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Mar 7, 2019

Lord of Growth, Spencer Burke, and SaaS Sales Mercenary, Patrick Forquer, talk Slack and Lyft heading for IPO while Gap is splitting into two independent public companies. 

 

 

 

TRANSCRIPT:

[0:00:18]

PJ Bruno: Hello there, welcome back to Braze For Impact, your weekly tech industry discuss digest. I'm PJ Bruno, and joined with me again, the lord of growth, Spencer Burke. How's it going?

 

[0:00:29]

Spencer Burke: Hey, PJ.

 

[0:00:30]

PJ Bruno: And also with me, from the sales org, the man who churns out more hot takes than hot cakes, Patrick Forquer.

 

[0:00:38]

Patrick Forquer: Hey... Great to be with you Peter.

 

[0:00:40]

PJ Bruno: It's good to have you guys back. This is a good episode too, we're talking all about IPO's, IPO readiness, who's getting themselves out there now, who plans to do it in the future. And then also, a nice little article about Gap splitting up later. But, before we jump in, level setting. Everyone's good? Patrick, you're feeling nice?

 

[0:01:00]

Patrick Forquer: I'm just looking at your... Pineapple shirt.

 

[0:01:03]

PJ Bruno: Mm-hmm (affirmative)

 

[0:01:04]

Patrick Forquer: And... It's really inspirational.

 

[0:01:06]

PJ Bruno: I think it's going to get us in the right zone.

 

[0:01:08]

Patrick Forquer: Yeah, I'm ready for summer, it's the coldest day of the year.

 

[0:01:11]

PJ Bruno: Yeah, sheesh.

 

[0:01:12]

Patrick Forquer: Pretty depressing here in New York. I can't leave because my wife could have a birth at any moment, so I can only think about Florida. And I see your shirt and I'm transported to another world PJ, so thank you.

 

[0:01:23]

PJ Bruno: Is the birth imminent?

 

[0:01:24]

Patrick Forquer: Yeah, we're in the red zone, as they say.

 

[0:01:27]

PJ Bruno: Oh, wow.

 

[0:01:28]

Patrick Forquer: T-minus six days until the due date.

 

[0:01:31]

PJ Bruno: Holy cannoli! [crosstalk]

 

[0:01:32]

Spencer Burke: Wow!

 

[0:01:33]

Patrick Forquer: So, to say I'm a ball of stress and emotion would be an understatement.

 

[0:01:39]

PJ Bruno: It'd be a good day.

 

[0:01:40]

Patrick Forquer: Yeah, it'd be great.

 

[0:01:42]

PJ Bruno: Awesome.

 

[0:01:43]

Patrick Forquer: Everyone pray for me, that's all I have to say.

 

[0:01:44]

Spencer Burke: (laughs)

 

[0:01:45]

PJ Bruno: Everyone out there, please, pray for Patrick Forquer.

 

[0:01:47]

Patrick Forquer: Yes, please. (laughs) And my wife.

 

[0:01:49]

Spencer Burke: Obviously. (laughs)

 

[0:01:49]

PJ Bruno: Obviously, and the child to be-

 

[0:01:51]

Spencer Burke: That's a lot more stressful for you obviously. (laughs)

 

[0:01:55]

PJ Bruno: All right, first article of the day, we got this seven billion dollar Slack has filed to go public. Slack, one of the most hotly anticipated IPOs of 2019 announced Monday that it had confidentially filed to go public with the Securities and Exchange Commission. The company, which sells an enterprise collaboration and chat platform, joins the ranks of Silicon Valley unicorns like Lyft, Uber, and Zoom, that could make history as the largest cohort of multi billion dollar privately funded companies to hit the public markets.

 

[0:02:28]

Patrick Forquer: Wow.

 

[0:02:29]

PJ Bruno: Yeah.

 

[0:02:30]

Patrick Forquer: Quick aside, when I was-

 

[0:02:32]

PJ Bruno: Oh, good.

