Aside from that, I'm surprised how much it costs Asana on engineering R&D, for essentially a ticket management system. How does a team grow to ~300+ developers ($89M R&D) to figure out how to attach PDFs and videos to tickets, and email people when there's a change in status? (ok yes I'm oversimplifying a bit, but not that much)
And (as with all such companies) how much they need to pour into Marketing/Sales to sell this thing. These above costs basically wipe out the gross profits by 2x.
As with most of these companies, user-facing feature development is only a small part of the engineering workload.
I would assume the majority of those engineers are working on less visible tasks: Devops, build systems, infrastructure monitoring, security, backups and data integrity, internal tooling for customer support, billing and accounts management, and other critical but otherwise invisible tasks.
Duplicating the core 80% of Asana's features as a one-off product wouldn't be extraordinarily difficult. Scaling it into something that can operate as a business with hardened security, reliable data storage, consistent uptime, and reasonable internal tooling for customer service is where things get difficult.
That said, companies often go overboard with hiring in the run-up to IPOs or acquisitions. Excessive R&D spends can be fixed on the road to profitability. Restoring a company's reputation after a major data loss disaster or a security breach is much more difficult, so it's safer to err on the side of throwing too many engineers at polishing everything. If they can't scale revenues to match, expect the engineering workforce to be cut down significantly.
How many of those jobs would be required if Asana was simply sold in a shrink-wrapped box that you installed on your desktop or the downstairs server run by the corporate IT guy.
In some ways SaaS is a big win because it offloads all those tasks to a centrally hosted service. No IT guy or tower server in the corporate mail room required. OTOH not everyone has the same ops requirements. Not every customer needs 99.999% reliabilty. Or ultra-hardened HIPAA-compliant security. Or heck, even remote access outside the office LAN.
By delivering Asana as SaaS instead of shrink-wrapped software, it means the Asana hosting team has to deliver to insanely tight operational requirements to every single customer. If one customer requires 5-9s of uptime, then basically every customer requires it. That certainly explodes the cost-of-goods-sold beyond selling shrink-wrapped software.
Not to mention that they didn't have the advantage of duplicating features. Developing an application from scratch requires significant experimentation, false starts, deprecated features, associated tech debt, reinvention, etc.
Just because you can drive across the US in four days, it doesn't mean the first explorers to make the journey were lazy.
However I am not sure how much is strictly necessary.
I honestly think a small team could achieve lot more . You loose the agility of smaller team at >50 have large company problems without the benefit of sheer manpower 500-1000 typically brings.
Scaling devops is not as hard as it sounds . There are plenty of cloud native services which scale pretty well more or less out of the box( you still domain knowledge I.e. need to know that service’s unique limitations)
scaling it for cheap is harder, still not as hard as it used to be, plenty of mature tech is available today. Ironically devops engineers with modern cloud skills generally are more expensive than the ones who know how to stand a server in a DC.
A lot of startups like WhatsApp , Instagram built great products at scale with less than < 50 so it not impossible to achieve
Kik messenger had 300M users and a tiny team. Same with WhatsApp - and it's reliable.
Asana scales more or less horizontally, meaning that they don't do anything much at the scale of all of Asanas customers. No individual customer repo should be massive (unlike say Facebook, where a user search searches the entire world.)
The reason reminded me of when I get quoted a large price for an hours work like dentist or plumber and they are like i have insurance and car expenses ;)
Most of these other things are absolutely useless.
The answer is, unsurprisingly, not that they're terribly inefficient. Rather it's that running a popular service at scale is hard, the long tail of features is really a long tail, and a lot of effort goes into even simple things because small differences really add up when multiplied by large N.
