Jun
04
2019
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VCs bet $12M on Troops, a Slackbot for sales teams

Slack wants to be the new operating system for teams, something it has made clear on more than one occasion, including in its recent S-1 filing. To accomplish that goal, it put together an in-house $80 million venture fund in 2015 to invest in third-party developers building on top of its platform.

Weeks ahead of its direct listing on The New York Stock Exchange, it continues to put that money to work.

Troops is the latest to land additional capital from the enterprise giant. The New York-based startup helps sales teams communicate with a customer relationship management tool plugged directly into Slack. In short, it automates routine sales management activities and creates visibility into important deals through integrations with employee emails and Salesforce.

Troops founder and chief executive officer Dan Reich, who previously co-founded TULA Skincare, told TechCrunch he opted to build a Slackbot rather than create an independent platform because Slack is a rocket ship and he wanted a seat on board: “When you think about where Slack will go in the future, it’s obvious to us that companies all over the world will be using it,” he said.

Troops has raised $12 million in Series B funding in a round led by Aspect Ventures, with participation from the Slack Fund, First Round Capital, Felicis Ventures, Susa Ventures, Chicago Ventures, Hone Capital, InVision founder Clark Valberg and others. The round brings Troops’ total raised to $22 million.

Launched in 2015 by New York tech veterans Reich, Scott Britton and Greg Ratner, the trio weren’t initially sure of Slack’s growth trajectory. It wasn’t until Slack confirmed its intent to support the developer ecosystem with a suite of developer tools and a fund that the team focused its efforts on building a Slackbot.

“People sometimes thought of us, at least in the early days, as a little bit crazy,” Reich said. “But now Slack is the fastest-growing SaaS company ever.”

“We think the biggest opportunity in the [enterprise SaaS] category is going to be tools oriented around the customer-facing employee (CRM), and that’s where we are innovating,” he added.

Troops’ tools are helpful for any customer-facing team, Reich explains. Envoy, WeWork, HubSpot and a few hundred others are monthly paying subscribers of the tool, using it to interact with their CRM in a messaging interface and to receive notifications when a deal has closed. Troops integrates with Salesforce, so employees can use it to search records, schedule automatic reports and celebrate company wins.

Slack, in partnership with a number of venture capital funds, including Accel, Kleiner Perkins and Index, has also deployed capital to a number of other startups, like Lattice, Drafted and Loom.

With Slack’s direct listing afoot, the Troops team is counting on the imminent and long-term growth of the company’s platform.

“We think it’s still early days,” Reich said. “In the future, we see every company using something like Troops to manage their day-to-day.”

May
30
2019
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The Slack origin story

Let’s rewind a decade. It’s 2009. Vancouver, Canada.

Stewart Butterfield, known already for his part in building Flickr, a photo-sharing service acquired by Yahoo in 2005, decided to try his hand — again — at building a game. Flickr had been a failed attempt at a game called Game Neverending followed by a big pivot. This time, Butterfield would make it work.

To make his dreams a reality, he joined forces with Flickr’s original chief software architect Cal Henderson, as well as former Flickr employees Eric Costello and Serguei Mourachov, who like himself, had served some time at Yahoo after the acquisition. Together, they would build Tiny Speck, the company behind an artful, non-combat massively multiplayer online game.

Years later, Butterfield would pull off a pivot more massive than his last. Slack, born from the ashes of his fantastical game, would lead a shift toward online productivity tools that fundamentally change the way people work.

Glitch is born

In mid-2009, former TechCrunch reporter-turned-venture-capitalist M.G. Siegler wrote one of the first stories on Butterfield’s mysterious startup plans.

“So what is Tiny Speck all about?” Siegler wrote. “That is still not entirely clear. The word on the street has been that it’s some kind of new social gaming endeavor, but all they’ll say on the site is ‘we are working on something huge and fun and we need help.’”

Siegler would go on to invest in Slack as a general partner at GV, the venture capital arm of Alphabet .

“Clearly this is a creative project,” Siegler added. “It almost sounds like they’re making an animated movie. As awesome as that would be, with people like Henderson on board, you can bet there’s impressive engineering going on to turn this all into a game of some sort (if that is in fact what this is all about).”