 

[0:02:33]

Patrick Forquer: (laughs) About Slack. So, when I was interviewing at [inaudible], now Briz, I was also at the same time interviewing at Slack. And so I'm in this, one of their big glass conference rooms in their office down in Soho, and I'm interviewing with a woman on video chat. And like halfway in, kind of normal conversation going on, and then all of a sudden, apropos to nothing, she just kind of freezes up and gets super awkward. Starts stuttering, is like, "uh-" And then I turn around and Stewart Butterfield (laughs) standing outside the door, just waiting to come in. And then his PR woman came in and kicked me out of the room, mid-interview. So that was my-

 

[0:03:14]

PJ Bruno: That's why you didn't get the job.

 

[0:03:15]

Patrick Forquer: That was great.(laughs)

 

[0:03:16]

PJ Bruno: That was when you met Stewart.

 

[0:03:18]

Patrick Forquer: (laughs) Yeah, so Stewart and I are old friends-

 

[0:03:19]

PJ Bruno: Old buds, from back in the day. [crosstalk]

 

[0:03:20]

Patrick Forquer: Really happy for him. Spencer, what do you think of this story? I don't know, start us off.

 

[0:03:27]

Spencer Burke: I mean, it's really exciting, we have a couple IPOs we're talking about in the cast today. Slack, I think, has become pretty iconic in the sense that it came out of nowhere, it feels like.

 

[0:03:40]

PJ Bruno: Out of nowhere.

 

[0:03:41]

Spencer Burke: And now, it's everywhere. In interviews, customers, Slack is all over the place. People want to connect with us over Slack more than they do over email. So I think it's exciting to see companies that you know IPO-ing on this kind of timeframe. Because, you know we're going to talk about Lyft, but like Airbnb, Uber, these companies that signify the unicorns in a lot of peoples' minds. We haven't really seen a lot of velocity towards IPO yet, so this really one of the first ones.

 

[0:04:16]

PJ Bruno: Right, exactly. They're moving quick. They started working on the app at the end of 2012, they did their soft launch in August of 2013. And then they had, I read this article they did this crazy friends and family press blitz, and in the first day had 8,000 people using it. And then in two weeks, 15,000.

 

[0:04:36]

Patrick Forquer: Yeah, also big shout-out to the U.S. Government for shutting down for a month, so all these IPOs that we're talking about we probably could've talked about a month sooner had the government been open but, you know...

 

[0:04:47]

PJ Bruno: (laughs) Exactly, well hey, we're on their clock.

 

[0:04:49]

Patrick Forquer: Yeah, one thing I find interesting too is as I read more about the Slack IPO was, they're doing a couple things differently. First they're a direct listing, so instead of doing a traditional IPO you're hiring an underwriter, who then likes to stint the stock pricing, and goes out to institutional investors for you. They basically, during direct listing to the exchange where their initial investors and employees who have stock can essentially create an exchange on their end, and then sell their stock individually, and to the upper market. The two benefits for the investors are there's not a lock-up period, you don't have to wait any specific amount of time. And it can be good and bad I guess, but since there's no defined price, the market sets the value, so it's super interesting. Which is why they're able to file confidentially, where they're not releasing the type of info that we'll talk about with Lyft. Where we see more detail on the growth [crosstalk] metrics et cetera. And what I was also looking at was interesting because they sell traditional subscription software at per seat pricing. And their per seat pricing and user base has gone up rapidly, as we've talked about, which is obviously a huge attribute to their success. They've made about 380 million in revenue last year, and somewhere I read that they have 900 million on the books, so, unlike Lyft they're not IPO-ing to raise money for the company, they're basically just IPO-ing so they can pay their initial investors back, they raised about a billion dollars. So completely different... State of business for most of the IPOs that we'll talk about for the rest of the podcast where its like they have a ton of money on hand, they're growing at a huge clip, they're relatively profitable for a company at their stage. And, you know, super interesting. I think they're the first to reck listing since Spotify, and I can't wait to see where the price falls, and how much shares go into the market from an availability perspective. So, be super interesting to watch, unlike traditional...

 

[0:06:53]

PJ Bruno: Yeah, I was looking at some stats for IPOs generally, and one thing that was really interesting for me is most IPOs, it's like 40%, are in healthcare. I think we get really immersed in technology being in a tech space. Like, if its an IPO it has to be a tech company. In reality there's a much broader market that exists around IPOs and across industries. And actually, on the confidential filing, I think it's like 99% of companies do that, so that's the common trajectory for the process.

