that sounds good for them.

Their product kind of did turn to crap.

30% cpu at idle with 5 accounts.

50% if I enable emojis.

Like I'm sorry but it's essentially IRC. There is zero excuse for being that much of a hog.

You can blame it on electron if you like (I do) but it doesn't change anything for the end user.

> Like I'm sorry but it's essentially IRC.

It's irc with emojis, 2mb animated gifvs, embedded hd video and other complex content rendering. Of course it's using as much ram and cpu as a browser.

Which of course misses the point of why people use Slack over IRC: history without screwing about. I could make do without the emojis, GIFs, video or other content rendering if IRC had history without the need for a constant connection.

>Which of course misses the point of why people use Slack over IRC: history without screwing about.

It's why you use Slack, rather than why people use Slack. I'm sure you could make do without the emojis, GIFs, and videos, but the market says people seem to think otherwise.

To be fair, why he uses Slack is likely due to his employer using Slack.

And the reason his employer uses it is to ensure everyone can interrupt everyone and give each other more work.

Is there a competitor that doesn't have the emojis/gifs/videos? They're easy enough that everyone adds them, so I don't think we can conclude "the market" has made a clear choice.

(Ok, I remember HipChat didn't have gifs but there was a lot else wrong with HipChat)

Those who think Slack is just IRC are the same ones who have been predicting the year of the Linux desktop

And who think Dropbox is just rsync + crontab.

Yea except I'm neither of these people but good job on the strawman arguments.

Slack is nicer than IRC to use. Nobody here is debating that. Slack solves a heap of problems with IRC.

My only point of contention is that there is zero argument for it using the resources it does. None of the mentioned solutions require any more resources than IRC consumes.

We just have a big heaping pile of electron nobody wants to acknowledge as the source of the problem.

I skipped this because the history and search are perceivably done server side

Of course ?

Yes it often makes sense to produce inefficient code for many business reasons (development speed, users don't care, easier platform to deploy to, etc).

However what Slack does would be nowhere near taxing for a modern computer if it were to be done remotely efficiently.

I also use Telegram's desktop app. I wouldn't call it lightweight, but it has the features you list without the resource demands of electron. Dash is currently using more memory on my laptop.

Anecdotal, but with 5 workspaces joined, Slack idles between 0-2% while on the foreground for me.

This is a fairly modest i7 3770k based system. Their work on reigning in runaway CPU usage truly seems to have paid off.

Calling a 3770k modest is a stretch but I have a mobile dual core here (OK, it's a Kaby Lake but still) and also seeing 0% in Task Manager.

If having a six-year-old CPU isn't considered modest, it really says something about the lack of progress in the CPU space.

We discussed this recently: from Sandy Bridge to Kaby Lake , IPC grew 20%, power consumption dropped brutally. And by Kaby Lake progress has completely stalled due to Intel's inability to switch to 10nm allowing AMD to catch up.

Apparently they've fixed a lot of the CPU issues, it's just still in Beta: https://medium.com/@matt.at.ably/wheres-all-my-cpu-and-memor...

That was written in July 27 2017. I doubt its still in Beta.

Also adding: Slack Helper eventually goes into a death spiral and uses almost all of the CPU under macOS. I have to force quit it every other day or so. Slack seems to have been doing that for roughly 2 years.

Slightly mitigating data point: Other Electron apps do this too.

I have never had this happen on my mac running Slack.

Perhaps it's down to hardware differences then, assuming that you've got a newish machine. This is a fairly old MacBook Pro which will be replaced soon. Hard to say what the cause is, but I don't have any issues with other non-Electron apps.

Are you new to Slack? People have been joking about the resource demands of the Slack desktop client for years. If anything, that situation is actually improving.


They weren't saying its just IRC so it isn't a viable business model. They're saying its just IRC so it shouldn't be a CPU hog.

Your link is not really relevant here because it talks of business viability not program performance.

Slack's decision regarding liquidity doesn't indicate anything about if something is or isn't wrong with the market.

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

All shareholders will be able to sell publicly => liquidity

Normally when you file to go public you create new shares, which are sold on the market for amount, which gives you cash.

Normally, yes. But this is a direct listing.

I'm not an expert, but can they not issue new shares, and then directly market those on the public market?

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

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

> Stupid question but how do they create liquidity?

They just open for trading and hope that the buyers and sellers manage to find a reasonable price. (It works better if the company already has a relatively active "secondary market" - many of these private companies do, particularly if they grant stock to employees).

> Don't all the money go into the shareholders' pockets who sell in the listing?

Listing just makes it easier for shareholders to trade, yes. At some future point the company itself might sell stock (what would usually be called a "secondary offering" though technically the first one would be their IPO) or buy stock (a "buyback").

This IPO is a public listing so the company itself isn’t selling stock.

Shareholders can cash out

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

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

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

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

You could probably roll your own with Riot & Matrix, but it's probably not as feature-rich as Slack or Mattermost.

Past HN discussion: https://news.ycombinator.com/item?id=17031306

We use Zulip which is an unfortunate mix of awesome and mediocre.