After months of speculation, Tiny Speck unveiled its project: Glitch, an online game set inside the brains of 11 giants. It would be free with in-game purchases available and eventually, a paid subscription for power users.

May
13
2019
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Slack aims to be the most important software company in the world, says CEO

Slack this morning disclosed estimated preliminary financial results for the first quarter of 2019 ahead of a direct listing planned for June 20.

Citing an addition of paid customers, the workplace messaging service posted revenues of about $134 million, up 66% from $81 million in the first quarter of 2018. Losses from operations increased from $26 million in Q1 2018 to roughly $39 million this year.

In addition to filing updated paperwork, the Slack executive team gathered on Monday to make a final pitch to potential shareholders, emphasizing its goal of replacing email within enterprises across the world.

“People deserve to do the best work of their lives,” Slack co-founder and chief executive officer Stewart Butterfield said in a video released alongside a live stream of its investor day event. “This desire of feeling aligned with your team, of removing confusion, of getting clarity; the desire for support in doing the best work of your life, that’s universal, that’s deeply human. It appeals to people with all kinds of roles, in all kinds of industries, at all scales of organization and all cultures.”

“We believe that whoever is able to unlock that potential for people … is going to be the most important software company in the world. We aim to be that company,” he added.”

Slack, valued at more than $7 billion with its last round of venture capital funding, plans to list on the NYSE under the ticker symbol “SK.”

The business filed to go public in April as other well-known tech companies were finalizing their initial public offerings. Following Uber’s disastrous IPO last week, public and private market investors alike will be keeping a close-eye on Slack’s stock market performance, which may determine Wall Street’s future appetite for Silicon Valley’s unicorns.

Though some of the recent tech IPOs performed famously, like Zoom, Uber and Lyft’s performance has served as a cautionary tale for going out in poor market conditions with lofty valuations. Uber began trading last week at below its IPO price of $45 and is today down significantly at just $36 per share. Lyft, for its part, is selling for $47.5 apiece today after pricing at $72 per share in March.

Slack isn’t losing billions per year like Uber, but it’s also not as close to profitability as expected. In the year ending January 31, 2019, Slack posted a net loss of $138.9 million and revenue of $400.6 million. That’s compared to a loss of $140.1 million on revenue of $220.5 million for the year ending January 31, 2018. In its S-1, the company attributed its losses to scaling the business and capitalizing on its market opportunity.

Workplace messaging startup Slack said Monday, February 4, 2019 it had filed a confidential registration for an initial public offering, becoming the latest of a group of richly valued tech enterprises to look to Wall Street. (Photo by Eric BARADAT / AFP) (Photo credit should read ERIC BARADAT/AFP/Getty Images)

Slack currently boasts more than 10 million daily active users across more than 600,000 organizations — 88,000 on the paid plan and 550,000 on the free plan.

Slack has been able to bypass the traditional roadshow process expected of an IPO-ready business, opting for a path to Wall Street popularized by Spotify in 2018. The company plans to complete in mid-June a direct listing, which allows companies to forgo issuing new shares and instead sell directly to the market existing shares held by insiders, employees and investors. The date, however, is subject to change.

Slack has previously raised a total of $1.2 billion in funding from investors, including Accel, Andreessen Horowitz, Social Capital, SoftBank, Google Ventures and Kleiner Perkins.

May
09
2019
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Against the Slacklash

Such hate. Such dismay. “How Slack is ruining work.” “Actually, Slack really sucks.” “Slack may actually be hurting your workplace productivity.” “Slack is awful.” Slack destroys teams’ ability to think, plan & get complex work out the door.” “Slack is a terrible collaboration tool.” “Face it, Slack is ruining your life.”

Contrarian view: Slack is not inherently bad. Rather, the particular way in which you are misusing it epitomizes your company’s deeper problems. I’m the CTO of a company which uses Slack extensively, successfully, and happily — but because we’re a consultancy, I have also been the sometime member of dozens of others’ Slack workspaces, where I have witnessed all the various flavors of flaws recounted above. In my experience, those are not actually caused by Slack.

