16 ms·

Slack’s Shares Plunge After It Predicts a Larger Loss

188 points by doppp 7y ago

chucknelson 7y ago
I'm surprised investors aren't more scared of the competition, particularly Microsoft and its Teams product that is part of Office 365. Maybe it's not a huge deal because the overlap of Slack customers and Office 365 customers isn't that big?
- thejosh 7y ago
 If they can fix teams so everybody who uses it doesn't hate it, I'm sure they'll absolutely dominate.
 - ttul 7y ago
 There is also the possibility of Microsoft buying Slack to fix Teams.
 - jupblb 7y ago
 It's very unlikely considering they thought about doing that a few years ago.[0] I don't think they'll rapidly push forward with adding features characteristic for Slack as well. Teams is just yet another corporate tool that is easy to sell to existing customers of Office 365. [0] https://www.businessinsider.com/microsoft-canceled-8-billion-slack-bid-due-to-bill-gates-and-satya-nadella-pushback-2016-3 https://www.businessinsider.com/microsoft-canceled-8-billion...
 - gonzo41 7y ago
 I'm still stuck with Skype. Go Delphi!
 - scarface74 7y ago
 It’s basically the definition of enterprise software that the people who buy it aren’t the people who use it. The bean counters don’t care whether the users hate the software.
- DylanDmitri 7y ago
 Teams isn't going to directly take market share from Slack, but it forms a hard barrier limiting Slack's future growth. Large established organizations are switching to Teams, and finding it good enough that they'll never want to pay for Slack.
 - calvinmorrison 7y ago
 Never underestimate the power of workplace bureaucracy. At organizational size X, integrating with new Microsoft product Y, single sign on working and easy deploys to all office machines, support from Microsoft and Microsoft lackeys pitching new ideas to IT people, of course they're gonna pick teams.
 - bradstewart 7y ago
 > integrating with new Microsoft product Y, single sign on working and easy deploys to all office machines, support from Microsoft Those sound more like great features than "workplace bureaucracy".
 - rchaud 7y ago
 One man's "workplace bureaucracy" is another man's "it just works". To everybody who isn't a software developer and will likely never need Jira integrations and Slackbots, Slack is just another chat app. For a paid software, Slack needs to win those people over too.
 - Slimbo 7y ago
 Teams is absolutely taking share from Slack. As chat permeates organisations, it needs policies, single sign on, oversight and standards that are harder to implement in slack than Teams/Office 365. I know of many organisations who've been forced off slack because 'company policy'.
- Blackstone4 7y ago
 Work is a non-software company and we asked if we could use Slack and IT responded by saying that we already had Teams installed and included with O365.... therefore we should use that. That's what we've being doing except that no one chats on there....
 - _jal 7y ago
 > That's what we've being doing except that no one chats on there ...Which serves as a demonstration that nobody needs chat. Isn't it great how that works?
 - jodrellblank 7y ago
 You might say nobody needs it, but they might benefit from it. As many times as I’ve hated on Slack on HN, my anger is at their bloat and sluggishness and low density UI to do basic text chat. At least I can do basic text chat in an IRC style channel in it. Desktop Teams is a nightmare of mystery magic UI, I never have any clue where I am in it, where anything else is, how to get to or from stuff or what the chat is doing, it’s super unpleasant. It’s basically a web browser to SharePoint but with no browser chrome or address bar or navigation hints or breadcrumbs, then the same into a Skype replacement, then a pile of chat channels which aren’t channels and have rolled up chat threads in a list in them, but all of this in one window so you can only do one thing in the UI at any time (I.e. NOT chat to someone and look up some documentation in another window because it only has one window) and Teams honking at you wherever you are with red blobs of attention grabbers and “people are trying to contact you in Teams” dark pattern Facebook bullshit where the mobile teams and desktop teams notify and then emails you. It’s both completely overwhelming and underwhelming at the same time.
- Kiro 7y ago
 It would literally be impossible for my company to switch from Slack. It's so tightly integrated.
 - flixic 7y ago
 Consider replacing "literally" with "practically" or something similar in phrases like these. I have seen first-hand how much of the business can run on Slack. Yet, if it's gone one day, companies would survive.
- ArtWomb 7y ago
 The divide between customer bases actually resonates throughout the industry. It's Conoco Philips and the Department of Justice vs Gitlab and Sysdig. Old econ vs new roughly. And is sort of playing out across AWS vs Azure, etc. I wonder how Slack addresses this divide. Perhaps in keeping more of a startup ethos and attracting international players such as Grab.
- lvh 7y ago
 Have you used Teams? I've had to once, to talk to people and Microsoft, and it was _hilariously_ bad. I don't know anyone who uses it in earnest, and I know people who have used Google Chat. (I do most of the sales calls for Latacora, which feels like a decent representative sample of startups, and I think all but one, maybe two, of the companies we have ever spoken with used Slack. Order of magnitude a percent.)
 - Ididntdothis 7y ago
 I agree that Teams is pretty bad but a lot of companies use it because they have office 365. Your view is probably skewed by looking at Silicon Valley it startups. A lot of big companies use Teams. In my company Teams was actually a big improvement because we had nothing before.
 - lvh 7y ago
 Oh sure: I didn’t mean to imply nobody does, I’m definitely just talking to startups.
 - gamblor956 7y ago
 My company tried slack, Hangouts, and teams. We're standardizing on teams because it's the easiest for non-technical users to understand and use.
 - techslave 7y ago
 que? how can one not understand slack? it couldn’t be simpler.
 - Spivak 7y ago
