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Slack S-1

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Re: Slack S-1

#281

Post by techntoke »

deathanatos wrote: post #242
techntoke wrote: post #183

Earlier quoted context omitted.

You mean Slack cloned IRC with markup and pictures

And history. And search. And attachments. And video calls. And a decent experience for non-power-users. And a decent integration/API story. And multi-person DMs. All of which are immensely useful features. I get that HN likes to think "it's just chat", but a decent chat application (having used gChat, Slack, IRC, AIM, …) is way more nuanced than that.

The point was it is unfair to say that Mattermost cloned Slack. Many of these technologies aren't unique to Slack.

Re: Slack S-1

#282

Post by GordonS »

cosmie wrote: post #84
adamw2k wrote: post #32

Surprised at Sales and Marketing expense given the low number of Enterprise (>$100k) contracts. Wonder what's baked in there beyond AE compensation? I don't see a whole lot of traditional advertising, but maybe it's out there?

They're doing quite a bit of TV advertising[1]. Production and flighting costs on commercials, at a global scale, isn't going to come cheaply. [1] https://www.ispot.tv/brands/Zyh/slack/

I wonder how effective TV advertising would really be for something relevant to such a small proportion of the population.

Re: Slack S-1

#283

Post by will_brown »

throwawaymath wrote: post #270
will_brown wrote: post #176

Earlier quoted context omitted.

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?

Okay why not, I'll take the bait. > There are people who want to invest in ICOs, Ponzi schemes Ponzi schemes are fraudulent operations intrinsically designed to extract money from investors by misleading them. Slack is a software company with a cogent, well-defined plan to leverage unprofitability now into significantly greater profitability later. Not only are these things meaningfully different, they're categorical…

My comment is not in a vacuum it’s a direct response to a comment that suggest regulation of a thing is improper because “people want to do it”. Your point is directly in line with mine...we can regulate things notwithstanding “people wanting to do it.” And that is not a reason to not regulate a thing, if people don’t agree with the merits of the proposed regulation, fine, but I think we both agree “because people want to do it” is not a reason to not regulate something.

I’m not saying slack is a fraud...I’m not even saying it’s a bad investment. People have read all that in to a concept.

Re: Slack S-1

#284

Post by will_brown »

freewilly1040 wrote: post #200
will_brown wrote: post #176

Earlier quoted context omitted.

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?

ICO’s and Ponzi scheme involve misrepresentations to the investor and/or theft

But you agree people still want to invest in them right? I think ICO proved that there is a market for known fraud/pump and dumps, you may think you can get in and out and make a buck because a bunch of morons don’t see the fraud.

Re: Slack S-1

#285

Post by ska »

jdavis703 wrote: post #81
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…

I know people who are wealthy enough to be accredited investors. However I have way more financial literacy than some of these so-called accredited investors. That I’m forbidden from buying and selling certain assets only because I’m not rich enough (yet) really goes against the whole pull yourself up by your own bootstraps ideology.

The pull yourself up by your bootstraps stuff isn't the issue here, it's risk management.

Accreditation is not in place to define who is informed and smart enough to make the investments, it is defining who can afford to take the loss, and who at least has the resources to do it properly.

Re: Slack S-1

#286

Post by toasterlovin »

will_brown wrote: post #35
neom wrote: post #11

"Our revenue was $105.2 million, $220.5 million, and $400.6 million in fiscal years 2017, 2018, and 2019, respectively, representing annual growth of 110% and 82%, respectively. Our growth is global with international revenue representing 34%, 34%, and 36% of total revenue in fiscal years 2017, 2018, and 2019, respectively. We continue to invest in growing our business to capitalize on our market opportunity. As a re…

Is there any other industry where a company can go public having lost $500,000,000 over the last 3 years? I get it their “market share” is increasing every year and the loses are staying the same...and even that is not the full picture of a path to profit. But if the company could turn a profit, then why not do it privately, show that and then go public? My guess like Uber and Lyft...they can’t turn a profit, and for…

Slack has a huge opportunity in front of them (become the messaging platform for every business that exists). They’re investing a lot of money to acquire all of that business (salespeople, travel, etc.). That is literally one of the main purposes of capital and access to capital is why you would take a company public.

