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Slack Raises $160M Series E at $2.8B Valuation

88 points by cormacdriver 11y ago

dntrkv 11y ago
How did Slack blow up so quickly? I remember when I first read about it on TheVerge, that same morning the head of our sales team messages the CTO and suggests our company try it out. Next thing I know, every other company is using it. From my perspective, it went from nothing to huge success overnight.
- joshmlewis 11y ago
  This article was posted a couple months ago here and should answer your question: http://www.fastcompany.com/3041905/slacks-founder-on-how-they-became-a-1-billion-company-in-two-years http://www.fastcompany.com/3041905/slacks-founder-on-how-the...
  - deleted 11y ago
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- petercooper 11y ago
  I'd certainly find some analysis of this interesting to read. Campfire was popular throughout my more technical social groups up until a couple of years ago but never came close to the intensity around Slack. I imagine having a rather powerful free plan helped a lot, although Hipchat might disprove that.
  - ch4s3 11y ago
    Yeah, but the consensus seems to be that Atlassian ruined HipChat. I'm not sure if that's true, but everyone I know that switch lists that as a top reason.
    - georgespencer 11y ago
      Still using Hipchat. Seems fine.
      - jcruiz 11y ago
        Ever since Atlasssian started a HipChat marketing campaign in San Francisco. The servers have gone down a couple of times at least. Dunno if there is any correlation with that. But in general it works as expected.
    - optimusclimb 11y ago
      Been using HipChat for almost 3 years (so I believe, pre Atlassian, and post.) It seems well suited to purpose, and works fine for me. The only gripes I have are minor (for instance, their iOS offering has this infuriating behavior that it will notify you for direct messages, and throw up the old red dot on the app icon, but then provide no ability to see where the message came from when you open the app.) In light of how well it works, I am mystified as to how slack has managed to come in to the exact same space and carve out such a massive valuation. If there was ever an industry ripe for disruption, the "modern chat client with goofy icons that allows you to post gifs and search your chats without arcane IRC syntax" did not seem like one to me.
      - ch4s3 11y ago
        The search actually feels really nice. I'm mostly indifferent to them on the web, but Slack native and on iOS is a bit nicer.
  - jcdavis 11y ago
    > Campfire was popular throughout my more technical social groups up until a couple of years ago but never came close to the intensity around Slack Slack is a substantially better experience than Campfire
- gooseus 11y ago
  Yeah, I remember hearing about it, using it and loving it all in the span of a few hours /days. Then within a month every other team I talked to was also using it... blew HipChat right out of the water. I would attribute it to the amazing UX and well thought out feature-set. Integrations and per-channel notifications were both essential features and easy to find and figure out how to use. I also wouldn't discount the design, their choice of color palette and styled stripes with the # managed to set them apart while still looking professional. I don't know what contributed the most to my adoption personally, but whatever it is, they've got it.
  - bqe 11y ago
    Could you expand on why it's so much better than HipChat? I haven't used Slack yet, but I'm interested in trying it out. It sounds like it's the same thing as HipChat.
    - wlesieutre 11y ago
      I use both (HipChat with a small group for some side projects, Slack for my local maker space), so I can summarize my experiences with them: For the general functionality, they're the same thing. It's IRC rooms and direct messages with persistent state across devices and support for pasting images and files. HipChat does have a native Windows client, but it's months behind the OS X version, doesn't work with touchscreens and has known issues that take months to get fixed. I generally end up using a Chrome wrapper on their web client, which is how Slack does multiplatform anyway. Not a great solution (Chrome has a tendency to pop the software keyboard up all the time, even when you have one plugged in), but it works. If you're an OS X shop, the native clients may be a plus for HipChat. As far as functionality goes, one feature that (AFAIK) is missing from HipChat is the ability to log in to multiple organizations. If you use it at work and at home, you'll be logging out and in on every device every time you want to change modes. One of my side project HipChatters uses it for his day job and has this issue. Slack's client lets you sign in to multiple teams (haven't tried it, but I see it in the menu). I've spent much more time in HipChat, so I've experienced a lot more random issues there. Stuff like several hours of chat history being skipped when I scroll up (fixed by relaunch if you notice it happened), constant failures to reconnect after waking from sleep (again, fixed by relaunching), phone notifications popping up for every message even though you're currently in the chatroom on your phone having a conversation with someone, etc. It's possible that Slack has similar bugginess that I would have hit if I used it as much as I use HipChat, but I don't have enough time in it to say.
- brentm 11y ago
  It's just a great product that is viral by nature. The chat itself is nothing revolutionary but the ease of third party integrations into an everyday environment blows comparisons out of the water.
  - jgalt212 11y ago
    Yes, I find the seamless integration with Yo the gamechanger for me. https://slack.com/integrations https://slack.com/integrations All snark aside, the lion's share of the integrations seem geared toward technology workers.
