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I feel like the world has lost it's mind slightly. When a 2 year old startup launches an $80m fund. I mean I understand they want to be a platform and can see t

by chuhnk 11y ago

I feel like the world has lost it's mind slightly. When a 2 year old startup launches an $80m fund. I mean I understand they want to be a platform and can see the strength in funding projects that will empower a platform model but still. This is the point at which I think we're really in a boom heading in that bubble direction, and I was never one to fall in to the trap of calling it a bubble before. Love slack, love the platform play, but my God this is getting crazy.

TheAppGuy 11y ago
As someone who has been through the hype and then crash of dotcoms in 2000, this does feel like a bubble.
cowsandmilk 11y ago
I think it is a useful way to double down on an investment. Rather than putting more money into the mothership, you bet on external tools that will help the mothership grow. It is also a way to reduce the costs of acquisition of the best integrations. If the majority of slack shareholders hold the majority of the shares in the best integration, it effectively lowers the price of acquisition to turn the tools built on slack into internal products/features.
- jamiequint 11y ago
  This. $80m invested in a Slack ecosystem for these investors is likely to generate even more than that in returns (on their existing Slack equity) even if the investors never saw a dime out of the $80m invested.
dsg42 11y ago
Slack has an insane amount of money, and they don't need any of it. They've put massive amounts of cash in the bank to stay safe in a downturn, and are well on their way to profitability. They really DO have the cash to burn, and this is a great way to spend it on many fronts.
tomasien 11y ago
Slack makes a ton of money and it is unimaginable to me (and many others) that it's not going to be a massive force. It has been a revelation to literally every entrepreneur I know - and I'm from Virginia not SV (although I recently moved to NYC - same deal). Now that it has established itself beyond almost any doubt, its INVESTORS have established an $80M bet around those who make the company a core component of their strategy. Slack, which has very low burn, seems to have contributed to this fund but we can safely assume it was a small amount (if at all). This is a sign of strength. We're still creating transformational companies with real revenue models, and these companies often facilitate other great companies. Tech is strong - valuations may be wrong one way or another, but tech is a great place to deploy capital.
- michael_fine 11y ago
  Genuine question -- how how is it been a revelation? It seems to be very similar to HipChat, which was just an iteration on previous chat systems.
  - burkestar 11y ago
    I think comparing feature for feature isn't the right way to understand why Slack is a disruptive innovation. Often it's an innovation along some other dimension - process, business model, etc. In this case it's Slack's business model and "platform" strategy. Other tools like HipChat were just that, a tool. Slack is a platform in the sense that it enables businesses and developers to leverage and extend the platform, thereby adding additional value to the platform. This leads to so-called "Network Effects" where as more apps are built on the platform, the more valuable the platform and the more likely others will want to build on that platform, etc. in a virtuous cycle.
    - mariusmg 11y ago
      You definetly work in PR. You have the quality of taking something trivial and describing it as if it is a big deal.
  - johnmaguire2013 11y ago
sinzone 11y ago
That's the difference from being just a tool, or a platform. The former is easy to copy and replace, the latter goes in monopoly position once you have an ecosystem around you (see Salesforce, Facebook). $80M is the price they have to pay to go in monopoly position as soon as possible and become a platform.
jsmeaton 11y ago
I think it's a fantastic idea, but I struggle to comprehend how they can possibly think that $80 million is an appropriate amount of money for such a venture.
incepted 11y ago
> I feel like the world has lost it's mind slightly. When a 2 year old startup launches an $80m fund. Slack was founded in 2009 and has raised over $300M (yes, three hundred million dollars) [1] [1] https://www.crunchbase.com/organization/slack#/entity https://www.crunchbase.com/organization/slack#/entity
- TheLogothete 11y ago
  Wow, what did they need 300m for? This is nuts.
  - hkmurakami 11y ago
    The CEO is quoted as saying "we don't need it but the terms were so good that it would be foolish to refuse the money. Also it buys safety during a downturn."
refriedbeans3 11y ago
570,000 paying customers.
pallian 11y ago
At 2M DAU, there's a lot of upside in building a bot for that audience. We just launched a simple expense management slack bot last week and in the past few days, our engagement has gone up... will post some numbers shortly. https://medium.com/trippeo-blog/introducing-expense-management-on-slack-track-receipts-with-trippeo-s-slack-bot-ccfb90a79fee#.wld06bqo8 https://medium.com/trippeo-blog/introducing-expense-manageme...
rekoros 11y ago
Slack is not 2 years old. It's a pivot from a company started in 2009.

