Slack Closes $250M Funding Round at $5B Valuation
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I am currently a member on seven Slacks. Each one has a different username and password combination. I have to log in to each one separately. AFAICT there is no way to link them so I can log into all of them all at once. And then once I'm in, every Slack has multiple channels. Trying to keep up with all of them is hopeless. But if I'm not paying attention to a conversation in real time, going back after the fact and trying to extract meaningful content is difficult (it's hard just to find where a particular conversation starts and ends). Trying to go back and make a contribution to the conversation after the fact is completely hopeless.
Yes, real-time chat can be very handy, but I don't see anything that Slack does that Adium or Skype doesn't do better IMHO. And for archival discussions I'd much rather have a Google group. Keeping a threaded structure makes it so much easier to go back and trace the conversation after the fact.
There's your problem.
I'm pretty surprised that you think Adium and Skype are better products than Slack - neither are the same and they are pretty clearly much worse at team communication, if you can call it that.
That's certainly one of my problems. But I work on multiple projects and every one of them has its own Slack. So what exactly am I supposed to do about that?
I also don't think the situation would be much better if I were only on one Slack. One Slack with multiple channels is more or less equivalent to multiple Slacks (except for the multiple login annoyance).
Screenshot found on Google image search: https://toky.co/img/integrations/desktop-app-slack.png
I like Slack as a company and a product, but I cannot understand why they do this like they do. Even worse, if you forget our password to one team, you have to remember, the subdomain of the team you're on in order to even get the password back. So annoying.
You requested a magic link for logging in to [foo].slack.com. Unfortunately, this email address isn't currently associated with that team.
We also searched for Slack teams you've already joined or are allowed to join, using [email address i entered]. It looks like you have several!
And then it lists a bunch of teams associated with that email address and includes Join buttons.
I use Franz (http://meetfranz.com/) for this.
However, I don't think the future of collaboration will be Slack. It is just too expensive and quite buggy at the moment. I'm hoping there will be competition that will either make Slack better or replace Slack with a cheaper, less buggy alternative.
I was thinking about the impact of taking it away again, if Hangouts supported "channels" that people in the domain could join I think we would have a pretty seamless departure. The channels feature is about all I've remained to love after having slack for 2 years.
Because otherwise I don't really see any inherent performance issues in the problem domain that would require hardware more powerful than what we had in the early 90s. IRC, for all it's UX issues, proves exactly that.
Especially voice/video chat, holy crap Slack is ridiculous. The first time I started a Slack voice chat, I actually had time to disable my extensions and log into my router before I figured that no, it's not a problem on my end, it's just that slow and the damn thing loaded.
Slack is just really bad in terms of performance.
Yet, Slack manages to have lag between pressing Enter and showing a message. It's baffling to me how almost nobody doesn't seem to have a problem with that. Miranda IM worked much faster when connected to 6 networks... on a machine that was 10x slower than my phone.
Like, come on.
Can't blame the entire OS for a single program being badly written.
- Scrolling up to something that happened fairly far back in history can feel really awkward and broken, image loads and ajax fetches can make the scrollbar behaviour really janky (to be fair, I just tried this and it was better than I remember, although still far from perfect)
- Switching rooms takes about a second, even if I was just in that room, which while not horrible, is still a little laggy for something that should be nearly instant if I have the room's content cached.
Overall while it's gotten better, the "native" Slack app still feels very much like a webpage with OS chrome around it (which is what it is, but other apps like VS Code, Atom, and Discord don't give this impression nearly as much)
This is all on the latest Macbook Pro upgraded as much as possible in every respect save the video card.
Granted that it's an older model, but why does an IRC chat program need 10 minutes to run? What is it doing?
I've a high end workstation on windows 10, and a gigabit jnternet connection. There's no excuse for the delays we see. Another major issue for me at least is their editing system. If you send a message, and edit it "too soon", the UI pretends to edit it, and some seconds later comes back and gives you a modal dialog saying it failed to apply the edit, and undoes your edit. The delay is _huge_ - 10-20 seconds.
Don’t people “just not respond” even more with email? Maybe I’m an outlier but I probably reply to less than 50% of things that come into my email.