- 31reasons 11y ago
  >>How did Slack blow up so quickly? I am pretty sure even founders don't know. It just happens with a combination of lot of luck and a very good product.
- pbreit 11y ago
  I think there's a bit of a gap between perceived and actual size. While 750k users is certainly impressive, it's really quite small in the scheme of things.
deleted 11y ago
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jayhuang 11y ago
This is pretty surreal for me. I tried out Slack briefly when they first allowed the public to request accounts. Made a mental note "cool", and moved on. The next year or so I started to see a lot more teams/companies that were getting on the Slack hype-train, and now this. Huge props to the team on this valuation but I'm still quite confused.
- fweespeech 11y ago
  Yeah, I agree completely. I really don't see the value compared to the alternatives.
  - sososoko 11y ago
    such as?
    - bigdubs 11y ago
      IRC, FlowDock, HipChat, the list goes on.
    - fweespeech 11y ago
      I've tried FlowDock, HipChat, IRC, Slack, and like 5 others I can't remember the name of. I always end up going back to IRC.
  - jcruiz 11y ago
    Agree, it's pretty odd business model... "a cool chat"
  - GFischer 11y ago
    "No wireless. Less space than a nomad. Lame" http://en.wikiquote.org/wiki/IPod http://en.wikiquote.org/wiki/IPod
- jbhatab 11y ago
  I haven't used a tool like Slack that I have so strongly integrated into my tech ecosystem. It seamlessly fit in with everything I use and is always up on my computer.
georgespencer 11y ago
Good for them. I don't use the product but they seem like great folks.
foolfoolz 11y ago
who would have thought you could make a chat room in 2013 and become a billionaire
- thebouv 11y ago
  What is old is new again?
- logicallee 11y ago
  snapchat, whatsapp...
- zeeshanm 11y ago
  IMO, the cool thing about slack is integration with other services for "real-time" notifications. At my previous job, we had this tool built internally in irc chat room to notify whenever client connected/disconnected a session, breached some risk limit, etc. It was super helpful to be on top of stuff in real-time. And once you have something like this it's hard to let go of it.
- codecamper 11y ago
  icq
fra 11y ago
I don't understand why so many businesses use a product with such a weak SLA as their main mode of communication. Both Hipchat and Slack have terrible uptime guarantees, and you should stay away from them.
- tim333 11y ago
  Slack's uptime's been better than 99.995%. Communication failures due to some guy not reading your email are probably much higher. I don't think the SLAs are a big issue. https://status.slack.com/calendar https://status.slack.com/calendar
- kazazes 11y ago
  I have four direct channels of communication with my team. Email, phone/SMS/iMessage, gchat, and Slack. Their team SLA guarantees 99.99% uptime, and their status site [1] indicates 99.999% uptime. Everyone will always be reachable with effort, even in a group setting. Slack isn't an infrastructure critical component (such as Github or AWS) where 0.001% downtime would effect my business. Slack's utility far outweighs the prospect of a few hours (max) of downtime a month. [1] https://status.slack.com/calendar https://status.slack.com/calendar
- pbreit 11y ago
  Oh, c'mon. Email is hardly bulletproof and it's fine. SLAs are almost worthless. You really think a few bucks to a handful of whiners is going to change a company's uptime approach? No way. SLAs are for old school, fat cows who are always looking for someone to chew out.
czbond 11y ago
A series E seems fairly late stage of a round for how young the company is...
- deleted 11y ago
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- richardlblair 11y ago
  As it says in the article, this was about taking money while the VC market is hot. It's easy to get massive amounts of cash at crazy valuations right now, so companies are raising what they can and putting it in the bank for a rainy day.... or when bubbles burst.
sparaker 11y ago
A pretty impressive product, good going!
mherdeg 11y ago
A friend shared the thought that Slack is a little bit of a scary company to invest in because it was very easy to adopt. "We had no trouble importing our historical message archive and just moving over to this new chat system very quickly. I worry about the long-term stability of this company because if something better comes along, it will be equally fast to switch and never go back," he said. I wonder about this. Will people move to the new, better thing and ditch their existing product? Is that an existential threat to Slack? I do know that the product IS pretty great and "team chat with searchable archives" has been tough to get right for a long time. (Internal IRC servers, IRCCloud, Campfire, Hipchat). But being technically excellent and fun to use is no guarantee of success (soft spot in my heart for Zephyr and platforms like Zulip).
- temuze 11y ago
  I agree. Slack needs to hustle right now and increase the barrier to entry. Not sure how - integrations help. Maybe asynchronous communication as well?
  - 31reasons 11y ago
    Some kind of machine learning based answering system that look like Stack Overflow but answers come from analyzing chats!
- steamy 11y ago
  I wonder about this. Will people move to the new, better thing and ditch their existing product? Is that an existential threat to Slack? Slack gotta make switching costs in terms of inconvenience at least bit high for them to jump ship otherwise they'd face a very unpleasant outcome should a new hot player/product hits the market
- pbreit 11y ago
  That's about as short-sighted as it gets.
SandB0x 11y ago
