50%
1/2 resolved calls right
2 scored · avg 45
◆ 4 sources
8
companies · 41 data points
so these companies that are moving to subscription models and that are pseudo SAS are going to have three to four to five great years ahead of them
there's going to be a SAS product that's lighter and cheaper and faster and better just more Innovative just more collaborative the slack of your you're going to turn around the slack of your space is going to come out of nowhere
in 2018 when you have rebuilt your whole network on top of 40 other apps and at last thing got distracted and they didn't do those Integrations and slack has them all you might change
I also like slack slack is putting so many resources into building this product that in two years hip chat game over they can't keep up unless the Paradigm doesn't change
the first time we met, I think I knew why Slack was going to take off and we had a debate versus Slack versus HipChat.
Bill.com will reach an $8 billion annual run rate.
What happened: Bill.com’s actual annual recurring revenue in FY2022 and FY2023 was around $1.2–$1.5 billion, far below the $8 billion run‑rate predicted.
Verify at source ↗Dropbox will not reach $6 billion in revenue by relying solely on a low-cost ($5/month) subscription model.
What happened: Dropbox’s total annual revenue never exceeded $6 billion (it hovered around $2 billion in 2022) and the company did not rely solely on its $5/month consumer plan for growth.
Verify at source ↗That's the interesting part of the case study. It wasn't like Slack that was wildfire.
the first time we met, I think I knew why Slack was going to take off and we had a debate versus Slack versus HipChat.
We are seeing folks like HubSpot, which is one of the great performers in these challenging times, move from marketing automation to CRM. HubSpot is becoming the CRM for SMBs, not just marketing everything.
look at Shopify today. Shopify's gross margins are only 50% because most of its revenue is not from software anymore. It's what it's called merchant services, which are payments. And that's great, but the margins are lower.
when you look at what was happening with Shopify and zoom, you saw that COVID peaked really early the utilization, you can see it Shopify that the e-commerce penetration started to drop almost as soon as we get the hell out of the house. Right. It started to revert to the mean.
we should panic when both the AWS slows down and Azure and the CIO spend
we see in the snowflakes and the data dogs and everything. I mean, we've never seen anything like this poll. This revenue didn't come out of nowhere. These startups, it's massive pull from buyers.
It is Zoom and Slack. The free version of Zoom and Slack are magic.
And we look at all these companies like Zendesk is at a billion HubSpot's at a billion. All of the, the ones we came up with are at a billion in revenue, Slack's at a billion and these brands last forever.
And we can even squint at some of Shopify's numbers and see a deceleration in the sense that five years got pulled forward into, into two months. So that growth can't, you can't have about 200% of commerce be e-commerce, can you? I mean, there's a, there's a, there's a maximum, right? So this could be. But the brands are going to go forever.
they went from 3 million to 13 million this year, um, because Shopify exploded.
Slack's NPS is off the charts okay
Why is Stuart Butterfield doing what he does why is he making slack one of the most beloved companies in Silicon Valley it's because he know he has to do this he has a precious brand and he is doing everything he can to deliver against that promise
the rocket ships the slacks of the world get there in 5 quarters or less
look at box like and box is a great company like basically the whole senior management team just turned over again okay SVP of engineering left S Sales left all of them Aaron at 390 million in revenues got to pick pick himself up and go recruit his sixth management team it's box was founded in 04 so we're 12 years out right that's hard
there's nothing more competitive on the which is like storage and file sharing I mean box more Enterprise
box is one of the best SAS companies of all times but it's also in the single most competitive space and it has a low average deal size like the ticket size is low
box was doing pre IO it was spending two years wow to get a customer on the theory it will keep them for three four five seven or 10 and then it will do upsells and upgrades so if the person is going to be a $300 a year customer we can spend $600 a year acquiring acquir in sales and marketing which is a little scary it's aggressive and box isn't that anymore box went public it scaled it back and Box is doing 300 and something million in Revenue now so it all worked out right
when box or Facebook do their events they lost leaders to you know build the platforms and those guys are printing money
they've also lost much of mobile right yeah so think it the big guys for ass sass they're doing what they have to do to stay in the game to keep their products current um but they're they haven't innovated in any interesting way
it's hard for me to believe that that's going to have a material impact on Revenue the problem is these guys are just h by the materiality threshold
the big guys for ass sass they're doing what they have to do to stay in the game to keep their products current um but they're they haven't innovated in any interesting way or like Oracle or sap they're buying all the old stuff because it has scale
it's not even true with box anymore you know for box less than 1% of their revenue today is premium
I also like slack slack is putting so many resources into building this product that in two years hip chat game over they can't keep up unless the Paradigm doesn't change
during the third year you're like you know what maybe this year we're going to have to rip out everything and we're going to have to do zaps we're going have to do everything but everyone on my team wants I like I'm happy with hip chat it works it works on twist it works everywhere but I want everyone wants slack
in 2018 when you have rebuilt your whole network on top of 40 other apps and at last thing got distracted and they didn't do those Integrations and slack has them all you might change
it is another cool software product development tool but took advantage of where collaboration is today and where apis Integrations are today and made it just so much more valuable
what's bitching about slack beyond the cool UI and that it's fast and that works on every device is that it integrates with everything in the world right every single product you use every single bug tracking tool CI CD tool if you want take a Zen desk you put it in there everything
I think Slack's super interesting I'm not sure slack is actually so different than at lassan
there's going to be a SAS product that's lighter and cheaper and faster and better just more Innovative just more collaborative the slack of your you're going to turn around the slack of your space is going to come out of nowhere
they haven't innovated in any interesting way or like Oracle or sap they're buying all the old stuff because it has scale ... but if you're buying 10-year-old technology at the end of the day you're buying the future you're buying the past
they've also lost much of mobile right
the problem is these guys are just h by the materiality threshold ... just to move the needle you need to do 10% of that so is this free office app you're using going to do $4 billion doar of new incremental revenue for Microsoft no
Microsoft's done some interesting things they bought a compley and and wonderist and a few other things ... but it's hard for me to believe that that's going to have a material impact on Revenue
so these companies that are moving to subscription models and that are pseudo SAS are going to have three to four to five great years ahead of them
Office 365 which I use for PowerPoint you know what it is it's software you go to Microsoft's website you download it it can take five to six hours to download sometime ... and so it's downloaded software
what they've done an amazing job of as we talked alluded to earlier is financial engineering so Wall Street likes recurring Revenue
Microsoft has been hit hard by the SAS Revolution
Salesforce is at $6 billion in recurring Revenue six billion how do you get to six billion you don't get there with five bucks a month
we all owe a huge debt to Salesforce sales Salesforce Salesforce you know marketing pushed through the whole idea of no software and SAS pushed through the idea that people would pay 19 and then 80 and then $200 or $300 a month per user for a product
we like the Salesforce model where realistically not only you locked in but you're locked in with office and Oracle too you're locked in paying every year every year so Wall Street likes the financial engineering side