Action. E will hear from senators its tradingg in debut. 38. 50,shares opened at 48 above. At 19. 5 a cap at 19. 5 capped atcap at 19. 5 billion. Investor intz is an stephen, you were at microsoft for more than two decades, which is a slack competitor. Guys k sendoff of the off the bigfend guys. Slack is generally viewed as measures. Y a bunch of i think they are in a really great position in undergoing a phenomenal amount of change in terms of the way people work. People are looking for things that integrate more software and slack does a good job doing that. In terms of mechanics, we have a lot of questions on why they chose direct listing. Do you think we got an answer . He is able to explain that the main reason they are looking to do a direct listing is they did not want to dilute shares any further all stop they have a lot of cash and feel confident they dont need to raise any more money and doing a direct listing elastic do that. It allows you to go public and not lose shares. As much asthey raise they did . It must have felt worth it at the time. He said we were always getting a and it is true, slack has always in a darling of the Venture Capital world and i can imagine they were able to negotiate the deals they were really good for them in the private market and dont feel the need to raise more. Chart that shows how tech ipos have been performing so far this year. Stephen, you ran windows. One of the Big Questions about slack, is it nice to have . There is a lot of economic uncertainty. Why would they pay for slack and not cot office or why would they pay for slack and not cot office . New thing about the workplace, even during bad times, it turns out it is a way to invest to make it through the bad times. You communicate better, get more done, search customers better and we have seen that for decades in the way that Technology Investing looks. It is fundamentally rethinking Companies Really approach the sharing information and making it much more modern. You know how Corporate America can be an slack is cool and hip and great to use. Do you think more Traditional Companies will see the value . Slack has hundreds of paying alreadys and they are there are already Traditional Companies that see the value whether it is target or ibm that are most traditional. I dont think it is about seeing the value as much as the company embracing this idea of we can really do better as a company us and tools we use for employees. We are raising this generation now entering the workforce that are used to communication and used to openness and those are all the characteristics of slack, not the characteristics of email. Cases, workers are more responsive on slack been there email. What are the challenges ahead . We have seen Revenue Growth slow from down at about one of your 10 to a projected 50 this year. I think there are questions of what is going to help bolster the revenue Going Forward . I had it explained to me that bigger itg is just gets, the harder it is to double every year and that makes sense. Is trying to explain what slack is to people dont use it. It is kind of a different category. It is not comparable to what we have seen before. You can share files, have video calls. I do something they need to keep working on. It is easy to get people to use it, but harder to make that first pitch. Ellen, we will listen to how they tell their story. I spoke with the cfo after the opening bell and asked how confident he was about listing directly. This point it has been working exactly the way it was and then theork same thing will happen tomorrow. We are very much focused on the longterm. You are still paying large fees to bankers and paying a lot of money on the market, so what problem are you really solving by doing a direct lessings set of the a direct listing instead of ipo . Became with 300 million on the balance sheet. We did get a little more freedom. Ith how we tell the story we were able to do an investor day, livestream it and make it available to everyone all stop i think that has put us in a better position. Profitable ill unprofitable will stop how far out is it . Unprofitabletill l stop how far out is it . Slack is still unprofitable. How far out is it . [no audio] we can still invest aggressively while driving towards that nearterm profitability will sto. [no audio] theres a lot of deferred revenue. As he was saying, bringing more cash than we put out is a priority because it allows us to control our own destiny. The idea is we continually find new ways or opportunities to invest in further growth the business. We dont need a lot, just a little bit. We are very pleased with Revenue Growth and we have gotten over 95,000 customers today. Customers, so at the pace we are on now, it will come down, but we are very optimistic about the opportunity and believe there is a huge opportunity, so we are focused on that. We have charted progress from the very beginning. The first interview i did was in a gamed you were making called glitch which sort of became slack. Your users really love the quirkiness of slack, which was inspired by you. That said, youre becoming a public company. You will do earnings calls every quarter. How do you manage that transition with public Investors Holding your feet to a fire . Over the course of many years, building an internal picture that allows us to operate. That began long time ago and we have been working to transition a limited number of ways we do. We believe we can keep the same keep things more simpler and productive. Theres also a huge admission and i think the challenge for us is bringing investors along on that ride and help them understand what the longterm we can do to what support companies all over the. You enter a volatile market, in the myths of a trade war with china. You can imagine that an economic downturn, businesses will cut budgets. ,hey might not cut microsoft have