 Never used Teams. This is not a comparison just some things in Slack that are weird. * Formatting is done with Markdown syntax instead of "word processor" style formatting. In a word processor if you type Hello, Ctrl+b World Ctrl+b! it would produce Hello, World! In Slack it produces Hello World !* * . * /commands are not discoverable or intuitive to anyone who never used IRC or CLI programs. Non-programmers have no idea what arguments are or that [brackets] means optional. * Bots and their syntax have the same problem except that their DSLs are far more varied and arcane. * Very few people know or understand the difference between a channel and a group. * Threads are super weird compared to email. It's like an inbox but not really. Threads interleaved into actual message timelines are not very discoverable and difficult to follow. * Attachments and files don't really work like most people expect. * There are at least 5 different settings panels all with different things and scopes. * Reminders and a bunch of stuff being implemented as a magic "account" in Slack is super confusing to people. * Very few people really "get" apps as well in this respect. They're in your message timeline, they look like accounts, and are in some ways but aren't in others. * The difference between a "bot" and "app" isn't super well defined. Some respond to messages in a channel, some need commands.
- judge2020 7y ago
 Hangouts chat as well, GSuite integration: https://gsuite.google.com/products/chat/ https://gsuite.google.com/products/chat/ It's one of the few products that's forced Google to create a desktop app (even if it still is CEF based).
- ElonMuskrat 7y ago
 No chance to survive The explanation is here For Slack has no moat
- sys_64738 7y ago
 I wouldn't be surprised if Slack got bought up by the likes of Facebook or some other big tech.
geerlingguy 7y ago
Well if they’d just implement dark mode or a dark theme on desktop...
- swozey 7y ago
  I thoroughly enjoy going through this thread every time slack updates and breaks my dark theme CSS hack (nowadays I just miserably run it in a tab with darkreader).. 2014! They're making sure that they've "upgraded their infrastructure" before they release it I believe was the last real update with substance. https://twitter.com/slackhq/status/531941157283315712?lang=en https://twitter.com/slackhq/status/531941157283315712?lang=e...
- magashna 7y ago
  You can hack it in
  - GhettoMaestro 7y ago
    Been waiting years for official desktop app dark mode support. The lack of it is sheer stupidity, considering they have dark mode in the iOS Slack app.
bluedino 7y ago
>> Revenue rose to $145 million from $92 million a year earlier. Slack said it had more than 100,000 paying customers, a 37 percent increase over last year. They should be fine. $307m of the loss was stock-related compensation. How could you screw up a business who has a product as popular as Slack?
- kennyadam 7y ago
  By taking too much investment, needing to pay back too much so you end up destroying your business for short term gains. edit: Just look at what's happening to Patreon
  - wlesieutre 7y ago
    What’s happening to Patreon?
  - fortran77 7y ago
    Staffing way too high, too!
  - kwerk 7y ago
    I’m out of the loop. What’s happening with Patreon?
    - collyw 7y ago
      They got a big pushback after deciding that they (wrongly) thought that they were a content provider platform and not a payment platform and started banning users with political views they didn't like.
      - kaushikt 7y ago
        Genuine question: How could a company confuse of what they mean to their users by such a huge margin? A content provider vs payment platform. Woah!
mattmanser 7y ago
Stewart Butterfield, Slack’s chief executive, said in an interview that it would take time for the market to understand his company since it had created a new category of software, unlike soda or cars We've had public business software companies for decades, they all created a new "category" of software, why does he think his is something new? Fundamentally speaking, how is Slack any different to the first email program? The first operating system? The first chat system? We've had this sort of software, and companies that sell it, for a very long time now.
- anbotero 7y ago
  Thanks! I mean it, THANK YOU! We were using HipChat at a previous company (2013, I think), and I never understood the switch to Slack. I was like: Wait, but what's the difference? Everybody knew about Slack, and no one about HipChat. I also don't think they introduced a new category of software, they just spent an absurd amount of additional money in marketing. That's it.
  - phlakaton 7y ago
    My company switched from HipChat to Slack around 2015. I won't say hype didn't play into the decision, but IIRC there were two other motivations: 1) more reliable performance, 2) better integrations with Google Docs. At the time it was claimed that this was really a whole new way to organize data and work. In practicality, not that much changed from HipChat. Pinned items and the ability to rifle back through conversations saved my bacon a few times, but looking back on it, I don't think they outmatch properly-organized documentation and wikis.
    - anbotero 7y ago
      We were kind of heavily invested in Atlassian stack, which means we used Confluence a lot. We had a good system for creating and looking for documentation in our wiki system, so I hope that was not a selling point for Slack. Unfortunately we (Tech) never really knew why we switched. EDIT: Also, on the performance side, we were there for the beginning of both systems, and both had their good amount of issues initially. By the time we switched, I don't remember that many HipChat outages. I remember a lot of Slack outages starting up as well, and these days I have issues with Web interface connectivity at least once a week (native works).
Mindstormy 7y ago
I just wish they had not acquired Screen Hero. That was a beautiful standalone product that I wish I could still use.
- crispyporkbites 7y ago
  https://screenheroreplacement.com/ https://screenheroreplacement.com/
- pcarolan 7y ago
  Agreed. I'd be happy if they brought their video chat up to the standard Screen Hero set. It was one of the best pieces of software I remember in recent years.
- jsherwani 7y ago
  Screenhero cofounder here. I’m working on a successor to Screenhero. It’s currently in private beta: https://screen.so https://screen.so
  - nodesocket 7y ago
    Interesting, so the acquisition agreement did not have a non-compete clause or golden handcuffs to Slack? If you don't mind me asking, how come you left Slack?