* Small team of 5 devs and maybe 1 manager working on some large area of the product is very efficient
* Startup is growing users/revenue very fast, attracts big VC investment
* Major hiring, a year or two later that same area of the product has 30 devs, 5 product managers, 5 dev managers, 3 designers, a manager of the dev managers, a manager of the product managers/designers, and a manager of the dev and product managers
* There’s too many cooks in the kitchen, nobody feels empowered to make decisions, meetings multiply like crazy, every decision takes exponentially longer to make than before
* Instead of planning 1 sprint ahead, you start doing quarterly plans, 3 year visions, customer facing roadmaps, etc. “Predictability” becomes more important than productivity
* Teams know that only predictability matters, so they start making really conservative estimates, just to be safe
* If you have 2 months to do 1 month of work ... it’ll take 2 months. And this starts becoming the new norm
* Plus, you start spending more and more time planning, “scoping out epics”, etc., to get “better” estimates
You get the idea - pretty soon that 45 person team ships not much more than the 6 person team used to. Nobody is purposefully dogging it, or trying to go slow, but it happens when companies grow unless you’re really, REALLY good at fighting it. And few companies are. Everyone is BUSY, but they’re busy doing quarterly plans, “full potential analyses”, change management, meeting with stakeholders, working on all sorts of checkboxes to get all sorts of security certifications to sell to one or two big government buyers, working on “business development” projects that users don’t care about, etc.
Wow. Interesting.
I understand (but not approve) 300 devs - they got a ton of integrations, enterprise client handling, lot of mobile, frontend and backend surface area to cover, lots of devops and support, teams to build new features, maintain tooling and so on... given time, any software team will slow down and scale up, unless it is specifically countered by the company. There's always stuff to be done (create, maintain, or both), pressure comes from the top and the usual response is "throw bodies at it". The less hackerish/the more corporate the company, the faster the engineering team blows up. Kinda inverse function of the red tape.
But the reason I believe Asana is going down is that their product is just what it sounds like - boring. It's a problem that's been solved a million times and they are just lucky they got on the ride in the early days. But they never evolved and the marked is getting new competition every day that is fighting to take their users away the moment they google asana alternatives. On one hand, they got Jira/YouTrack to fight on the enterprise side and Trello/Monday/Clubhouse/Notion to fight at the startup & SMB sides. If they don't evolve their product and bring something unique that will differentiate them and save their customers more time or mental context, they will remain the "boring" choice in a time where people are looking for the "fun" thing. And while it's good to be the boring choice, it's also a good way to haemorrhage users and profits.
If I was steering Asana, I'd look at stuff like Notion and JetBrains Space for inspiration and product evolution, focus on minimising users context burn rate, developer and general UX optimisation and visual noise reduction. If there is no large changes soon, grab some popcorn and watch it burn - I give it about a year before it starts tumbling downwards.
It's really hard to have a failed tech IPO at the moment with all the demand which is why they're all rushing the gates.
It'll take a large, broad recession to bring tech stocks back down
I'd expect Asana, Unity, Sumo and Snowflake to all pop and stay up in the short term
I'd add AirBNB to the list considering booking is only down 10% off it's high and Expedia is up 100%+ from it's covid-low
Product innovation and quality represent very little of a company’s value. Distribution is where value is derived, and Asana’s distribution is incredible. And their product isn’t bad!
(Note: I worked at Asana when it was ~100-150 engineers, and it felt like we could use double that. Having since moved to a FB team, I find I can develop UI features at probably 3-4x the speed in comparison to my time working on Asana UI, simply due to using modern React code with jsx and functional components using hooks)
How would you distinguish that motivation from "Investors / boards feeling that the business is in a strong position, and the worldwide uncertainty from the pandemic has stabilized enough to feel confident about continued growth, so they're ready to go public"?
Why assume such a negative viewpoint without giving any reasoning or arguments for it?
One other conflicting thing about your view, is that if filing now investors are still probably a year out from being able to sell their shares. If they thought things were about to turn south, that's a long time to wait. Surely it would be better for them to sell on a secondary offering and get out sooner if they were sure of that?
People have been saying this for months now. Is there evidence that there are disproportionally more IPOs recently?
4 relatively large, well known companies filing IPO's today.
I don't know any hard evidence to say if overall IPOs increased but the examples named in this thread are very biased towards tech.
The stock market is not the economy.
What has changed since March, except a whole lot of small-business bankruptcies and closures, cities burning in mass protest, and an even-closer, tightly contested election with massive political consequences?
The reason the market looks so good right now is because tech stocks represent a significant portion of the indices. Many other stock are still way down (appropriately)
Is it possible to reach a S-1 with a decent valuation with just ~30 employees "market confidence"-wise?