Like Mattermost Zulip can be self-hosted, although we use the online paid for version.

Zulip's USP is the 'topic' system which group messages in each thread into a coherent conversation. It makes it much easier to look back over a set of conversations and see what happened. It works really well. It's let down by the mobile apps though, which are clunky and don't behave reliably.

The web-app is excellent though and the topic system does (just) win out over the crap apps. I do wish they'd sort them out though, both for me and so I could make an unqualified recommendation.

Same here. I like it but it does lack some of the features and polishing you get with Slack. I find that the Windows client leaves a lot to be desired. I have to restart it constantly because it becomes painfully slow. Channel "unread visualization" is unreliable. The search is pretty bad. Things like that.

You might also checkout zulipchat. I've been advocating for us to use it internally (over M$ Teams) for a while now.

Discord is way more polished than both

Discord is not more polished for decent sized companies who need to worry about regulatory compliance and things.

Was in the same boat at my previous company, we used Mattermost because of privacy concerns with Slack. Eventually moved to Slack because the mobile options were not great on MMost and Slack was more polished.

Boy, I mentioned Slack a lot.

RocketChat too

Used it. I don't think anyone liked it too much. Switched to Zulip, which seems a little less objectionable. Still I'd prefer good old IRC.

Bitrix24 is much better in that respect IMHO. Both cloud and on-premise editions, and you get not only chat, but tasks and projects as well.

we use it. we're a pretty big company too. like it.

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


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

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

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

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

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

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

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

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

I really wanted to like this (remember when it was called Eul and built with Go, even recommended it to friends and coworkers) - I spent months following the GitHub repo, looking forward to seeing the code I imagined would inspire the Go community.. but the author sadly do certain things that comes off as untrustworthy, such as promising to open source but failing to do so even after a year, renaming the project without warning/announcement, letting the homepage redirect to spam (possibly malware), tons of AV (hopefully falsely) flagging the apps, etc.

.im domains need to be renewed 3 days before expiration. I had a bad habit of renewing my domains 1-2 days before the deadline. So I lost it. Lesson learned.

I decided to change the name to Volt and set up a redirect to volt.ws 1 month before expiration.

This should have been announced, yes.

AV were flagging the app because I compressed it with UPX, which I no longer do, and because it wasn't signed (it is now).

But in general yes, huge delays and not much communication from my part. That's not going to happen any more, I'll post a detailed blog about it.

I don't see how you owe any explanation to a non-paying client. Please don't feed the freeloaders. They always set new standards.

> so I spent two weeks in October 2017 to create a very light and minimalistic language that can seamlessly interop with C

> V compiler is written in V.

> can be translated to from C/C++. An automatic translator supports the latest standards of these languages.

> incremental build system,

Wow, that's incredibly fast. Self-hosted in 2 weeks? Hot code reloading? This is everything I plan to do with Zig, but apparently done already. How did you do it so quickly?

Hi Andy,

I wrote the original version in Go in 2 weeks. Half a year later I spent 2-3 weeks to re-write it in V. It's very small.

I just want to mention that the download links don't work yet (I'm assuming since you have not launched) but they look like they should work. You should have some indication on the webpage as well. Very interested in this product after skype finally forced the upgrade to the electron version a week ago. Can't wait to try it out. Thanks and all the best

edit totally missed the "coming soon"...

This is really interesting and I'd be excited to use it if the memory usage is even half that of the official Slack client. Bookmarked.

Right now it has ~10% of Slack's usage for the same chats.

Not surprising. Hopefully this helps rebut people who say things like that Slack has to be that big because its complicated and caches messages for performance.

Is there any documentation on the language? Is it something akin to Zig? [https://ziglang.org/]

There's some info here: https://volt.ws/lang

Some ideas are similar, yes.

Your language has been submitted to Hacker News here:


Just letting you know in case you want to respond to comments, including mine. ;)

It's so mean to give us big juicy download links below a little grey `(coming soon)` =)

Is that mailing list for Volt also the place to find out more about V the language? It sounds and looks really interesting!

For now yes. I'll create a separate website and communities for V in April.

Where can I read about this language?

I found this page on the site https://volt.ws/lang but it's quite thin on detail.

>It was delayed by 9 months

reasons? why wouldn't i expect the same going forward in the future? 9 month delay on a closer source app=no for me ever using it

also your download links don't work, way to clickbait people into signing up for your email list

You mean three native desktop apps.

Qt /thread

Qt is not native.

Native doesn't mean "it's not written in JS" or "it's fast". Native means "it uses the GUI toolkit of the target platform". And Qt doesn't do that, it merely mimics its appearance.

You are incorrect. Toolkits like Qt are exactly what people are talking about when they say "native". How many apps do you think still use X11 graphic primitives? Did you even know they exist? How many programs use native Win32 controls? Not even Microsoft does that anymore.

> How many apps do you think still use X11 graphic primitives?

Good question. Let's see, what are the GUI programs that I use every day... Emacs, exwm (separate X client so I guess it counts even if elisp), st, chromium, mpv, mupdf, conky. That's 6 out of 7, so I guess the answer is most of them?

