Slack went public last Thursday, sort of. I say "sort of" because it wasn't a real IPO — no roadshow, no new shares sold, no underwriters pricing it the usual way the night before. Slack did a direct listing instead, which is still rare enough that it's only the second big one anybody's actually tried, after Spotify did it last year. NYSE set a reference price of $26 a share, and when the stock opened for trading Thursday morning it opened at $38.50. Popped almost 50% before a single new share had even been created, because none were. That's the part people keep glossing over: a direct listing doesn't raise the company any money at all. Existing shareholders (employees, early investors, Stewart Butterfield himself) just get to start selling whatever they already hold, whenever they want, no lockup theater.
Butterfield's the detail I keep coming back to, because I think about it every single day I open Slack for the two other people who help me keep this blog's server from catching fire. The guy didn't set out to build workplace chat software. Slack came out of the wreckage of a game called Glitch that his company, Tiny Speck, spent years building and then shut down in 2012 because basically nobody played it. The internal tool they'd thrown together for themselves while making the game turned out to be the actual product. I love that. Most software this size has an origin story that's been focus-grouped into mush by the time it goes public (sorry, direct-lists). This one's just true, and a little embarrassing, which is more interesting than the usual founder-myth stuff.
Now for my actual complaint, because I have one and it's not going away just because the company's suddenly worth something like twenty billion dollars. If you're on Slack's free tier, which is what my three-person channel runs on because I'm not paying per-seat to coordinate about who's doing the database backups this week, your searchable message history caps out at 10,000 messages. Past that, old stuff doesn't vanish exactly, it just becomes unsearchable and basically unreachable. We hit that wall back in March. There's genuinely useful stuff sitting in our workspace from 2016 that I can't get back to without upgrading. Not a huge deal for three people talking about server maintenance, I know. But it's a weird thing to build into a tool whose entire pitch is "a searchable record of everything," and it's obviously there to nudge you toward the paid plan, which, fine, that's how freemium works, I'm not naive about it. I just think it's the least Slack-like thing about Slack.
The bigger story everybody in tech is chewing on right now is Facebook's Libra announcement from last week, and I'm mostly staying out of that one for the moment. There's a hundred think pieces already out and a hundred more coming, and I don't have much to add that smarter people haven't already said better. Slack's debut was the smaller, weirder story, and it was more fun to sit with for an afternoon.
One more thing about the mechanics, since I find those more interesting than the stock price honestly. Because there's no underwriter setting the price through a roadshow, and no lockup period forcing early holders to sit tight for months, the opening trade is close to pure price discovery. Nobody really knew what it'd open at until it opened. Spotify did the same thing last year and it worked out fine for them too. I wouldn't be shocked if a few more companies with enough brand recognition, ones that don't need Wall Street to explain what they even do, start skipping the traditional IPO circus entirely. Airbnb's name keeps coming up whenever people speculate about who's next.
It's almost midnight here, I've got a cup of tea going cold next to the keyboard, and our little free-tier Slack channel just pinged with someone asking if the backups actually ran tonight. They did. Going to go answer that instead of tidying this post up any further.