Do platforms like Slack really offer a great benefit to a business? Maybe I'm being cynical, but it seems that if you had a dysfunctional organisation then this is not a silver bullet, and if you had a well functioning organisation you would manage just fine with old fashioned tools like email and Dropbox. > Support for private groups and 1:1 direct messaging gives you complete flexibility. Private things stay private, so just the right people see them. If you haven't managed to work out how to implement this kind of communication with email then aren't there bigger problems at your workplace? There are other things that bother me, such as > The “ambient awareness” that comes from increased transparency cuts down on the need for meetings. > “We no longer wonder what’s happening on the front line, we know. It makes our relationships deeper because we discover things about each other and we're in touch with exactly what’s happening.” So I now need to scroll through screens of idle chatter to try and figure out what some other team is doing? Is this constantly pinging me while I'm trying to work? Will every conversation descend into bikeshedding as every man and his dog wants to offer his opinion on the new logo or product feature? I've just never come across Slack in London yet, so maybe I'm yet to understand what it's like in practice.
- dpritchett 11y ago
  It's not a silver bullet but it's definitely helped our company. We are a mostly-remote Rails-focused company with tens of people throughout the Western hemisphere. I've found my communications with clients and teammates got a lot better once we added Slack to the Google Apps + Skype setup we already had in place.
- deleted 11y ago
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- rabino 11y ago
  We have a pretty functional distributed organization and Slack has been a godsend for us. We totally love it.
- toomuchtodo 11y ago
  Slack has been hugely helpful in the 100% remote org I work for. If you want me to go into detail, my contact info is in my profile. In short, I live in Slack now and love it. Its an augmented reality I can share with my team, and the closest I'm getting to shared mind state without an implant in my head.
bhc3 11y ago
I've not used Slack. How does it differ from Yammer and Jive? I ask, because those two work collaboration platforms have their own valuations. Yammer was bought for $1 billion by Microsoft. Jive Software's current market cap is $404 million. I'm curious what the key differences are that drive a $2.8 billion valuation relative to the lower valuations of those two companies.
nnoitra 11y ago
How are companies like this valued so much, it's just a fancy chat computer program. I don't understand the economics behind this.
- espitia 11y ago
  Like this: https://signalvnoise.com/posts/1941-press-release-37signals-valuation-tops-100-billion-after-bold-vc-investment https://signalvnoise.com/posts/1941-press-release-37signals-... On a serious note: Remember it is a private financing round. VCs and parties involved calculate based on current metrics future value of company. So, although it may or may not be accurate, it is literally putting a value based on other metrics. For all we know, it could all collapse in a year from now or a lion's share of businesses around the world will be using Slack as their main comms. platform in 10 and thus $2.6B wouldn't sound so bad.
feverishaaron 11y ago
For those that are confused about the value of Slack – It's not just about text chat. It's about comprehensive search and combatting organizational forgetfulness and knowledge drain. If we put it on Slack, it's archived "forever" and a team member a few years from now can start with a Slack search before re-inventing the wheel. This is especially evident with the integrations. If just the relevant slice of data is fed into Slack, it's easier to digest than running a full report in another tool. And it's now part of the corporate history. So finding patterns of endemic problems becomes much easier.
- napoleond 11y ago
  > It's about comprehensive search and combatting organizational forgetfulness and knowledge drain. They are far from achieving that vision. I agree that company-searchable chat (and email) is valuable, but I doubt it will ever replace proper internal documentation--any other approach is far too noisy, and without a lot of context it's impossible to know if correspondence about an issue from two years ago is still relevant today.
  - feverishaaron 11y ago
    Ah, but it searches inside files and any connected system as well. So If I search for "Arc Code:500" it will show me any chats, any github pull requests and any Google docs that mention that phrase.
- AndrewKemendo 11y ago
  If we put it on Slack, it's archived "forever" and a team member a few years from now can start with a Slack search before re-inventing the wheel. Heard that one before. If Slack gets eaten by Google etc...that might not be the case. I am preferential to self hosted solutions.
  - bsbechtel 11y ago
    To play devil's advocate, your self hosted server could go up in flames one day too...or it gets hacked. Obviously there's risks with any solution. As to the magnitude of each risk, it's hard to say, but I'd agree with you that getting bought out by someone else and your data being lost or compromised in the process is a pretty big one.
RaphiePS 11y ago
My favorite thing about Slack is how they've thought of all the little things. My go-to example is that when they send you a notification email, it includes links to silence further emails with a single click. Obviously, this isn't a big "feature." It's not going to show up on their marketing materials. Nobody will ever say "hey, you should try out Slack because they let you silence emails." But it's this sort of UX philosophy, of anticipating and cleverly solving tiny little annoyances, that make it a really pleasurable product to use.
- nostrademons 11y ago
  Isn't this a legal requirement? http://en.wikipedia.org/wiki/CAN-SPAM_Act_of_2003#Unsubscribe_compliance http://en.wikipedia.org/wiki/CAN-SPAM_Act_of_2003#Unsubscrib... Technically the law is only that you have to honor them within 10 days, but I've seen a bunch of sites with one-click unsubscribe nowadays.