    - runako 7y ago
      (I'm not affiliated with either Slack or ScreenHero. But I loved ScreenHero.) It would be common for an acquisition agreement to shackle the founders with non-competes. It would also be common for those non-compete clauses to have limited durations. (I have seen 2-3 years in documents.) Slack bought ScreenHero over 4 years ago. The non-competes have likely expired.
- Rapzid 7y ago
  It's almost impressive how poorly Screen Hero was integrated into Slack(if at all?!).
skywhopper 7y ago
I get that they are the most obvious comparisons for recent IPOs, but it's disappointing to see Slack being conflated with Uber, Lyft, and We, none of which have a remote chance of ever making more than a razor-thin profit in their respective industries. Whereas Slack is a SaaS company, with the real potential (whether it's likely or not) to become highly profitable down the road.
- s_Hogg 7y ago
  If they can figure out how to get cash out of the gigantic amount of people who use slack without anyone paying for anything, it'll be phenomenal. Really hope the answer isn't ads!
  - kaushikt 7y ago
    Slack doesn't seem to be the sort of company who will go with an Ad strategy for monetisation. A number of free users upgrade over time by upgrading their free account or by highly recommending Slack at their workplace.
    - dorian-graph 7y ago
      > Slack doesn't seem to be the sort of company who will go with an Ad strategy for monetisation. I feel like I've definitely heard that said a few times before.
- elhudy 7y ago
  Would you be able to expand on this perspective? Is there an example of a highly profitable SaaS company which offers a super simple subscription solution and doesn't rely on data-collection based advertising?
  - paxys 7y ago
    Office 365, Salesforce, Ultimate Software, Adobe Creative Suite, GSuite, ADP, Box, DocuSign, Shopify, HubSpot, Zoom.
mytailorisrich 7y ago
Leaving aside the costs of their listing and related compensation (which are crazy high!) they made a $57m loss on $145m in revenue. Considering that they are a pure software company this is quite shocking and, to me, a sign not to touch them with a barge pole.
- dpflan 7y ago
  What revenue and loss numbers (relative %s) would not shock you?
  - mytailorisrich 7y ago
    Anything less than a profit would shock me.
    - nkohari 7y ago
      Nowadays, it's very rare for a software company to be profitable when they IPO.
    - icedchai 7y ago
      Growth companies don't make a profit this early on. They put it all back into sales and marketing.
      - mytailorisrich 7y ago
        "Growth company" does not mean anything at all. If they were just putting it all back in sales and marketing they wouldn't have losses this high.
        icedchai 7y ago
        Actually, it does. It means they're focused on revenue growth, not profitability, at this stage. Sales and marketing is very, very expensive. Have you worked at any SaaS companies with tons of inside sales?
t34543 7y ago
Good! Slack product managers are arrogant and the product is garbage. Lots of dark patterns.
elhudy 7y ago
Earnings run-up aside, it's only down 7% or $2 from this past Friday. That's a lot, but not in comparison to it's drop since IPO.
collyw 7y ago
Slack is overrated and over priced. Its not like messenger platforms are difficult. We have had msn messneger, yahoo messenger, whatsapp, rocketchat, facebook messneger, messenger, gchat, skype. Slack doesn't do anything particularly special.
- kaushikt 7y ago
  I disagree. Slack is not just about chat, they are about communication. We moved from Skype to Slack and it was incredibly different for us. Open channels meant - more transparency and anyone can join and contribute. All those hella bots are extremely handy. Overall, i would say we became more transparent, focussed and it made communication across a single company SIMPLE.
  - slothtrop 7y ago
    I've heard it described as having IRC channels with skype capabilities
    - smileysteve 7y ago
      > with skype capabilities I'd be interested to know the stats on people using the video feature. My experience is that companies on slack primarily trust Hangouts and Zoom more than Slack for video conference.
  - sha666sum 7y ago
    You just unironically argued that chat applications are not about communication, while Slack is. This makes no sense, as chatting is communication.
- sha666sum 7y ago
  MSN Messenger with Pidgin as the client is the best IM experience I've ever had, at least for one to one conversations. There's also something to be said for identifying contacts by their email addresses, since even when the IM inevitably dies, you have a way to reach these people.
- 7y ago
shay_ker 7y ago
It'd be really interesting for Slack to go the Atlassian or Microsoft route - acquire companies that solve adjacent problems, and then bundle the products to enterprise customers. The sales get harder to ignore, and it'd make Slack as a company even stickier. A couple things come to mind, like file sharing, calendar & room management, project management (around tasks, mainly), VoIP integration for sales calls, and maybe even gasp email.
- davnicwil 7y ago
  I think this is their strategy, and I think what's more they will want to solve these things vertically 'on top of' slack as plugins and apps. They started filling the pipeline for this a while ago by literally funding startups building such things. Acquiring some of the more popular ones is surely one of the goals, should this work out.
SeeDave 7y ago
