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posted by martyb on Tuesday September 19 2017, @08:22AM   Printer-friendly
from the picking-up-the-slack dept.

https://www.reuters.com/article/us-slack-fundraising/slack-valued-at-5-1-billion-after-new-funding-led-by-softbank-idUSKCN1BT0KO

Software startup Slack Technologies Inc said it raised $250 million from SoftBank Group Corp and other investors in its latest funding round, boosting the company's valuation to $5.1 billion.

The latest fund-raising, led by SoftBank through its giant Vision Fund and joined by Accel and other investors, lifted Slack's total funds raised to $841 million, the enterprise messaging operator said in an emailed statement.

The fund provides resources which will help Slack to run as a cash-generating company and the raise will reduce its dependence on outside financing, Slack Chief Executive Stewart Butterfield said.

Also at TechCrunch and Bloomberg.


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  • (Score: 5, Insightful) by stormwyrm on Tuesday September 19 2017, @09:01AM (23 children)

    by stormwyrm (717) on Tuesday September 19 2017, @09:01AM (#570121) Journal

    How irritating, it took some digging to figure out WTF Slack [wikipedia.org] is supposed to be. The Reuters article that's the main source doesn't explain what it is nor does it even link to the website [slack.com]! Neither does the Bloomberg article explain what it is. TechCrunch is little better, referring it briefly as a 'workplace collaboration tool'. Evidently it seems to be some sort of instant messaging groupware. Why such a thing would be valued at $5 billion though, is the question I think we ought to be asking.

    --
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  • (Score: 5, Informative) by canopic jug on Tuesday September 19 2017, @09:41AM (8 children)

    by canopic jug (3949) Subscriber Badge on Tuesday September 19 2017, @09:41AM (#570129) Journal

    It's mostly a solution in search of a problem. As others have already noted this is just another VC bubble. It's from a company that's done little but marketing and hype. What they have is this:

    1. Make a proprietary copy of IRC
    2. Lose money [techcrunch.com]
    3. Launch IPO
    4. Cash out

    Chat software is like having a perpetual meeting. It completely zaps concentration and productivity until you turn it off. With it off, since it claims that its strength is synchronous communication, there is no point in having it. Stick with e-mail and a real mail client with proper filtering and sorting to get any work done. No, M$ Outlook does not fall into that category, especially since it is tied to M$ Exchange [blogspot.com].

    If there is a percieved need for sychronous chat, then there is always the original: IRC.

    --
    Money is not free speech. Elections should not be auctions.
    • (Score: 3, Funny) by LoRdTAW on Tuesday September 19 2017, @12:34PM

      by LoRdTAW (3755) on Tuesday September 19 2017, @12:34PM (#570156) Journal

      Chat software is like having a perpetual meeting. It completely zaps concentration and productivity until you turn it off. With it off, since it claims that its strength is synchronous communication, there is no point in having it.

      How else are decentralized web devs supposed to do pair programming?

    • (Score: 4, Insightful) by zocalo on Tuesday September 19 2017, @12:59PM (6 children)

      by zocalo (302) on Tuesday September 19 2017, @12:59PM (#570164)
      We use Slack at work for remote collaboration between offices and in my experience, while it does have a few useful functions over IRC, there are not all that many of them. In practice, the only real functional advances over IRC that people actually seem to use are the web based UI and inclusion of inline imagery and emojis. Even then, all of that was pretty much already available using tools like AIM, MSN Messenger, Skype, etc. years ago, so whatever problem it was trying to solve already was. YMMV as to whether or not that is an improvement, personally I find the inline imagery to be useful (1000 words, and all that), but the standard ASCII emoticons are more than sufficient, but apparently some people feel they can't express themselves properly without spraying various fruits/veg and other things around (not to mention animated gifs).

      Frankly, I think a lot of it is just down to the mindset that newer must be better which tends to be stronger when you are younger and like to be seen as on the cutting edge of things. It's a phase most of us go through from teens-to-whenever, and it tends to pass in favour of whatever lets you get a given task done with the least resistance, regardless of how "hip" it is. Some things gain enough traction to carry on lumbering along (Facebook, maybe), others whither on the vine (MySpace), but if your primary userbase is the current generation of hipsters, then I'd be paying a LOT of attention to whether or not the next "generation" (e.g. those 5 years or so younger) is adopting your product, because if they're not it's almost certainly time to strap on that golden parachute and pull the cord.
      --
      UNIX? They're not even circumcised! Savages!
      • (Score: 2) by Pino P on Tuesday September 19 2017, @02:44PM

        by Pino P (4721) on Tuesday September 19 2017, @02:44PM (#570196) Journal

        In practice, the only real functional advances over IRC that people actually seem to use are the web based UI and inclusion of inline imagery and emojis.