 

[0:07:29]

Spencer Burke: That's interesting.

 

[0:07:32]

Patrick Forquer: Also, I was reading about the general enterprise collaboration space. It's growing at a 15% year over year clip, which is awesome for Slack, and obviously they have a huge market share. But I was also reading about their competitors and I saw Yammer...

 

[0:07:46]

Spencer Burke: (laughs)

 

[0:07:46]

Patrick Forquer: Would you like me to repeat that? [crosstalk]

 

[0:07:48]

PJ Bruno: I haven't heard that word in so long.

 

[0:07:51]

Patrick Forquer: Yes. Slack totally changed the game for this space, and everyone else is just trying to catch up. But, I was just thinking back to past softwares I used before I started using Slack, and it's just like, what a disaster.

 

[0:08:02]

PJ Bruno: Didn't Yammer try to do like the same thing, wasn't it-

 

[0:08:05]

Patrick Forquer: Yeah, just basically, horribly.

 

[0:08:07]

Spencer Burke: (laughs)

 

[0:08:07]

PJ Bruno: Right, just bad. Just bad.

 

[0:08:07]

Patrick Forquer: (laughs)

 

[0:08:08]

PJ Bruno: Well you know they pride themselves, Stewart says, it's always like they're veracious when it comes to user feedback. They're just constantly taking it in, and mitigating risk. I guess it's like if they tried out with a group of engineers and one engineer says, "Oh, I don't like it, I'm not going to use it," that's like... It's kind of over for that opportunity. But yeah... Also as PR goes, I think he learned with Flicker, press and doing it the right way it's like, how you win the game. They were the official sponsor of the World Cup for Christ’s sake. No tech company does that.

 

[0:08:44]

Spencer Burke: I didn't even know that, really?

 

[0:08:45]

PJ Bruno: Oh yeah, if you watched any of the games Slack was everywhere, you know. So, they knew what they were doing with that. Let's move on. Lyft. Files for IPO. It [inaudible] it's growth and reveals it lost 991 million last year. Yeah, I mean, how do I feel about this? I'll give you guys just the opening tagline here: "Potential investors in Lyft Inc. Initial public offering got their first look at the ride-hailing companies financials Friday, revealing a startup that's hustling to outrun it's growing losses. Lyft's revenue is exploding, and so is its net loss. Like many IPO candidates, the San Francisco company has never turned a profit. It lost 991 million in 2018 up 32% from the year before, even as revenue from the same period doubled." And yeah, I don't think profitability really matters to IPO anymore. IPO should help that kind of, that relationship has changed quite a bit.

 

[0:09:49]

Patrick Forquer: A couple of folks had thoughts on this, and tech industry just got Slack shown also. Shout-out to Boris and Chris for their [inaudible]. I read from recode, I'm reading the stats, so I hope it's true, but 80% of companies that have filed IPO in the past year have not been profitable the year leading up to their IPO. And the last time the percentage was that high was 2000... So not good times potentially, but if you see a company like Lyft... Most of the analysis of their IPO that I was reading people look at things like competitive advantage, product market fit, their margins, and then their growth metrics. So obviously growth is really good, so it comes down to your point of view on... They're going to raise money to pay off some losses that they have, or put towards R&D and investment, and expansion. But, do we really think that their product market fit or competitive advantage is that far superior to an Uber or any of the other ride sharing competitors? And I think that's kind of the key question. If you're going to invest in something like Lyft you're going to have to ask yourself-

 

[0:11:04]

PJ Bruno: Do you use Lyft?

 

[0:11:05]

Patrick Forquer: I do.

 

[0:11:06]

PJ Bruno: You do-

 

[0:11:06]

Patrick Forquer: Well, Lyft-

 

[0:11:06]

PJ Bruno: Over Uber?

 

[0:11:07]

Patrick Forquer: Braze costumer, obviously.

 

[0:11:09]

PJ Bruno: Shout-out.

 

[0:11:10]

Patrick Forquer: Shout-out. (laughs)

 

[0:11:11]

PJ Bruno: Got to do it.