It seems like there is more than usual IPOs this August compared to previous years: https://www.nasdaq.com/market-activity/ipos
My armchair guess would be, this is a win win market. Its booming, so you can ride it as it goes up. And if you don't do well, you can blame COVID. A lot of companies were on the cusp and this probably accelerates them all.
We do need a return to the regulatory environment where IPOs are non-news due to their frequency and prevalance
Asana's gross margin is ~85%!
Their net retention is tracking @ 120% in 2020.
So every $1.00 dollar of sales to a customer last year turned into $1.20 this year.
AKA negative churn.
Which explains the reason you see them spending $105m in sales & marketing to generate $142m in topline.
Obviously this runs its course eventually, but at that point you cool down your S&M & R&D engine and try to keep up with counting all the cash flows.
SAAS is just a remarkable business, absolute cash pigs.
(1) https://tomtunguz.com/does-better-ndr-imply-greater-toleranc...
If you're confident that the company's eventually going to exit (obviously a big "if"), and you have the cash liquidity (which he obviously does, as one of the original co-founders of fb), is this essentially a method of getting compensation that isn't taxed as compensation? I'm trying to understand what the justification is for maintaining what looks like a fairly complicated transaction. It looks like they've done it a few times (2017, 2020 jan 2020 june). His entities also participated as investors in the Asana Series D and Series E rounds.
Not meaning to cast aspersions, just curious because I haven't seen these kinds of setups in S-1's before. But most S-1 companies don't have people with pre-ipo, >1bn net worth founder-CEOs, so it makes sense that this one might be a bit anomalous.
1) Often trusts and LLCs are used for liability protection and anonymity; you see this used by investors owning multiple residential real estate properties.
2) Your comment on tax is interesting; of course, capital gain in the US is taxed at 20% (plus your state), while income tax gets to roughly twice that. So, potentially, that could be a way to reduce how much taxes you will pay.
However, in relation to #2, I doubt that Moskovitz really cares to save 100k-200k a year in taxes. It's probably more about #1.
Again, this is my $0.02. Please correct me or improve my comment if you know the subject more than I do.
Inheritance tax benefits might be substantial though.
You're probably very right about the liability and anonymity aspects.
You can always swap out the trustee on a trust, giving full control without transferring title of the security
A lot of fun things you can do in the financial engineering space
edit: I’ve seen them done on employee shares/stock options, or on LLC membership interests, but in this case I could imagine being able to change ownership without reporting insider sales (likely not 100% compliant from the regulatory perspective but its likely never been challenged in court especially if nobody knows the trustee changed lol), or just easier asset management for inheritance purposes
I last used Asana at my last company, which I left 2 years ago. It was slow and a resource hog even on our pretty beefy work MacBook Pros. Compared to my current Jira Cloud experience in 2020, I much prefer Jira now.
Asana is pretty complex these days and neither is perfect. Both are kind of slow. But crucially, bulk editing tickets in Asana is just a lot nicer. This is the single reason I prefer it over Jira because anything bulk is just a hell of multi modal dialogs: click, wait, click, wait, etc. It completely sucks the life out of me and makes me curse at my laptop.
Asana feels more like a spread sheet when you are bulk editing. I can switch to the list view, multi select a few tickets and e.g. add some tags, assign to the same person, etc. Boom done. This is so satisfying. I also love bulk inserting tickets in the list view: type, enter, type, type, etc. No modal dialogs involved for two key activities. No process bureaucracy imposed. This is why I like it so much. Jira does not even come close to enabling this level of efficiency.
I'm mostly a developer but seem to always end up taking on a lot of product management tasks as well. Comes with the job when you hit a certain amount of seniority. I tend to be vastly more experienced than some of the junior PMs I work with as well (by some decades). So, inevitably, I end up spending quality time with whatever ticketing system is used and translating their business requirements into actually actionable tickets suitable for consumption by developers (i.e. doing their job). I'm experienced enough to know that the tool is rarely the problem or the solution (it's always the process) but the tools do bias the process (jira and scrum-butt go together real well) and tend to become part of the problem. PMs preferring Jira because that's all they know is usually the reason it's used.