And if you need a realtime convo, come tap me on the shoulder or schedule a time to talk. That’s the main benefit of slack (and email): async communication. Async is good.
If I had a 50% response rate for emails that clearly need a response, that would severely impact my ability to do my job and would likely result in my manager taking steps to help me improve that.
I meant for my real email.
As for my manager taking steps to help me improve that, he’s even worse. Or just has a stronger things-that-are-important filter than I do for Slack. Email is for papertrailing things that were previously agreed upon in person or on slack.
The problem is not 'Slack' or 'Email' - it's the wasted communications energy at all these companies.
Most companies have not figured this out, and think that tech will solve if for them. Not so much.
I feel like slack (and competitors) have a lot of room to grow still.
Especially when timezones are involved
Given that they steadfastly refuse to implement an ignore user feature while at the same time they've implemented mandatory channels, of course the signal-to-noise ratio falls and people just ignore Slack. I know I do.
If you have to ignore your colleagues you have far worse problems than Slack not having an "ignore user" feature.
Slack's been pretty clear that they don't want their product to be used for this use case, and have even nudged some larger "casual" communities and open-source projects off. So it's not surprising that they plan their feature roadmap according to what (they think) will be useful to businesses.
Try working at a large enough company. Or, try using any number of bots. I'm in a few mandatory channels of zero relevance (ok, mute) and a few of high relevance that are punctuated with lots of bot chatter I'd like to ignore. And, sure, there are a few coworkers I'd prefer to ignore.
Even IRC will let you manage notifications with more granularity than Slack will.
I do consulting for a bunch of startups and they often invite me to their slack. I'm pretty fascinated by the hugely different "slack cultures" at each company.
One company I worked for would militantly tell people to never use @all, @channel, etc, because it was distracting (THANK YOU!!!!) and another client will literally do "@channel, I'm WFH today" in the all company channel. I've had 2-3 hour blocks where I'll have 6-7 notifications that aren't for me.
If you ask me, Slack is the best way to distract your employees from doing work. It's like putting everyone in ~1 hour of meetings a day for no good reason.
I could see something similar to Slack as a free, open source project. It could possibly develop out of something like Signal [https://signal.org/]. Making and supporting an open source solution can be a viable business too (e.g. CoreOS, Docker). I doubt that it would kill Slack either. It should be interesting to watch, and will benefit the end users as a whole through an improved Slack and/or a similar free option.
Slack being hacked is generally just not something most business need in their threat model. Same goes for Gmail, GitHub, and most other business services.
I can imagine people lackadaisically sharing things like ssh keys / passwords on it. I certainly have.
Any time something is hacked where the participants thought they had privacy is a potential disaster. Not sure how you can say otherwise.
There are PLENTY of other chat protocols other than IRC. Not sure why people always make the comparison. IRC would be a poor choice for a workplace.
XMPP is a pretty good alternative with stuff like movim that have a friendly modern looking client.
But in this world, it's valued @ 5B. The tech world (bubble) is amazing.
Businesses are now being appraised like houses: "Comparable businesses were just bought for X dollars".
At the end of the day the valuations don't rely on businesses bottom line. They are based on two factors:
- How much Google, Apple, etc. MIGHT buy them for in the future.
- How much investors THINK Google, Apple, etc. would buy them today for.
Speculative markets have never failed us. /s
It's the fact that they don't necessarily have 'vendor lock in' - and substitution is easy. And it's an easy thing to copy.
It's designed for small teams, and small teams can switch to the 'next, cool thing' in a heartbeat.
At the end of the day it's just chat. That's it. There's nary anything special about it. They did a good job of it.
That said, brands to have sticking power, and if there is no reason to change then why?
They have some new MS execs, who might teach them the ways of 'sinking their claws in' :) and becoming incumbent.
I should add, the larger the company (even with small teams), the bigger the switching costs. After about 500 people, IT kind of becomes 'detached' from the people, and doing anything on one's own becomes harder, so tech becomes entrenched.
This company is the next 'IPO pony' the VC's are building up, hoping to push onto markets at high valuation to get a big bang.
I wonder if they can use this money to build an actual product edge, maybe with search.