 

[0:11:12]

Patrick Forquer: Great cross channel, customer engagement, Lyft.

 

[0:11:14]

PJ Bruno: Love it.

 

[0:11:14]

Spencer Burke: (laughs)

 

[0:11:16]

Patrick Forquer: But in all seriousness, yeah I use Lyft, it's a great product. When you talk to drivers, drivers who do both almost unanimously tell me that Lyft is better to their drivers, they pay them more, they treat them with more respect.

 

[0:11:30]

PJ Bruno: Right, they get bonuses now.

 

[0:11:30]

Patrick Forquer: They get bonuses and all that jazz. So that part I really like, it's just if the idea is that we're moving towards an autonomous future, where the cars drive themselves, then the real competitive situation you have to look at- it's not necessarily with Uber but its with car manufacturers like Tesla or GM, or whoever may be making these autonomous cars and then could have a more clear enough sight into unseating some like a Lyft or an Uber. And obviously that's not tomorrow, but in terms of long-long term growth, you know, something to watch.

 

[0:12:04]

Spencer Burke: So are you... Thumbs up, thumbs down?

 

[0:12:08]

Patrick Forquer: I'm thumbs up on Slack, I think I'm thumbs down on Lyft.

 

[0:12:12]

Spencer Burke: Oh, why?

 

[0:12:14]

Patrick Forquer: I don't know. It might have a couple of good quarters, I think if you're going to buy something and just set it and forget it, it's not something that I would want to hold for a really long time, just cause I don't think that the return for profitability or margin perspective is going to be where investors want it to be over the next three or four quarters. I mean... They lost a billion dollars last year.

 

[0:12:34]

PJ Bruno: Patrick's picks.

 

[0:12:35]

Patrick Forquer: Yeah. (laughs) [crosstalk]

 

[0:12:38]

Spencer Burke: Not financial advice. (laughs)

 

[0:12:42]

Patrick Forquer: What do you think PJ, you going to buy some Lyft?

 

[0:12:44]

PJ Bruno: no. No, I'm definitely the type of guy that I'm ETF, index funds all the way. Just hang on to it until I die, like literally that's it.

 

[0:12:52]

Spencer Burke: Keep it simple.

 

[0:12:53]

PJ Bruno: My father taught me well.

 

[0:12:54]

Spencer Burke: (laughs)

 

[0:12:54]

PJ Bruno: It's all about low risk, live forever.

 

[0:12:58]

Patrick Forquer: Spencer, what do you think? Slack vs Lyft, which one would you buy?

 

[0:13:02]

Spencer Burke: I think Lyft is more exciting to me. I think, for me Lyft's IPO represents an opportunity for people to buy into this vision of the world with ride sharing, [inaudible] one. They also talk about autonomous vehicles, so, that's all on the radar. Someones not going to sneak up on them and be like, “Oh, cars drive themselves now,” and Lyft's like, “Oh shit, we didn't see this one coming."

 

[0:13:30]

Patrick Forquer: (laughs)

 

[0:13:30]

Spencer Burke: And I think they wanted to file before Uber, just so that their owning this conversation. So even though they're to turning a profit right now, we know Ubers in the same position. And so they can kind of own that, be out there talking about it, control the messaging, and they're going to get a wave of investment from people who haven't had an opportunity to buy Uber and some of the private financing that they've done. Now Lyft's there in the public market, you want a piece of that action, it's there.

 

[0:13:59]

PJ Bruno: Yeah. I still don't get how they're going to grow out of that hole though. Because last year, effectively they lost $1.50 for every ride that was given. [crosstalk]

 

[0:14:13]

Patrick Forquer: Spencer doesn't care.

 

[0:14:15]

PJ Bruno: (laughs) He was literally was going to say, whatever Patrick says, I'm going to take the opposing standpoint, and I'm going to [inaudible] him into the ground.