I don't know enough about the Slack product or business model to comment authoritatively, but I'm really confused how they're losing money (and so much of it) and I sense a bit of "weirdness" around unit economics/user conversion/pricing. I've long thought that they've essentially built beautiful native/mobile/web clients for IRC-type chats and provide hosting/IRCOp services. Charging per-seat to enterprise seems like a very, very lucrative proposition for this type of product/service. There are a couple of eyebrow-raising financials: 1.) 100,000 paid users @ $6.67-$15/mo = $667k-1.5m MRR = $2m-$4.5m QRR 2.) 13m DAUs @ $0/mo (free tier) 3.) They lost $30m Q3 '18 4.) They lost $300m Q4 '19 due to 'stock based compensation' (which from my perspective should have been accrued Q4 '15 onwards) And for all the above... a $5billion unicorn valuation considering chat is a solved problem? Three major questions: 1. Has any other SaaS or company in human history ever had a 1:130 ratio of paid:free users with a hard cap of $15 on MRR? 2. Does quarterly losses between $30-$300m on $4.5m in revenue make sense considering the unit economics of cloud-based chats? 3. Does 100k paid subscribers seem a bit low for a 6 year old company? Really weird situation from my "knows enough to be dangerous" perspective and I'm all ears because from my perspective: 1.) There's really not enough innovation or a big enough TAM (considering competitors) to drive a unicorn valuation 2.) Which shouldn't matter because this is still a potentially lucrative market 3.) And yet... they're losing money hand-over fist Weird, weird weird. Feel free to share your thoughts, I just ask that you consider this message comes from a perspective of "confused guy trying to make sense of these crazy times"
- jmull 7y ago
  It's over 100000 paid customers, not paid users. E.g., your revenue number is way off... the article says their revenue for the quarter was $145 million. So I guess the average revenue per customer was approaching $1500 (well, unless I dropped a zero or three somewhere, which is possible). For Slack customers are organizations with potentially multiple users. Likewise, I think your 1:130 number is perhaps comparing apples to oranges.
  - SeeDave 7y ago
    Thanks for the clarification! I was really scratching my head there based on the apples to oranges comparison of 'customers' to 'users' and you were right... my revenue estimate was indeed way off. Upgrading Slack from 'WTF' to "Let's see how this plays out and if it's priced accurately' because $30m in losses on $145m in revenue for cloud enterprise chat with a long-tail of free-tier users seems pretty promising! Thanks again!
pcarolan 7y ago
Slack's long-term value prop isn't chat, it's the platform. If you've used any of the great bot apps it hosts (PTO Ninja for example), it's easy to imagine a future where these kinds of apps replace whole swaths of bloated Saas-ware. I'm excited to see more of these and a competitive eco-system emerge within Slack the way Apple built the app store. Slack should invest heavily in building a platform for developers if it wants to grow, if it can pull this off it's going to look a lot more like Salesforce.com in 5 years where whole industries are built on its back. This is also the moat they have against MS Teams. Microsoft hasn't been as successful in building wildly productive developer ecosystems since the Windows 9X days.
- JMTQp8lwXL 7y ago
  Slack is sticky and their competitive advantage will be (1) making it stickier and (2) expand the enterprise features (e.g., make it easy to implement a company Data Storage policy, SSO integration, etc).
- deleted 7y ago
  [deleted]
- brown9-2 7y ago
  I think some people are wildly overestimating how much of management or timekeeping style apps people want to use inside a chat interface.
ilikehurdles 7y ago
Slack is back up at or above where it was at end of trading hours yesterday. It plunged after-market, opened at $26, and is back near $31 again now. NYT should just start using AI to write negative articles about tech companies when their stock swings more than 5% and put their journalists to better use.
tictoc 7y ago
Slack feels like employee surveillance beyond the chatting capabilities
- merpnderp 7y ago
  Are the alternatives any better? For instance is discord protecting your chats?
  - gamegod 7y ago
    Mattermost, IRC, etc.
    - merpnderp 7y ago
      IRC is great, but I've never thought of it as protecting my privacy. It's definitely public and almost always logged by a myriad of bots if not the server.
      - icedchai 7y ago
        You can run your own server.
    - paxys 7y ago
      How are either of these more private than Slack? Whoever hosts the server can see whatever is on it.
- mattmar96 7y ago
  Agreed. Particularly the 'online/offline' status for users.
frequentnapper 7y ago
I don't understand. They are already back up. Is this even relevant anymore?
thorwasdfasdf 7y ago
I'm sorry but comparing it to Uber is highly misrepresentative. Uber has serious Cost structure that can not be removed: the cost of the driver is essential to the operation of it's busienss. Slack on the other hand is just a SaaS. Why are their costs so high? They said stock based compensation, but that doesn't begin to tell what it's for. Their user acquisition costs don't need to be really high, as far I know they started off with a great deal of virality and without too much paid acquisition. Between then and now, what happened? Naive question: Couldn't they simply cut most of their engineering/marketing and be wildly profitable? If I were to take a wild guess, I'd say it was they tried to grow too quickly and overspent on marketing, getting a barely decent ROI on ad spend.
- paxys 7y ago
  The stock has also bounced back already, so the headline is no longer accurate.
- imglorp 7y ago
  They have a billboard in Times Square right now, with some partner.
- deleted 7y ago
  [deleted]
freediver 7y ago
Seems even nytimes reporter is embarrassed by what slack actually is (chat app) calling it “business software”.
rainyMammoth 7y ago
One of the most useless product of our generation. The fact that they believe themselves that they make "work happen" is a level of self-koolaid-drinking that I rarely saw even in Silicon Valley. I'm happy that the stock is plummeting.
wetpaws 7y ago
Slack is essentially an IRC. IRC is pretty much dead nowadays, Slack is just the same concept but with a cloud integration and a modern client. It is neither new nor a particularly good implementation, discord is faster and better as a communication tool and possibly more clones are coming. The only lucky thing for Slack is that it was in the right time in the right place and introduced 30 year old concept to the corporate folks - but this advantage can go away anytime.
kerng 7y ago
New category of software? Such a statement shows how disconnected leaders can be from reality. Collaboration and communication software has existed basically since computer networks exist. More specifically icq, MSN, even Skype falls into the same category of software... They created a succesful startup - a lot of kudos for that. The company, as so many others this year, fails to proof itself in the public market.

