Lawmakers in washington to take action. We will hear from the senator who spoke out first. Workplace messenger slack soaring in its trading debut. After forgoing the traditional ipo, the companys shares opened at 38. 50, 48 above. Point, climbed as high as 22 a share, more than double the last valuation on the private markets. It makes it one of the most Viable Companies to hit the markets this year, but will it be able to avoid the slump of uber, both trading below . Is a couple correspondence. Jason horowitz is an investor in and stephen, you were at microsoft for more than two decades, which is a slack competitor. Can slack fend off the big guys . Well, can microsoft fend off slack . Right now, the way the Industry Leaders have talked about slack, its generally viewed as a leader, certainly by a bunch of measures. I think theyre in a really great position. The industry is 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 fantastic job of doing that. Emily in terms of mechanics, we had a lot of questions on why they chose direct listing. I talked to the ceo, stuart butterfield. Do you think we got an answer . I think so. He was able to explain that the main reason slack was looking to do a direct listing is they didnt want to dilute shares any further. 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. Emily why did they raise as much as they did . It must have felt worth it at the time. He said we were always getting a really fair valuation and we thought capital was always available. And its true, slack has always in a darling of the venture been 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. Emily i have a chart in the bloomberg that shows how tech ipos have been performing so far this year. So, you know, stephen, you ran office. You ran windows. One of the Big Questions about slack is, is it just nice to have . There is a lot of economic uncertainty. Why would they pay for slack and not cut office or why would they pay for slack and not cot not cut office . I think new thing about the workplace, even during bad times, it turns out its 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. And i think in this case, slack isnt really nice to have. It is fundamentally rethinking Companies Really approach the sharing information and making it much more modern. Moving from files of email to an open Committee Case and platform. Emily well, you know how Corporate America can be an slack is cool and hip and great and easy to use. All those things are great, but do you think more Traditional Companies will see the value . They already do. Slack has hundreds of paying customers and there are already Traditional Companies that see the value in all of this whether its a target or ibm that are more traditional. I dont think its about seeing the value as much as the company embracing this idea of wow, we can really do better as a company and the tools we use for us and for our employees. Were raising this generation now entering the workforce that are used to communication and also used to openness and those are all the characteristics of slack, not the characteristics of email. Emily right, in some cases, workers are more responsive on slack than their email. What are the challenges ahead . Weve 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 the slowing is just bigger it gets, the harder it is to double its size every year, and that makes sense. Another thing is trying to explain what slack is to people dont use it. Its a kind of a different category. Its not comparable to what weve seen before. Emily its not just messaging. Its not just email files. You can share files, have video calls. I do think its something they need to keep working on. Its easy to get people to use it, but harder to make that first pitch. Well 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. Take a listen. Well see. At this point, its been working exactly the way it was supposed to work and then the same thing will happen tomorrow. We are very much focused on the longterm. Emily now, youre still paying large fees to bankers and paying a lot of money on the private market, so what problem are you really solving by doing a direct listing instead of a traditional ipo . Well, the first one is we dont need to raise traditional capital. We came into this with 300 million on the balance sheet. We did get a little more freedom with how we tell the story. Instead of only having a roadshow in private rooms with private investors, 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. Emily slack is still unprofitable. How far out is profitability . As we continue to build on what we think is a new category, thats going to be our focus for a long time. Investorso spoke to who are going for cash flow even. We can still invest very aggressively while driving towards that nearterm profitability margin. Ofly so stuart, how much a priority is profitability . I dont want to get too much into it. Theres a lot of deferred revenue. Its not that much priority. 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, though, we continually find new ways or opportunities to invest in further growth the business. We dont need a lot of cash flow, just a little bit. Emily what other revenues are you expecting to tap . Were very pleased with Revenue Growth and weve gotten over 95,000 customers today. We have 640 five customers, over at the0 in revenue, so pace were on now, it will come down, but were very optimistic about the opportunity and believe there is a huge opportunity, so we are focused on that. Emily we have charted progress from the very beginning. The first interview i did was in 2011 and you were making a game called glitch which sort of became slack. Into any 15, jared leto crashed our interview. I will never forget that. Your users really love the quirkiness of slack, which was very much inspired by you. That said, you are becoming a public company. You are going to be doing earnings calls every quarter. How do you manage that transition with public Investors Holding your feet to a fire . I think both alan and i have been committed, over the course of many years, building an internal picture that allows us to operate. On the financial business side, that began a long time ago. And weve been working to transition a limited number of ways we do. We believe we can keep the same culture. We believe we can keep the same approach into serving customers. And we believe in making our customers lives more simpler and productive. Theres also a huge admission and i think the challenge for us goingkind of what were to have to pull off, is kind of bringing investors along on that ride and help them understand what the longterm vision is and what we can truly do to support companies all over the. Aily now, youre entering volatile market, in the midst of a trade war with china. You can imagine that an economic downturn, businesses will cut budgets. They might not cut microsoft, but they might think that slack falls into that category. How risky is that . I dont really see any risk and that. Our customers tell us slack was not what they thought they needed, but they cant live without it. It will be cut on a discretionary basis. Much are youn, how following whats happening in the Global Economy . We watch it just like everybody else but it doesnt necessarily affect the way we run our business. We control what we control and the markets do what they need to do. Emily now, stuart, analysts say that startups are a dime a dozen. You have huge competitors like microsoft and facebook with huge pockets and millions of users. Over the longterm, how do you differentiate yourself . How do you compete . Even as you say, you havent figured out the optimal price because it depends on what your competitors are doing . Its hard for me to imagine anything a competitor would do that would