Is Slack a good business?
My belief is it that Slack is not a good business. Explicitly: We will see Slack’s market cap remain flat or decline and remain below their Direct Listing high water mark for the next 2 years. Current Slack Market Cap: $12.36B. Market cap at Direct Listing: $19.5 billion
Why?
MSFT Teams has a larger Total Addressable Market — i.e. not just desk jobs
MSFT Teams has a better sales team and has the power of bundling with Excel/Word etc — in effect hurting Slack by taking the best customers
Slack users do not love Slack. Most orgs use Slack in a way that makes it feel like an all day meeting.
The timing is right for the backlash against Slack — in the story up to the Direct Listing, Slack was the hero as it killed email, but now, I argue, the realization comes that Slack didn’t actually solve the problem it just moved the problem. The unknowns are: 1. Did it solve the problem? (and I am wrong about the above). 2. If the problem is not solved, does it feel solved — which might be enough.
I provide the above intro because below, I present evidence that I may be wrong — specifically:
What is this? Network Map of Shared Channel connections between different Slack Organizations (Different companies using Slack).
As of October 31st, more than 26,000 companies have created more than 70,000 shared channels.
This is Slack building a moat — if these Shared Channels become the ways different companies communicate and do business — the current companies won’t abandon Slack, AND this should lead to increased velocity of Slack adoption and usage. In a sense this is Slack’s attempt to become as integral as a business having a phone line.
Source: https://slackhq.com/shared-channels-growth-innovation
Casper - Breakdown the S-1
Notes:
I love the simplicity Derek Thompson creates in explaining Casper’s business. Yes it glosses over much — but I think it is an excellent high level understanding.
Reading the actual S-1 - the main thing to learn is positioning — Casper in the S-1 does a good job of creating a new economy — the Sleep Economy and highlighting how they are poised to own this new and growing area. I love the attempt, and for their future success, I wish they had started beating the Sleep Economy drum significantly earlier (1-2 years ago) so that the story was more believable.
I’m going to attempt to do Derek Thompson style breakdowns with future S-1s
iPod: Project Start to Shipped in 11 Months
Notes:
The iPod was a transformative product for Apple and for the world. The iPod made Apple the company that understood Consumer Electronics showed they knew how to make a product that felt years ahead — yet this history makes it clear how uncertain that was in January 2001. Conversely, it shows how well Apple was able to get behind a single vision and execute once the decision had been made.
Yes a lot of credit should be given to Tony Fadell having already spent years understanding the software and hardware that would go into the iPod.
Read more stories about quickly accomplished significant projects: https://patrickcollison.com/fast | This is a great read!
The Ultimate Business: Creating Good Jobs
Part of Uber’s success was empowering a wide range of people to easily make money:
Incredibly simple and easy job application (download the app and sign-up!)
Low barrier to entry (a driver’s license, clean criminal record and a working car)
Work when you want, for however long you want.
A job this easy to start and stop never existed before! Which leads me to believe that the ultimate business is a business that creates “Good Jobs”. There are different types of “Good Jobs” — and I posit Domino’s pizza creates “Good Jobs” — not the same as instant on/off like Uber:
While it’s only ~720, the potential career path from entry level to franchisee is compelling. Read here for insight into monthly income of a Dominos Pizza Franchise:
https://www.quora.com/What-is-the-monthly-income-of-a-Dominos-Pizza-franchise
2020s: Continuous Health Monitoring
Link: https://www.whoop.com/
Notes:
What: A strap to capture your heart rate data 24/7
Whoop’s current pitch is aimed at athletes — better training, better recovery = better performance.
My take:
By 2022 - All of Silicon Valley will be wearing some sort of heart rate monitor 24/7 (e.g. Apple Watch, Whoop). No night time charge required.
By 2025 most people will want/desire to be wearing a health monitor 24/7.
What’s special:
5 day battery life
The strap is “cool”
Business model — You aren’t buying the strap — you are becoming a member (monthly subscription) and with your monthly subscription — you get the strap (the hardware). Unknown - does this mean when they launch v4, if I am a member do I get a “free” upgrade for sustained membership?
My hot take: Whoop will be a big winner in 2020 - something you start regularly seeing on wrists.
Whoop Ad:
Roblox Follow-up: Big Ambitions
Notes:
These objectives from presentation in November 2019 really seem to drive at how Roblox is building an entire Ecosystem and Network.
John Malone: Cable Cowboy
Link: https://www.amazon.com/Cable-Cowboy-Malone-Modern-Business/dp/047170637X
Notes:
Fun fast read. Would recommend - Thank you Colin Kelly for the recommendation!
Malone is/was a master of:
Tax minimization and Financial Engineering - A lot still to be learned here on the how. Further, it appears most businesses do a poor job of tax minimization.
Deal making - His superpower may have been being able to always find a way to do a deal in which the other side is truly happy maybe even thinking they have totally won and Malone is a sucker while Malone is playing an entirely different game and traded you one thing to win a future you don’t yet see.
Building up the supporting industries - Example being his foresight to understand the need to create and own channels (content) not just the wires.
The Original Value of Credit Cards to Small Business: Replace the Back Office
Source: Stratechery - but really Joe Nocera in his 1994 book, A Piece of the Action
Notes:
Incentives Incentives Incentives - Credit Cards solved a huge problem for small businesses — something I never knew until this week. The story that credit cards provided users (regular people) credit is not the whole story — as this snippet shows — users (regular people) already had access to credit.