WFH

WFH Who benefits:

ZM obviously
CRWD yes more endpoints
DDOG yes more monitoring
MDB neutral
SHOP neutral
OKTA yes more secure logins
AYX neutral

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DocuSign
Teamviewer (SaaS listed in Germany)
Atlassian

Hi Meaty,
A one word post like that may seem cute on some boards but it doesn’t go here. It will be deleted. Why did you post it? What is it about the company that makes you think what you think about it?
Saul

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I figured he was referring to Slack Technologies…

I think he was asking about Working From Home, or companies that are benefitting from this transition…

Folks, Saul clearly realised he was talking about Slack. He’s wanting people to explain why they believe companies benefit from the WFH paradigm, and not just post the name. A name is meaningless.

Last couple quarters, Slack had 5,000 net new paid customers in each Q. Last week, halfway through the quarter, they had added 7,000. A week later, 9,000. Maybe not Zoom level numbers, but definitely benefiting from WFH. Slack reported their last quarter and just 2 weeks ago, March 12, right in the middle when the coronavirus was giving the stock market the week of hell. Internally they revised guidance several times and ended up giving 46% growth. A clear slow-down but pretty good!

Just today, the CEO tweeted a rather good read of a thread - diary like of the last few weeks. This comment I think deserves attention:

When the possibility of millions of deaths is slowly starting to sink in, it’s hard to say an otherwise normal CEO thing like “the macro environment is creating significant tailwinds for the business” and it felt completely impossible to extrapolate out from this present moment.

They will very clearly exceed 46% growth this quarter, and will benefit massively from enterprise companies switching to WFH. Slack is not a verb, it’s not in the consumer minds like Zoom. But then it doesn’t have to worry much about the number of free users like Zoom does. I imagine also comparatively much lower bandwidth to run (i.e. it’s not bandwidth heavy video). So even the free versions won’t cost them much.

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Hi Ben,

Thanks for the input.

But then it doesn’t have to worry much about the number of free users like Zoom does.

Would you care to expound on this a bit? I’m interested to know why companies can use Zoom for free more so than Slack.

Any insight is appreciated.

Thanks,
A.J.

Hi AJ. I didn’t explain myself well there. Not saying anything groundbreaking and more my opinion rather than any hard facts.

The whole world is hearing of zoom. I had a zoom dinner with my family this last week. On a sidenote, I’ve just heard of houseparty that seeming to becoming popular amongst friends. Zoom is getting a lot of new users, but, as has been discussed already, a good number of them will never pay a dime to Zoom. They’re there to keep in touch with friends and family. If they had to pay they would just use one of the dozens of other video communications platforms that are free. Now of course Zoom has the optionality to place ads on these free accounts, monetize them that way, which could be huge.

Slack - it’s not really a consumer facing product. It’s a business facing productivity product. My point, my opinion, is that both Slack and Zoom are getting a ton of new customers, but the percentage of quality (paying or with the potential to pay) customers Slack gets will be higher than Zooms. So short term Zooms margins will be hit more than Slacks.

Long-term, well, if Zoom can keep those free customers whilst monetizing them via ads, that’s a whole other story.

I also forgot to post the tweet. Here it is for those interested:
https://twitter.com/stewart/status/1243000487365861376

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If we are facing lockdown as well as working from home then I would think this will accelerate consumption of commerce and entertainment via online vs physical forms.

In this situation, digital broadcast, ecommerce, online gaming and all aspects of home living and home delivery (food, retail etc) would benefit.

Not sure I see Shopify as neutral assuming its merchants can survive. Clearly its share price has held up pretty well. Square is also now bouncing back on that kind of assumption.

Ant

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Slack - it’s not really a consumer facing product. It’s a business facing productivity product. My point, my opinion, is that both Slack and Zoom are getting a ton of new customers, but the percentage of quality (paying or with the potential to pay) customers Slack gets will be higher than Zooms. So short term Zooms margins will be hit more than Slacks.

In SaaS type business, unlike manufacturing, the large costs are not in the cost of product sold, hence the ultrahigh gross margins. In SaaS the two major costs are R&D and S&M, neither of which is increased by free users. In addition, since Zoom knowns whether the user is or not a free account, it can take steps to throttle back free usage if paying customers are at risk of getting poor service.

Free users are not a threat, on the contrary, every sales organization needs a backlog of potential customers to sell to and Zoom has them in spades. If I may be permitted an anecdote from my days as an insurance agent, I attended a sales training course, it went like this:

1.- Make a list of 100 people you know

2.- Qualify the list, remove names of people you cannot contact, people who don’t have money to pay for insurance, people who don’t need insurance. What’s left are your prospects

3.- Contact your prospect

4.- If on the second visit you have not made a sale, don’t waste your time, drop them from the list

Now think about it in Zoom’s terms, they have a huge list of names. From the usage they can likely filter out the ones who are prospects. What a deal!

I downloaded a white paper from Datadog and got the following email

Hi Denny,

I hope you are enjoying working in the Datadog platform. I wanted to drop you a friendly note as your point of contact here. It looks like you have not gotten the chance to fully configure the platform and want to make sure I can help out as needed.

It would be great to learn a bit about your goals for the trial so I can share some of our documentation and KBs for best practices.

What are some of the things you’re trying to achieve with Datadog?

Hope to hear back from you soon,
Scott

I wish I had had it that easy when looking for insurance prospects!

Back to SaaS, according to David Skok the important metrics are CAC vs. LTV. Think how free users impact CAC and some of them can become lifelong paying users.

Denny Schlesinger

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“The whole world is hearing of zoom.” if so the stock has been heard of too, and most of the potential gain from here may be priced in.

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