A pain point with Asana is that it is indeed quite slow for some things. E.g. drag and drop of tickets is very sluggish on Firefox. Initial page load is also not great; but once loaded things are reasonable. However, Jira cloud is painfully slow in comparison. I've seen 10-20 second page loads for ticket detail pages. That's appallingly bad and IMHO completely unacceptable for a paid product. It looks to me that they UI is doing lots of REST requests all the time and some use cases seem to end up doing way too many of those.
So any time they get busy, the seconds add up. It's what makes using Jira such a miserable experience because absolutely everything involves multiple such page loads. If you can avoid having to go to detail screens, it helps. Unfortunately, inevitably the fields you care about are scattered over different views.
Asana is much less painful in this respect. But both have challenges on this front. Jira is the more feature rich (in the everything and the kitchen sink sense); but the features that matter to me (as opposed to the gazillions of crap bolted onto Jira over the past 20 years) are all there in Asana. Also, it seems to be a bit more opinionated on what the UI should be in the sense that you don't end up spending a lot of time heavily customizing it; which is a thing in all Jira projects I've been on.
I can work with both but prefer Asana.
An issue with both is that they integrate poorly with things like Github pull requests and version control in general. These days what I look for and have not really found yet (despite lots of plugins) is deep integration with and visibility into CI/CD. IMHO the life cycle of an issue includes events from these. At some point PRs are created, CI tests them, the PR is merged (and thus closes the issue), and CD deploys the change to production. I'd love to have a Github issue tracker style integration into either Asana or Jira. In fact with a little feature work to adopt some asana like features, the Github issue tracker could end up being superior.
Example Epics. A way to roll pieces of a project into a larger ticket describing that project. There's no concept in asana. So you have to hack it by doing sub tasks and manually adding the project to each subtask so it shows up on the board.
That being said, there is one thing I have been missing in all of those years. That is the ability to have automatic numbers assigned like Jira does (e.g. TE-01, TE-02) and allow those to be referenced in Git messages. So that is why I built a 3rd party integratie[0] that does this and integrate this. The Asana API was a _joy_ to work with, it works fast, quickly and the documentation is top notch. Now compare that to my experience with both the BitBucket API and Jira API.
- list views of issues (if you prefer that over the board)
- can do everything without touching a mouse (if you're into that)
- integrations to GitHub, Slack, etc.
- reach editor with markdown shortcuts (similar to the Notion editor)
And that their plan is to just continue trying to upsell and acquire new customers?
Hmmmm
R&D costs outpacing revenue in the year before IPO really surprises me (from ~54% to ~62%).
For comparison, Atlassian went from ~38% to ~36% in the year before IPO.
Almost none of these project management tools are built with full functionality for a freelancer who manages projects and people doing the tasks/projects, but doesn't need them to log into the project management tool.
Have always admired Atlassian on how it was run, at least till 2016 they had no sales team and grew the product with self serve.
The median forward revenue multiple for public enterprise SaaS companies is 10x, and with 2020 revenues of 150mn that results in a 3bn market cap.
A third data point is they raised 75M 16 months ago at a $900m post money valuation. With growth at 100% annually that puts their current valuation at 2.5bn or so.
Three different 30 second valuation strategies that result in the same ballpark numbers.
Given their revenues of 142M and 1.2M paid users, that's an average a tad below $120 a year per user, which would actually be less than their cheapest plan. That doesn't add up, it smells of free trials counted as paid users.
Napkin math, assuming the user acquisition was evenly distributed throughout the year, came out to maybe $160/user.
$1,000 LTV would mean that each user stays a user for ~6 years.
I'm not sure if that's a reasonable assumption or not. Just sharing numbers because I was curious how much the average user might be paying, after seeing the discussion above.
So while the timing here is interesting, nobody decided on Friday that many well-known tech firms would declare their intent to go public on Monday.
"We started Asana because our co-founders experienced firsthand the growing problem of work about work. While at Facebook, they saw the coordination challenges the company faced as it scaled. Instead of spending time on work that generated results, they were spending time in status meetings and long email threads trying to figure out who was responsible for what. They recognized the pain of work about work was universal to teams that need to coordinate their work effectively to achieve their objectives. Yet there were no products in the market that adequately addressed this pain. As a result of that frustration, they were inspired to create Asana to solve this problem for the world’s teams."