(Emacs is built with --without-x-toolkit)

Hmm, I do not consider an Qt app on macOS to be native.

>How many programs use native Win32 controls? Not even Microsoft does that anymore.

So because Microsoft has lowered the bar, now everything can be called "native"? There's a reason many people hate UWP.

Not using native Win32 HWND based controls does not imply UWP. Virtually every program that was made for Windows XP and later does not use native Win32 controls; this includes “outdated” frameworks like WinForms.

X11 and Win32 UI are actually fairly similar in this respect.

Actually the VCL[1], shipped with Delphi, does to a large extent use the native Win32 controls. They've added some quality of life stuff on top of them, but the TEdit component[2] is a wrapper around the Win32 edit control etc.

Delphi is not so popular these days, but there still is a fair share of Delphi programs running.

[1]: https://en.wikipedia.org/wiki/Visual_Component_Library

[2]: http://docwiki.embarcadero.com/Libraries/Seattle/en/Vcl.StdC...

Which is the native GUI toolkit of Linux/UNIX? Athena? Motif? GTK+?

None, unfortunately. You have X11, but nobody uses that anymore.

Yeah, the question was tongue in cheek. Which one do we use then?

I guess the best option is GTK+ because of the number of users?

There are themes that mimic GTK apps on Qt and vice versa and they look like crap.

But in my opinion Qt apps also look like crap on Windows and Mac. They look somewhat like a native app, but everything is off.

For example, if you have a Qt app on Windows and you click a menu separator, the menu closes, <s>like it would do on Mac</s>. On Windows, clicking a menu separator should do nothing, the menu should remain open. There are dozens of little annoyances like that. Not to mention padding/spacing of elements, etc.

Of course, Qt is very useful. I've worked with it (using QWidgets) and I've liked it a lot, despite of its drawbacks. But it's certainly not native. It merely emulates the target interface.

I'm reading this on a Mac; I clicked on the File menu in Safari, then clicked a menu separator, and the menu remained open.

This does not, of course, invalidate your main point in any way. (I also currently have p4v open on another display, and, well.)

GTK isn't any more "native" than Qt -- they're both abstractions atop X (or Wayland, or Broadway).

They wouldn't raise any cash from this kind of IPO. Your point, however, is valid.

They can keep the resources they waste on my machine if they'd only give me a damned dark mode.

Why? Do you have issues with their current app? I've never noticed any problems that I think it being native would solve really.

> Do you have issues with their current app?

I've got Slack open right now, I'm a member of 2 teams and it's using 1.5 GB of memory across all of its processes.

I'm wondering if you think that's an acceptable memory usage? I don't personally feel that's acceptable for an app that isn't Photoshop, a video production suite or a 3D modelling program.

I'm a member of a third "occasional team", but I don't dare open that because I really don't wish to give more RAM to Slack!

Curious: What OS are you using and what's your total memory usage for Slack and all of its helper processes?

Another problem with the Electron app: there were drive-by trolls in the public Clojure Slack team a couple of weeks ago, because it's possible to open the JS in the Electron app and interfere with user role permissions and notify thousands of users with extremely obscene photo messages all at once.

I'd switch to a proper native app that respects the norms of its host platform in a heartbeat.

The memory usage is just obscene. Maybe it doesn't matter with all the RAM we have, but I hate inefficiencies and looking at slack's resource usage just makes me sad.

Serious question...

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

One thing I can't help but notice is that Discord and its API are pretty unreliable. My bot and users regularly encounter unavailability errors. But mainly my bot.

It makes me wish I could pay a monthly fee to get better service, but in reality I'm sharing the same freely-distributed resources as any spammy Discord server. For example, I've been in Discord servers incessantly spammed by its users counting to the number 1,000,000, messages scrolling by like access logs during a DDoS. And I'm sitting there chuckling, "my server is in the same bucket as these people?"

At least Slack lets you pay them for an uptime SLA. I don't think I'd use Discord for a serious venture.

That said, surely your niche plays a large role in which one you pick. I'm somewhat in the gaming niche and Discord was a no-brainer. Gamers/teens are already on a dozen other Discord servers. Meanwhile, all of the Slack groups I'm a part of are professional.

> At least Slack lets you pay them for an uptime SLA.

The paid SLA is 99.99%, which is 1hr/yr downtime, but they've definitely missed that on our instance at least. The only thing I can really say that Discord is worse at is that discord has had a couple of total login server failures, but an individual server blipping out for an hour or three seems about equally common on both in my experience.


These compliance certifications.

I am not a fan of either Slack or Discord, but I would guess it is the feature requests that companies have made to Slack around it's API's, data retention policies, access controls, chat logging and monitoring and such that make people lean towards it. Discord could probably implement the same features if they wished to go that direction.

Discord is an amateur product for enterprise. You can't even use SSO / AD to log into it.

>Slack has been around longer, looks more professional and has more tie-ins with work flow management tools

Others (like myself) see these as much bigger advantages.