188 points by doppp 7y ago

I'm surprised investors aren't more scared of the competition, particularly Microsoft and its Teams product that is part of Office 365. Maybe it's not a huge deal because the overlap of Slack customers and Office 365 customers isn't that big?

thejosh 7y ago
If they can fix teams so everybody who uses it doesn't hate it, I'm sure they'll absolutely dominate.
- ttul 7y ago
  There is also the possibility of Microsoft buying Slack to fix Teams.
  - jupblb 7y ago
    It's very unlikely considering they thought about doing that a few years ago.[0] I don't think they'll rapidly push forward with adding features characteristic for Slack as well. Teams is just yet another corporate tool that is easy to sell to existing customers of Office 365. [0] https://www.businessinsider.com/microsoft-canceled-8-billion-slack-bid-due-to-bill-gates-and-satya-nadella-pushback-2016-3 https://www.businessinsider.com/microsoft-canceled-8-billion...
- gonzo41 7y ago
  I'm still stuck with Skype. Go Delphi!
- scarface74 7y ago
  It’s basically the definition of enterprise software that the people who buy it aren’t the people who use it. The bean counters don’t care whether the users hate the software.
DylanDmitri 7y ago
Teams isn't going to directly take market share from Slack, but it forms a hard barrier limiting Slack's future growth. Large established organizations are switching to Teams, and finding it good enough that they'll never want to pay for Slack.
- calvinmorrison 7y ago
  Never underestimate the power of workplace bureaucracy. At organizational size X, integrating with new Microsoft product Y, single sign on working and easy deploys to all office machines, support from Microsoft and Microsoft lackeys pitching new ideas to IT people, of course they're gonna pick teams.
  - bradstewart 7y ago
    > integrating with new Microsoft product Y, single sign on working and easy deploys to all office machines, support from Microsoft Those sound more like great features than "workplace bureaucracy".
  - rchaud 7y ago
    One man's "workplace bureaucracy" is another man's "it just works". To everybody who isn't a software developer and will likely never need Jira integrations and Slackbots, Slack is just another chat app. For a paid software, Slack needs to win those people over too.
- Slimbo 7y ago
  Teams is absolutely taking share from Slack. As chat permeates organisations, it needs policies, single sign on, oversight and standards that are harder to implement in slack than Teams/Office 365. I know of many organisations who've been forced off slack because 'company policy'.
Blackstone4 7y ago
Work is a non-software company and we asked if we could use Slack and IT responded by saying that we already had Teams installed and included with O365.... therefore we should use that. That's what we've being doing except that no one chats on there....
- _jal 7y ago
  > That's what we've being doing except that no one chats on there ...Which serves as a demonstration that nobody needs chat. Isn't it great how that works?
  - jodrellblank 7y ago
    You might say nobody needs it, but they might benefit from it. As many times as I’ve hated on Slack on HN, my anger is at their bloat and sluggishness and low density UI to do basic text chat. At least I can do basic text chat in an IRC style channel in it. Desktop Teams is a nightmare of mystery magic UI, I never have any clue where I am in it, where anything else is, how to get to or from stuff or what the chat is doing, it’s super unpleasant. It’s basically a web browser to SharePoint but with no browser chrome or address bar or navigation hints or breadcrumbs, then the same into a Skype replacement, then a pile of chat channels which aren’t channels and have rolled up chat threads in a list in them, but all of this in one window so you can only do one thing in the UI at any time (I.e. NOT chat to someone and look up some documentation in another window because it only has one window) and Teams honking at you wherever you are with red blobs of attention grabbers and “people are trying to contact you in Teams” dark pattern Facebook bullshit where the mobile teams and desktop teams notify and then emails you. It’s both completely overwhelming and underwhelming at the same time.
Kiro 7y ago
It would literally be impossible for my company to switch from Slack. It's so tightly integrated.
- flixic 7y ago
  Consider replacing "literally" with "practically" or something similar in phrases like these. I have seen first-hand how much of the business can run on Slack. Yet, if it's gone one day, companies would survive.
ArtWomb 7y ago
The divide between customer bases actually resonates throughout the industry. It's Conoco Philips and the Department of Justice vs Gitlab and Sysdig. Old econ vs new roughly. And is sort of playing out across AWS vs Azure, etc. I wonder how Slack addresses this divide. Perhaps in keeping more of a startup ethos and attracting international players such as Grab.
lvh 7y ago
Have you used Teams? I've had to once, to talk to people and Microsoft, and it was _hilariously_ bad. I don't know anyone who uses it in earnest, and I know people who have used Google Chat. (I do most of the sales calls for Latacora, which feels like a decent representative sample of startups, and I think all but one, maybe two, of the companies we have ever spoken with used Slack. Order of magnitude a percent.)
- Ididntdothis 7y ago
 I agree that Teams is pretty bad but a lot of companies use it because they have office 365. Your view is probably skewed by looking at Silicon Valley it startups. A lot of big companies use Teams. In my company Teams was actually a big improvement because we had nothing before.
 - lvh 7y ago
 Oh sure: I didn’t mean to imply nobody does, I’m definitely just talking to startups.
- gamblor956 7y ago
 My company tried slack, Hangouts, and teams. We're standardizing on teams because it's the easiest for non-technical users to understand and use.
 - techslave 7y ago
 que? how can one not understand slack? it couldn’t be simpler.
 - Spivak 7y ago
 Never used Teams. This is not a comparison just some things in Slack that are weird. * Formatting is done with Markdown syntax instead of "word processor" style formatting. In a word processor if you type Hello, Ctrl+b World Ctrl+b! it would produce Hello, World! In Slack it produces Hello World !* * . * /commands are not discoverable or intuitive to anyone who never used IRC or CLI programs. Non-programmers have no idea what arguments are or that [brackets] means optional. * Bots and their syntax have the same problem except that their DSLs are far more varied and arcane. * Very few people know or understand the difference between a channel and a group. * Threads are super weird compared to email. It's like an inbox but not really. Threads interleaved into actual message timelines are not very discoverable and difficult to follow. * Attachments and files don't really work like most people expect. * There are at least 5 different settings panels all with different things and scopes. * Reminders and a bunch of stuff being implemented as a magic "account" in Slack is super confusing to people. * Very few people really "get" apps as well in this respect. They're in your message timeline, they look like accounts, and are in some ways but aren't in others. * The difference between a "bot" and "app" isn't super well defined. Some respond to messages in a channel, some need commands.
judge2020 7y ago
Hangouts chat as well, GSuite integration: https://gsuite.google.com/products/chat/ https://gsuite.google.com/products/chat/ It's one of the few products that's forced Google to create a desktop app (even if it still is CEF based).
ElonMuskrat 7y ago
No chance to survive The explanation is here For Slack has no moat
sys_64738 7y ago
I wouldn't be surprised if Slack got bought up by the likes of Facebook or some other big tech.