  - seanlinehan 11y ago
    It is a legal requirement to allow users to unsubscribe from your email newsletter, yes. What Slack does that is really cool is at the bottom of their notifications email they have: Snooze these notifications for: an hour, eight hours, a day, three days, or the next week. Or, turn email notifications off. For more detailed preferences, see your account page. "hour", "eight hours", "three days", "next week" are all links that silence the notifications for discrete periods of time. Pretty neat.
  - RaphiePS 11y ago
    It's not just unsubscribe. They let you turn off emails for an hour, a day, etc. Really convenient if you're generally interested in notifications, but just need a little break. Another example: when you change your password, Slack will send you a special link to sign-in on mobile so you don't have to type out your new password on a tiny keyboard.
    - jffry 11y ago
      Sadly (though necessarily) that email-a-link thing doesn't work if you turn on 2-factor auth.
mberning 11y ago
It's a great product. Really enjoy using it. But with this much attention and hype it makes me worried about who is going to come in and buy them and ruin it.
karangoeluw 11y ago
For those wondering how/why Slack took off so fast, read this: https://qz.com/335321/slack-is-everywhere-growing-fast-and-still-works-great-heres-how-they-did-it/ https://qz.com/335321/slack-is-everywhere-growing-fast-and-s...
joelrunyon 11y ago
What are they planning to do with the 160M? Didn't they just raise 120M in October?
jewel 11y ago
Can someone with more experience comment on the terms of the investment itself? Why would people invest in this company if they haven't even begun to spend the $120M of their series D money yet? For those of us outside of Silicon Valley who don't have the same funding climate, what's it like?
- bsbechtel 11y ago
  There's fear of missing out for the investors...every investor in Silicon Valley wants to get in on the next Facebook or Google, and the investing environment there is intensely competitive. For the entrepreneurs though, I am left scratching my head as to why they would accept this money, given the massive amount of risk and responsibility you take on when you accept this money. If you don't need the money, why would you accept it when it has such a high price?
  - jewel 11y ago
    I imagine that Slack's founder, who was formerly co-founder of Flickr, is experienced enough that he could avoid a lot of the pitfalls of raising too much money such as losing control of the board. Since this isn't to add runway, it doesn't make much sense unless he's not planning on selling to another company anytime soon. By my estimation, Slack is not too far from being profitable (or able to get that way), with ARR somewhere between $15M - $30M and only 125 employees. With this big war chest Slack could buy or build a few other collaboration tools. It'd be great to have a competitor to Google Apps at a similar price point.
  - ghshephard 11y ago
    Why do you think there is any more risk/responsibility in raising money in an E-Round versus an IPO?
    - bsbechtel 11y ago
      Well, first it depends on the valuation, but that goes for any equity financing round. But also, it depends on the type of investor you are taking on, and their expectations for returns to fit in their profile. Private investors tend to invest in higher risk/reward equities, meaning you need to achieve higher growth rates to satisfy them. I am guessing many of the companies raising massive private rounds now need to still grow significantly before a liquidity event could justify the investor's investment (once you go public, the pressure isn't as high to achieve 2-3x growth year over year). Publicly traded technology stocks are expected to grow at most 20-30%/year, without further diluting the equity pool. Every new private financing round makes the pool a little smaller, meaning you still need to grow even faster to achieve the returns required by your investors. In addition, once you IPO, you have access to many other forms of financing that are significantly cheaper than selling equity.
jalonso510 11y ago
This is a case where I see the outrageously high valuation and really do think it's reasonable. They're allegedly adding $1m in annually recurring revenue every 11 days, which is just phenomenal for this young a product. They'll be in range for an IPO in less than 2 years if they want. Slack has just really nailed it and is moving really quickly.
foobarqux 11y ago
Did previous investors participate in this round? I can't tell from the wording in the article.
chatmasta 11y ago
Ignoring the question of "why are they valued so much," I have a more immediate question... what do they need all this money for???? Capital costs are low and slack is probably cash flow positive. Why are they raising a Series E for this much money? That's enough to pay for thousands of employees. They must have something up their sleeve beyond just chat. My theory is investment is flowing into slack because enterprise was so quick to adopt them, and slack now has its foot in the door at many of the largest companies. This puts them in a position to compete with Dropbox, Box, and other enterprise-focused companies. Slack is playing in a field much bigger than corporate chat. They are a new entrant into the enterprise platform wars and seemingly more agile than Dropbox et al. I imagine investors are putting money into this advantage position more than the slack product itself.
asumanth 11y ago
Huge props to the Team at Slack. They've made a great product. My personal opinion is, tools like slack and others can get quite distracting with the constant notifications. I foresee in the future where startups are doing products that reduce/manage the "noise".