The tie-ins with work flow management tools I get (even though most of this can be set up in Discord as well) but I think the look and tenure of the application is not really that big of a deal. If you want professional looking from a company that has been around forever then pick Microsoft Teams, otherwise pick the best one. And I have a hard time seeing Slack as better than Discord.

Just because you don't care how something looks doesn't mean that's true for everyone.

Fashion and style matter to lots of people. If 2 things are roughly equivalent, the one that's cool and looks neat is going to be the one chosen by the people who do care about those things.

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

On the other hand I use Slack daily.

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

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

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

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

Default Windows 10 comes with preinstalled video games, much less a store. Discord already has subscriptions, at some point I see them selling a version with enterprise features.

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

I don't think anyone considers Discord a competing product. It targets a different market/userbase than Slack.

Slack is very much setup for business use and integrations.

Discord has a bot API, but it's mostly focused around realtime chat for communities (like a community-focused Skype).

They're very similar, but serve different purposes and different markets

I wouldn't say they compete directly as one is obviously targeted at corporate and the other is targeted at gamers. But they are extremely similar and even the UI, while themed completely different, is extremely similar.

Essentially the exact same app but with voice channels for talking to people alongside the text channels.

Discord has a worse TOS that implies spying on you and has large Chinese investors. That combined with less certification means it is hard to use Discord in an enterprise environment.

One big difference is that with Slack you log into single workspaces, with discord you log into all your groups at once.

This is big for enterprise.

Discord search at least on mobile is completely unusable for anything serious - you can click a result to jump to that point in the chat, but you can't scroll from there - it just shows a few messages before and after. Compare to Slack which can jump to any point in the chat and scroll as much as you need from there.

Kind of funny to me that two business communication/productivity apps would be named Slack and Discord.

Every time I load Discord I feel like it takes pains to remind me that it is not a safe space for me. It is a safe space for Gamerz, who have a marked tendency to behave like unsupervised teenage boys.

You get the skip the edgy loading screens.

Slack offers Enterprise sales

Thats what so many miss in a tech company IPO.

Slack has built a business model off commodity tech that was around for decades. It has happy customers who continue to spend money with them and a plan to continue growing their revenue with more happy customers.

Personally I just see it as a refresh of yammer or a business focused discord but at the end of the day someone in procurement is signing checks for Slack.

slack is a marketed IIRC manager.

Enterprise IRC that people actually want to use and will pay for. B2B is incredibly lucrative if you cater to large organizations' risk needs.

That being said, I'm sure the valuation is overinflated. The ARR ranges I've read don't justify it.

If you're feeling bold and want to speculate, I'd probably short it.

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

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

Just from top of my head:

1. Investors and employees cash out

2. You have huge leverage with stock compensation that now is real cash

3. You can buy other companies because you have access to funding(sell company shares instead of taking a loan, etc)

I’m sure there are more benefits

Why can't liquidity of existing stocks be provided without becoming public? Seems like easier task than going public and coming under myriad of different rules.

When you have over a certain number of shareholders you have to follow strict reporting rules, giving your company all of the costs of being public but none of the benefits.

A public market gives you access to millions of potential buyers, so you get the best price, with minimal fees. That’s liquidity. A private company could try to provide something like that without using the public market, but it won’t be nearly as good.

They can, that is what's called "Private Equity". Private equity companies (similar to how Warren Buffet operates), usually want control, which changes a lot of how the Company may be run. Public companies are generally controlled by a group of investors, none of which has majority control.

Um, no. Private equity is not what you're describing, and is the opposite of how Warren Buffett operates.

Private equity specializes in leveraged buyouts of companies. The typical deal is that the private equity partners put their own money into a fund, that they then get others to invest in. This fund puts up a downpayment on a company with the bulk of the loan being taken out by the company, and then buys out the current owners. The private equity folks then try to "put lipstick on the pig" by making the company generate what looks to be good numbers, and then flip it to someone else. The profit is then shared with the fund as returns.

Sometimes the deal goes wrong and the private equity partners have to run the company for longer than expected.

Sometimes the deal goes very wrong, and the company goes out of business. Like happened to Toys "R" Us.

Even when the deal goes wrong, the private equity partners typically make their investment back between the fee for setting up the deal, and fees for running the company. This leaves the investors in their fund and the bank holding the bag as everything crashes and burns. But hey, that outcomes just proves how much smarter the private equity guys were than everyone else all along!

Compare and contrast to Warren Buffett's approach of buying whole companies cash, keeping current management in place, and running them for long term returns.

Private Equity describes any trading in non-listed companies. Private Equity funds sometimes do the things you’ve described, but private equity just means the shares aren’t traded publicly, it doesn’t denote any particular investment strategy. There’s pros and cons on each side, but if you want liquidity, then you’re going to struggle getting it through private equity investment.

Isn’t pretty much all startup investment private investment?

Doesn’t seem like they have any issues gaining liquidity.

Yes it is. But liquidity in terms of trading volume, not in terms of money the company has in the bank. Liquidity in terms of how many shares are traded each day. If you have shares in a private company, and you want to sell them, you’re going to have to arrange a private transaction, and rely on somebody elses valuation. Going public is one way of addressing that problem.