 

[0:14:23]

Spencer Burke: Yeah, I don't know if it matters necessarily. We're stuck in this idea that they need to be profitable, right now. Amazon got a lot of criticism for a long time because they were investing so much [crosstalk] back into the company, and Ubers raised, through debt and venture capital, 24 billion dollars in financing in the private markets. So people are investing in these companies at an insane scale already. So the difference now is that the three of us, anyone, can go buy a piece of Lyft. People are already investing quite a bit here, it's now just in a public market. So means there's more scrutiny, they'll have to have a track tour profitability, but I think in a public market it gives you some pressure in a form to do that.

 

[0:15:17]

PJ Bruno: Right, I agree. I also think, and I'm not saying that I'd never buy [inaudible] if it's a slam dunk vs Slack. But if you think about, okay we're going to prioritize growth over profitability, Amazons obviously the model for that. And they've done a great job and been a great investment for a lot of people. But also, Amazon's market share and their competitive advantage is pretty vastly superior to their competitors set, if you look at overall eCommerce sales Amazon is obviously very dominant in that way. And Lyft is as well. I mean, obviously it's them and Uber kind of neck and neck, but the question then becomes do you of their marketiture long term. And I don't have an answer, but its just something to think about, something I would think about.

 

[0:16:05]

Spencer Burke: But I think even this kind of starts the Segway into our next topic a little bit. Even the way you're framing that kind of exposes that Amazon isn't just an eCommerce business. And they don't provide a lot of reporting to break everything out, but I think it's something like AWS is 50% of the revenue. And so it's like, all right, who is their eCom competitors? Okay, you can go through Walmart and other folks in that space, but then there's AWS, and who's their competitor? Google, Microsoft, and that's it. And maybe they should be two separate companies.

 

[0:16:38]

PJ Bruno: Maybe it should be two separate companies, on that note...

 

[0:16:43]

Spencer Burke: Great pivot.

 

[0:16:43]

PJ Bruno: Yeah I know, what a Segway.

 

[0:16:45]

Spencer Burke: You're a pro

 

[0:16:48]

PJ Bruno: So Gap will split into two publicly traded companies, and their stock surges. Gap said Thursday that they'll split into two independently publicly traded companies, one comprised of it's Old Navy brand, ans the second a yet to be named company that includes its other brands like Banana Republic and Athletica. And yeah, The Gap stock surged like 23% on that call. Any initial thoughts about this?

 

[0:17:15]

Patrick Forquer: I always like when you know something was a semi-hastily made decision, where it's like, we're splitting into two companies, it's going to be Gap and then company Y. (laughs) We haven't named the second company yet. We just know that this one company is doing really horribly and this other one is doing really well. We need to split them up so we don't cannibalize our business.

 

[0:17:36]

Spencer Burke: I actually thought that was a great move, because then the press is about, it's about the change and their stock surged on the news-

 

[0:17:43]

PJ Bruno: Interesting, right.

 

[0:17:44]

Spencer Burke: Instead of criticism of, oh why did they call it some random acronym, or why is it Gap instead of Banana Republic? It's new-co, don't worry about the name, this is super exciting.

 

[0:17:56]

PJ Bruno: New-co right.

 

[0:17:57]

Patrick Forquer: New-co, doesn't matter.

 

[0:17:58]

Spencer Burke: Exactly, yeah.

 

[0:18:02]

PJ Bruno: And it's funny because I guess it's to protect old Navy's business, because they're doing quite well, and they want to keep themselves apart from some of these other brands. But Old Navy, I remember when I was a teenager it was quite cool place to shop, but I specifically called my cousins yesterday, my 15 and 17 year old cousins to be like, “Hey, do people go to Old Navy?” And they're like, “No!”

 

[0:18:24]

Patrick Forquer: (laughs)

 

[0:18:25]

PJ Bruno: “Okay, well where are you guys shopping?” They're talking about Urban Outfitters-

 

[0:18:27]

Spencer Burke: I love that you're doing this research.

 

[0:18:29]

PJ Bruno: Yeah, Pacsun, Lululemon. I was like, “You can afford to shop at Lululemon?”

 

[0:18:33]

Spencer Burke: (laughs)

 

[0:18:33]

PJ Bruno: What did they pay you in high school now! What's the salary in high school?

 

[0:18:38]

Patrick Forquer: I was also bummed to see that their closing a bunch of Gap stores, because-

 

[0:18:41]

Spencer Burke: Like 200.

