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Slack S-1

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Re: Slack S-1

#171

Post by maxxxxx »

est31 wrote: post #128
maxxxxx wrote: post #89

Earlier quoted context omitted.

They also don’t have very high barriers to entry for competitors. Replacing SAP is really hard after it has been established in a company. On the other hand replacing Slack is really easy. Same for Uber. Customers and drivers can jump ship anytime.

Uber has a big competitive moat, which is willingness to burn money. They've got a lot of it, and any competitor which can't raise as much money for that purpose as Uber has will lose out. It's simple, in any area that a small competitor of Uber operates they just artificially lower prices and do it until the competitor runs out of money. The company with more money wins. Slack... sure you can just spin up a rocket.c…

"Uber has a big competitive moat, which is willingness to burn money. "

that's a very bad long term strategy :-)

Re: Slack S-1

#172

Post by tbrock »

moreira wrote: post #37
douglasfshearer wrote: post #12

Slack has a 5-year, $50M/year minimum commitment with AWS. From the document: > In April 2018, the Company executed an amendment to its existing agreement with Amazon Web Services (“AWS”). The amended agreement was effective as of May 1, 2018 and continues through July 31, 2023. The Company has minimum annual commitments of $50.0 million each year of the agreement term for a total minimum commitment of $250.0 million…

Perhaps I'm just not aware how things work in companies of Slack's size, but... what do you think $4M/mo is spent on, for what essentially amounts to a chat app? I realise there a lot of extras in Slack (attachments cost S3 storage, video calls take bandwidth, webhooks take some processing), but as of January 2019, they had 10M daily active users. $50M/365 gives us $137K per day. $137K per day just to serve 10M activ…

That’s nothing for a company making that much revenue, they have to keep all the websocket connections open for notifications, index all the messages for search, store files, host video chats / phone calls, etc... it’s not trivial.

Re: Slack S-1

#174

Post by vlovich123 »

kortilla wrote: post #164
pengstrom wrote: post #161

I've been thinking about venture funding and how companies do not turn a profit while growing. Wouldn't using funding to sell a service/product under the market value be considered anti-competitive? I mean the businesses without funding would have to price their services high enough to turn a profit, while venture-backed businesses do not. Are there not chat services that would have thrived if Slack did not offer one…

No, being competitive and pushing down prices for consumers is not viewed as being anti-competitive. Whether a company makes money or not is its own problem. VC vs bank loan vs bootstrap is the same. Build a working product that brings in enough money to profit before you run out of cash. It’s basically how every business started.

Predatory pricing is generally considered illegal. The US happens to hold a pretty skeptical view on the matter. The better truth is that startups/new businesses are just too small & by the time they get big their prices typically have adjusted to not be flooding the market (i.e. too late).

Re: Slack S-1

#175

Post by Saturdays »

LandR wrote: post #53

I'm staggered that there are 575 companies paying slack $100k / year. I don't even have anything against slack but what is possibly worth $100k a year from a comms software?

To be clear the filing says >$100K, I'm sure some are spending way way more, it beats the cost of hiring an engineering team to do all this (build, improve, maintain etc...)

Re: Slack S-1

#176

Post by will_brown »

freewilly1040 wrote: post #170
will_brown wrote: post #62

Earlier quoted context omitted.

I think a company going public should not operating at $150M losses using VC money...letting them cash out and profit by selling to the public. I also think there are other fundamental benefits to the economy. Yes the public is free not to buy...just as non-accredited investors would be free not to invest in unregistered securities yet regulations are still in place for a reason to protect would be investors. It does…

Well there people who disagree and would like to invest in them. Why should your opinion be forced on them?

There are people who want to invest in ICOs, Ponzi schemes...others want to rape, murder...why should anyone’s opinions be forced on these people?

Re: Slack S-1

#177

Post by jvagner »

freewilly1040 wrote: post #163
jvagner wrote: post #140

Earlier quoted context omitted.

Two years ago a company we were at had Slack and it was used vigorously. They hit a user limit and couldn't get the CEO to pony up whatever it cost to extend Slack. (This company was the kind of company that had unlimited budgets for conferences and sales calls, but could hardly ever get a CC# for a dev team need...) They switched to MS Teams, but at least two years ago, it felt unusable. Or, the team's Slackness cou…

Your example demonstrates my point. Your CEO made a terrible decision in making you switch. Your co spent much more paying people to migrate to something worse than it would have spent just ponying up for the license.

Agreed. But if Teams comes with Office365, Slack may have trouble getting CEOs to pay more per-user monthly fees.

And I pay for both Office365 and G Suite at my business, and Google just invited me to Currents. I know better than to dump something like Slack for any new (like, first 3 years) Google product, but... Slack's getting some real competition.

Re: Slack S-1

#178

Post by maxxxxx »

freewilly1040 wrote: post #167
maxxxxx wrote: post #119

Earlier quoted context omitted.

“Could you "replace Outlook" -- it's just an email client after all.” Absolutely. There is always pain in transitions but some are easier than others.

But why would you? “Hey boss I’m going to take up a bunch of everyone’s time getting everyone on boarded and retrained, as well as doing a nontrivial data migration, because some hot new email client is marginally better”

As almost always for cost reasons. What I am trying to say is that some things are more difficult to replace than others. Moving away from slack is doable. Moving away from Outlook is doable. Moving from 100000 Windows machines to Linux is harder. Moving away from SAP is really hard.

Re: Slack S-1

#179

Post by olivermarks »

The cynical perspective is that direct listing rather than an IPO lets large holders get out faster after the stock begins trading, which suggests a lyft style pop and deflation

Re: Slack S-1

#180

Post by jorts »

phamilton wrote: post #132
amrrs wrote: post #2

Lyft, Uber, Zoom, Beyond Meat and now, Slack Is there any benefit of Public at this point of time? or Just a trend to grab as much as Wallet share from the average investor?

Has there ever been a non monetary benefit to going public?

It can give you credibility to your customers. They can see your financial position which, assuming the company is performing well, can give them peace of mind that you're not a startup that will disappear tomorrow. It helps with recruiting, as you're more well known and the equity that folks get is more liquid.
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