That's certainly one type of PE, but there are a lot of funds that after the LBO they hold onto the company (and charge them management fees).

Until the activist investors show up.

Providing enough liquidity at scale is hard without the public market.

> Why can't liquidity of existing stocks be provided without becoming public?

Who do you propose employees sell their shares to?

Whenever possible you want to diversify. Having tens of thousands of dollars worth of shares in a single company is almost never a good idea, especially if that company is your employer too!

Atlassian just invested in them as part of a dope deal to switch to Slack. Much to the chagrin of everyone who wants to run their development toolchain entirely on-premises.

Could be that a promise of IPO Real Soon Now factored into that exchange. But the original investors and the employees have to be thinking "we're not gonna get that much more successful than now. Where's my money?"

No. Atlassian sold HipChat to Slack so that Slack could kill it. Atlassian did not invest in Slack

> As part of this partnership, Atlassian has made an equity investment in Slack, and Slack has acquired the IP for Stride and Hipchat Cloud, both of which we will discontinue.


It's a distinction without a difference. At the end of the day, the deal was to shut down Hipchat - in exchange Atlassian was paid with shares of Slack.

Might not officially be an "investment" but it more or less amounts to the same thing.

They invested as part of their partnership [0] to provide a successor to Hipchat after Stride was DOA.

[0] https://www.atlassian.com/blog/announcements/new-atlassian-s...

Spotify's CPO gave a good digest of the reasons recently: https://youtu.be/jTM7ZCKEUGM?t=2340

In short:

* Need to go public if the company is too big

* More fair for employees stock holders

To provide liquidity to employees and investors.


Not if you're an employee or investor.

If only the current economic system would encourage dividends rather than stock.

What do you think dividends are paid on?

Dividends do not solve this problem.

They're the owners of the company. They get to (collectively) decide when they want to cash out.

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

edit: Ah, missed the employees angle.

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

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

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

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

If they choose to sell it.

Whilst markets exist for selling shares in private companies, it’s harder and there is a smaller pool of people looking to buy.

On the public market, any shareholder can sell their shares (relatively) easily, and since it’s a public market the pool of potential buyers is much bigger.

Employees don’t automatically get money for their shares, being public just makes it easier for them to if they decide they want to.

The company could only use cash to do dividends or share buybacks, and the company is worth more than its cash on hand (maybe 10-20x as much more in Slack’s case.) A public offering makes it possible for effectively every shareholder to sell their shares for the full value without the company having to make a strategic financial decision to return cash to shareholders.

It would be cash for individuals who till now have illiquid options or private stock. Not just the company’s war chest.

I don't get it.

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

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

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

As I understand it, there are two reasons to go public: to raise money, and for investors to exit. From the way they are going public (direct listing), it doesn't appear that they are trying to raise money.

For investors, some companies get large enough that there isn't anyone who can buy them in whatever sector they are in. Going public is a way of them exiting the business and getting cash out.

Hot take: the board REALLY wants them to revert their icon redesign, but they don’t want to look like they’re the ones doing it, so they’re taking the company public so new shareholders will advocate in their stead. /s

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

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

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

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

It's already been moving from a developer-focused chat platform to one almost hyper-focused on attracting enterprise sales. Slack built its first stage on the backs of developer evangelism and good integrations with third-party providers (something HipChat ignored / did poorly). And once they took that as far as they could go, they went full enterprise.

I think the big tipping point for me was when they changed their chat retention policy from one focused on balanced user privacy, to one focused on whatever your boss wants to get their hands on.

I think Slack had a nice balance between privacy and legal accountability before. Basically, there needed to be some serious event to warrant your boss snooping on your messages (because both parties would be notified it was happening). Now, it appears they are moving more towards a model of "your boss can covertly just peak at whatever they want, whenever they want."


It also sucked when they closed the IRC gateway.


It says something about the system of rolling out companies with high valuations that don't seem sustainable outside of major changes that alter the product's desirability.

But people will buy this and other stocks regardless so I'm not sure there's any incentive to change that.

Coming to the same conclusion, for me, just took a long slog of silently (and often subconsciously) working around the broken parts of Slack.

When my company moved to Discord, it was a huge breath of fresh air.

My primary uses for slack are the searchability, and the multiple workspaces connected through one client, which Discord hasn't offered me, though I might be missing features.

Discord definitely lets you connect to multiple servers through one client. As for searchability, all chat logs are stored forever (unlike slack where only so many are stored unless you pay for full logs). The downside is that discord stores all the logs on their servers instead of yours, so it may not be suitable for some companies' security policies.

I don't know about the comparison of Discord vs Slack on searching, but both apps have had the multiple workspaces/servers feature for ages now.

How many accounts? The resource usage scales linearly with accounts. I had to remove all but one account just to get it under control.

Why would this mean something was wrong with the market? Slack has a firehose of revenue from paying customers.

Because my reaction isn't based on Slack - it's based on my experience of nearly everything that goes public shifting to growth at the cost of user contentment. Everything gets loaded with ads, pages start offering me solutions I don't want - the product that I was happy to pay for becomes one I don't want to pay for.