geerlingguy 7y ago

Well if they’d just implement dark mode or a dark theme on desktop...

swozey 7y ago
I thoroughly enjoy going through this thread every time slack updates and breaks my dark theme CSS hack (nowadays I just miserably run it in a tab with darkreader).. 2014! They're making sure that they've "upgraded their infrastructure" before they release it I believe was the last real update with substance. https://twitter.com/slackhq/status/531941157283315712?lang=en https://twitter.com/slackhq/status/531941157283315712?lang=e...
magashna 7y ago
You can hack it in
- GhettoMaestro 7y ago
  Been waiting years for official desktop app dark mode support. The lack of it is sheer stupidity, considering they have dark mode in the iOS Slack app.

bluedino 7y ago

>> Revenue rose to $145 million from $92 million a year earlier. Slack said it had more than 100,000 paying customers, a 37 percent increase over last year. They should be fine. $307m of the loss was stock-related compensation. How could you screw up a business who has a product as popular as Slack?

kennyadam 7y ago
By taking too much investment, needing to pay back too much so you end up destroying your business for short term gains. edit: Just look at what's happening to Patreon
- wlesieutre 7y ago
  What’s happening to Patreon?
- fortran77 7y ago
  Staffing way too high, too!
- kwerk 7y ago
  I’m out of the loop. What’s happening with Patreon?
  - collyw 7y ago
    They got a big pushback after deciding that they (wrongly) thought that they were a content provider platform and not a payment platform and started banning users with political views they didn't like.
    - kaushikt 7y ago
      Genuine question: How could a company confuse of what they mean to their users by such a huge margin? A content provider vs payment platform. Woah!

mattmanser 7y ago

Stewart Butterfield, Slack’s chief executive, said in an interview that it would take time for the market to understand his company since it had created a new category of software, unlike soda or cars We've had public business software companies for decades, they all created a new "category" of software, why does he think his is something new? Fundamentally speaking, how is Slack any different to the first email program? The first operating system? The first chat system? We've had this sort of software, and companies that sell it, for a very long time now.

anbotero 7y ago
Thanks! I mean it, THANK YOU! We were using HipChat at a previous company (2013, I think), and I never understood the switch to Slack. I was like: Wait, but what's the difference? Everybody knew about Slack, and no one about HipChat. I also don't think they introduced a new category of software, they just spent an absurd amount of additional money in marketing. That's it.
- phlakaton 7y ago
  My company switched from HipChat to Slack around 2015. I won't say hype didn't play into the decision, but IIRC there were two other motivations: 1) more reliable performance, 2) better integrations with Google Docs. At the time it was claimed that this was really a whole new way to organize data and work. In practicality, not that much changed from HipChat. Pinned items and the ability to rifle back through conversations saved my bacon a few times, but looking back on it, I don't think they outmatch properly-organized documentation and wikis.
  - anbotero 7y ago
    We were kind of heavily invested in Atlassian stack, which means we used Confluence a lot. We had a good system for creating and looking for documentation in our wiki system, so I hope that was not a selling point for Slack. Unfortunately we (Tech) never really knew why we switched. EDIT: Also, on the performance side, we were there for the beginning of both systems, and both had their good amount of issues initially. By the time we switched, I don't remember that many HipChat outages. I remember a lot of Slack outages starting up as well, and these days I have issues with Web interface connectivity at least once a week (native works).