        And scrolling back to what was said earlier while you were gone without everybody having to lease a server to run his own ZNC.

      • (Score: 2) by cubancigar11 on Tuesday September 19 2017, @03:07PM

        by cubancigar11 (330) on Tuesday September 19 2017, @03:07PM (#570202) Homepage Journal

        ChatZilla?

      • (Score: 0) by Anonymous Coward on Tuesday September 19 2017, @03:11PM (3 children)

        by Anonymous Coward on Tuesday September 19 2017, @03:11PM (#570205)

        What does Slack have that XMPP/Jabber doesn't have, and what can we do to implement it for the open source/fuck VC ecosystem?

        • (Score: 1, Funny) by Anonymous Coward on Tuesday September 19 2017, @03:29PM

          by Anonymous Coward on Tuesday September 19 2017, @03:29PM (#570220)

          Hype and buzzwords.

        • (Score: 0) by Anonymous Coward on Tuesday September 19 2017, @05:13PM

          by Anonymous Coward on Tuesday September 19 2017, @05:13PM (#570262)

          Slack has nothing really special about it.

          What can be done? Make an open / free version that is dead simple to set up on a server so that companies can run their own infrastructure. There is just this magical FAITH people have that these SaaS businesses will not sell their data or spy on them. Shit, want to do corporate espionage? Work for slack!

        • (Score: 0) by Anonymous Coward on Tuesday September 19 2017, @08:15PM

          by Anonymous Coward on Tuesday September 19 2017, @08:15PM (#570332)

          None of the FOSS(preferably agpl) xmpp web GUIs that i've seen really got good enough or gained enough traction. I would like to find one though.

  • (Score: 5, Interesting) by ledow on Tuesday September 19 2017, @11:13AM (3 children)

    by ledow (5567) on Tuesday September 19 2017, @11:13AM (#570142) Homepage

    Yup, I thought the same.

    But it's simply not worth that amount of money. Never believe an investment figure like that. It's what the previous INVESTORS say it's worth. Why would they do that? To encourage more investment, spread the risk, cash out and leave someone else holding the hot potato. This is basically: "This second-hand car, mate? Well it's worth at least twenty grand, isn't it? Only one careful owner, and she was a nun who only drove on a Sunday"

    It has 2.7m users. to be worth $5bn each user would have to have paid / be guaranteed to pay: $2000.

    Absolute top-tier payment is £11.70 billed monthly (sorry, it gives it to me in GBP): $15.80 per month.

    Thus EVERY SINGLE ONE of their 2.7m claimed users would have to be subscribed for over 10 years at the top rate to make that amount of money even COME IN to the company, let alone provide services and assets to that value. That's quite obviously not true as their free tier almost certainly makes up the vast, vast majority of those users, if indeed 2.7m of them are actually active at all.

    It's a con. It's a bubble. It's to make people think "Oh, that's worth a lot" with almost ZERO basis for that number in fact (income, profit, etc.). In 2016 their revenue (income before expenses) was $64m. They would have to have ZERO outgoings and earn that for 78 years guaranteed before their valuation ever reflected that kind of revenue.

    It's a game of "who gets left holding the hot potato". That guy loses VAST sums of money, as does the company, its employees, suppliers and customers when it all tanks. Everyone else who merely passed it on will make profit based on the snake-oil of telling people it's worth a lot more than they can ever prove "in potentia".

    It's an old game, and people still fall for it. Be prepared for Slack to not even exist in ten years time, let alone 78.

    • (Score: 2) by ledow on Tuesday September 19 2017, @11:16AM

      by ledow (5567) on Tuesday September 19 2017, @11:16AM (#570143) Homepage

      P.S. $64m means that in 2016, it had ~300k active paying users. Nowhere close to 2.7m.

    • (Score: 3, Interesting) by VLM on Tuesday September 19 2017, @12:26PM (1 child)

      by VLM (445) Subscriber Badge on Tuesday September 19 2017, @12:26PM (#570152)

      There are at least two other revenue sources

      One is, being centralized IRC, selling the conversation data to corporations and governments. I've worked for telcos that ran a miniscule profit off government monitoring, we were allowed to bill at standard and reasonable consulting rates etc. Its not necessarily tremendously useful but with a paranoid police state they gotta have eyes everywhere, so they made a place that needs eyes and they can bill for it. As for corporate info aside from outright data dumps which are probably illegal, they could sell something probably legal similar to google's ngram viewer... say you're selling XYZ field products to software devs, how much would you pay for a graph of how often the dev community mentions XYZ vs time, perhaps?