Ultimately, it's an easy-to-reproduce experience, and there will be/are competitors offering 'the same thing' - and so there will be price competition.
If you want to 'switch to an alternative' it would be a disruption, not a 'massive pain'. Your 'old chats' are not that valuable.
If Slack was integrated into other systems - or integrated with partners, customers etc. - that is 'lock in'.
FYI - It may very well be the 'next cool things' comes along, and you find small teams 'just using that cool thing' already.
Finally I would say that Slack is not even that optimal - there is a lot of 'noise' in those channels, and the value add I believe is not that high.
I consult for startups sometimes, they put me on Slack and it's total noise. I ask to just use email, and it works.
I think 'best practice' is not in a tool, it's in behaviour.
Email, used properly, with the help of a simple chat app for teams, can work just fine.
This is the definition of lock-in. Switching would be a disruption so you don't do it. I'm locked into Gmail. There are lots of competing products, but everyone knows my Gmail address and all my old emails are on it. I don't bother exploring switching because I know it will be a disruption.
All new technologies and process imply some degree of disruption.
'Lock in' is existential disruption.
+ You wrote your entire app in .NET - that's lock in. Changing it means gambling the whole company.
+ You went Oracle/SQL because of regulatory requirements - your app is wrapped around SQL, you have SQL/Oracle exports on board, you're not going to change that.
+ SAP - your whole company is wrapped around it, it's integrated with a dozen other systems.
+ You went Cisco - it really only interfaces with other Cisco gear. Lock in.
Slack is a 'chat app'. It's not that big a deal to switch.
If Slack evaporated tomorrow - one could switch to an alternative instantly. Teams would figure out a new protocol for communicating instantly. It's just chat.
You're over-constraining lock-in to its technical factors. Facebook has lock-in for totally non-technical reasons. These are equally, if not sometimes more, powerful than technical lock-in.
Lock-in means high switching costs. If it's more disruptive to switch than you could hope to gain from switching, you won't bother even contemplating switching and are, again by definition, locked in.
Some Thoughts On Burn Rates:
Real-time chat rooms just to make productive teams, I've found.
If you're a knowledge/tech company, would you let me put a device in your worker's workspace that emitted an annoying noise randomly ever 5-15 minutes, interrupting them and causing them to spend time regaining their focus on that ask they were working on? Probably not, but orgs are handing money over hand over fist to Slack for the privilege of enabling this.
Knowledge Productivity Diagram Example: https://i.imgur.com/sAdZ63y.jpg
I work for a 200+ person company and we have approximately 800 channels, maybe 20% of them are work related, the remaining channels are noise. There's a channel wherein some people in the company pick up on grammatical and spelling errors of others in the company and post them for others to laugh at, there's another channel for the three people in the company that think they know latin to make the same Monty Python joke (Romani ite domum) over and over.
For the current project we're working on, we've put in a no robots rule into the channel (no Git/Jira/Travis notifications) and when one of the higher-up managers in the company decided to join the project channel and make two joke-like comments which added no value to the project, we had the project manager remove him from the channel.
Slack has over-casualised our company, for work it sometimes works well, for distractions it almost always works too well.
It's not all Slack's fault though, it's also partially the company's fault for trying to embrace Slack for everything.
Not a Slack employee or anything, just love the software.
Seriously, the only thing that could convince a company is either lower admin cost (vs Mattermost) and way better customer service when something fails. (vs Discord) Pretty sure big co mc corp wouldn't like a potential competitor running its comms.
Additionally a strong competitor is as always email. Perhaps enhanced with scheduling and mailing lists. If you don't like to set it up, you could pay Google for example. And both Google and MS are improving their chat/IM offerings.
They can and will undercut such a start-up instead of buying it, unless they see enough value in an acquihire.
Companies that make heavy use of office would find it very difficult to move over to another office suite (if they could find one that meets their needs), whereas moving off slack to one of the many alternatives, doesn't seem that hard.
Might be an overstatement. I would say let's see until they innovate on something that people like and would pay for. Until then, I wouldn't call them a failure until they actually run out of business
I hate how a lot of open source projects have adopted it as the de-facto community discussion forum, mainly because it's a product designed for companies/organisations - not a disparate band of interested contributors.