Mindstormy 7y ago

I just wish they had not acquired Screen Hero. That was a beautiful standalone product that I wish I could still use.

crispyporkbites 7y ago
https://screenheroreplacement.com/ https://screenheroreplacement.com/
pcarolan 7y ago
Agreed. I'd be happy if they brought their video chat up to the standard Screen Hero set. It was one of the best pieces of software I remember in recent years.
jsherwani 7y ago
Screenhero cofounder here. I’m working on a successor to Screenhero. It’s currently in private beta: https://screen.so https://screen.so
- nodesocket 7y ago
  Interesting, so the acquisition agreement did not have a non-compete clause or golden handcuffs to Slack? If you don't mind me asking, how come you left Slack?
  - runako 7y ago
    (I'm not affiliated with either Slack or ScreenHero. But I loved ScreenHero.) It would be common for an acquisition agreement to shackle the founders with non-competes. It would also be common for those non-compete clauses to have limited durations. (I have seen 2-3 years in documents.) Slack bought ScreenHero over 4 years ago. The non-competes have likely expired.
Rapzid 7y ago
It's almost impressive how poorly Screen Hero was integrated into Slack(if at all?!).

skywhopper 7y ago

I get that they are the most obvious comparisons for recent IPOs, but it's disappointing to see Slack being conflated with Uber, Lyft, and We, none of which have a remote chance of ever making more than a razor-thin profit in their respective industries. Whereas Slack is a SaaS company, with the real potential (whether it's likely or not) to become highly profitable down the road.

s_Hogg 7y ago
If they can figure out how to get cash out of the gigantic amount of people who use slack without anyone paying for anything, it'll be phenomenal. Really hope the answer isn't ads!
- kaushikt 7y ago
  Slack doesn't seem to be the sort of company who will go with an Ad strategy for monetisation. A number of free users upgrade over time by upgrading their free account or by highly recommending Slack at their workplace.
  - dorian-graph 7y ago
    > Slack doesn't seem to be the sort of company who will go with an Ad strategy for monetisation. I feel like I've definitely heard that said a few times before.
elhudy 7y ago
Would you be able to expand on this perspective? Is there an example of a highly profitable SaaS company which offers a super simple subscription solution and doesn't rely on data-collection based advertising?
- paxys 7y ago
  Office 365, Salesforce, Ultimate Software, Adobe Creative Suite, GSuite, ADP, Box, DocuSign, Shopify, HubSpot, Zoom.

mytailorisrich 7y ago

Leaving aside the costs of their listing and related compensation (which are crazy high!) they made a $57m loss on $145m in revenue. Considering that they are a pure software company this is quite shocking and, to me, a sign not to touch them with a barge pole.

dpflan 7y ago
What revenue and loss numbers (relative %s) would not shock you?
- mytailorisrich 7y ago
  Anything less than a profit would shock me.
  - nkohari 7y ago
    Nowadays, it's very rare for a software company to be profitable when they IPO.
  - icedchai 7y ago
    Growth companies don't make a profit this early on. They put it all back into sales and marketing.
    - mytailorisrich 7y ago
      "Growth company" does not mean anything at all. If they were just putting it all back in sales and marketing they wouldn't have losses this high.
      - icedchai 7y ago
        Actually, it does. It means they're focused on revenue growth, not profitability, at this stage. Sales and marketing is very, very expensive. Have you worked at any SaaS companies with tons of inside sales?

t34543 7y ago

Good! Slack product managers are arrogant and the product is garbage. Lots of dark patterns.

elhudy 7y ago

Earnings run-up aside, it's only down 7% or $2 from this past Friday. That's a lot, but not in comparison to it's drop since IPO.

collyw 7y ago

Slack is overrated and over priced. Its not like messenger platforms are difficult. We have had msn messneger, yahoo messenger, whatsapp, rocketchat, facebook messneger, messenger, gchat, skype. Slack doesn't do anything particularly special.

kaushikt 7y ago
I disagree. Slack is not just about chat, they are about communication. We moved from Skype to Slack and it was incredibly different for us. Open channels meant - more transparency and anyone can join and contribute. All those hella bots are extremely handy. Overall, i would say we became more transparent, focussed and it made communication across a single company SIMPLE.
- slothtrop 7y ago
  I've heard it described as having IRC channels with skype capabilities
  - smileysteve 7y ago
    > with skype capabilities I'd be interested to know the stats on people using the video feature. My experience is that companies on slack primarily trust Hangouts and Zoom more than Slack for video conference.
- sha666sum 7y ago
  You just unironically argued that chat applications are not about communication, while Slack is. This makes no sense, as chatting is communication.
sha666sum 7y ago
MSN Messenger with Pidgin as the client is the best IM experience I've ever had, at least for one to one conversations. There's also something to be said for identifying contacts by their email addresses, since even when the IM inevitably dies, you have a way to reach these people.
7y ago

shay_ker 7y ago

It'd be really interesting for Slack to go the Atlassian or Microsoft route - acquire companies that solve adjacent problems, and then bundle the products to enterprise customers. The sales get harder to ignore, and it'd make Slack as a company even stickier. A couple things come to mind, like file sharing, calendar & room management, project management (around tasks, mainly), VoIP integration for sales calls, and maybe even gasp email.

davnicwil 7y ago
I think this is their strategy, and I think what's more they will want to solve these things vertically 'on top of' slack as plugins and apps. They started filling the pipeline for this a while ago by literally funding startups building such things. Acquiring some of the more popular ones is surely one of the goals, should this work out.