cause us to change our plans when those plans are all about creating value for our customers. What you want to do is make slack the Company Become more valuable because the product because more valuable. Because of the platform, because of the incubation. Theres a whole world out there of other software that continues to proliferate, continues in a world where we have 10 million daily active users out of the 200 million plus that we think would benefit, its just wide open. Emily shares now indicating to open to 32 to 34 per share. Its getting a little bit higher. This means that investors and employees can sell their shares immediately. Alan, should we be worried once employees can sell with no lock up . I think employees, like investors, they appreciate how big an opportunity this is. Were just Getting Started here one, where in a category that values user engagement, customer experience. We think that will help for the future. Emily stuart, last question for you. Youve been very diverse in building a team. Unfortunately, other ceos still dont think diversity is a priority. How has having more voices help you improve the bottom line . Well, i think that theres a bit of an increasing return. The better job we do, the easier it is to take the next step. Theres a lot of early employees that made a contribution to the slack culture, opened it up, and brought in people from the network that has allowed us to continue. You said that we have more work to do. That doesnt end if we are part of a larger culture in larger society. My hope is that there are a group of people that graduate from slack and go on to start other companies and spread that way to working. Emily my interview with steward and allen. And if you didnt see it when it happened, heres a picture of jared leto crashing our interview in 2015. We recognize him with the sunglasses and the pink hair. Just a reminder, bloomberg lp is an investor in slack. Coming up, apple is pleading with the administration to not proceed with tariffs on china. This is bloomberg. Emily apple is urging the Trump Administration not to move toward with new tariffs, as much as 25 on a new slate of products imported from china. 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. Joining us now, mark and sarah. Mark, ill start with you. This is the first time apple has specifically mentioned the iphone in a plea to the u. S. Government. Are they asking for special treatment here . Mark yeah, youre right, 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. Are they asking for special treatment . Sort of. Apple is the most significant phone maker coming out of the u. S. Its the only company in this unique position of being such a global conglomerate that has such a stronghold on this market while also being an American Company that produces almost everything in china. So in a way they are asking for special treatment, but i think if it was granted to other phone makers, they wouldnt be too upset about it. Emily we know that tim cook, the ceo of apple, has met with the president several times, certainly made an effort to keep the conversation going to stop the tariffs. If the administration does slap the new tariffs on the products, would apple be an exception . Sarah tim cook was in washington as early as last week. We do know that he does have the ear of trump. We also know 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 exemption. So, 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 its really hard to tell how much flexibility they have. Apple comes up, in almost every conversation we had, but theyve really had no impact on any tariffs weve had at all, correct . Mark , so first of all, i wouldnt correct you if you were wrong, but youre not wrong. There have been some accessories, some wireless routers that they dont even sell anymore, but the iphone is really apples breadandbutter and is the core. Weve 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, dont do this to us. Basically, theyre saying this is going to hurt their contributions, but what it will actually hurt are their very high industryleading margins for these products and they dont want to sacrifice that. Sarah, which way is the wind blowing at the white house today . What will be the result of the president s meeting with president xi at the g20 . Sarah 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. The other path, i suppose, is for trump and xi 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 was at a hearing on capitol hill this week and spoke for 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. The Trump Administration doesnt be big impacts. It does sound like it may be backing china into a corner with these tariffs. They believe china pays the tariffs. Apple is saying in u. S. Companies are saying they are paying the tariffs. Emily right, and apple is one of many u. S. Companies. Thank you both. Coming up, waymo is partnering up with the Worlds LargestAutomotive Alliance for more opportunities in driverless cars. Details on that next. This is bloomberg. Emily on thursday, apple recalled some of its macbook pro laptops. The recall is due to batteries that might overheat and could pose a safety risk. This problem affects the 15 inch version of the older macbook pro. Apple said it will replace the batteries in these models at no charge. Waymo has agreed to more Driverless Services with renal renault. They will Research Related to legal issues with Driverless Services in france and japan. The city of austin, texas is looking better and better for tech workers. The cost of living is lower and certainly than san francisco. And paychecks are getting fatter. They rose 15 over three years to an average of about 125,000. Thats according to the recruiting platform hired. Coming up, in the public eye, we look at why Cloud Companies like slack seem to be so beloved by wall street. We talked to one investor who saw it coming more than a decade ago. And later, facebook is creating its own crypto currency. But one senator says not so fast. Well hear from Sherrod Brown. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Emily this is bloomberg technology. Im emily chang in san francisco. Back to our top story, slacks soaring debut. Every cloud has a silver lining. Maybe this case, its gold. 10 years ago, market Cap Companies were around hundred billion dollars. Now its close to 1 trillion. Our next guest is no stranger to investing in the cloud. He has backed box, docusign, and more. You did not invest in slack. Unfortunately, correct. Emily and objective outsider, which i like. So, what chances do they have in a market where youre competing with microsoft, facebook, and enterprise juggernauts . Guest great to be back and its a fantastic company, so huge kudos to the team and the base. Investigators its 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 its what is fair value, but its a heck of a company and welldeserved. Emily ive used slack for free in a number of situations, never paid for it. The Company Never paid for it. You often have teams going rogue and using slack. So, can they get people to pay up when they can get a lot of it for free . Guest part of these models, free becomes marketing. They dont need to go out in the wild when for a low marginal cost they can entice users through this premium offering and walk them through a conversion funnel and a very appealing way. A number of Clock Companies have undertaken this method and it works really well if you have this strong product, and they have 140 net upsells, which shows the model is working. Emily how do they stand out or fit into the cloud ipo market right now . A salesertainly theyre business. A lot of people have been looking at this for a number of reasons. Theyre a scale business which puts 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