7 ms·

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

by dd36 8y ago

dmoy 8y ago
This is literally described in the S-1. A large plurality of it is sales & marketing. The next biggest chunk is R&D.
- deleted 8y ago
  [deleted]
- dd36 8y ago
  Right. What R&D is slack doing that requires hundreds of millions of dollars? Or G&A? No wonder their investors are cashing out. They see that there are limits else they'd keep riding this as a private company.
omarchowdhury 8y ago
SF tech company salaries.
geodel 8y ago
They need to pay about ~2000 employees including multiple hundred engineers who regularly yap about another JS/Electron stunt they pulled today.
theWheez 8y ago
Acquiring more users!
mbesto 8y ago
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.
- Spivak 8y ago
  I think your point still stands but some of that S&M can never be cut because of churn and is highly susceptible to interference from competitors. Slack doesn't have that much lock-in and a lot of people have their sights on that market -- "Cheaper than Slack and bundled with Office365/G Suite" is an extremely tempting offer.
  - TheGRS 8y ago
    Maybe, so far I've been in a few situations where we didn't go with Slack...only to go back to Slack. Part of the lock-in is their brilliant multi-org client. I can easily go back-and-forth between my company, a contract's IM, an alumni group of people in my last job and a group of local artists that like to talk to each other. Hell I've thought about luring most of my close friends from Facebook onto Slack. Their API is also quite good IMO, which provides a sort of lock-in, though not a huge one.
    - sjy 8y ago
      Do all your contacts work in the tech industry? I'm wondering if we're really backwards here in Australia, or if I've just had bad experiences. Slack-style messaging seems really uncommon outside tech, even though traditional AIM-style IM is used everywhere. I think a lot of enterprises could benefit from capturing corporate knowledge in searchable Slack channels, but the only teams I see using them are doing IT and software.
    - bspn 8y ago
      > Part of the lock-in is their brilliant multi-org client While not quite as fully-featured as Slack, Keybase offers this. I'm a member of multiple orgs and seamlessly change between conversations (both group and 1-on-1).
  - rorykoehler 8y ago
    From my experience slack also has negative churn. People get used to it and automatically choose it the next time. You are correct about potential threats though.

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

by dd36 8y ago

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

dmoy 8y ago

This is literally described in the S-1. A large plurality of it is sales & marketing. The next biggest chunk is R&D.

deleted 8y ago
[deleted]
dd36 8y ago
Right. What R&D is slack doing that requires hundreds of millions of dollars? Or G&A? No wonder their investors are cashing out. They see that there are limits else they'd keep riding this as a private company.

omarchowdhury 8y ago

SF tech company salaries.

geodel 8y ago

They need to pay about ~2000 employees including multiple hundred engineers who regularly yap about another JS/Electron stunt they pulled today.

theWheez 8y ago

Acquiring more users!

mbesto 8y ago

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.

Spivak 8y ago
I think your point still stands but some of that S&M can never be cut because of churn and is highly susceptible to interference from competitors. Slack doesn't have that much lock-in and a lot of people have their sights on that market -- "Cheaper than Slack and bundled with Office365/G Suite" is an extremely tempting offer.
- TheGRS 8y ago
  Maybe, so far I've been in a few situations where we didn't go with Slack...only to go back to Slack. Part of the lock-in is their brilliant multi-org client. I can easily go back-and-forth between my company, a contract's IM, an alumni group of people in my last job and a group of local artists that like to talk to each other. Hell I've thought about luring most of my close friends from Facebook onto Slack. Their API is also quite good IMO, which provides a sort of lock-in, though not a huge one.
  - sjy 8y ago
    Do all your contacts work in the tech industry? I'm wondering if we're really backwards here in Australia, or if I've just had bad experiences. Slack-style messaging seems really uncommon outside tech, even though traditional AIM-style IM is used everywhere. I think a lot of enterprises could benefit from capturing corporate knowledge in searchable Slack channels, but the only teams I see using them are doing IT and software.
  - bspn 8y ago
    > Part of the lock-in is their brilliant multi-org client While not quite as fully-featured as Slack, Keybase offers this. I'm a member of multiple orgs and seamlessly change between conversations (both group and 1-on-1).
- rorykoehler 8y ago
  From my experience slack also has negative churn. People get used to it and automatically choose it the next time. You are correct about potential threats though.