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Slack S-1

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Re: Slack S-1

#361

Post by DanielRibeiro »

m0zg wrote: post #339
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…

How the heck does one spend $539.5M per year running something like Slack, that's what I'd like to know. It just doesn't seem that complicated of a service.

That's a great question. They expanded it a bit on their "SUMMARY CONSOLIDATED FINANCIAL DATA AND OTHER DATA" section.

Their operating expenses are divided in 3: Research and development, Sales and marketing and General and administrative.

They also describe a bit the evolution of these under the Risk Section, beneath "We have a history of net losses, we anticipate increasing operating expenses in the future, and we may not be able to achieve and, if achieved, maintain profitability."

Re: Slack S-1

#362

Post by andrewprock »

BoorishBears wrote: post #241
xfitm3 wrote: post #114

Earlier quoted context omitted.

Slack is not flexible or customizable - when basic features like muting someone are requested you're told that you are using Slack wrong. The notion of a one size fits all solution is flawed.

Your told that because it’s true. If someone is sending you messages that are so useless you need to mute them, either your organization is seriously disfunctional or you shouldn’t be in Slack.

Unfortunately disfunctioal cultures are widespread. If you can only solve the problems of Ivory Towers, you are not going to have many customers.

Re: Slack S-1

#363

Post by EpicEng »

will_brown wrote: post #186
the_watcher wrote: post #127

Earlier quoted context omitted.

The rules are about what information is disclosed. The difference is that with public companies, there are rules about what actually gets disclosed and how often. That's why the general public is allowed to invest. It's about how much information is available, not what that information actually is. Investors need to determine whether or not they invest. In no world is the SEC's role to determine whether or not a comp…

>In no world is the SEC's role to determine whether or not a company's business strategy qualifies them to go public or not. Profitability is objective...let’s not pretend what I’m suggesting is the SEC subjectively making a decision on a business judgement or business plan. Simply you want to register a security for public offering show a GAAP profit...I understand that’s not “how it works” or I wouldn’t have sugges…

You realize that you can very easily be proven wrong, right?

Amazon was "losing" more money in each year leading up to their IPO. By your logic we all should have been protected from investing in this obvious scam of a company, right? If you could go back in time and dump money into Amazon stock, would you?

Of course you would, because profitability is obviously too simplistic a measure to gate companies from going public. Also, the SEC isn't my nanny and I'm capable of reading an S1 to make my own decision. You seem to have an incredibly narrow understanding of the economics behind these companies.

Re: Slack S-1

#364

Post by rgbrenner »

viscanti wrote: post #211
Radim wrote: post #87

Earlier quoted context omitted.

> their revenue has increased more than their losses But "net loss" already takes revenue into account! "Loss" is not the same thing as "expenses". The revenue increased substantially, but so did expenses , resulting in a slight decrease in loss over the past 3 years. At the current rate, the company would reach break-even profitability around the year 2070.

They're investing in growth. It's unclear if that investment is good or bad, but looking at quarterly accounting numbers won't tell us. All we can see here is that they're investing more than they're making. If you created a business that simply bought $1M worth of Stocks (e.x. ETFs) and bonds, the first quarter when you made the initial investment you'd show a "loss" of $1m. You might sell those 10 years later for $…

If you created a business that simply bought $1M worth of Stocks (e.x. ETFs) and bonds, the first quarter when you made the initial investment you'd show a "loss" of $1m.

No, that's not how accounting works. If you buy $1M in stocks, then you move the amount from one asset account (cash) to another asset account. You have $1M in assets both before and after, with no losses.

Re: Slack S-1

#365

Post by djakjxnanjak »

zymhan wrote: post #332
xenospn wrote: post #263

Earlier quoted context omitted.

I would assume the smaller companies are much more efficient when it comes to R&D.

And if they don't have a breakthrough drug, they go bust and investors lose their money and employees lose their jobs.

Let’s remember that a job is an arrangement where you are paid for work on an ongoing basis. If you choose to work for a startup, you assume the risk that this work opportunity will go away. But if that happens, the salary you already earned isn’t lost. You are not getting screwed on the trade where you give x hours and receive y dollars.

Working for a biotech startup instead of a big company, you accept this risk for the chance of a payoff in an acquisition.

Now, if your startup isn’t making payroll, GTFO.

Re: Slack S-1

#366

Post by idlewords »

ddebernardy wrote: post #355
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…

I suspect there aren't many other industries where a company can go from zero to a $1.6Bn exit in a year and a half (YouTube) -- while losing money, no less. Or from zero to a $19Bn exit in 5 years (WhatsApp).

In most industries, after such a financial performance you exit quite rapidly in a different direction.

Re: Slack S-1

#367

Post by miles_matthias »

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…

I'm sure a big amount of this is data costs, especially as they store more analytics, natural language processing, and ML training on the data.

Re: Slack S-1

#368

Post by acchow »

est31 wrote: post #65
paulddraper wrote: post #40

Earlier quoted context omitted.

It's still mind boggling that all these unicorns haven't stopped growing after being in business for years and having a mature product. It's a strange world.

Don't forget that products like Slack, Uber, Airbnb, etc. all could have basically everyone as their customer. These companies influence the daily lives of millions of people, with comparatively few employees, thanks to the scaling skills of technology. That's why they are valued so high and are still growing. Sure, they might be overvalued and one day the bubble can burst, but neither is it just a ponzi scheme, ther…

Airbnb is profitable.

Re: Slack S-1

#369

Post by soared »

mritchie712 wrote: post #91
soared wrote: post #74

Earlier quoted context omitted.

My company pays quite a bit for slack and an alerts integration. My company spends ~$500k/day in client’s money and so real-time alerts in slack easily pay for themselves.

What do you use for alerts? We've been working on Slack as a destination for SeekWell ( https://seekwell.io/ ). Basically you can write SQL and if there are results, we'll send a message to Slack. Same works for Python, including plots / images.

All of our alerts I believe come directly the specific platforms or one-off integration companies (where we buy ads, so facebook/google ads/few others). SeekWell would work for us if we had a competent product team to build a data warehouse that actually worked. Some of ours operate like:

1. Supermetrics pulls data into a google sheet once an hour

2. Alert logic in the spreadsheet

3. Some slack integration (zapier maybe) sends slack alerts based on cell values

Currently looking at eletype to replace a lot of our custom stuff

https://www.eletype.com/install/

Re: Slack S-1

#370

Post by FPGAhacker »

dahdum wrote: post #314
Radim wrote: post #87

Earlier quoted context omitted.

> their revenue has increased more than their losses But "net loss" already takes revenue into account! "Loss" is not the same thing as "expenses". The revenue increased substantially, but so did expenses , resulting in a slight decrease in loss over the past 3 years. At the current rate, the company would reach break-even profitability around the year 2070.

They quadrupled their revenue while keeping their losses flat in just 3 years, for a sticky high margin enterprise product. With just modest revenue growth they'll be able to optimize towards profit whenever they choose.

Since we are talking about net losses being flat, it means their expenses are going up as fast as their revenue.
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