88 points by cormacdriver 11y ago

How did Slack blow up so quickly? I remember when I first read about it on TheVerge, that same morning the head of our sales team messages the CTO and suggests our company try it out. Next thing I know, every other company is using it. From my perspective, it went from nothing to huge success overnight.

joshmlewis 11y ago
This article was posted a couple months ago here and should answer your question: http://www.fastcompany.com/3041905/slacks-founder-on-how-they-became-a-1-billion-company-in-two-years http://www.fastcompany.com/3041905/slacks-founder-on-how-the...
- deleted 11y ago
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petercooper 11y ago
I'd certainly find some analysis of this interesting to read. Campfire was popular throughout my more technical social groups up until a couple of years ago but never came close to the intensity around Slack. I imagine having a rather powerful free plan helped a lot, although Hipchat might disprove that.
- ch4s3 11y ago
  Yeah, but the consensus seems to be that Atlassian ruined HipChat. I'm not sure if that's true, but everyone I know that switch lists that as a top reason.
  - georgespencer 11y ago
    Still using Hipchat. Seems fine.
    - jcruiz 11y ago
      Ever since Atlasssian started a HipChat marketing campaign in San Francisco. The servers have gone down a couple of times at least. Dunno if there is any correlation with that. But in general it works as expected.
  - optimusclimb 11y ago
    Been using HipChat for almost 3 years (so I believe, pre Atlassian, and post.) It seems well suited to purpose, and works fine for me. The only gripes I have are minor (for instance, their iOS offering has this infuriating behavior that it will notify you for direct messages, and throw up the old red dot on the app icon, but then provide no ability to see where the message came from when you open the app.) In light of how well it works, I am mystified as to how slack has managed to come in to the exact same space and carve out such a massive valuation. If there was ever an industry ripe for disruption, the "modern chat client with goofy icons that allows you to post gifs and search your chats without arcane IRC syntax" did not seem like one to me.
    - ch4s3 11y ago
      The search actually feels really nice. I'm mostly indifferent to them on the web, but Slack native and on iOS is a bit nicer.
- jcdavis 11y ago
  > Campfire was popular throughout my more technical social groups up until a couple of years ago but never came close to the intensity around Slack Slack is a substantially better experience than Campfire
gooseus 11y ago
Yeah, I remember hearing about it, using it and loving it all in the span of a few hours /days. Then within a month every other team I talked to was also using it... blew HipChat right out of the water. I would attribute it to the amazing UX and well thought out feature-set. Integrations and per-channel notifications were both essential features and easy to find and figure out how to use. I also wouldn't discount the design, their choice of color palette and styled stripes with the # managed to set them apart while still looking professional. I don't know what contributed the most to my adoption personally, but whatever it is, they've got it.
- bqe 11y ago
  Could you expand on why it's so much better than HipChat? I haven't used Slack yet, but I'm interested in trying it out. It sounds like it's the same thing as HipChat.
  - wlesieutre 11y ago
    I use both (HipChat with a small group for some side projects, Slack for my local maker space), so I can summarize my experiences with them: For the general functionality, they're the same thing. It's IRC rooms and direct messages with persistent state across devices and support for pasting images and files. HipChat does have a native Windows client, but it's months behind the OS X version, doesn't work with touchscreens and has known issues that take months to get fixed. I generally end up using a Chrome wrapper on their web client, which is how Slack does multiplatform anyway. Not a great solution (Chrome has a tendency to pop the software keyboard up all the time, even when you have one plugged in), but it works. If you're an OS X shop, the native clients may be a plus for HipChat. As far as functionality goes, one feature that (AFAIK) is missing from HipChat is the ability to log in to multiple organizations. If you use it at work and at home, you'll be logging out and in on every device every time you want to change modes. One of my side project HipChatters uses it for his day job and has this issue. Slack's client lets you sign in to multiple teams (haven't tried it, but I see it in the menu). I've spent much more time in HipChat, so I've experienced a lot more random issues there. Stuff like several hours of chat history being skipped when I scroll up (fixed by relaunch if you notice it happened), constant failures to reconnect after waking from sleep (again, fixed by relaunching), phone notifications popping up for every message even though you're currently in the chatroom on your phone having a conversation with someone, etc. It's possible that Slack has similar bugginess that I would have hit if I used it as much as I use HipChat, but I don't have enough time in it to say.
brentm 11y ago
It's just a great product that is viral by nature. The chat itself is nothing revolutionary but the ease of third party integrations into an everyday environment blows comparisons out of the water.
- jgalt212 11y ago
  Yes, I find the seamless integration with Yo the gamechanger for me. https://slack.com/integrations https://slack.com/integrations All snark aside, the lion's share of the integrations seem geared toward technology workers.
31reasons 11y ago
>>How did Slack blow up so quickly? I am pretty sure even founders don't know. It just happens with a combination of lot of luck and a very good product.
pbreit 11y ago
I think there's a bit of a gap between perceived and actual size. While 750k users is certainly impressive, it's really quite small in the scheme of things.

