I didn't read the whole thing yet so I don't know if he covers this:
I think many of us (or at least a few loud members) in the tech community have started to see underwriting as a bad form of cronyism. The point jump on opening day becomes substantially about putting money in the pockets of a favored set of investors. Half of that comes from frothing up the public, but the other half comes out of the pockets of the pre-IPO investors and the company. That's not okay.
We know that in a hot neighborhood you want to price your house a little low to get a bidding war going. I get that something similar happens in the stock market. But that's an art of shaving 5-10% off hoping you yield an extra 5-10% over your original price point. We're seeing much, much bigger spreads than that with IPOs, which I take to mean that everyone but the underwriters and their friends are getting screwed.
Thanks for sharing. I swear, if you want to understand Wall Street, all you really need is Matt Levine. It's more informative than seemingly anything else out there.
great read. levine points out that lockout periods are basically a condition for traditional IPOs by the lead investors, and isn't required in a direct listing. assuming direct listings become a thing, inevitably there will be a big firm that does it and doesn't require a lockout period. i cannot wait to see what happens in that case.
Does anyone else here use Mattermost, an open source, self-hosted alternative to Slack? I like it. We're not allowed to store communication offsite. I have no experience with Slack, so I'm wondering how current offerings compare.
Nothing is wrong with the market: Slack may have decided that this is the best way for them to create liquidity. There is also a cap (2000) on the number of shareholders a company can have before they have to abide by what amounts to the same reporting requirements as a publicly traded company.
Slack also get the advantage of the usual market pop of acquiring companies share prices that usually amounts to a significant % of the cash value of the transaction.
What are the benefits of using Slack over Discord? I know Slack has been around longer, looks more professional and has more tie-ins with work flow management tools but those seem like small advantages compared to how feature rich Discord is. Just genuinely curious as I prefer Discord for communicating with my coworkers about non-sensitive information but it doesn't seem to get any love outside of video game and internet communities.
One thing I can't help but notice is that Discord and its API are pretty unreliable. My bot and users regularly encounter unavailability errors. But mainly my bot.
It makes me wish I could pay a monthly fee to get better service, but in reality I'm sharing the same freely-distributed resources as any spammy Discord server. For example, I've been in Discord servers incessantly spammed by its users counting to the number 1,000,000, messages scrolling by like access logs during a DDoS. And I'm sitting there chuckling, "my server is in the same bucket as these people?"
At least Slack lets you pay them for an uptime SLA. I don't think I'd use Discord for a serious venture.
That said, surely your niche plays a large role in which one you pick. I'm somewhat in the gaming niche and Discord was a no-brainer. Gamers/teens are already on a dozen other Discord servers. Meanwhile, all of the Slack groups I'm a part of are professional.
I am not a fan of either Slack or Discord, but I would guess it is the feature requests that companies have made to Slack around it's API's, data retention policies, access controls, chat logging and monitoring and such that make people lean towards it. Discord could probably implement the same features if they wished to go that direction.
Discord has a worse TOS that implies spying on you and has large Chinese investors. That combined with less certification means it is hard to use Discord in an enterprise environment.
Discord search at least on mobile is completely unusable for anything serious - you can click a result to jump to that point in the chat, but you can't scroll from there - it just shows a few messages before and after. Compare to Slack which can jump to any point in the chat and scroll as much as you need from there.
Every time I load Discord I feel like it takes pains to remind me that it is not a safe space for me. It is a safe space for Gamerz, who have a marked tendency to behave like unsupervised teenage boys.
The got a good product, it makes money, lots of people use it. Aren't they afraid of "winning" the market so completely that they can only look forward only to a downhill ride?
Is it simply because they took investor money and now need to grow like bejeezus to pay them back?
It's already been moving from a developer-focused chat platform to one almost hyper-focused on attracting enterprise sales. Slack built its first stage on the backs of developer evangelism and good integrations with third-party providers (something HipChat ignored / did poorly). And once they took that as far as they could go, they went full enterprise.
I think the big tipping point for me was when they changed their chat retention policy from one focused on balanced user privacy, to one focused on whatever your boss wants to get their hands on.
I think Slack had a nice balance between privacy and legal accountability before. Basically, there needed to be some serious event to warrant your boss snooping on your messages (because both parties would be notified it was happening). Now, it appears they are moving more towards a model of "your boss can covertly just peak at whatever they want, whenever they want."
It says something about the system of rolling out companies with high valuations that don't seem sustainable outside of major changes that alter the product's desirability.
But people will buy this and other stocks regardless so I'm not sure there's any incentive to change that.