slack fall into that. How risky is that . I dont think there is much. Notomers tell us slack was what they thought they needed, but they cant live without it. Say how much are you following what is happening in the Global Economy . Not necessarily affect the way we run our business, we watch like everybody else. Control andhat we the markets do what they need to do. Are a dime anible] dozen. You have huge competitors like millions of users. Compete . U you say you have not figured out the optimal price because it depends on what your competitors are doing . Imagine hard for me to anything a competitor would do that would change our plan when our plans are create are around greeting value for our customers. Theres a whole world out there that continues to proliferate, continues in a world where we. Ave 10 million active users open tos indicating to 34 per share. And means that investors employees can sell their shares immediately. Worried oncewe be employees can sell with no locked up . I think employees, like investors, they appreciate the category. Heree just Getting Started in a category that values engagement and customer these customer experience. Last question for you. In have been very diverse building a team. Unfortunately, other ceos still dont think diversity is a priority. How does having more voices help you improve the bottom line . I think theres a bit of an increasing return will stop the better job we do, the easier it is to take the next step. Early employees that made a contribution to the slack culture and brought in people from the network that has allowed us to continue. You said we have more work to do. Part ofnot added we are a larger culture in larger society. Group ofs there are a people that graduate and go on to start other companies and way to working. My interview with alan. Heres a not see it, picture of jerry o crashing our interview in 2015. Theecognize him with sunglasses and he doesnt care. Bloomberg lp is an investor in slack. Does not wantle the u. S. To proceed with tariffs on china. This is bloomberg. Apple is urging the Trump Administration not to move , as muchth new tariffs as 25 of products from china will stop the tech giant says it would reduce the companys contribution to the economy and global competitiveness. It would affect nearly all major apple products including the iphone. Sarahg us now, mark and allsop mark, i will start with you. This is the time the first time apple has mentioned the iphone in a plea to the u. S. Government. Are they asking for special treatment . This is the first time they mention the iphone. It represents two thirds of sales and pretty much other sales because they buy that because of iphones. Apple is the most significant phone maker coming out of the u. S. It is the only company in this unique position of being such a global conglomerate that has such a strong hold on this market while also being an American Company that produces almost everything in china. If it was granted to other phone makers, they would not be too upset about it. We know that the ceo of apple has met with the president several times, certainly made an effort to keep the conversation going to stop if the administration does slap the new tariffs on the products, would apple be an exception . In washington as early as last week. We do know that he does have the ear of trump. We also note that in previous rounds of tariffs, apple was able to get a couple of its products off it. Other companies have gotten other items taken off. Companies can apply for exception. There are options that apples behest to try to avoid the tariffs. That being said, i think the Trump Administration really wants to make an impact, so it is really hard to tell. Apple comes up in almost every conversation we had, but theyve really had no impact at all, correct . They have not really been impacted by tariffs at a significant level. There have been some accessories, wireless routers that they dont sell anymore, but the iphone is really apples breadandbutter and is the core. We have been talking about is the iphone going to be impacted for a year. This is the first time apple is coming out and think, please, do not do this to us. Basically, they are saying this is going to hurt their contributions, but what it will actually hurt are the very high industryleading margins for these products and they dont want to sacrifice that. Which way is the wind blowing at the white house today . Of thell be the result president s meeting with president xi at the g20 summit . I think theres two ways they could go. One, they both are scheduled to meet at the g20. Best case scenario, they chart a path forward for talks to continue. Path is to not come to any sort of agreement and if that happens, trump says he plans to move forward with the tariffs and the u. S. Trade representative had a hearing on capitol hill and spoke four hours. One of the comments that really struck me was he said theres going to be some discomfort to get a deal with china and that is going to happen right here in the u. S. Bedoes sound like it may backing china into a corner with these tariffs. Apple is saying in u. S. Companies are saying they are paying the tariffs. Apple is one of many u. S. Companies. Thank you both. Coming up, waymo is partnering with the Worlds Largest allianceeliance for more opportunities in driverless cars. On thursday, apple recalls. Ome of its macbook pro laptops the recall is due to batteries that might overheat and could pose a safety risk. The 15 inchaffects version of the older macbook pro. Apple says it will replace the batteries at no charge. More has agreed to driverless services. They will Research Related to legal issues in japan and france. The city of austin, texas is looking better for tech workers. Andcost of living is lower paychecks are getting fatter. They rose 15 over three years to an average of about 125,000. Why cloud we look at Companies Like slack seem to be so beloved by wall street. We talked to an investor who saw it coming more than a decade ago. And later, facebook rating its own crypto currency. A senator says not so fast. We will hear from Sherrod Brown. His is bloomberg will sto were the slowskys. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Emily this is bloomberg technology. Stories,wer top slacks soaring debut back to our top story, slacks soaring debut. Our next guest is no stranger to investing in the cloud. , ands backed box, docusign more. What chances do they have in a market where youre competing facebook, and, enterprise juggernauts . It is a fantastic company, so huge kudos to the team and the base. It is a milestone event. Investors are reacting with greed, appropriate for this business, paying 50 times run rate revenue. The only hole you can chew and it is what is fair value, but it is a heck of a company and welldeserved. Emily i have used slack for free in a number of situations, never paid for it. The Company Never paid for it. Can they get people to pay up when they can get a lot of it for free . To go out int need the wild when for a low marginal cost they can entice users through this premium offering and walk them through a conversion tunnel. A number of Clock Companies have undertaken this method and it works really well if you have strong product, and they have 140 net up cells, which shows the model is working. Emily how do they stand out or fit into the cloud ipo market . A lot of people have been looking at this for a number of reasons. They are a scale business which. Uts them on a short list there had been a class of Companies People were watching closely and also the way in which they went public, i think this will change some of the mindsets in terms of the direct listing and if that is a viable alternative, but theres still 55 companies behind them while the private side valued at 50 billion today in cloud alone, so there is a long list public investors are looking at. Cap theith their market higher if they did a traditional ipo or lower . I think it was an absolute homerun for them. Huge credit, i love financial innovation in general, but the fact they got the perception of the pop with the price and the actual opening price and they captured full value for shareholders emily they did not actually leave money on the table. We should be clear about that. Absolutely. The halfmillion dollar spread was captured by employees and. Nvestors very few companies have attempted this, and it is a small class of companies that can pull it off and i think it suggests good things for trying to do more for market match with these ipos as opposed to the props that have happened with other companies. Emily if you were to see other Tech Companies do that, would you buy . If provocative, yes. We were one of the largest buyers in pinterest. We have had five ipos investment this quarter alone. A number of them could have considered this. Ive got to imagine that the boards are sitting around right now thinking is this for us and can we get the best of both worlds. Emily 10 years ago, you saw the cloud coming and wrote something called 10 laws of the cloud. That was in 2008 and that was advice for founders about how to start a cloud company. The cloud industry has exploded since then and is still exploding. . At are the laws today i was an early cloud ceo. It was a small group of companies then. 15 Public Companies in the entire ecosystem that were public and only a few hundred of any scale on the private side. Fastforward today and there are 50plus public cloud companys and hundreds below them price side that are about to flip over. What we have seen is that it is a much more nuanced world where they are getting more sophisticated about product. Our earlier discussion about slack, uc productled companies and very thoughtful metrics to unlock the margin, very producible revenue stream investors love. He did the best of both of these companies. High growth because of this generational shift in technology and predictable Business Models because of the subscription dynamics underneath the core customer relationship. Emily the cloud sounds like a great idea and obviously in many ways it is if it is the only way. T also increases vulnerability biggest risk to the cloud that you see today . I would dispute relative vulnerability. I dispute the notion that Cyber Attacks are a threat to software and businesses in general. However, absolutely what you see is that a purposefilled company is much better positioned to defend it than a corporation installedo software with thousands of applications with also its a different attack vectors that they dont know how to protect against. I absolutely would bet on salesforce. Com to defend their Software Suite that i fortune 2000 company protecting 2000plus applications trying to do a similar job. Emily when are you coming out with 10 new laws . We just published the 10th anniversary edition. It was really fun. It is live on our website actually today. Right, well, i gave you an opportunity for a plug. Thanks so much for stopping by. The partner at Kleiner Perkins helped lead the first three investment rounds for slack. She spoke with bloomberg earlier today. Slack is just an Amazing Company and brand that has a lot of recognition. The company has 10 million daily active users so you can imagine slack. Ople just know the company also has a lot of capital it has raised in the private markets. They need to go out and raise anchor mental capital in the Public Markets. The direct listing is actually quite interesting because it allows you to transact very quickly, set the right price, and it is highly effective. We know they do not need to raise cash, but theres always a question with Tech Companies about the path to profitability. What would you like to see from s