Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Slack S-1

sec.gov

Post reply on HN
Print view View original

371–380 of 469 posts

Re: Slack S-1

#371

Post by idlewords »

lotsofpulp wrote: post #279
mises wrote: post #129

Earlier quoted context omitted.

The market is hot, and people would stuff money in a hole in the ground right now if you promised a possible 5x return. That will change soon enough. I think these unicorns may know this and may have decided their time to raise money publicly is now, before a market crash. Not saying the market is about to crash, but it's certainly volatile.

Software having basically zero marginal cost is a game changer. There's a reason why the big tech companies are the belle of the ball right now, they all print money, and they're still growing. Some things are worth the risk for that kind of payout.

Software had zero marginal cost before everyone started hosting it on cloud services.

Re: Slack S-1

#372

Post by jumpinalake »

rogerkirkness wrote: post #349
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…

One could argue the entire purpose of investment capital is to spend it.

You clever.

Re: Slack S-1

#373

Post by chc »

evrydayhustling wrote: post #298
will_brown wrote: post #260

Earlier quoted context omitted.

>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…

Ok, then why is loss-making more acceptable (safer for small investors) in a formerly profitable company than it is for a not-yet-profitable company? And as others have pointed out you are exactly wrong about efforts to make public investment available earlier. Besides founders who would love to have more fundraising options, there is plenty of evidence and outcry that small investors are not getting access to econom…

> Ok, then why is loss-making more acceptable (safer for small investors) in a formerly profitable company than it is for a not-yet-profitable company?

One has demonstrated the ability to turn a profit and the other has not. This seems a bit like asking "Why is radiation considered a valid cancer treatment and rhino horn isn't when both have failed to help people before?"

Re: Slack S-1

#374

Post by smolder »

marcosdumay wrote: post #228
smolder wrote: post #201

Earlier quoted context omitted.

At that scale, I suspect there are some ~$10k engineering-time efforts that could save them $1m a year in costs, if they already have the people on staff with the expertise. In my limited experience, a lot of opportunities like that get missed because: - an optimization is considered lower priority than feature work and bugs, so never gets staffed - it's considered risky even when it's not - it's difficult to quantif…

Head count is not infinite. I don't agree with the GP's claim that they aren't running out of money (if they don't show a profit, they are running out of money, by definition), but developer time is a limited resource that must be carefully allocated. They have a very hard problem on their hands of estimating the revenue growth new features will bring, and compare them to costs savings from better code. I don't think…

I just wanted to say I fully agree with what you said; it's a very hard problem.

Re: Slack S-1

#375

Post by dzonga »

What I don't understand is how, a messaging service losses 100mil. Their competitor's like DHH's Basecamp are printing money, so how would they lose money. Cutthroat competition overall with offering like MS Teams, FB Workplace n Whatever Google has or will kill.

Re: Slack S-1

#376

Post by dd36 »

mbesto wrote: post #290
dd36 wrote: post #235

Earlier quoted context omitted.

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 the…

What R&D does slack do to the tune of hundreds of millions per year?!? What G&A is over a hundred million a year? Do you use Slack?

Yes, they have a boatload of fat to trim. They can pull an Etsy move but is that not already baked into their valuation? I, frankly, don't care enough to look as I won't be investing. I just cannot believe their VC investors let them get that bloated - it's probably why they're pushing for an exit so fast. I also am not convinced Slack is very sticky. We switched to Mattermost last week and miss nothing about Slack.

Moreover, as I said in another comment: If there is all this money left to be made, why are their investors pushing them to go public? They should be riding that gravy train privately and cashing out a few years from now for 10x more...

Re: Slack S-1

#377

Post by microdrum »

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…

There are tons of such industries. Medicine is one.

Re: Slack S-1

#378

Post by ttul »

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…

Holy Jesus these are amazing SaaS growth metrics. Rule of 40 be damned.

Re: Slack S-1

#379

Post by a13n »

floatrock wrote: post #318
robhunter wrote: post #150

I think historical accounting practices and standards are not great at evaluating SaaS businesses. We came up with the concept of depreciation/amortization as a way to better match up expenses with revenues in a given time frame. I think we need a similar mechanism for allocating sales & marketing costs. My company spends about $1,000/year on Slack. We likely will in perpetuity, as long as we/Slack exists. Slack spen…

> If you "depreciated" Slack's sales and marketing costs over the LTV of the average customer... This is starting to sound very similar to mark-to-market accounting, and the one word associated with "mark-to-market" is "Enron". From http://www.creditpulse.com/accountingfinance/lessons-enron/e... > Basically, mark-to-market is a type of accounting that enables a company to book the value of an asset or a liability, no…

LTV isn't some fluffy made up number, it's the output of a formula

Re: Slack S-1

#380

Post by ttul »

cupofjoakim wrote: post #41
maxxxxx wrote: post #33

Earlier quoted context omitted.

It’s still mind boggling that all these unicorns haven’t found a way to make money even after being in business for years and having a mature product. It’s a strange world.

Well, these guys do have a good way to make money. Enterprise contracts are worth their weight in gold. As you could see from the quote, their revenue has increased more than their losses - which mean that they are on their way to become profitable. Arguably they could be now, if they didn't invest in growth as much.

I’d love to see - and I didn’t check the S-1 so lazyweb me - their lifetime value estimation. I bet that $400M is worth > $5B billions over the lifetime of all customer cohorts.
Post reply on HN