Snap’s initial public offering on March 2 attracted massive media attention with their IPO price set at $17 in spite of reasonable doubts whether the company is to make profit in the years to come. The first day of Snap’s stock trading saw its price jumping impressive 40 percent while reaching all-time high of $27.09 the next day.

Snapchat Fails to Cope with Rivals

Volatile trading of Snapchat’s parent company continued for just over three months before their stock price closed at IPO price of $17 on June 15, 2017. Many experts believe that it is only a matter of time before Snap’s stock will fall below the IPO price and the company will join the ranks of other tech companies that slowly evaporated following a successful IPO.

Snap have a fair chance to recover but their flagship product, Snapchat, is experiencing troubles competing with rivals like Facebook and Instagram while marketers seem reluctant to turn to their platform for promoting brands.

Snap stock price closing between IPO on March 2, 2017 and June 15, 2017. During this period the stock price fall from $25 to initial IPO price of $17.

The fate of Snap’s stock in the recent months is another sign that for an online service to be really successful it should focus either on entertainment or varied business applications. Services like Facebook are a strange mix of both but they look like an exception to the rule and, as weird it may sounds, their future is also not rock solid in the long run.

Slack Is Following Another IPO Strategy

Slack, for example, boasts steep growth curve of both their daily active users and paid users. They see their active daily users reach 5 million recently with paid users counting over 1.5 million. Their workplace chat program is facing fierce competition from products like Microsoft’s Teams but they look well-positioned to withstand temporary buzz around emerging similar products.

Slack hirs 5 million active users as of February 2017. Paid users reach 1.5 million.

To the surprise of many, Slack are not planning an IPO any time soon. Stewart Butterfield, CEO and co-founder of Slack, says in an interview with Bloomberg their IPO is “years away” and for a good reason.

Snap and Slack: Two Different Paths

Cloud-based services of all kinds enjoy interest from both customers and investors. Moreover, those type of services actually shape the future of business and enterprise software. On the other hand, shareholders will always seek profits and dividends with many shareholders failing to realize that companies like Snap and Slack are making business in a very tough market where profiteering is almost impossible.

This is not an excuse for Snap to rush with their IPO, though. Recent examples of other successful tech companies show that progressing through bootstrapping and VC funding is far too often a better option compared to going public prematurely. That is why Snap vs Slack comparison is strongly in favor of the Slack’s business chat platform.

Bearing in mind the growing number of business and enterprise-level cloud platforms that incorporate chat and real-time collaboration, Snap will have to reinvent themselves as a popular entertaining platform to survive. Slack, for their part, should only add features to compete on equal terms with rival platforms.

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