That's likely a degree of hyperbole - I'm sure there are plenty of companies with products I've liked that have gone public and the product has remained great or even improved. But my gut reaction on hearing something go public is not "Yay, now they can improve their features" it's "Oh no, it is going to get screwed up", and that seems NOT to be the reaction I'm supposed to get.

Depends on what makes it useful and a good experience for you. As a user of a product with no ads (especially if you aren't a paying customer) you always know the IPO or acquisition is the ultimate goal.

It means somethings fucked with the VC system and they're finding companies that should be worthless.

I agree.

I also think we're going through a bizarre period in tech. I know I know, that's historical bias and all, but it doesn't mean living through it feels any less bizarre.

A trite example is my use of Slack. I don't use it for messaging, though I've had the opportunity both in professional and non-professional settings to do so. Rather, I use Slack as a kind of RSS feed because people and organizations whose content I value have given me that opportunity on Slack. It's my favorite content notification feature because it is all in Slack, rather than being assaulted with notifications from all angles.

Another trite example is my use of text messaging over the past year or so. Messaging is largely my social media experience now. I have - largely through no fault of my own - many different distinct group text messaging threads that are basically permanent. In Jan. 2018 that was not the case. Now, I can't get rid of these people I care about in meat space, from my messaging inbox! These group threads last for months and when one goes dead or silent another replaces it the next day. Each participant is posting in them on a daily basis (often 5+ times a day), with pictures and videos as well, and often long paragraphs of text.

I do think the VC industry is showing signs of being broken. However, I also think companies are shape-shifting faster and more frequently then before.

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

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

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

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


I'd imagine that number is significantly greater today.

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

Thanks for the link

I'm pretty sure almost all companies (which is the majority of the user base) that use slack are paying for it.

You might be able to say that most users aren't paying for it, but most organizations are.

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

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

[Many|most] companies big enough to worry about company secrets and PII being logged will get a contract with Slack set up before putting anything on there.

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



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

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

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

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

It has been a few very good years for raising cash from private investors, but that is now slowly reversing. Best to IPO now while the stock market is still mostly bullish.

You gotta rob the Street before the Street robs you!

Get cash when the markets are frothy and the money is cheap, and then use it when they're not.

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

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

Most companies need to sell themselves to investors - that's part of what the "roadshow" is about. Slack is a lot more visible than most B2B companies - people will be lining up to buy their shares without needing a banker to sell them on the company, in a way that wouldn't be the case for many businesses.

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

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

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

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

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

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

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

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

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

I find myself increasingly preferring email over chat

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

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

Gitter is also pretty popular for that kind of thing.

The short answer is yes and more and more are moving from Slack to Discord primarily for the unlimited history and also better access control.

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

For my curiosity:

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

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

I suspect ICOs have done all manner of experimentation here.

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

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

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

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

Link / Paywall: https://www.theinformation.com/articles/slacks-financials-ah...

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

We use MS Teams.

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

IT's just terrible IME

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


Maybe because it's included with Office365 Business Premium (local Office + Exchange/Onedrive/Sharepoint/Teams, etc) or O365 Business Essentials (just the online services)? It's also included with E1/E3/E5 on the Enterprise side.

So basically if you're using any of the MS products that include online services you get it free. If you're not, you can get Teams for $5/month/user and get Exchange and online storage thrown in free (vs $6.67-12.50/month/user for Slack depending on your compliance and reporting needs).

If nothing else, there may be pressure to "try what we're already paying for anyway and see if it's good enough," and while there's at least one other comment about how bad it is, I'm pretty sure a lot of the Microsoft online services have been improving at a pretty decent clip.

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

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

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

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

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

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

ULA does that, not spacex

and spacex doesnt plan on going public

and technically it's russian engines that launch them

in any case company valuation is not based on aspirations

> in any case company valuation is not based on aspirations

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

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

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

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

Yes, they are. Multiple constellations with thousands of satellites each are planned.

That just reinforces the point; ULA is worth even less.

Not quite, we are transitioning to our own rockets soon afaik.

How do you expect to compete with fully reusable boosters a la SpaceX? Are you building your own and when do you hope to have them delivering paying payloads? Or does ULA hope to buy reusable rockets from Blue Origin, not just engines?

They stopped using Russian engines years ago.

Nope, five of the eight ULA launches in 2018 were Atlas V's and Atlas V first stages currently use Russian RD-180 engines. ULA is interested in replacing those engines with Blue Origin engines, or replacing the Atlas V with the Vulcan (probably also using Blue Origin engines), but that hasn't happened yet.

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

No but I used Slack today.

His example was just one of many problems solved by putting stuff in space. The modern world would have a very hard time operating at the current scale of humanity without sats. Flight ops, shipping ops, transit navigation and routing for the stuff that you buy, general communication links you probably don't even know you're using when you are using them.

Slack is obviously very useful, but it's also trivially replaced. The ability to put stuff in space is not easily replaced. Conquering the inherit business risk of space operations and engineering when others won't is part the value of space companies.

Slack could be meaningfully replaced at a company with a git repo checkout and some local hardware.

