Investor darling Slack .... has never made a profit.
Ah, the Twitter business model!
Slack shares got hammered last night in its maiden results after listing on the NYSE in June, despite the collab company beating analyst forecasts for second quarter sales. There were a few bumps on the road, including the $8.2m in credits it dished out to customers for service failures, as revealed in the financials for the …
Poncy offices. Apple Mac Pros, Starbuck coffee lunches/meetings. Having to travel for "meetings" instead of using a digital solution so they can say they are a "traveller" and "Busy all over for meetings". Hipster clothes and accessories. Endless meetings with fuck all to show for it. Stuck with an issue instead of using current staff that are good if not better, they probably hire overpriced consultants that just ask the engineers "What would you suggest" then they palm that answer off as their own.
That's what I bet.
Investor is the wrong term, Investors look for viable companies that will make money.
The people that buy slack, uber, snap, etc. are just hoping that some bigger company will buy them out. A more appropriate term might be speculator, or gambler, or maybe idiot.
"Perhaps its because all their employees are Slackers"
Maybe, but it's more likely that the business model has never been one that makes financial sense in the first place or scales negatively. It's the 80's dot com boom all over again with a new generation of people.
Lots of ideas that sound great will never be a profitable business. Some good ideas would make a great business if the company hadn't decided to locate to three floors of a high rise building in San Francisco with a view of the Golden Gate bridge at astronomical rates and had to pay the least employee six figures so they can afford to rent a shoe box to live in (and disinfectant for their shoes).
Whenever I hear Slack mentioned, the commentary is usually not positive:
• it is a disruption
• it is addictive
• it is a time-waster
• it is intrusive
and so on.
That being said, we have Microsoft Teams and it is annoying. I turn it off. If co-workers want me, they can send me an e-mail or walk the 100m to my desk.
The comments from Ezra Klein about Slack & Vox on his podcast are an example.
A pointy-haired-boss introduced it to our old company. It didn't last long. It was shit, a time waste, nothing but poncy shit was done on it and then when it turned out he had to pay for the old archive messages it was scrapped for some other digital, hipster bollocks.
Having said that, I can't lie that I'd like to create something that is classed as "Hipster bollocks" just because I'd like to retire. I love IT but can't stand this push to "the cloud". And can't stand lying fucking consultants.
When that crap gets introduced to an organization by a pointy-haired-boss, productivity drops
You nailed it.
We had since forever a local Jabber server for intra-communication. No voices, no pictures, no distractions.
Then we hired an outsider to "revitalize" our flagship product. Oh Lord. First thing he did was to tear down Jabber and slap us Slack on our faces, just because "notifications from successful builds and new commits". Which we already had in e-mail.
And then many other things went downhill. The ship he was supposed to save is sinking faster, but in an angle where captain's quarters will be the last to get under the ocean.
AC for obvious reasons, as I haven't (yet) left the ship
We have Teams,.... it's just Yet Another Place to Lose Stuff. Another feed to check,.... and I don't really like the interface. I'd far rather there was more Skype integration into Outlook, so everything was driven by the same client, but Skype is a dead duck and apparently telephony is moving into Teams,..... so again we have two clients,...
I'm tempted to say they're using it wrong.
But seriously, I've been a slack user for about three years and my approach to solve all these issues is to mute all but the most important channels I'm subscribed to. It kills the endless distracting notifications and I get notified if I'm mentioned by name anyway. I will go through all the muted channels first thing, around lunchtime and at the end of the day, never more frequently and often less than that.
I'm in 30 channels across two organisations. All are muted except for one team channel and the channels dedicated to receiving alerts about production issues. Works like a charm.
Slack is a genuinely useful product, which unlike Twitter et al has directly paying customers. The central software really can't be that complicated so:
For the third quarter, Slack said it expects revenues of between $154m and $156m – 46 to 48 per cent year-on-year growth and a loss of between $47m and $49m, both slightly higher than expected.
How are they even spending $47m on anything, let alone spending more like $200m? I wouldn't know HOW to spend $200m.
It seems all these companies are started in someone's garage for about £50 and then suddenly cost hundreds of millions once they get well known. Are losses actually losses, or do they just borrowing and borrowing?
One obvious guess is cloud costs.
I don't know if Slack operates its own data centers, but very possibly not. In which case, it can get hammered by cloud costs both due to freemium model and due to even paying customers loading ever more non-chat stuff (pics and what not) into their Slack channels.
Security is also probably a serious issue because Slack is basically an overgrown web app.
I think you might have a point there. Many "cloudy" companies use woefully inefficient languages like Python, Node.js, Java or Ruby which require lots of memory and/or CPU cores to run with sufficient performance, and the only scalability they do is just adding more machines. Which come at a cost.
I am so glad that Golang is gaining popularity, even though it is not my favourite language it is simple (and opinionated) enough for Python coders to pick up and write decent code.
"and the only scalability they do is just adding more machines. Which come at a cost."
Ahhh, you see, the reason they use inefficient code that forces the investors to pay for more hardware is because the IT department is coin mining whenever there is any excess capacity, like in the middle of the night and on weekends. During peak business hours the app is using all of the hardware capability so they can show that the racks are needed.
"How are they even spending $47m on anything, let alone spending more like $200m?"
The business will never go anywhere if you don't have a full suite of C-level executives. You also need branding specialists, social media coordinators, a department to sponsor influencers, telephone sanitizers, etc. The whole lot that "everybody knows" is required to be taken seriously in the business world.
We need an icon for a "B-Ark"
Installs per-user, reinstalls if deleted, pops up a BIG window on login begging you to log in. Now it makes sense, they're trying to beat Slack.
Software as a service BLOWS. It's merely a way to assure eternal rental, and to keep the user away from pesky competitors.
Email is a necessity.
Slack is, and always will be, a poor substitute for email.
It may be the current trendy proprietary messaging app, like ICQ and AOL instant messenger and so many others before it.
But it will eventually die like all the previous ones when a newer and therefore trendier one comes along.
Meanwhile people will use email to get work done.
What's equally crazy is how Google killed / butchered / neglected / abused Hangouts (which most of the early Slack adopters had via G Suite) and those same companies are now paying to use something that does 99% of the same thing. Slack is a glorified .gif sharing network and I seriously doubt it contributes in anyway to effective and productive working.
Just like open plan offices - it's noisey, a distraction and should be eliminated immediately.
Well, let's see. In the last three months they've spent $218m on R&D, $136m on sales and marketing, $123m on basically running the company (probably includes admin/finance/HR/etc staff, fixed overheads, facilities, etc), $31m delivering their products and services and another $3m on other stuff.
I'm not sure where your $600m/year comes from, they've spent more than that in the last six months. Unless you just mean the costs of delivering the product and the R&D costs, in which case they've spent $318m in the last six months, but most of that is on R&D which will primarily be focussed on creating new products/revenue streams rather than the cost of delivering their existing ones, so I'm not sure that answers your question either.
More relevantly they were cash flow positive in the last six months. You can make a loss almost indefinitely if you remain cash flow positive.
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