Depends on what makes it useful and a good experience for you. As a user of a product with no ads (especially if you aren't a paying customer) you always know the IPO or acquisition is the ultimate goal.
Well the general startup model is to figure out a revenue stream after either an exit or going public, so you're probably onto something.
Yes, I know, you can pay for slack, it's absolutely a viable product for free so most users don't. Does that sound like something a publicly traded company would be happy with?
The privacy statement of Slack is horrible. I also wonder why so many companies trust often highly sensitive conversations to what is essentially an IRC forum that could be taken over by an evil company any minute.
Convenience unfortunately seems to be higher valued than privacy by many. This held true for a web agency I worked for. Getting things done, even with proprietary tools, stood above all. The privacy policy was read later, or not at all.
[Many|most] companies big enough to worry about company secrets and PII being logged will get a contract with Slack set up before putting anything on there.
The interesting thing about these direct list IPOs is that if you have confidence your investors will hold, you don't need the bank for stability, you have stability as a result of such low volume. I'm no pro but I think the real risk is introduced when you don't know your investor base well, hence traditional underwritten IPOs have worked well. If the company doesn't need to raise money, seems like a fine way to let the little guys find liquidity. Will likely follow a similar chart as $ESTC.
Most companies need to sell themselves to investors - that's part of what the "roadshow" is about. Slack is a lot more visible than most B2B companies - people will be lining up to buy their shares without needing a banker to sell them on the company, in a way that wouldn't be the case for many businesses.
Not sure if the comments were supposed to be connected, but just to be clear, Elastic NV (ESTC) did a traditional IPO. Spotify was the first to do this direct IPO and Slack would be the second.
Microsoft Teams does almost everything Slack does, and some things even better. What vision would Slack provide to the investors to convince them that they would not just be wiped out by Microsoft or Google?
Personally I feel Slack was a huge missed opportunity by Google. Their enterprise woes would have reduced a bit
My use case for loving IRC is this: I like to chat with other people while learning a language/framework. What do you guys use these days to do the same? Are there public channels on discord or slack, so to speak?
Is there any mathematically optimal algorithm for doing an open initial offering? Some sort of auction I guess where at the end there’s just one price and 100% of shares are sold?
I know Google did a Dutch auction... is that considered the state or the art? Are there variations that wouldn’t have the same problem?
I suspect ICOs have done all manner of experimentation here.
This is tangential, but a couple of years ago I market tested the idea of a slack competitor that limits interruptions. I could not find demand and ditched the project.
Ever tried https://twist.com/tour ? I've always thought it looked interesting, but my company uses Slack. The main difference seems to be that it's thread focused rather than channel focused. Which makes me wonder if it's basically just modern email (which is fine).
[+] [-] certmd|7 years ago|reply
https://www.bloomberg.com/opinion/articles/2019-01-11/direct...
[+] [-] hinkley|7 years ago|reply
I think many of us (or at least a few loud members) in the tech community have started to see underwriting as a bad form of cronyism. The point jump on opening day becomes substantially about putting money in the pockets of a favored set of investors. Half of that comes from frothing up the public, but the other half comes out of the pockets of the pre-IPO investors and the company. That's not okay.
We know that in a hot neighborhood you want to price your house a little low to get a bidding war going. I get that something similar happens in the stock market. But that's an art of shaving 5-10% off hoping you yield an extra 5-10% over your original price point. We're seeing much, much bigger spreads than that with IPOs, which I take to mean that everyone but the underwriters and their friends are getting screwed.
[+] [-] airstrike|7 years ago|reply
[+] [-] mylons|7 years ago|reply
[+] [-] nofunsir|7 years ago|reply
[+] [-] TheBill|7 years ago|reply
Slack also get the advantage of the usual market pop of acquiring companies share prices that usually amounts to a significant % of the cash value of the transaction.
[+] [-] cpursley|7 years ago|reply
[+] [-] killyp|7 years ago|reply
What are the benefits of using Slack over Discord? I know Slack has been around longer, looks more professional and has more tie-ins with work flow management tools but those seem like small advantages compared to how feature rich Discord is. Just genuinely curious as I prefer Discord for communicating with my coworkers about non-sensitive information but it doesn't seem to get any love outside of video game and internet communities.
[+] [-] hombre_fatal|7 years ago|reply
It makes me wish I could pay a monthly fee to get better service, but in reality I'm sharing the same freely-distributed resources as any spammy Discord server. For example, I've been in Discord servers incessantly spammed by its users counting to the number 1,000,000, messages scrolling by like access logs during a DDoS. And I'm sitting there chuckling, "my server is in the same bucket as these people?"