Also see this page on Wikipedia documenting some of NASA’s inventions that have benefited us: https://en.m.wikipedia.org/wiki/NASA_spinoff_technologies

Or use GPS?

>I personally don't get a lot of productivity gain from putting stuff into space

You don't use phones, digital maps, or are glad that your national defense is up and running?

Of course, but that productivity is "baked into the cake" at this point. How much incremental productivity is gained by the new things being put into space now?

Edit: Just 1 GPS satellite, I misread.

Satellites don't last forever. SpaceX launched 10 gps sattelites in 2018... (or more, not sure, that's just one launch)


I believe SpaceX has launched one next generation GPS satellite so far (Dec, 2018). They are big and take up the full payload of a Falcon 9. So heavy, in fact, that SpaceX has to launch them in disposable mode. It is the Iridium satellites are the ones that SpaceX launches 10 at a time.

You're right. Put an edit at the start of my post making it clear I misread.


Something tells me that it's possible these devices will need to be replaced or upgraded at some point

From what I see and experience, Slack has a negative impact on productivity the way most companies and employees end up using it. People get easily distracted, context switch, create random non-work related chats (music, video games, movies, etc.), and constantly check it like a bad habit.

I guess I'm old, moldy and miss the productivity and work ethic before the popularity of Twitter, Facebook, text messaging, and Slack were excessively popular and overly accessible.

I use slack to you know, slack off. My productivity has never been as low since slack was added as a constant distraction

It's possible you only notice the productivity loss, but the gains are so seamless (sharing a screenshot, a chat that removes the need for a meeting etc.) that they aren't as noticeable.

You can always quit out of the program for a while if you need to really focus, I do that often.

Yes you do. You apparently just don't know it.

Company valuation isn't based on the complexity of the product, it's based on potential/future earnings. Sure, valuations aren't an exact science, but the fact of the matter is the market has decided at the moment that Slack in its current state has more earning potential than SpaceX.

Understood and agreed.

However, complexity of a product does (or at least should) inform risk of future competitors. The market for instant messaging systems is relatively low-cost to enter, has lots of serious players, and seems to be moving towards a subscription model, which is easier to disrupt.

Perhaps a free protocol will win sufficient mindshare to commoditise the market, though I'm not optimistic - most players' profitability rely on walled gardens.

Either way, the market is replete with its varied biases, unfounded optimism, and information asymmetry.

SpaceX is not available to purchase in an open market. Soon Slack may be. If they were both publicly listed, maybe their market caps would means something. Estimated private valuations, not so much info there.

And the market is of course irrational and wouldn’t be the first time.

I’ve got nothing against Slack, but they are just another Snapchat.

They provide a useful service, don’t get me wrong, but suffers from the same disease as many other software companies that grew via venture investment.

Please name one similarity between Slack and Snapchat.

The market is more often correct about future earnings over any meaningful window than any individual on Hacker News.

> Please name one similarity between Slack and Snapchat.

They're both easily replaceable communication services.

Slack is the Oracle of Snapchat, because enterprise lock in is a cornerstone of their business strategy

Slack does not have vendor lock-in [1], which implies significant cost and thus inability for most customers to switch to alternatives.

In case you didn't know, Oracle has lock-in over their customers because their platforms expose proprietary features not delivered by competitors, or because they have certifications demanded by law in certain industries.

The cost of switching from Slack to something else is insignificant and there's nothing that Slack can do to prevent competitors from emerging, short of burning cash to acquire them like they did with Hipchat.

Slack does not even target the market of Oracle, because big enterprises prefer and even require on-site solutions. I've worked with German companies threatening to fire employees if Skype or Slack were found on company owned computers.

Comparing Slack with Oracle is like comparing Snapchat with Microsoft Exchange.

[1] https://en.wikipedia.org/wiki/Vendor_lock-in

One has high risk and high capital expenses, the other basically prints money by charging people for web-IRC.

So the question is - is it slack overpriced, or company you mentioned is underpriced?

My brain (a trivial organ that just lets my body parts talk to each other) weighs 5 times as much as my kidneys (organs that filter all the blood in my body and keep the whole thing alive).


(I appreciate that the reality is slightly more nuanced than that.)

> My brain (a trivial organ that just lets my body parts talk to each other) weighs 5 times as much as my kidneys (organs that filter all the blood in my body and keeps the whole thing alive).

> Ridiculous!

> (I appreciate that the reality is slightly more nuanced than that.)

You are hilarious. Ignore the people that say poor analogies doused in sarcasm make for weak arguments.

If you had literally dozens of dozens of paid-for, or hundreds of free, brains at your disposal, any of which could be dropped into place and be fit for the purpose of letting your body bits talk to each other, then that may be a slightly more appropriate analogy.

Unless you're implying a chat app is analogous to the renal system? It's not really clear what point you were trying to make.

The point is that it's meaningless to compare the valuation (or weight) of two companies (or organs) that serve very important but completely different functions.

And as others have pointed out, there are most likely teams working on putting stuff in space who use Slack, and Slack or its employees couldn't function without the services like communications and weather data that satellites provide. So just like vital organs in a human body, one can't really function without the other.