Please note that I am not saying “Slack is just a tool, you have to use it correctly.” Even if that were so, a tool which lends itself so easily to being used so badly would be a bad tool. What I’m saying is something more subtle, and far more damning: that Slack is a mirror which reflects the pathologies inherent in your workplace. The fault, dear Brutus, is not in our Slacks, but in ourselves.

May
08
2019
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Slack to live stream pitch to shareholders on Monday ahead of direct listing

Slack, the ubiquitous workplace messaging tool, will make its pitch to prospective shareholders on Monday at an invite-only event in New York City, the company confirmed in a blog post on Wednesday. Slack stock is expected to begin trading on the New York Stock Exchange as soon as next month.

Slack, which is pursuing a direct listing, will live stream Monday’s Investor Day on its website.

An alternative to an initial public offering, direct listings allow businesses to forgo issuing new shares and instead sell directly to the market existing shares held by insiders, employees and investors. Slack, like Spotify, has been able to bypass the traditional roadshow process expected of an IPO-ready business, as well as some of the exorbitant Wall Street fees.

Spotify, if you remember, similarly live streamed an event that is typically for investors eyes only. If Slack’s event is anything like the music streaming giant’s, Slack co-founder and chief executive officer Stewart Butterfield will speak to the company’s greater mission alongside several other executives.

Slack unveiled documents for a public listing two weeks ago. In its SEC filing, the company disclosed a net loss of $138.9 million and revenue of $400.6 million in the fiscal year ending January 31, 2019. That’s compared to a loss of $140.1 million on revenue of $220.5 million for the year before.

Additionally, the company said it reached 10 million daily active users earlier this year across more than 600,000 organizations.

Slack has previously raised a total of $1.2 billion in funding from investors, including Accel, Andreessen Horowitz, Social Capital, SoftBank, Google Ventures and Kleiner Perkins.

Apr
26
2019
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Slack files to go public, reports $138.9M in losses on revenue of $400.6M

Slack has filed to go public via a direct listing. Similar to what Spotify did last year, this means that the company won’t have a traditional IPO, and will instead allow existing shareholders to sell their stock to investors.

The company’s S-1 filing says it plans to make $100 million worth of shares available, but that’s probably a placeholder figure.

The S-1 offers data about the company’s financial performance, reporting a net loss of $138.9 million and revenue of $400.6 million in the fiscal year ending January 31, 2019. That’s compared to a loss of $140.1 million on revenue of $220.5 million for the year before.

The company attributes these losses to its decision “to invest in growing our business to capitalize on our market opportunity,” and notes that they’re shrinking as a percentage of revenue.

Slack also says that in the three months ending on January 31, it had more than 10 million daily active users across more than 600,000 organizations — 88,000 on the paid plan and 550,000 on the free plan.

In the filing, the company says the Slack team created the product to meet its own collaboration needs.

“Since our public launch in 2014, it has become apparent that organizations worldwide have similar needs, and are now finding the solution with Slack,” it says. “Our growth is largely due to word-of-mouth recommendations. Slack usage inside organizations of all kinds is typically initially driven bottoms-up, by end users. Despite this, we (and the rest of the world) still have a hard time explaining Slack. It’s been called an operating system for teams, a hub for collaboration, a connective tissue across the organization, and much else. Fundamentally, it is a new layer of the business technology stack in a category that is still being defined.”

The company suggests that the total market opportunity for Slack and other makers of workplace collaboration software is $28 billion, and it plans to grow through strategies like expanding its footprint within organizations already using Slack, investing in more enterprise features, expanding internationally and growing the developer ecosystem.

The risk factors mentioned in the filing sound pretty boilerplate and/or similar to other internet companies going public, like the aforementioned net losses and the fact that its current growth rate might not be sustainable, as well as new compliance risks under Europe’s GDPR.

Slack has previously raised a total of $1.2 billion in funding, according to Crunchbase, from investors including Accel, Andreessen Horowitz, Social Capital, SoftBank, Google Ventures and Kleiner Perkins.