At least Slack lets you pay them for an uptime SLA. I don't think I'd use Discord for a serious venture.
That said, surely your niche plays a large role in which one you pick. I'm somewhat in the gaming niche and Discord was a no-brainer. Gamers/teens are already on a dozen other Discord servers. Meanwhile, all of the Slack groups I'm a part of are professional.
[+] [-] zackkitzmiller|7 years ago|reply
These compliance certifications.
[+] [-] LinuxBender|7 years ago|reply
[+] [-] Thaxll|7 years ago|reply
[+] [-] paulcole|7 years ago|reply
Others (like myself) see these as much bigger advantages.
[+] [-] crescentfresh|7 years ago|reply
On the other hand I use Slack daily.
[+] [-] brynjolf|7 years ago|reply
[+] [-] adamnemecek|7 years ago|reply
This is big for enterprise.
[+] [-] mcintyre1994|7 years ago|reply
[+] [-] jliptzin|7 years ago|reply
[+] [-] egypturnash|7 years ago|reply
[+] [-] amiga-workbench|7 years ago|reply
[+] [-] fargo|7 years ago|reply
[+] [-] ousta|7 years ago|reply
[+] [-] andrewmcwatters|7 years ago|reply
That being said, I'm sure the valuation is overinflated. The ARR ranges I've read don't justify it.
If you're feeling bold and want to speculate, I'd probably short it.
[+] [-] SketchySeaBeast|7 years ago|reply
So why is it going public? Is there a benefit to a successful company?
[+] [-] crispyambulance|7 years ago|reply
Why do they need or want to go public with revenue north of 1 Billion dollars and ~1000 employees? (according to a Recode story from last year: https://www.recode.net/2017/6/15/15810088/slack-deal-funding...).
The got a good product, it makes money, lots of people use it. Aren't they afraid of "winning" the market so completely that they can only look forward only to a downhill ride?
Is it simply because they took investor money and now need to grow like bejeezus to pay them back?
[+] [-] ergothus|7 years ago|reply
Does this mean something is wrong with our market, or just my expectations?
[+] [-] eeeeeeeeeeeee|7 years ago|reply
I think the big tipping point for me was when they changed their chat retention policy from one focused on balanced user privacy, to one focused on whatever your boss wants to get their hands on.
I think Slack had a nice balance between privacy and legal accountability before. Basically, there needed to be some serious event to warrant your boss snooping on your messages (because both parties would be notified it was happening). Now, it appears they are moving more towards a model of "your boss can covertly just peak at whatever they want, whenever they want."
https://mashable.com/2018/03/21/slack-direct-message-privacy...
[+] [-] duxup|7 years ago|reply
But people will buy this and other stocks regardless so I'm not sure there's any incentive to change that.
[+] [-] jMyles|7 years ago|reply
When my company moved to Discord, it was a huge breath of fresh air.
[+] [-] tptacek|7 years ago|reply
[+] [-] bdcravens|7 years ago|reply
[+] [-] shittyadmin|7 years ago|reply
[+] [-] 6cd6beb|7 years ago|reply
Yes, I know, you can pay for slack, it's absolutely a viable product for free so most users don't. Does that sound like something a publicly traded company would be happy with?
[+] [-] x1lo321|7 years ago|reply
[+] [-] iwakura|7 years ago|reply
[+] [-] judge2020|7 years ago|reply
[+] [-] userbinator|7 years ago|reply
https://news.ycombinator.com/item?id=18923809
https://news.ycombinator.com/item?id=18924347
[+] [-] herpderp3dtwerp|7 years ago|reply
[+] [-] 1290cc|7 years ago|reply
[+] [-] neom|7 years ago|reply
[+] [-] lmm|7 years ago|reply
[+] [-] drewr|7 years ago|reply
[+] [-] thewizardofaus|7 years ago|reply
[+] [-] sidcool|7 years ago|reply
Personally I feel Slack was a huge missed opportunity by Google. Their enterprise woes would have reduced a bit
[+] [-] dawhizkid|7 years ago|reply
[+] [-] edgarvaldes|7 years ago|reply
[+] [-] enriquto|7 years ago|reply
[+] [-] erikpukinskis|7 years ago|reply
Is there any mathematically optimal algorithm for doing an open initial offering? Some sort of auction I guess where at the end there’s just one price and 100% of shares are sold?
I know Google did a Dutch auction... is that considered the state or the art? Are there variations that wouldn’t have the same problem?
I suspect ICOs have done all manner of experimentation here.
[+] [-] dangero|7 years ago|reply
[+] [-] MacroChip|7 years ago|reply