But their relative valuation or weight is unrelated to how important one is to the other or to the rest of the world or body.

Each company or organ's valuation or weight is entirely determined by what it needs to be to carry out its function.

> If you had literally dozens of dozens of paid-for, or hundreds of free, brains at your disposal, any of which could be dropped into place and be fit for the purpose of letting your body bits talk to each other

It's a common trope to argue that Slack is easily replaceable by a competitive product or open-source protocol like IRC.

When people say things like "any of which could be dropped into place" or "Slack could be meaningfully replaced at a company with a git repo checkout and some local hardware" [1], we're entitled to ask "so why don't they"?

The reasons are to do with network effects, cost-of-ownership, security, scalability, easy-of-use, and countless other factors - but all those factors add up to the reason why Slack is valued at its current valuation.

But a nature metaphor applies here too: the evolutionary forces of creation and destruction have meant that a player that may only have been slightly fitter than what was there before has become completely dominant, and made it extremely difficult for another player to challenge it.

We can all sit back in our chairs and scoff at how easily another player could replace Slack's function in any individual context, but that tells us nothing about just how the alternatives will usurp Slack's present market dominance in reality.

[1] https://news.ycombinator.com/item?id=19082841

Thank you for a more thoughtful response.

My original comment was intended to be a succinct yet expletive-free reflection of the despair engendered by this story.

I disagree with a few of your claims - mostly some assumptions that I do not share.

> .. it's meaningless to compare ... two companies that serve very important but completely different functions.

This is the fundamental one. You think Slack serves a very important function, whereas I do not.

I also have a different stand on 'cultural relativism'. I believe you can, and probably should, compare individuals and organisations doing wildly different things.

> When people say things like "any of which could be dropped into place" or "Slack could be meaningfully replaced at a company with a git repo checkout and some local hardware" [1], we're entitled to ask "so why don't they"?

This assumes two things:

1) That people don't replace Slack with better alternatives. This is clearly not true - there are myriad cases where people eschew it outright, or abandon it after some time, with regular posts on HN describing same.

2) That people not actively replacing Slack is proof positive that it's qualitatively a good thing. It should be obvious why this isn't compelling.

> The reasons are to do with network effects, cost-of-ownership, security, scalability, easy-of-use, and countless other factors ...


Though Network effect in a communication context makes me think a) vendor lock-in, b) proprietary protocols, c) designed difficulty in integrating with existing messaging systems, and d) middle-management FOMO.

The rest are obviously contentious -- otherwise there'd only be one player in the market.

Fitness in an evolutionary sense may not mean what you think it means. A Cronus related metaphor may be appropriate to locking your customers into a walled garden to discourage potential future competition.

I just don't get what there is to despair about :) It's just a company that investors have judged is valuable based on the data they've seen. It's no big deal.

To some of your points:

- Communication is about as important a function as there is. Nothing else happens without it. Indeed it's one of the main reasons satellites exist.

- We can argue about whether Slack's communication service is important/good/valuable, but at the end of the day it's a waste of both our time; the market doesn't care what you or I think or say, it only cares what consumers/companies use/buy, and revealed preferences indicate that many people/companies use it and pay for it, and that's the whole reason it has a high valuation.

- A few posts on HN about people stopping using Slack tells us little; HN is a narrow audience, and people who write posts about stopping using popular products is orders of magnitude narrower again.

- I expressed no value judgements about whether or not Slack is good thing and investors don't either; they just care that it's a successful business that will likely keep getting more successful.

- That said, I understand why they make that assessment; I'm in around 10 different Slack instances across all the different projects and networking groups I'm in. I neither love it nor hate it. I don't spend much time in it most of the time. I use it when I need to and don't use it when I don't, and it's no big deal.

- But it's now always the go-to product people fire up when a new project or collaboration group comes together. It is now the default product for that type of communication. I couldn't name a viable competitor these days, and I've been online and working in tech for 20+ years, and have used IRC, Campfire and HipChat in the past, as well as others I don't remember.

So, none of this should be surprising. It's just a popular product that investors want to invest in. The valuation of other, different kinds of companies is totally irrelevant!

By the way, in case you're wondering why I'd be so disparaging of a harmless-seeming comment like yours, it's because comment threads like this literally make HN a laughing stock:


Many HN users go to great effort to contribute deeply-considered, carefully crafted, highly insightful comments based on a wealth of experience and expertise.

Those are the comments that make HN great.

It's a shame when middlebrow dismissals get all the attention.

Team chat is highly valuable, and surprisingly difficult to do well.

The company that put stuff into space probably needs its people to chat to each other from their computers in order to operate.

And at 1/13 the value of a company that gives you cancer (Altria, $92B).

Capitalism profits from giving people what they want. There are more people that want to chat with others from their computer than there are folks who want to put stuff into space. There are quite a few more people who want to ruin their health, rasp up their voice, make their clothes & apartment stink, and give themselves cancer than want to chat with others from their computer.

Funny enough the "company that puts stuff into space" likely pays for Slack as well.

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