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> "I don’t feel like there are any serious vulnerabilities in the business."

No one in technology should ever find themselves uttering these words. It's like asking for it.

If the tech world remains relatively unchanged Slack is easily worth $3 billion. All they need to do is get a few million workers on there chatting away and they've got ~$10/month * millions, which is hundreds of millions per year.

They should probably sell to Microsoft and let them take on the risk at this point. There's a good chance the tech world will change around them and the whole thing will come tumbling back down to earth. Or they could try to become the new Microsoft.

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>No one in technology should ever find themselves uttering these words. It's like asking for it.

It's a completely different matter to be saying the same words in private vs in a public interview that will be read by millions of readers. A CEO must say this (or something to the general effect while being PC) when speaking in public. Doing otherwise can only have negative consequences with respect to employees, customers, etc.

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.

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.

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

>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-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.

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.

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.

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.

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.

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.

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.

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.

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.

> There's a good chance the tech world will change around them and the whole thing will come tumbling back down to earth.

What supports this claim? Yes tech and the tech world changes quickly but some of the core functions of running a business, such as effective team communication, will not go away any time soon.

Slack is ridiculously expensive - $7/user/month for chat? It's ripe for competitors to undercut them.

It's a pity that Atlassian is still napping with Hipchat usability features (particularly multiple accounts).

Multiple accounts is supposedly in development/beta - https://help.hipchat.com/forums/138883-suggestions-ideas/sug... but yeah, they waited way too long to implement that.

For pretty much any business, that's pennies.

Approximately 700 pennies.

> such as effective team communication, will not go away any time soon.

Communication itself won't go away, but that doesn't imply that a platform/application which facilitates communication won't fade away. Just ask IRC, ICQ and AIM (All of which are still in active use today)

And yet Slack was able to seize large portions of the market. Did communication just recently become a need?

I agree with artursapek. Part of their success comes from better execution, many in the enterprise space are starting to argue that superior design for end-users is more important than ever (https://twitter.com/levie/status/586265289748307969), and also the market is dramatically expanding as we speak as more teams are working remotely than ever before, caused by a variety of technological breakthroughs. Part of Slack is execution, another part is timing.

Okay, which means exactly the opposite of what artursapek is saying: a better execution can displace the market leader.

It doesn't matter if the demand doesn't go away. A higher quality supply will displace Slack, just as Slack displaced the many before it.

There have been many before them, see Flowdock, Campfire, IRC, going back as long as we've had the Internet. What sets Slack apart is they've executed it better than anyone. They took the industry by storm overnight, it seems.

Thats not really en explanation.

There are several reasons why they are doing well and they have much less to do with execution than with the right people getting involved.

"right people getting involved" IS execution

That's an important clarification. Most people think execution is the inherent quality of the product. Obviously execution is having the correct people involved to open doors.

With the right people getting involved I am talking about the investors. That has nothing to do with execution but to do with access to distribution and press.

Have you actually used Slack? Where I currently work, we have gone through two other chat products in the past two years: Campfire followed by Flowdock. They all fizzled out and died - people just stopped using them for some reason.

Then we tried Slack, and it's the first time the entire team has adopted 100% and maintained it. Slack mobile has even replaced text messaging/GroupMe for a lot of us as well.

Don't hand-wave away their success by giving credit to investors. It makes you sound bitter and insecure, or at least uninformed. They've done a great job building their product and deserve the position they're in. Whether or not $2.8B is an accurate valuation is beyond me, but it does seem like they're minting money over there.

Campfire and Flowdock are both pretty awful compared to Hipchat (the previous market leader) and Slack. I think Hipchat is feature-wise mostly on par with Slack, but has a much more approachable interface. Hipchat is also learning from slack on how to make integrations easier to install and configure. Slack surged into the space by marketing to companies that were using nothing - not by winning people away from competitors. I'm not sure that Hipchat can take the space back from slack without a major new killer feature, but Slack's marketshare is hardly guaranteed.

I have not only used slack i am running a 600 people channel, use it for work plus several side projects. I am a huge proponent of Slack and I have used them since very early on. I am not disputing the quality of the App.

But it's not just an execution game as many would like to claim.

So you're making my argument for me: you don't believe in Slack's longevity because they're satisfying a permanent need. You believe in it because it executed well.

Nothing prevents anyone else from executing better. The permanence of the need doesn't point, in any way, to the permanence of this particular supply.

I suspect the MSN generation is only just reaching a level where they can make purchasing decisions. Good technical companies have been using slack-like systems for years, but traditional companies are... conservative.

Using multiple devices became mainstream; nowadays everyone needs to be able to use your system from their phone and their computer at the same time. This shouldn't be hard to handle but through accidents of history it's terrible on the big open-source options (Jabber or IRC). And companies need internally-hosted. If AOL had been willing to make a self-hosted AIM, or MS a self-hosted Skype, they would've killed it.

I'm not sure why they didn't. And I'm not sure why Atlassian didn't seize the whole market with HipChat, which is almost identical to Slack (it's very marginally less polished). At my current company we use Slack's free tier because we fit within the usage limits for that but not those for HipChat, so maybe it's that?

Do that many people really have work phones that are mobile devices? I've had a desk phone at several jobs, which I pretty much never use, but I was only issued a mobile device as work phone once. I never really used it either. Yet people talk about this as though it is a common thing. Is there some specific industry or type of job that routinely gives people mobile devices for work use?

It's more that tech people are willing to use company chat outside of work. At a minimum slack is very handy for "I'll be late in today" from the train, and I don't mind using my personal phone for that.

I agree. What exactly would be changing? The parent's argument rests entirely on a vague claim that seems very undeveloped.

such as effective team communication, will not go away any time soon.

But tools come and go my friend

especially something in this space, a communication platform. even if you completely exclude the chances that your sofware will ever be less than perfect... who knows what messaging platform will evolve into your space and when one will find the keys to network effects that eat your lunch.

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