      The other revenue idea is the traditional American form a monopoly and then F over the population. So if 432 million smart phones were sold last year and they all paid a "slack tax" of $1 to have slack preinstalled, then in a feverish VC dream that would work out pretty well. Or god forbid if slack became popular enough that it became "corporate mandatory" they most certainly could charge $100/yr for every employee of a company (not just devs with free accts) in a site license, perhaps. If google has 72 thousand employees that very theoretical site license would be $7.2M/yr, times every company out there. The problem of course is slack has a compelling feature set and intense network effect, but its not "THAT" great.

      • (Score: 3, Insightful) by Pino P on Tuesday September 19 2017, @02:48PM

        by Pino P (4721) on Tuesday September 19 2017, @02:48PM (#570197) Journal

        Or god forbid if slack became popular enough that it became "corporate mandatory" they most certainly could charge $100/yr for every employee of a company

        Slack's ability to increase the price for its service is limited by the threat of "Screw it; we're switching to Discord." That's why, for example, the FamiTracker user community [famitracker.org] and the Cyanide & Happiness fan community [wikia.com] have settled on Discord.

  • (Score: 3, Interesting) by VLM on Tuesday September 19 2017, @12:15PM (2 children)

    by VLM (445) Subscriber Badge on Tuesday September 19 2017, @12:15PM (#570149)

    A lot of clojure people hang out on one of the channels which is kinda donated for free, so I've used it, some.

    Its secret sauce appears to be one-click integration. I could replace any of it, for open stuff anyway, with a very small Perl script, but with Slack its one click and it works.

    Also the desktop and mobile UI is pretty nice and consistent.

    Its slightly warmed over IRC with centralized servers and support, really. You could almost call it an IRC hosting company.

    • (Score: 1) by pdfernhout on Wednesday September 20 2017, @03:37AM (1 child)

      by pdfernhout (5984) on Wednesday September 20 2017, @03:37AM (#570518) Homepage

      By me: http://www.pdfernhout.net/reasons-not-to-use-slack-for-free-software-development.html [pdfernhout.net]

      What if the Clojure community tried MatterMost or Matrix.org?

      --
      The biggest challenge of the 21st century: the irony of technologies of abundance used by scarcity-minded people.
      • (Score: 2) by VLM on Wednesday September 20 2017, @12:35PM

        by VLM (445) Subscriber Badge on Wednesday September 20 2017, @12:35PM (#570595)

        I'm sure it would work, but its the dreaded network effect where ten guys go on slack and you can guess where the eleventh and following go.

  • (Score: 3, Insightful) by Anonymous Coward on Tuesday September 19 2017, @06:06PM (5 children)

    by Anonymous Coward on Tuesday September 19 2017, @06:06PM (#570288)

    If anything, this would the nice thing about wealth inequality.

    There are an increasingly large number of people with absurdly massive amounts of money, and no real clue what to do with it. They all want to make sure they invest a gazillion dollars in the next Facebook or other 'big thing' and so are quick to voluntarily throw a few bucks at any idea that looks even remotely promising. Of course throw some change translates to millions of dollars for corporations and individuals whose disposable income is measured in billions of dollars.

    On the other hand this is obviously completely butchering any correlation between merit and reward in the market. It's all about getting investors hyped, getting them to throw billions of dollars at something, going public, and cashing out. Our world is like a giant candy store for charismatic sociopaths.

    • (Score: 3, Interesting) by Virindi on Wednesday September 20 2017, @01:13AM (4 children)

      by Virindi (3484) on Wednesday September 20 2017, @01:13AM (#570472)

      Actually, all they seem to care about is slick marketing. As a result, we are being driven ever faster to a society of slick marketing and no substance.

      • (Score: 0) by Anonymous Coward on Friday September 22 2017, @12:40AM (2 children)

        by Anonymous Coward on Friday September 22 2017, @12:40AM (#571493)
        this was posted at 20170922_004017 UTC
        • (Score: 2) by martyb on Friday September 22 2017, @12:43AM (1 child)

          by martyb (76) Subscriber Badge on Friday September 22 2017, @12:43AM (#571496) Journal
          another test, please ignore
          --
          Wit is intellect, dancing.
          • (Score: 2) by martyb on Friday September 22 2017, @12:43AM

            by martyb (76) Subscriber Badge on Friday September 22 2017, @12:43AM (#571497) Journal
            yet another test message
            --
            Wit is intellect, dancing.
      • (Score: 2) by martyb on Friday September 22 2017, @12:46AM

        by martyb (76) Subscriber Badge on Friday September 22 2017, @12:46AM (#571499) Journal
        written at 20170922_004625 UTC
        --
        Wit is intellect, dancing.
  • (Score: 2) by JoeMerchant on Tuesday September 19 2017, @09:48PM

    by JoeMerchant (3937) on Tuesday September 19 2017, @09:48PM (#570381)

    If you have to ask "what is Slack?"

    A) you're not hip enough to matter to the author or the publication

    B) you won't care when you find out

    C) all of the above

    ?

    --
    🌻🌻 [google.com]