SeeDave 7y ago

I don't know enough about the Slack product or business model to comment authoritatively, but I'm really confused how they're losing money (and so much of it) and I sense a bit of "weirdness" around unit economics/user conversion/pricing. I've long thought that they've essentially built beautiful native/mobile/web clients for IRC-type chats and provide hosting/IRCOp services. Charging per-seat to enterprise seems like a very, very lucrative proposition for this type of product/service. There are a couple of eyebrow-raising financials: 1.) 100,000 paid users @ $6.67-$15/mo = $667k-1.5m MRR = $2m-$4.5m QRR 2.) 13m DAUs @ $0/mo (free tier) 3.) They lost $30m Q3 '18 4.) They lost $300m Q4 '19 due to 'stock based compensation' (which from my perspective should have been accrued Q4 '15 onwards) And for all the above... a $5billion unicorn valuation considering chat is a solved problem? Three major questions: 1. Has any other SaaS or company in human history ever had a 1:130 ratio of paid:free users with a hard cap of $15 on MRR? 2. Does quarterly losses between $30-$300m on $4.5m in revenue make sense considering the unit economics of cloud-based chats? 3. Does 100k paid subscribers seem a bit low for a 6 year old company? Really weird situation from my "knows enough to be dangerous" perspective and I'm all ears because from my perspective: 1.) There's really not enough innovation or a big enough TAM (considering competitors) to drive a unicorn valuation 2.) Which shouldn't matter because this is still a potentially lucrative market 3.) And yet... they're losing money hand-over fist Weird, weird weird. Feel free to share your thoughts, I just ask that you consider this message comes from a perspective of "confused guy trying to make sense of these crazy times"

jmull 7y ago
It's over 100000 paid customers, not paid users. E.g., your revenue number is way off... the article says their revenue for the quarter was $145 million. So I guess the average revenue per customer was approaching $1500 (well, unless I dropped a zero or three somewhere, which is possible). For Slack customers are organizations with potentially multiple users. Likewise, I think your 1:130 number is perhaps comparing apples to oranges.
- SeeDave 7y ago
  Thanks for the clarification! I was really scratching my head there based on the apples to oranges comparison of 'customers' to 'users' and you were right... my revenue estimate was indeed way off. Upgrading Slack from 'WTF' to "Let's see how this plays out and if it's priced accurately' because $30m in losses on $145m in revenue for cloud enterprise chat with a long-tail of free-tier users seems pretty promising! Thanks again!

pcarolan 7y ago

Slack's long-term value prop isn't chat, it's the platform. If you've used any of the great bot apps it hosts (PTO Ninja for example), it's easy to imagine a future where these kinds of apps replace whole swaths of bloated Saas-ware. I'm excited to see more of these and a competitive eco-system emerge within Slack the way Apple built the app store. Slack should invest heavily in building a platform for developers if it wants to grow, if it can pull this off it's going to look a lot more like Salesforce.com in 5 years where whole industries are built on its back. This is also the moat they have against MS Teams. Microsoft hasn't been as successful in building wildly productive developer ecosystems since the Windows 9X days.

JMTQp8lwXL 7y ago
Slack is sticky and their competitive advantage will be (1) making it stickier and (2) expand the enterprise features (e.g., make it easy to implement a company Data Storage policy, SSO integration, etc).
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brown9-2 7y ago
I think some people are wildly overestimating how much of management or timekeeping style apps people want to use inside a chat interface.

ilikehurdles 7y ago

Slack is back up at or above where it was at end of trading hours yesterday. It plunged after-market, opened at $26, and is back near $31 again now. NYT should just start using AI to write negative articles about tech companies when their stock swings more than 5% and put their journalists to better use.

tictoc 7y ago

Slack feels like employee surveillance beyond the chatting capabilities

merpnderp 7y ago
Are the alternatives any better? For instance is discord protecting your chats?
- gamegod 7y ago
  Mattermost, IRC, etc.
  - merpnderp 7y ago
    IRC is great, but I've never thought of it as protecting my privacy. It's definitely public and almost always logged by a myriad of bots if not the server.
    - icedchai 7y ago
      You can run your own server.
  - paxys 7y ago
    How are either of these more private than Slack? Whoever hosts the server can see whatever is on it.
mattmar96 7y ago
Agreed. Particularly the 'online/offline' status for users.

frequentnapper 7y ago

I don't understand. They are already back up. Is this even relevant anymore?

thorwasdfasdf 7y ago

I'm sorry but comparing it to Uber is highly misrepresentative. Uber has serious Cost structure that can not be removed: the cost of the driver is essential to the operation of it's busienss. Slack on the other hand is just a SaaS. Why are their costs so high? They said stock based compensation, but that doesn't begin to tell what it's for. Their user acquisition costs don't need to be really high, as far I know they started off with a great deal of virality and without too much paid acquisition. Between then and now, what happened? Naive question: Couldn't they simply cut most of their engineering/marketing and be wildly profitable? If I were to take a wild guess, I'd say it was they tried to grow too quickly and overspent on marketing, getting a barely decent ROI on ad spend.

paxys 7y ago
The stock has also bounced back already, so the headline is no longer accurate.
imglorp 7y ago
They have a billboard in Times Square right now, with some partner.
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freediver 7y ago

Seems even nytimes reporter is embarrassed by what slack actually is (chat app) calling it “business software”.

rainyMammoth 7y ago

One of the most useless product of our generation. The fact that they believe themselves that they make "work happen" is a level of self-koolaid-drinking that I rarely saw even in Silicon Valley. I'm happy that the stock is plummeting.

wetpaws 7y ago

Slack is essentially an IRC. IRC is pretty much dead nowadays, Slack is just the same concept but with a cloud integration and a modern client. It is neither new nor a particularly good implementation, discord is faster and better as a communication tool and possibly more clones are coming. The only lucky thing for Slack is that it was in the right time in the right place and introduced 30 year old concept to the corporate folks - but this advantage can go away anytime.

kerng 7y ago

New category of software? Such a statement shows how disconnected leaders can be from reality. Collaboration and communication software has existed basically since computer networks exist. More specifically icq, MSN, even Skype falls into the same category of software... They created a succesful startup - a lot of kudos for that. The company, as so many others this year, fails to proof itself in the public market.