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.
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.
Do they? Aren't existing shareholders usually bound to hold their shares for some time (e.g. 6 months after the IPO)?
> 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.
If one inconsequential event like this warrants such an extreme reaction respect will be in short supply everywhere.
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!
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.
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.
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.
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.
(Ok, I remember HipChat didn't have gifs but there was a lot else wrong with HipChat)
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.
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.
This is a fairly modest i7 3770k based system. Their work on reigning in runaway CPU usage truly seems to have paid off.
Slightly mitigating data point: Other Electron apps do this too.
Your link is not really relevant here because it talks of business viability not program performance.
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").
Past HN discussion: https://news.ycombinator.com/item?id=17031306
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.
Boy, I mentioned Slack a lot.
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.
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...
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.
> 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?
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.
edit totally missed the "coming soon"...
Some ideas are similar, yes.
Just letting you know in case you want to respond to comments, including mine. ;)
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
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.
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)
So because Microsoft has lowered the bar, now everything can be called "native"? There's a reason many people hate UWP.
X11 and Win32 UI are actually fairly similar in this respect.
Delphi is not so popular these days, but there still is a fair share of Delphi programs running.
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.
This does not, of course, invalidate your main point in any way. (I also currently have p4v open on another display, and, well.)
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.
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.
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.
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.
Others (like myself) see these as much bigger advantages.
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.
On the other hand I use Slack daily.
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.
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
This is big for enterprise.
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.
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.
So why is it going public? Is there a benefit to a successful company?
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
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.
Doesn’t seem like they have any issues gaining liquidity.
Who do you propose employees sell their shares to?
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?"
Might not officially be an "investment" but it more or less amounts to the same thing.
* Need to go public if the company is too big
* More fair for employees stock holders
edit: Ah, missed the employees angle.
This is a good move by Slack to provide a return to the employees who have stuck with them.
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.
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?
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.
Does this mean something is wrong with our market, or just my expectations?
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."
But people will buy this and other stocks regardless so I'm not sure there's any incentive to change that.
When my company moved to Discord, it was a huge breath of fresh air.
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.
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.
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?
They were making $200M in revenue over a year ago:
I'd imagine that number is significantly greater today.
Thanks for the link
You might be able to say that most users aren't paying for it, but most organizations are.
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.
Get cash when the markets are frothy and the money is cheap, and then use it when they're not.
Personally I feel Slack was a huge missed opportunity by Google. Their enterprise woes would have reduced a bit
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.
Gitter is also pretty popular for that kind of thing.
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.
"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...
It's always having to reconnect, the history doesn't work well, notifications are unreliable.
IT's just terrible IME
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.
(Yes, I appreciate it's not a unique observation, and that reality is slightly more nuanced than that, but nonetheless, prima facie crazy.)
Did you check today's weather forecast specific to your location?
Compared to what the 2,000 active satellites enable, Slack is just chatter.
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
It kind of is though. Valuation is based on future discounted cash flow. Aspirations inform how much future cash flow a company can generate.
No but I used Slack today.
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.
You don't use phones, digital maps, or are glad that your national defense is up and running?
Satellites don't last forever. SpaceX launched 10 gps sattelites in 2018... (or more, not sure, that's just one launch)
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.
You can always quit out of the program for a while if you need to really focus, I do that often.
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.
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.
The market is more often correct about future earnings over any meaningful window than any individual on Hacker News.
They're both easily replaceable communication services.
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.
(I appreciate that the reality is slightly more nuanced than that.)
> (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.
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" , 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.
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" , 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.
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!
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.
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.