 

[0:18:41]

PJ Bruno: Yeah

 

[0:18:44]

Patrick Forquer: Several times on business trips I have spilled a, you know, coffee or breakfast item onto a shirt that I'm wearing to a meeting and almost always The Gap is the nearest store that opens at 8:30- 9:00 am.

 

[0:18:59]

Spencer Burke: You got to have a back up shirt.

 

[0:19:00]

PJ Bruno: That's true. Except today, you currently have a stain on your shirt.

 

[0:19:03]

Spencer Burke: Do I?

 

[0:19:04]

PJ Bruno: (laughs)

 

[0:19:04]

Patrick Forquer: I looked, dang it.

 

[0:19:08]

Spencer Burke: (laughs)

 

[0:19:08]

Patrick Forquer: But no, The Gap clutch, the large slim fit blue Gap shirt. Can't miss.

 

[0:19:14]

PJ Bruno: Yeah, that's true. Well you have a build like a large model, so I think that it probably fits you just right

 

[0:19:19]

Patrick Forquer: (laughs)

 

[0:19:19]

PJ Bruno: But you know, Old Navy, when they had those fleeces come out-

 

[0:19:22]

Patrick Forquer: Oh, the performance fleece?

 

[0:19:23]

PJ Bruno: They cornered the market, obviously.

 

[0:19:25]

Patrick Forquer: (laughs) They sure did.

 

[0:19:25]

Spencer Burke: Those commercials.

 

[0:19:27]

PJ Bruno: That's all I remember, I was walking down the street, all I could remember was that whole advertising campaign around fleeces. I was like, God, they were in their stride then, and now I don't know if it's as accessible to the younger market.

 

[0:19:38]

Spencer Burke: Yeah, the switch from a business Podcast to a nostalgia Podcast.

 

[0:19:41]

PJ Bruno: You know what, I think the best Podcasts weave in both.

 

[0:19:45]

Spencer Burke: (laughs)

 

[0:19:45]

Patrick Forquer: To Spencer's point, I think it'll be interesting to see if these other kind of retail conglomerates who have brands performing at different levels like Gap and Old Navy, will split off if [inaudible] comes to mind, as well as a couple of others. Abercrombie, Hollister, et cetera. Where certain brands, certain markets doing really well have really good margins, and then really good [inaudible], or really good eCommerce business. And so I think in that perspective we might see more of this as brands in retail continue to get more specialized. And obviously AWS should be a standalone company. And I think Kevin was talking about it, it would've been the fastest company to a billion in earnings in history if it had been its own thing.

 

[0:20:31]

Spencer Burke: Yeah I think it's interesting splitting out the higher end brands from Old Navy. I was reading, apparently Diesel jeans is filing for bankruptcy, [crosstalk] (laughs) they totally missed the move to eCommerce, they took out all these leases on super expensive real estate on fifth avenue because they were trying to be a luxury brand, but the only stores that were performing were the ones that were the outlets, the discounted. So it's clear, people don't want to pay full price for these jeans, and if you look at that as two different businesses, ones really healthy, ones not so healthy. It's all rolled into one, and with some bad decisions on real estate, but I think that kind of highlights for why this is a move that's valued by the markets, right. They can understand the two different sides of this company in a more coherent way, rather than trying to lump it all together.

 

[0:21:31]

PJ Bruno: Yeah, the way this is, it seemed like a more proactive move verses, “Oh we're drowning.” It felt a little more like, “Okay, we're going to take this...” I don't know, The Gap seems like a pretty smart company when it comes to some of the stuff they're doing, especially with personalization and whatnot. They have their, I don't know if you guys know but they have their own proprietary CDP that they use.

 

[0:21:56]

Patrick Forquer: I think that the worse thing that happened to The Gap was... What's that movie with Steve Carell where he's the dad on the rebound, and then Ryan Gosling says to him, “You can do better than The Gap.” And I think I saw that while wearing a Gap shirt, and I felt really bad [crosstalk] about myself.

 

[0:22:10]

PJ Bruno: Oh, it's like crazy about love or something like that. Crazy in love, or something.