Apr
24
2019
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Slack to extend collaboration to folks who don’t want to give up email

As Slack gathered with its growing customer base this week at the Frontiers Conference in San Francisco, it announced several enhancements to the product, including extending collaboration to folks who want to stick with email instead of hanging with their co-workers in Slack .

Some habits are tough to break, and using email as your file-sharing and collaboration tool is one of them. Email is great for certain types of communications, but it was never really designed to be a full-fledged communications tool. While a tool like Slack might not ever fully replace email, it is going after it hard.

But Andy Pflaum, director of project management at Slack, says rather than fight those folks, Slack decided to make it easier to include them, with a new email and calendar bridge that enables team members who might not have made the leap to Slack to continue to be kept in the loop.

Instead of opening Slack and seeing the thread, the message will come to these stragglers in their trusty old email inbox, just the way they like it. Earlier this month the company announced tighter integration between Slack and Outlook calendar and email (building on a similar integration with Gmail and Google Calendar), where emails and calendar entries can be shared inside Slack. Pflaum says that the company is trying to take that email and calendar bridge idea one step further.

The non-Slack users would get an email instead with the Slack thread. It bundles together multiple responses to a thread in which the person has been engaging in an email, so the recipient isn’t getting an email for every response, according to Pflaum.

The person can respond by clicking a Slack button in the email and having Slack open, or they can simply reply to the email and the response will go to Slack automatically. If they choose the former, it might be a sneaky way to get them used to using Slack instead of email, but Pflaum says that it is not necessarily the intent.

Slack is simply responding to a request by customers to have this ability because apparently there are a percentage of people who would prefer to continue working inside email. The ability to open Slack to reply will be available soon. The ability to reply to Slack with the Reply button will be available later this year.

Apr
10
2019
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The right way to do AI in security

Artificial intelligence applied to information security can engender images of a benevolent Skynet, sagely analyzing more data than imaginable and making decisions at lightspeed, saving organizations from devastating attacks. In such a world, humans are barely needed to run security programs, their jobs largely automated out of existence, relegating them to a role as the button-pusher on particularly critical changes proposed by the otherwise omnipotent AI.

Such a vision is still in the realm of science fiction. AI in information security is more like an eager, callow puppy attempting to learn new tricks – minus the disappointment written on their faces when they consistently fail. No one’s job is in danger of being replaced by security AI; if anything, a larger staff is required to ensure security AI stays firmly leashed.

Arguably, AI’s highest use case currently is to add futuristic sheen to traditional security tools, rebranding timeworn approaches as trailblazing sorcery that will revolutionize enterprise cybersecurity as we know it. The current hype cycle for AI appears to be the roaring, ferocious crest at the end of a decade that began with bubbly excitement around the promise of “big data” in information security.

But what lies beneath the marketing gloss and quixotic lust for an AI revolution in security? How did AL ascend to supplant the lustrous zest around machine learning (“ML”) that dominated headlines in recent years? Where is there true potential to enrich information security strategy for the better – and where is it simply an entrancing distraction from more useful goals? And, naturally, how will attackers plot to circumvent security AI to continue their nefarious schemes?

How did AI grow out of this stony rubbish?

The year AI debuted as the “It Girl” in information security was 2017. The year prior, MIT completed their study showing “human-in-the-loop” AI out-performed AI and humans individually in attack detection. Likewise, DARPA conducted the Cyber Grand Challenge, a battle testing AI systems’ offensive and defensive capabilities. Until this point, security AI was imprisoned in the contrived halls of academia and government. Yet, the history of two vendors exhibits how enthusiasm surrounding security AI was driven more by growth marketing than user needs.

Apr
09
2019
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Slack integration with Office 365 one more step toward total enterprise integration

Slack’s goal of integrating enterprise tools in the chat interface has been a major differentiator from the giant companies it’s competing with like Microsoft and Facebook. Last year, it bought Astro, specifically with the goal of integrating enterprise productivity tools inside Slack, and today it announced new integrations with Microsoft OneDrive and Outlook.

Specifically, Slack is integrating calendar, files and calls and bringing in integrations with other services, including Box, Dropbox and Zoom.