by chuhnk 11y ago

TheAppGuy 11y ago

As someone who has been through the hype and then crash of dotcoms in 2000, this does feel like a bubble.

cowsandmilk 11y ago

I think it is a useful way to double down on an investment. Rather than putting more money into the mothership, you bet on external tools that will help the mothership grow. It is also a way to reduce the costs of acquisition of the best integrations. If the majority of slack shareholders hold the majority of the shares in the best integration, it effectively lowers the price of acquisition to turn the tools built on slack into internal products/features.

jamiequint 11y ago
This. $80m invested in a Slack ecosystem for these investors is likely to generate even more than that in returns (on their existing Slack equity) even if the investors never saw a dime out of the $80m invested.

dsg42 11y ago

Slack has an insane amount of money, and they don't need any of it. They've put massive amounts of cash in the bank to stay safe in a downturn, and are well on their way to profitability. They really DO have the cash to burn, and this is a great way to spend it on many fronts.

tomasien 11y ago

Slack makes a ton of money and it is unimaginable to me (and many others) that it's not going to be a massive force. It has been a revelation to literally every entrepreneur I know - and I'm from Virginia not SV (although I recently moved to NYC - same deal). Now that it has established itself beyond almost any doubt, its INVESTORS have established an $80M bet around those who make the company a core component of their strategy. Slack, which has very low burn, seems to have contributed to this fund but we can safely assume it was a small amount (if at all). This is a sign of strength. We're still creating transformational companies with real revenue models, and these companies often facilitate other great companies. Tech is strong - valuations may be wrong one way or another, but tech is a great place to deploy capital.

michael_fine 11y ago
Genuine question -- how how is it been a revelation? It seems to be very similar to HipChat, which was just an iteration on previous chat systems.
- burkestar 11y ago
  I think comparing feature for feature isn't the right way to understand why Slack is a disruptive innovation. Often it's an innovation along some other dimension - process, business model, etc. In this case it's Slack's business model and "platform" strategy. Other tools like HipChat were just that, a tool. Slack is a platform in the sense that it enables businesses and developers to leverage and extend the platform, thereby adding additional value to the platform. This leads to so-called "Network Effects" where as more apps are built on the platform, the more valuable the platform and the more likely others will want to build on that platform, etc. in a virtuous cycle.
  - mariusmg 11y ago
    You definetly work in PR. You have the quality of taking something trivial and describing it as if it is a big deal.
- johnmaguire2013 11y ago

sinzone 11y ago

That's the difference from being just a tool, or a platform. The former is easy to copy and replace, the latter goes in monopoly position once you have an ecosystem around you (see Salesforce, Facebook). $80M is the price they have to pay to go in monopoly position as soon as possible and become a platform.

jsmeaton 11y ago

I think it's a fantastic idea, but I struggle to comprehend how they can possibly think that $80 million is an appropriate amount of money for such a venture.

incepted 11y ago

> I feel like the world has lost it's mind slightly. When a 2 year old startup launches an $80m fund. Slack was founded in 2009 and has raised over $300M (yes, three hundred million dollars) [1] [1] https://www.crunchbase.com/organization/slack#/entity https://www.crunchbase.com/organization/slack#/entity

TheLogothete 11y ago
Wow, what did they need 300m for? This is nuts.
- hkmurakami 11y ago
  The CEO is quoted as saying "we don't need it but the terms were so good that it would be foolish to refuse the money. Also it buys safety during a downturn."

refriedbeans3 11y ago

570,000 paying customers.

pallian 11y ago

At 2M DAU, there's a lot of upside in building a bot for that audience. We just launched a simple expense management slack bot last week and in the past few days, our engagement has gone up... will post some numbers shortly. https://medium.com/trippeo-blog/introducing-expense-management-on-slack-track-receipts-with-trippeo-s-slack-bot-ccfb90a79fee#.wld06bqo8 https://medium.com/trippeo-blog/introducing-expense-manageme...

rekoros 11y ago

Slack is not 2 years old. It's a pivot from a company started in 2009.