4 ms·

After seeing what happened to Flickr (both the product and the team) after Yahoo bought it, combined with Slack's crazy growth, makes me think a sale is unlikel

After seeing what happened to Flickr (both the product and the team) after Yahoo bought it, combined with Slack's crazy growth, makes me think a sale is unlikely. Especially to a big company like MS.

ianstallings 12y ago
I disagree about the MS part. I think Slack would probably do very well there. The enterprise market is where Slack is going, and MS is fully entrenched there. They also have a very developer-centric culture that some people enjoy.
- hurin 12y ago
  I don't necessarily see why MS would purchase Slack instead of delivering their own solution. Unlike Skype it's not really key to have a large-user base on the service, all that matters is that your entire business is running the same solution - and Microsoft already makes and sells other related enterprise tools which gives them an advantage both in terms of sales and integration. Perhaps it's even more surprising that they haven't already delivered a competing solution.
  - npkarnik 12y ago
    Yammer is a team communication solution Microsoft already bought, but is way worse at synchronous communication (chat) than Slack, but also better at at asynchronous communication (threaded conversation, like on Facebook). Microsoft would want to buy Slack for the same reason they spent $$$ on best-in-class products like Yammer, Sunrise, rebranding Acompli as Outlook. Slack's revenue is incredible for a startup, but a drop in the bucket for MSFT (for now). More immediately, Slack represents an entry point for Microsoft to upsell Slack's customers to other Office365 services and Azure services.
npkarnik 12y ago
I didn't realize that the Slack CEO was also the Flickr founder, so you might be right in that Slack just isn't for sale to a megacorp. But Microsoft is the most likely buyer, it's been on a spree with integrating best-in-class enterprise products/productivity tools into Office 365 (Sunrise, Accompli, previously Yammer). Slack fits into that mold, though the sale price would probably be orders of magnitude higher than those acquisitions (likely upwards of $10 billion, possibly much more). At that price tag, it might be untenable. Not sure what Slack's medium-longer terms goals are, honestly. Their valuation is so high that only megacorps can afford them, but there's still enough risk that public markets might be skeptical (their revenue growth is astronomical, but they haven't been generating revenue for THAT long). In the interview, Stewart mentioned market saturation eventually limiting their crazy growth numbers, but I'd imagine they have a ways to go, given that the total enterprise market has to be well more than 200,000 total seats. Exciting times for them.
- lmm 12y ago
  IME there's quite a bit of overlap with Yammer (they pitch themselves differently but the actual use case is very similar), which was a high-profile recent MS acquisition.
- DonHopkins 12y ago
  I heard third hand that Tiny Speck was re-using the server infrastructure that they developed for Glitch in their next (at the time) secret project. To what extend that's literally true or it's just that he's just working with some of the same people and tools, I don't know, but it would certainly make sense. In much the same way Slack rose from the ashes of Glitch, Flickr did from Game Neverending, the predecessor to Glitch. http://gaming.wikia.com/wiki/Game_Neverending http://gaming.wikia.com/wiki/Game_Neverending >Although development of the game was later shutdown in 2004, the tools built for GNE later evolved into Flickr, a widely-hailed photo-sharing service. Occasional signs of this legacy are visible, such as the '.gne' file extension appearing in Flickr's URLs. http://techcrunch.com/2012/11/15/as-flickr-co-founder-butterfield-shuts-down-glitch-is-he-planning-a-new-photo-service-you-will-know-it-well-he-says/ http://techcrunch.com/2012/11/15/as-flickr-co-founder-butter... >Whether or not the next venture is based around imaging services, it looks like it will have a social element: “We have developed some unique messaging technology with applications outside of the gaming world and a smaller core team will be working to develop new products,” he writes.
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pbreit 12y ago
I'm having a bit of trouble buying the growth story. 750k users on a messaging service is small. And the service has been going for at least 20 months and the company much longer.
- jonknee 12y ago
  750k users on a free messaging service is indeed small. Slack is a paid messaging service and that's a whole other valuation. Slack generates more revenue than Whatsapp for example, despite being itty bitty in comparison of user base.
  - pbreit 12y ago
    Pretty sure WhatsApp makes more money than Slack. It made $15m in first 6 months of 2014. In theory it's on track to make 100s of millions of $ per year with the $1/year fee. Slack might make $1-2m/month with the 200k paying customers.
- notahacker 12y ago
  Yeah, the only number that impresses me there is the proportion of paying vs non-paying users which seems on the high side for a freemium product. 200k users could be achieved by signing up 3 or 4 megacorps (obviously at enterprise rates far lower than $10 per user) and having a business on that scale that doesn't make you a unicorn, even if you have a decent product and profitable business model. In fairness to Slack, the revenue run rates not mentioned in the article are more impressive, though I haven't seen how much they're spending to acquire those users. Skype had well over 50x the user base of Slack - achieved over a similar timescale - when they sold for a similar valuation back in 2005. Frankly, I was far more impressed with how circumspect Butterfield was about his startup's prospects than the growth figures.