deleted 11y ago

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jayhuang 11y ago

This is pretty surreal for me. I tried out Slack briefly when they first allowed the public to request accounts. Made a mental note "cool", and moved on. The next year or so I started to see a lot more teams/companies that were getting on the Slack hype-train, and now this. Huge props to the team on this valuation but I'm still quite confused.

fweespeech 11y ago
Yeah, I agree completely. I really don't see the value compared to the alternatives.
- sososoko 11y ago
  such as?
  - bigdubs 11y ago
    IRC, FlowDock, HipChat, the list goes on.
  - fweespeech 11y ago
    I've tried FlowDock, HipChat, IRC, Slack, and like 5 others I can't remember the name of. I always end up going back to IRC.
- jcruiz 11y ago
  Agree, it's pretty odd business model... "a cool chat"
- GFischer 11y ago
  "No wireless. Less space than a nomad. Lame" http://en.wikiquote.org/wiki/IPod http://en.wikiquote.org/wiki/IPod
jbhatab 11y ago
I haven't used a tool like Slack that I have so strongly integrated into my tech ecosystem. It seamlessly fit in with everything I use and is always up on my computer.

georgespencer 11y ago

Good for them. I don't use the product but they seem like great folks.

foolfoolz 11y ago

who would have thought you could make a chat room in 2013 and become a billionaire

thebouv 11y ago
What is old is new again?
logicallee 11y ago
snapchat, whatsapp...
zeeshanm 11y ago
IMO, the cool thing about slack is integration with other services for "real-time" notifications. At my previous job, we had this tool built internally in irc chat room to notify whenever client connected/disconnected a session, breached some risk limit, etc. It was super helpful to be on top of stuff in real-time. And once you have something like this it's hard to let go of it.
codecamper 11y ago
icq

fra 11y ago

I don't understand why so many businesses use a product with such a weak SLA as their main mode of communication. Both Hipchat and Slack have terrible uptime guarantees, and you should stay away from them.

tim333 11y ago
Slack's uptime's been better than 99.995%. Communication failures due to some guy not reading your email are probably much higher. I don't think the SLAs are a big issue. https://status.slack.com/calendar https://status.slack.com/calendar
kazazes 11y ago
I have four direct channels of communication with my team. Email, phone/SMS/iMessage, gchat, and Slack. Their team SLA guarantees 99.99% uptime, and their status site [1] indicates 99.999% uptime. Everyone will always be reachable with effort, even in a group setting. Slack isn't an infrastructure critical component (such as Github or AWS) where 0.001% downtime would effect my business. Slack's utility far outweighs the prospect of a few hours (max) of downtime a month. [1] https://status.slack.com/calendar https://status.slack.com/calendar
pbreit 11y ago
Oh, c'mon. Email is hardly bulletproof and it's fine. SLAs are almost worthless. You really think a few bucks to a handful of whiners is going to change a company's uptime approach? No way. SLAs are for old school, fat cows who are always looking for someone to chew out.

czbond 11y ago

A series E seems fairly late stage of a round for how young the company is...

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richardlblair 11y ago
As it says in the article, this was about taking money while the VC market is hot. It's easy to get massive amounts of cash at crazy valuations right now, so companies are raising what they can and putting it in the bank for a rainy day.... or when bubbles burst.

sparaker 11y ago

A pretty impressive product, good going!

mherdeg 11y ago

A friend shared the thought that Slack is a little bit of a scary company to invest in because it was very easy to adopt. "We had no trouble importing our historical message archive and just moving over to this new chat system very quickly. I worry about the long-term stability of this company because if something better comes along, it will be equally fast to switch and never go back," he said. I wonder about this. Will people move to the new, better thing and ditch their existing product? Is that an existential threat to Slack? I do know that the product IS pretty great and "team chat with searchable archives" has been tough to get right for a long time. (Internal IRC servers, IRCCloud, Campfire, Hipchat). But being technically excellent and fun to use is no guarantee of success (soft spot in my heart for Zephyr and platforms like Zulip).

temuze 11y ago
I agree. Slack needs to hustle right now and increase the barrier to entry. Not sure how - integrations help. Maybe asynchronous communication as well?
- 31reasons 11y ago
  Some kind of machine learning based answering system that look like Stack Overflow but answers come from analyzing chats!
steamy 11y ago
I wonder about this. Will people move to the new, better thing and ditch their existing product? Is that an existential threat to Slack? Slack gotta make switching costs in terms of inconvenience at least bit high for them to jump ship otherwise they'd face a very unpleasant outcome should a new hot player/product hits the market
pbreit 11y ago
That's about as short-sighted as it gets.

