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

411–420 of 469 posts

Re: Slack S-1

#411

Post by MrPea »

snypox wrote: post #95
arkitaip wrote: post #19

Earlier quoted context omitted.

I think we're already seeing a backlash against the always multitasking, loss of focus culture that Slack has become the poster child for in the SASS space. Just like Facebook or Twitter, Slack is engineered for constant dopamine-fueled engagement, which quickly turns it into a bad and ultimately unproductive habit for companies that use it. I am already seeing competitors like Level use Slack as a warning example an…

Weird opinion. I only know 1 colleague of mine who gets distracted by chat. For me, and for most people an efficient team collaboration tool (Slack) is a game changer though.

I've seen it happen. Slack is filled with things one can waste time on. Our company uses Mattermost which is like Slack except stripped down to core chat components.

Re: Slack S-1

#412

Post by IanCal »

ttul wrote: post #382
IanCal wrote: post #226

Earlier quoted context omitted.

I either wildly underestimate the cost or the scale of building slack, am I reading that right that they've spent well in excess of a billion dollars in the last few years?

You aren’t wrong. But keep in mind that these are all recurring revenue deals. The $400M is highly likely to recur next year or even increase - even if they don’t close a single additional customer. SaaS companies talk about “lifetime value” which is a fancy name for the net present value of future cash flow from each customer. What if today’s $400M will recur for ten years? That warrants a value of $4B just on today…

I can see them making money, I'm more shocked at the cost of running or building it up.

I try to assume that if I think something is odd but it's not my field, I'm wrong and don't understand it properly. It's just at a scale I find hard to understand. A billion dollars is a lot.

I'd love to know what it is they're pumping the money into that they make per user, because I can't see what massive upcoming things there are to build. What are they ploughing hundreds of millions into?

Again, with all of this, I assume it's me that doesn't understand.

Re: Slack S-1

#413

Post by tw04 »

freewilly1040 wrote: post #116
tw04 wrote: post #104

Earlier quoted context omitted.

I'd be curious if it's remotely sustainable. We started on Slack ~3 years ago. We're now moving (albeit slowly) to Teams. 18 months from now Slack will be gone entirely. I can't believe we're the only ones. And unlike Dropbox vs. Ondrive, Slack isn't markedly better in any area than Teams from my testing.

The cost of migrating away from something like slack for an enterprise org is enormous compared to what it costs. Teams might have parity in a vacuum, but everyone already knows what slack is and how to use it, including people you might hire in the future.

To be blunt: if someone who knows slack can't figure out teams, we won't be hiring them. It's a chat app, not a new programming language.

Re: Slack S-1

#414

Post by dredmorbius »

irishcoffee wrote: post #404
dredmorbius wrote: post #394

Earlier quoted context omitted.

WhatsApp. Microsoft would buy to prevent someone else from doing so. Though its hold has weakened greatly, the Outlook, Exchange, and AD behemoth still own enterprise communications.

I was under the impression Facebook owned WhatsApp...?

Why they own it, and what they paid to do so, is the point.

Re: Slack S-1

#415

Post by bryanmgreen »

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…

Two points:

1) I am 100% in alignment that companies should NOT IPO with losses. With no evidence or education to back on this, I'll just say I feel the opportunity for non-professional investors to put money into such unstable companies is an enormous risk - not just for themselves, but the economy as a whole. Maybe there needs to be a separate market for loss-leader investing.

2) With SAAS companies in particular, adjusting for profit can be easy and it boggles my mind they don't know this or are too egotistical to believe they should.

Slack's pricing model is way too expensive and their 1:6 Paid-to-Unpaid user ratio is evidence of that. They could easily merge their two paid tiers so paid accounts have a fuller product offering than the free version AND drop the price. If they convert half of their non-paid users through pricing adjustments they could be making a PROFIT without adding any additional expense.

Re: Slack S-1

#416

Post by abel212 »

Silhouette wrote: post #203
scrollaway wrote: post #69

Earlier quoted context omitted.

4.2M / month on AWS is a hefty bill but it's not unheard of. Slack is, I suspect, paying for all the marked up extras such as various expensive regulation compliance addons, at-rest encryption, multi-AZ+multi-region backups and mirrors and what not. There's also probably a huge amount of stuff they use on their side to run their own tooling and analytics on their clients; costs that won't necessarily rise per user. T…

The thing I find curious is that businesses of this scale are still using cloud hosting. Is it cost-effective or otherwise better in some way to outsource your infrastructure instead of hiring an in-house IT team to manage your own hardware and connectivity at this level?

My company recently dropped our in house data center and moved almost entirely to AWS. We had a few reasons; we just don't have the multiple data centers to gauruntee uptimes. Our product isnt data security so our limited staff can't keep the data as secure as AWS whose entire business is around security. And we just got to a point where it was cheaper to host on AWS than just to maintain our own data center. I hope that offers a little insight

Re: Slack S-1

#417

Post by Wump »

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…

It seems like this is captured with plain old LTV - CAC. What’s the advantage of introducing “depreciation” here?

Re: Slack S-1

#418

Post by austenallred »

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…

> This is starting to sound very similar to mark-to-market accounting, and the one word associated with "mark-to-market" is "Enron".

From Wikipedia:

Mark-to-market (MTM or M2M) or fair value accounting refers to accounting for the "fair value" of an asset or liability based on the current market price, or the price for similar assets and liabilities, or based on another objectively assessed "fair" value.[1] Fair value accounting has been a part of Generally Accepted Accounting Principles (GAAP) in the United States since the early 1990s, and is now regarded as the "gold standard" in some circles.

Re: Slack S-1

#419

Post by not_a_moth »

ttul wrote: post #384
not_a_moth wrote: post #301

Earlier quoted context omitted.

I see the counterargument, but we are still pushing companies onto the public that are losing copious amounts of money. Part of me wonders if we aren't witnessing the irrational exuberance before the (cyclical) fall.

This is not irrational exuberance. Slack makes a very sticky enterprise product with tremendous network effects. It’s hard to get rid of because it integrates with all sorts of other things within the enterprise. The value of chat is unlikely to diminish anytime soon. Losing money today to acquire customers who will stick around for years is a great idea. In fact, to move for profits today at the expense of growth wo…

Really? I know an org of > 2,000 people who recently switched away from Slack to the open-sourced Mattermost. I don't think Slack is untouchable. Overall point is considering other companies too with massive losses being pushed on the public feels like a trend, and maybe ominously represents a certain phase in a cycle.

Re: Slack S-1

#420

Post by scarface74 »

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…

Because all the GAAP numbers in the world don’t mean anything if a company can’t bring in more cash than it is spending.
Post reply on HN