In my password manager I have 8 passwords for different Slack "teams" that I've joined, because you can't just have one account.
Being on some mailing lists, the most annoying spam is from people requesting an invite to the community Slack channel. Every day you'll get at least one or two people wanting an invite.
It's silly, but I don't see what the alternative is - Slack has built a product that people like, it's just it doesn't gel well outside a corporate environment in my opinion
On their last raise @ $3.7b it was thought they were doing around $64m/year - so a 57x of revenue!
On this round they're raising @ $5b with $200m/yr - a ~25x of revenue valuation.
(1) http://www.businessinsider.com/thrive-leads-slacks-round-of-...
If you are blocking co-workers like one person mentioned or muting them, you have other issues (yes, you can mute a user)
If you're demanding or need instant communication with someone, just call them from Slack. Or, alternatively, make sure you '@' them properly & force a send notification. The issue I see is that not everyone is all about real time comms -- some people put Slack on their phone or on multiple machines. Some don't.
Some people claim it's buggy -- I've had far more issues with HipChat just when it comes to displaying on two monitors than I have ever had with Slack.
I saw a few people complain about productivity sinks but the reality is if you want to be a part of a certain group to keep up top of what's being discussed, that's the pulse & one way to do it if you have a large amount of brain power in the room.
Meh. I'm excited.
See: https://www.fastcompany.com/3067246/the-unexpected-design-ch...
And you're pleased with the lack of granularity of the notification settings, too?
Just try this out on linux (maybe works on other OSs): open a system manager with a real time CPU usage chart. Open the Slack desktop app (or a session in Chrome, it's the same). Open a channel (#random should work). Scroll up. Watch usage of all your CPU cores skyrocket. Stop scrolling. CPU usage goes back down.
They to hog all of my cores just to scroll up a list of messages.
BTW, this doesn't happen in Firefox: scrolling up doesn't cause CPU usage to go up measurably
- Video calling - Storage - Private Sharing - Guest member - Meeting rooms
My only complaint about the iOS app is its RAM consumption (it's not an Electron app on mobile too, I hope?) as iOS seems to suspend it and thaw it whenever I switch to another app. Oh, and it's still kinda slow, switching between teams takes 3-6 seconds.
Keep in mind the $5B "valuation" probably is based on share price of the preferred share times total number of all shares. In other words, fiction.
(I have a machine that can run 5 virtual Linuxes and 2 copies of a full HD game on 60fps, simultaneously, and can stream 1080p from my net, so no, it's definitely not my setup.)
Have you used Miranda 10-13 years ago?
If they want to go public and keep that valuation with that constricted of a supply, S&P/Nasdaqs/NYSE won't list you, but Hong Kong will love you, alongside the other 1% float unicorns.
From what I can tell the major competitor to Slack is Basecamp - a profitable company with 50 or so employees?
What is Slack doing with all this money? The slack I used at work was an html version of irc - is there more?
From what I've heard, Slack hit a pretty big infrastructure wall when it came to big organizations. Teams just didn't scale past 1000 people. So they've had to rebuild significant parts of the product in order to target large corporate customers.
Looking at some of their latest API updates, you can see glimpses of enterprise support. (eg moving away from handles to user ids likely enables active directory integration).
Back to the question: Why raise money? Because enterprise whales are a much more solid backbone than thousands of 20 person startups, and they still have some eng investments they need to make to handle someone like Walmart in an on premise installation with 10s of thousands of users.
He's talking about teams in the context of Slack not a different product.
But the real competition is Google or MSFT, since they have email and docs deployed to just about everyone and can try to capture that attention by offering something _just_ good enough for a lot less.
At Slack Frontiers last week (their first ever conference), they had a number of speakers from large orgs that use Slack, including Fox and Oracle. That size business is probably what they're working hardest to capture.
https://products.office.com/en-us/microsoft-teams/group-chat...
All of them will be racing to secure adoption and integrations with services used by various teams throughout organizations.
More recently (Mar '17) he expressed "I've said publicly before that we are trying to run the company so that we're ready to go public, not because we are going to necessarily." https://www.axios.com/slack-ceo-stewart-butterfield-23186588...