SandB0x 11y ago

Do platforms like Slack really offer a great benefit to a business? Maybe I'm being cynical, but it seems that if you had a dysfunctional organisation then this is not a silver bullet, and if you had a well functioning organisation you would manage just fine with old fashioned tools like email and Dropbox. > Support for private groups and 1:1 direct messaging gives you complete flexibility. Private things stay private, so just the right people see them. If you haven't managed to work out how to implement this kind of communication with email then aren't there bigger problems at your workplace? There are other things that bother me, such as > The “ambient awareness” that comes from increased transparency cuts down on the need for meetings. > “We no longer wonder what’s happening on the front line, we know. It makes our relationships deeper because we discover things about each other and we're in touch with exactly what’s happening.” So I now need to scroll through screens of idle chatter to try and figure out what some other team is doing? Is this constantly pinging me while I'm trying to work? Will every conversation descend into bikeshedding as every man and his dog wants to offer his opinion on the new logo or product feature? I've just never come across Slack in London yet, so maybe I'm yet to understand what it's like in practice.

dpritchett 11y ago
It's not a silver bullet but it's definitely helped our company. We are a mostly-remote Rails-focused company with tens of people throughout the Western hemisphere. I've found my communications with clients and teammates got a lot better once we added Slack to the Google Apps + Skype setup we already had in place.
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rabino 11y ago
We have a pretty functional distributed organization and Slack has been a godsend for us. We totally love it.
toomuchtodo 11y ago
Slack has been hugely helpful in the 100% remote org I work for. If you want me to go into detail, my contact info is in my profile. In short, I live in Slack now and love it. Its an augmented reality I can share with my team, and the closest I'm getting to shared mind state without an implant in my head.

bhc3 11y ago

I've not used Slack. How does it differ from Yammer and Jive? I ask, because those two work collaboration platforms have their own valuations. Yammer was bought for $1 billion by Microsoft. Jive Software's current market cap is $404 million. I'm curious what the key differences are that drive a $2.8 billion valuation relative to the lower valuations of those two companies.

nnoitra 11y ago

How are companies like this valued so much, it's just a fancy chat computer program. I don't understand the economics behind this.

espitia 11y ago
Like this: https://signalvnoise.com/posts/1941-press-release-37signals-valuation-tops-100-billion-after-bold-vc-investment https://signalvnoise.com/posts/1941-press-release-37signals-... On a serious note: Remember it is a private financing round. VCs and parties involved calculate based on current metrics future value of company. So, although it may or may not be accurate, it is literally putting a value based on other metrics. For all we know, it could all collapse in a year from now or a lion's share of businesses around the world will be using Slack as their main comms. platform in 10 and thus $2.6B wouldn't sound so bad.

feverishaaron 11y ago

For those that are confused about the value of Slack – It's not just about text chat. It's about comprehensive search and combatting organizational forgetfulness and knowledge drain. If we put it on Slack, it's archived "forever" and a team member a few years from now can start with a Slack search before re-inventing the wheel. This is especially evident with the integrations. If just the relevant slice of data is fed into Slack, it's easier to digest than running a full report in another tool. And it's now part of the corporate history. So finding patterns of endemic problems becomes much easier.

napoleond 11y ago
> It's about comprehensive search and combatting organizational forgetfulness and knowledge drain. They are far from achieving that vision. I agree that company-searchable chat (and email) is valuable, but I doubt it will ever replace proper internal documentation--any other approach is far too noisy, and without a lot of context it's impossible to know if correspondence about an issue from two years ago is still relevant today.
- feverishaaron 11y ago
  Ah, but it searches inside files and any connected system as well. So If I search for "Arc Code:500" it will show me any chats, any github pull requests and any Google docs that mention that phrase.
AndrewKemendo 11y ago
If we put it on Slack, it's archived "forever" and a team member a few years from now can start with a Slack search before re-inventing the wheel. Heard that one before. If Slack gets eaten by Google etc...that might not be the case. I am preferential to self hosted solutions.
- bsbechtel 11y ago
  To play devil's advocate, your self hosted server could go up in flames one day too...or it gets hacked. Obviously there's risks with any solution. As to the magnitude of each risk, it's hard to say, but I'd agree with you that getting bought out by someone else and your data being lost or compromised in the process is a pretty big one.