And, specifically re: Slack. Unlike, say, Uber or Lyft, Slack has customers who have demonstrated that they are willing to pay what the service actually costs. The ride-sharing companies have not. The entire investment thesis for them is that they will somehow be able to increase prices at some point in the future, but they don’t actually have any indication that this is true. And I agree that they are most likely a bad investment. Slack, on the other hand, has a huge and rapidly growing book of extremely sticky business. To turn on profitability, they turn off their expenditure on sales people. They’re very different models.

Re: Slack S-1

#287

Post by will_brown »

baccheion wrote: post #273
will_brown wrote: post #35

Earlier quoted context omitted.

Is there any other industry where a company can go public having lost $500,000,000 over the last 3 years? I get it their “market share” is increasing every year and the loses are staying the same...and even that is not the full picture of a path to profit. But if the company could turn a profit, then why not do it privately, show that and then go public? My guess like Uber and Lyft...they can’t turn a profit, and for…

IPOs were historically done by unprofitable companies to raise funds. It's like seeking out VCs for another round of funding, but it's instead the public. Now, it's usually done to give insiders an exit. What future growth would there be for buyers if the company went public already at its peak?

>What future growth would there be for buyers if the company went public already at its peak?

I never said anything about peak. I said profit. Certainly a company making profit may want to go public to finance growth to make more profit (ie peak).

IPOs/stock companies were not created for companies that were unprofitable.

Re: Slack S-1

#288

Post by nugget »

will_brown wrote: post #260
evrydayhustling wrote: post #215

Earlier quoted context omitted.

Put another way, you're suggesting that "public investors shouldn't have access to loss making companies, regardless of growth". That would eliminate not just tech IPOs, but a majority of publicly traded companies period . Only 2700 (out of about 7500) currently make the cut: https://finviz.com/screener.ashx?v=111&f=fa_netmargin_pos&ft... Like it or not, tolerating losses (preferably to accomplish growth!) has become…

>you're suggesting that "public investors shouldn't have access to loss making companies, regardless of growth". No that’s not what I’m saying...there is a difference between a company that is registering for an IPO and an existing publicly traded company. And let’s not pretend Tech companies IPOing at losses is somehow protection to small investors...I don’t see anyone clamoring to allow these small investor be allo…

>I don’t see anyone clamoring to allow these small investor be allowed to get in on unicorns pre IPO

Really? This sentiment is blanketed all over HN and other investment forums. One of the major macro changes to the investment landscape is rapidly growing companies staying private longer such that the gains benefit a much smaller pool of investors.

Re: Slack S-1

#289

Post by toasterlovin »

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…

The problem with Uber is not that they are lacking a moat, it’s that they have not demonstrated what the market size for ride-sharing is when consumers have to eventually pay the true cost. Given how incredibly expensive ride-sharing is when heavily subsidized, you’re have to be insane to think that the market won’t shrink when prices are 30-50% higher.

And if your answer to that problem is self driving cars, well then I’ll happily point you to the auto-rental market as roughly what kind of a business you’re investing in.

Re: Slack S-1

#290

Post by mbesto »

dd36 wrote: post #235
rayiner wrote: post #64

Earlier quoted context omitted.

Is there any other industry where developing an instant messaging system can result in $500 million in losses despite $700 million in revenue?

My thought as well. What on earth about Slack costs hundreds of millions to operate?

Guess what? You can actually see in an S-1 what it costs.

S&M = $233,191 for 2019

More than half their revenue is spent acquiring new customers...which, with a high likelihood, will net revenue over a N+1 year timeframe. This is an investors wet dream... I pay $1 now and I only need $.15 to operate that $1 every year for the next 7 years...that's a helluva return.

In other words...you can turn off the S&M tap and these companies could be profitable almost overnight.

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