So if the VC money is there for the taking, why not?
- Additional capital will add to the war chest to fend of competitors such as Microsoft Teams, HipChat and Google Hangouts Chat. With the deep pockets of Microsoft and Google, more cash can aid in innovation, R&D, marketing, etc.
- dilution - possible obligation to pay dividends - although probably not here, giving a board seat / some control
I think the basic question here is, how can Slack productively spend $250MM over the next couple of years--do they have a vision that exists in some proportion to that kind of capital? Slack is a nice platform, yet it's hard to imagine _hundreds_ of good developers toiling away on mobile apps, desktop apps, webhook integrations, etc.
Disclaimer: I am not a startup founder. I am not an investor. I have zero knowledge about how these things work besides from what I've read here. That being said, I thought the meta for raising money was (is?) that you don't raise money if you don't need it or don't anticipate you will need it?
I mean if you're Dropbox, you have massive infrastructure spending even in your early years that means as you get people to learn to embrace "the cloud" in early 2009, success is you have tons of users who use your product for free with a small fraction converting to a paid account and a smaller fraction using it at work (fancier paid account) I can understand the need to raise money. However, I thought raising money means the founders lose control of the majority of shares. My understanding is if you don't need the money, don't raise it because it is a liability. I can't imagine slack's infrastructure spending being anything near dropbox's (or maybe I am wrong?)
Now that I think about it again, I am sure I have made a mistake somewhere in my assumptions. I'd love to be corrected. Thanks
Edit: How did Snapchat and Uber founders manage to retain control even after many rounds of funding? Is that applicable here? Can I use the same thing if I ever become a founder?
Slack anticipates they might need the money in the future.
The question is whether money can be raised at acceptable terms. Uber had a lot of leverage because everyone wanted to invest in Uber.
They are going "big". Enterprise. Places Basecamp or hipchat never did or will.
As a proof, it took me 2 months to make this application: https://notes.sciter.com/ (and site for it in that time too).
Several people have built Slack clones and there's even multiple open source projects out there. Building a company and business at a scale like Slack is the incredibly difficult part and nobody has managed to replicate that.
- easy signup for public access
- integrations for killer apps in other verticals
- plugin architecture
- public and private apis
- mobile app(s) with 80% of core desktop functionality
- end-to-end encryption
Maybe it's sufficient to extend IRC. Add support for custom emojis & Giphy integration.
Voice, video conferencing and screenshare would be essential.
It was bad the first few months, but except for a recently publicized utterly embarrassing security vulnerability, in the last 2 months it's been working great. The mobile app is now much, much better than the HipChat ever was.
Also, https://githubengineering.com/a-formal-spec-for-github-markd...
CommonMark is as close as it gets to one and that one does include github-style code fencing, so I don't know what you're even on about.
The reason is that when using slack with github integration, it's annoying to need to switch markdown language as one goes back and forth between the two.
And Slack's lack of support for code formatting, bullet lists, etc. is IMO a sorely missed in that scenario.
In terms of Slack's misgivings, I don't think I've used a more incredibly bloated, buggy, slow electron app. Multiple team logins with no centralized account is _insane_ to mange across teams, this single point frustrates me and most people I talk to a lot. Not to mention the more teams you have, the more your electron app slows to an absolute crawl. The notifications leave a lot to be desired in terms of granularity per channel. They've done a really terrible job on "threads", the UI around it is messy and confusing, and the concept doesn't inline well. Those are just the most apparent daily gripes.
* Text channel 'voice' restricted by user level. Eg: a read-only channel
* Dark mode
* Option to mute someone in voice channel
* Push-to-talk
1) It absolutely solves some of the problems we had with slack, with a thoughtful approach to how people work and respond to the new "streaming inbox." (vs. the "batch inbox" a la David Allen's GTD paradigm.)
2) However, it just felt like a snappier version of email. Which isn't bad, but let's call it like it is. If it looks like a pig, acts like a pig, etc. etc. Which I don't mind! I actually love systems/ tools that work with email - it's pretty much the one universal app that works for everyone with no training!
Nevertheless, the overall experience with Twist was good and would recommend as a solid Slack alternative.