RaphiePS 11y ago

My favorite thing about Slack is how they've thought of all the little things. My go-to example is that when they send you a notification email, it includes links to silence further emails with a single click. Obviously, this isn't a big "feature." It's not going to show up on their marketing materials. Nobody will ever say "hey, you should try out Slack because they let you silence emails." But it's this sort of UX philosophy, of anticipating and cleverly solving tiny little annoyances, that make it a really pleasurable product to use.

nostrademons 11y ago
Isn't this a legal requirement? http://en.wikipedia.org/wiki/CAN-SPAM_Act_of_2003#Unsubscribe_compliance http://en.wikipedia.org/wiki/CAN-SPAM_Act_of_2003#Unsubscrib... Technically the law is only that you have to honor them within 10 days, but I've seen a bunch of sites with one-click unsubscribe nowadays.
- seanlinehan 11y ago
  It is a legal requirement to allow users to unsubscribe from your email newsletter, yes. What Slack does that is really cool is at the bottom of their notifications email they have: Snooze these notifications for: an hour, eight hours, a day, three days, or the next week. Or, turn email notifications off. For more detailed preferences, see your account page. "hour", "eight hours", "three days", "next week" are all links that silence the notifications for discrete periods of time. Pretty neat.
- RaphiePS 11y ago
  It's not just unsubscribe. They let you turn off emails for an hour, a day, etc. Really convenient if you're generally interested in notifications, but just need a little break. Another example: when you change your password, Slack will send you a special link to sign-in on mobile so you don't have to type out your new password on a tiny keyboard.
  - jffry 11y ago
    Sadly (though necessarily) that email-a-link thing doesn't work if you turn on 2-factor auth.

mberning 11y ago

It's a great product. Really enjoy using it. But with this much attention and hype it makes me worried about who is going to come in and buy them and ruin it.

karangoeluw 11y ago

For those wondering how/why Slack took off so fast, read this: https://qz.com/335321/slack-is-everywhere-growing-fast-and-still-works-great-heres-how-they-did-it/ https://qz.com/335321/slack-is-everywhere-growing-fast-and-s...

joelrunyon 11y ago

What are they planning to do with the 160M? Didn't they just raise 120M in October?

jewel 11y ago

Can someone with more experience comment on the terms of the investment itself? Why would people invest in this company if they haven't even begun to spend the $120M of their series D money yet? For those of us outside of Silicon Valley who don't have the same funding climate, what's it like?

bsbechtel 11y ago
There's fear of missing out for the investors...every investor in Silicon Valley wants to get in on the next Facebook or Google, and the investing environment there is intensely competitive. For the entrepreneurs though, I am left scratching my head as to why they would accept this money, given the massive amount of risk and responsibility you take on when you accept this money. If you don't need the money, why would you accept it when it has such a high price?
- jewel 11y ago
  I imagine that Slack's founder, who was formerly co-founder of Flickr, is experienced enough that he could avoid a lot of the pitfalls of raising too much money such as losing control of the board. Since this isn't to add runway, it doesn't make much sense unless he's not planning on selling to another company anytime soon. By my estimation, Slack is not too far from being profitable (or able to get that way), with ARR somewhere between $15M - $30M and only 125 employees. With this big war chest Slack could buy or build a few other collaboration tools. It'd be great to have a competitor to Google Apps at a similar price point.
- ghshephard 11y ago
  Why do you think there is any more risk/responsibility in raising money in an E-Round versus an IPO?
  - bsbechtel 11y ago
    Well, first it depends on the valuation, but that goes for any equity financing round. But also, it depends on the type of investor you are taking on, and their expectations for returns to fit in their profile. Private investors tend to invest in higher risk/reward equities, meaning you need to achieve higher growth rates to satisfy them. I am guessing many of the companies raising massive private rounds now need to still grow significantly before a liquidity event could justify the investor's investment (once you go public, the pressure isn't as high to achieve 2-3x growth year over year). Publicly traded technology stocks are expected to grow at most 20-30%/year, without further diluting the equity pool. Every new private financing round makes the pool a little smaller, meaning you still need to grow even faster to achieve the returns required by your investors. In addition, once you IPO, you have access to many other forms of financing that are significantly cheaper than selling equity.

jalonso510 11y ago

This is a case where I see the outrageously high valuation and really do think it's reasonable. They're allegedly adding $1m in annually recurring revenue every 11 days, which is just phenomenal for this young a product. They'll be in range for an IPO in less than 2 years if they want. Slack has just really nailed it and is moving really quickly.

foobarqux 11y ago

Did previous investors participate in this round? I can't tell from the wording in the article.

chatmasta 11y ago

Ignoring the question of "why are they valued so much," I have a more immediate question... what do they need all this money for???? Capital costs are low and slack is probably cash flow positive. Why are they raising a Series E for this much money? That's enough to pay for thousands of employees. They must have something up their sleeve beyond just chat. My theory is investment is flowing into slack because enterprise was so quick to adopt them, and slack now has its foot in the door at many of the largest companies. This puts them in a position to compete with Dropbox, Box, and other enterprise-focused companies. Slack is playing in a field much bigger than corporate chat. They are a new entrant into the enterprise platform wars and seemingly more agile than Dropbox et al. I imagine investors are putting money into this advantage position more than the slack product itself.

asumanth 11y ago

Huge props to the Team at Slack. They've made a great product. My personal opinion is, tools like slack and others can get quite distracting with the constant notifications. I foresee in the future where startups are doing products that reduce/manage the "noise".