After seeing what happened to Flickr (both the product and the team) after Yahoo bought it, combined with Slack's crazy growth, makes me think a sale is unlikely. Especially to a big company like MS.

ianstallings 12y ago

I disagree about the MS part. I think Slack would probably do very well there. The enterprise market is where Slack is going, and MS is fully entrenched there. They also have a very developer-centric culture that some people enjoy.

hurin 12y ago
I don't necessarily see why MS would purchase Slack instead of delivering their own solution. Unlike Skype it's not really key to have a large-user base on the service, all that matters is that your entire business is running the same solution - and Microsoft already makes and sells other related enterprise tools which gives them an advantage both in terms of sales and integration. Perhaps it's even more surprising that they haven't already delivered a competing solution.
- npkarnik 12y ago
  Yammer is a team communication solution Microsoft already bought, but is way worse at synchronous communication (chat) than Slack, but also better at at asynchronous communication (threaded conversation, like on Facebook). Microsoft would want to buy Slack for the same reason they spent $$$ on best-in-class products like Yammer, Sunrise, rebranding Acompli as Outlook. Slack's revenue is incredible for a startup, but a drop in the bucket for MSFT (for now). More immediately, Slack represents an entry point for Microsoft to upsell Slack's customers to other Office365 services and Azure services.

npkarnik 12y ago

I didn't realize that the Slack CEO was also the Flickr founder, so you might be right in that Slack just isn't for sale to a megacorp. But Microsoft is the most likely buyer, it's been on a spree with integrating best-in-class enterprise products/productivity tools into Office 365 (Sunrise, Accompli, previously Yammer). Slack fits into that mold, though the sale price would probably be orders of magnitude higher than those acquisitions (likely upwards of $10 billion, possibly much more). At that price tag, it might be untenable. Not sure what Slack's medium-longer terms goals are, honestly. Their valuation is so high that only megacorps can afford them, but there's still enough risk that public markets might be skeptical (their revenue growth is astronomical, but they haven't been generating revenue for THAT long). In the interview, Stewart mentioned market saturation eventually limiting their crazy growth numbers, but I'd imagine they have a ways to go, given that the total enterprise market has to be well more than 200,000 total seats. Exciting times for them.

lmm 12y ago
IME there's quite a bit of overlap with Yammer (they pitch themselves differently but the actual use case is very similar), which was a high-profile recent MS acquisition.
DonHopkins 12y ago
I heard third hand that Tiny Speck was re-using the server infrastructure that they developed for Glitch in their next (at the time) secret project. To what extend that's literally true or it's just that he's just working with some of the same people and tools, I don't know, but it would certainly make sense. In much the same way Slack rose from the ashes of Glitch, Flickr did from Game Neverending, the predecessor to Glitch. http://gaming.wikia.com/wiki/Game_Neverending http://gaming.wikia.com/wiki/Game_Neverending >Although development of the game was later shutdown in 2004, the tools built for GNE later evolved into Flickr, a widely-hailed photo-sharing service. Occasional signs of this legacy are visible, such as the '.gne' file extension appearing in Flickr's URLs. http://techcrunch.com/2012/11/15/as-flickr-co-founder-butterfield-shuts-down-glitch-is-he-planning-a-new-photo-service-you-will-know-it-well-he-says/ http://techcrunch.com/2012/11/15/as-flickr-co-founder-butter... >Whether or not the next venture is based around imaging services, it looks like it will have a social element: “We have developed some unique messaging technology with applications outside of the gaming world and a smaller core team will be working to develop new products,” he writes.

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pbreit 12y ago

I'm having a bit of trouble buying the growth story. 750k users on a messaging service is small. And the service has been going for at least 20 months and the company much longer.

jonknee 12y ago
750k users on a free messaging service is indeed small. Slack is a paid messaging service and that's a whole other valuation. Slack generates more revenue than Whatsapp for example, despite being itty bitty in comparison of user base.
- pbreit 12y ago
  Pretty sure WhatsApp makes more money than Slack. It made $15m in first 6 months of 2014. In theory it's on track to make 100s of millions of $ per year with the $1/year fee. Slack might make $1-2m/month with the 200k paying customers.
notahacker 12y ago
Yeah, the only number that impresses me there is the proportion of paying vs non-paying users which seems on the high side for a freemium product. 200k users could be achieved by signing up 3 or 4 megacorps (obviously at enterprise rates far lower than $10 per user) and having a business on that scale that doesn't make you a unicorn, even if you have a decent product and profitable business model. In fairness to Slack, the revenue run rates not mentioned in the article are more impressive, though I haven't seen how much they're spending to acquire those users. Skype had well over 50x the user base of Slack - achieved over a similar timescale - when they sold for a similar valuation back in 2005. Frankly, I was far more impressed with how circumspect Butterfield was about his startup's prospects than the growth figures.