 

[0:22:15]

Patrick Forquer: Yeah, well... You can't do better than The Gap. I think Spencer's wearing Gap right now if I'm looking [inaudible].

 

[0:22:20]

PJ Bruno: Is this Gap?

 

[0:22:21]

Spencer Burke: I'm not, I don't do brand endorsements.

 

[0:22:23]

PJ Bruno: Who are you wearing? Who are you wearing?

 

[0:22:26]

Spencer Burke: (laughs)

 

[0:22:26]

PJ Bruno: Tell us! Tell us!

 

[0:22:27]

Spencer Burke: We don't have a Patreon, but you can send a large slim fit to-

 

[0:22:31]

Patrick Forquer: Yeah, MeUndies, if you're listening... We need a sponsor.

 

[0:22:37]

Spencer Burke: Actually Pat, as our historian and financial analyst I have a question for you.

 

[0:22:42]

Patrick Forquer: Yes.

 

[0:22:42]

Spencer Burke: In the article it says the current market cap for Gap is 9.7 billion.

 

[0:22:48]

Patrick Forquer: Mm-hmm (affirmative)

 

[0:22:48]

Spencer Burke: Slack could be valued at seven billion in their IPO, how do you... I think for a lot of people Gap, know them, I can see their stores, wearing their clothing, almost ten billion dollar company, sure. Slack, it's a chat app. It's almost worth the same valuation. How do you explain that to people?

 

[0:23:12]

Patrick Forquer: I don't know what you're talking about.

 

[0:23:14]

PJ Bruno: (laughs)

 

[0:23:14]

Patrick Forquer: Well I mean Gap also has a very large international brand and presence, so its not just like a domestic U.S. Brand. But, I don't think you do, and especially if you look at the seven billion, I don't know what the multiplier, I think it was like 25x to earnings.

 

[0:23:31]

PJ Bruno: Mm-hmm (affirmative)

 

[0:23:32]

Patrick Forquer: So, I mean, we talk a lot about that here at Braze in terms of having SAS based revenue model, investors tend to like subscription based business more than they like retail business, because retail is subjects to market fluctuation and seasonal, overhead, seasonal impacts, macroeconomic impacts. You know, if Slacks an essential part of your business and the market goes down, you're still going to use it because it's how you run you're business. But I might not go buy a Gap shirt if-

 

[0:24:06]

Spencer Burke: (laughs) I don't know, you're doing it to do business, right?

 

[0:24:08]

PJ Bruno: So you're saying Slack is recession proof? You know that you will have to work until the day you die-

 

[0:24:11]

Patrick Forquer: Well no, nothing-

 

[0:24:12]

Spencer Burke: (laughs)

 

[0:24:12]

PJ Bruno: And that is certain.

 

[0:24:15]

Patrick Forquer: Well when Social Security- [crosstalk]

 

[0:24:17]

Spencer Burke: (laughs)

 

[0:24:18]

Patrick Forquer: When Social Security evaporates in the next 20 years we are going to all be working until we're 90 anyway.

 

[0:24:23]

Spencer Burke: I feel like we have gone off the rails-

 

[0:24:26]

PJ Bruno: (laughs) I think that's part of it. Well anyways, just in time for us to wrap up. Any final parting words-

 

[0:24:33]

Spencer Burke: Kill switch.

 

[0:24:33]

PJ Bruno: On IPO readiness?

 

[0:24:35]

Patrick Forquer: I just can't wait for Bird's IPO, that's all I have to say.

 

[0:24:38]

PJ Bruno: That's your jam.

 

[0:24:40]

Patrick Forquer: Yeah, that's my jam.

 

[0:24:41]

Spencer Burke: (laughs)

 

[0:24:41]

PJ Bruno: So many [crosstalk] plugs today.

 

[0:24:42]

Patrick Forquer: Shout-out to Cordy Thorten if you're listening.

 

[0:24:46]

PJ Bruno: Spence, you want to leave the people with something good? Something great?

 

[0:24:49]

Spencer Burke: No, I'm done.

 

[0:24:51]

PJ Bruno: All right, well you know what, I think I'm done too. But you guys, stay sharp, keep your eyes open, eyes on the prize, and come back and see us next time.