I can only imagine that the complexity of the coordination inside Facebook continued to grow after Asana was created.
So is Facebook a client of Asana to solve this problem ? How does a company like Facebook handle the "coordination problem" ? Do they have one tool that solves all the issues or a myriad of project management tools ?
1. Planner is bundled with 365
2. Planner works with Azure AD SSO for free.
3. Planner is 100% integrated with Teams.
This makes Asana an outside bet for me.
- Unity (San Francisco) - Jfrog (Sunnyvale) - Snowflake (San Mateo) - SumoLogic (Redwood City) - Asana (San Francisco)
[1] https://www.sec.gov/Archives/edgar/data/1477720/000119312520...
Disclaimer: I'm not a professional investor and I'm not familiar with Asana's business
The reason for coincidence might be cash-out for investors due to fear of covid-19? I do not know that.
It would be a dereliction of fiduciary duty for executives and boards NOT to fleece the public for cash right now.
The folks who are the real losers are any suckers who think they're going to get by with a fixed wage, particularly if they're in a competitive labor market.
In today's climate? Yes. To give you an idea:
The overall market is being carried by 5 companies...all "tech" companies:
https://www.putnam.com/advisor/content/perspectives/7816
And most of the high growth SaaS companies are up YoY...by a lot:
Wall st is foaming at the mouth to buy up more of these companies.
And we all know what happens in the U.S. in November every four years. So there's going to be great concern about the market dipping or taking a dive.
I'll give my answer
Fed is printing a lot of 'money' with its printing press
some of it is going to large tech because it is 'safe' and still 'growing'
However, there is $3 trillion of money printed, and even more being printed
So, where does this money get put?
Where can it get A RETURN?
Tesla is one answer. That's why Tesla is 1,000 P/E
Another answer is technology companies
Let's say there is Family X, friends of Fed and its printing press
Fed has printed $50 billion for them
Where can they put this $50 billion, so that it doesn't get killed?
A) Big Tech
B) tech that might become big Tech (like Tesla)
C) new tech IPOs
So any tech company that can IPO, should IPO
All this LIQUIDITY/Free Money/Printing Press Money is desperate to find ANY KIND OF RETURN
Also, they have so much money and no where to put it, their thinking is
17 different SaaS companies - at least 1 or 2 will become trillion dollar companies in 15 years
Invest in all 17
They literally 'printed' the money so it costs them nothing
Maybe as soon as they heard Airbnb and Palantir planned for their IPOs, everyone started to run for the hills for their own IPO filings before the whole thing falls over soon.
Reminds me of the dotcom era. Now this is the time again.
If the market is desperate for returns, and tech equities are one of the few remaining avenues for such returns, and you are the owner of those equities, what else would you expect to occur? "No no no, don't buy these valuable shares of my company, invest elsewhere!" No way, you're going to cash out as fast as possible before your gains evaporate when the market transitions.
I'm looking around their site and blog (and the S-1) and read a lot of 'marketing-speak', but no simple one-liner about what they actually do and what value they bring.
Am I missing something obvious?
What comparative companies are they like? I saw someone mention Jira. Are they 'a Jira'?
Completing that outstanding customer ticket is not like the process of achieving englihtenment.
I have no idea what any of this means. It's grandiose and therefore, upsetting.
The first step is to have a relationship with a private banker at a big bank/asset manager. You can tell her that you're interested in purchasing stock at IPO. Most big banks will have some allocation available.
Often the minimum ticket size is something like $100K--but there's no guarantee you'll get it. At some point before the IPO, your banker will tell you how much IPO stock was allocated to you. This will tell you how important you are to the bank. They might, maybe, throw you a bone and give you $10K of allocation.
You have to remember that IPOs are intended to be "free money." They are purposely underpriced. This isn't actually as nefarious as it sounds--the only people getting hurt by this is the issuing company, and not really. They want to have as good a relationship with the big bags of money as the issuing banks do. And there is some risk involved, they don't always pop, etc etc.
An important detail is that, because the IPOs tend to be mis-priced, they also tend to be pretty small. A company going public at a 2B valuation might only be offering 100MM worth of stock. At a 30% pop, that's basically 30MM of "free money" to distribute across the entire planet, which is honestly not that much.