Andy Pflaum, director of project management at Slack, came over in the Astro deal, and he says one of the primary goals of the acquisition was to help build connections like this to Microsoft and Google productivity tools.

“When we joined Slack, it was to build out the interoperability between Slack and Microsoft’s products, particularly Office and Office 365 products, and the comparable products from Google, G Suite. We focused on deep integration with mail and calendar in Slack, as well as bringing in files and calls in from Microsoft, Google and other leading providers like Zoom, Box and Dropbox,” Pflaum, who was co-founder and CEO at Astro, told TechCrunch.

For starters, the company is announcing deep integration with Outlook that enables users to get and respond to invitations in Slack. You can also join a meeting with a click directly from Slack, whether that’s Zoom, WebEx or Skype for Business. What’s more, when you’re in a meeting, your status will update automatically in Slack, saving users from manually doing this (or more likely forgetting and getting a flurry of Slack questions in the middle of a meeting).

Another integration lets you share emails directly into Slack. Instead of copying and pasting or forwarding the email to a large group, you can click a Slack button in the Outlook interface and share it as a direct message with a group or to your personal Slack channel.

File sharing is not being left behind here either, whether from Microsoft, Box or Dropbox; users will be able to share files inside of Slack easily. Finally, users will be able to view full Office document previews inside of Slack, another step in avoiding tasking switching to get work done.

Screenshot: Slack

Mike Gotta, an analyst at Gartner who has been following the collaboration space for many years, says the integration has done a good job of preserving the user experience, while allowing for a seamless connection between email, calendar and files. He says that this could give them an edge in the highly competitive collaboration market, and more importantly allow users to maintain context.

“The collaboration market is highly fragmented with many vendors adding ‘just a little’ collaboration to products designed for specific purposes. Buyers can find that this type of collaboration in context to the flow of work is more impactful than switching to a generalized tool that lacks situational awareness of the task at hand. Knowledge-based work often involves process and project-related applications, so the more we can handle transitions across tools, the more productive the user experience becomes. More importantly there’s less context fragmentation for the individual and team,” Gotta told TechCrunch.

These updates are about staying one step ahead of the competition, and being able to run Microsoft tools inside of Slack gives customers another reason to stick with (or to buy) Slack instead of Microsoft’s competing product, Teams.

All of this new functionality is designed to work in both mobile and desktop versions of the product and is available today.

Mar
18
2019
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Slack hands over control of encryption keys to regulated customers

Slack announced today that it is launching Enterprise Key Management (EKM) for Slack, a new tool that enables customers to control their encryption keys in the enterprise version of the communications app. The keys are managed in the AWS KMS key management tool.

Geoff Belknap, chief security officer (CSO) at Slack, says the new tool should appeal to customers in regulated industries who might need tighter control over security. “Markets like financial services, healthcare and government are typically underserved in terms of which collaboration tools they can use, so we wanted to design an experience that catered to their particular security needs,” Belknap told TechCrunch.

Slack currently encrypts data in transit and at rest, but the new tool augments this by giving customers greater control over the encryption keys that Slack uses to encrypt messages and files being shared inside the app.

He said that regulated industries in particular have been requesting the ability to control their own encryption keys, including the ability to revoke them if it was required for security reasons. “EKM is a key requirement for growing enterprise companies of all sizes, and was a requested feature from many of our Enterprise Grid customers. We wanted to give these customers full control over their encryption keys, and when or if they want to revoke them,” he said.

Screenshot: Slack

Belknap says this is especially important when customers involve people outside the organization, such as contractors, partners or vendors in Slack communications. “A big benefit of EKM is that in the event of a security threat or if you ever experience suspicious activity, your security team can cut off access to the content at any time if necessary,” Belknap explained.

In addition to controlling the encryption keys, customers can gain greater visibility into activity inside of Slack via the Audit Logs API. “Detailed activity logs tell customers exactly when and where their data is being accessed, so they can be alerted of risks and anomalies immediately,” he said. If a customer finds suspicious activity, it can cut off access.

EKM for Slack is generally available today for Enterprise Grid customers for an additional fee. Slack, which announced plans to go public last month, has raised more than $1 billion on a $7 billion valuation.

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