Is Slack Really Worth $2.8 Billion? A Conversation With Stewart Butterfield

Q.
You’ve said before that valuations are “arbitrary.” Is Slack’s almost $3 billion valuation arbitrary?

A.
Public investors often have some underlying rationale for getting to a decent price. In this market, there are bets about how big the company’s market can be, how good the team is — but there is also just a whole lot of supply and demand.

And there are a lot of investors who have a lot of money. So when I say arbitrary, I mean that it’s not coming from some airtight, textbook formula for how to value these types of companies. It’s based on how many there are — and there’s only one Slack — and if you would like to invest in this Slack, this is the price that it costs.

It’s very highly influenced by other factors: Interest rates being low, there’s a lot of money in V.C., funds get larger as a result, but the number of deals that they do remains about the same. So therefore the amount that they invest per deal goes up, which means the valuation goes up.

Q.
So do you think Slack is worth $3 billion?

A.
It is, because people say it is.

https://bits.blogs.nytimes.com/2015...a-conversation-with-stewart-butterfield/?_r=2