B (2:59)

Yeah, I think that that is somewhat what happened. And I think from Salesforce side, they're also looking at this in that it's a bit of a defensive move because they can see Microsoft being helped by having teams. When people use teams, it then also means they're using a lot of other Microsoft products. So that may be another one of the reasons that, from Salesforce aside, why this looks attractive.

A (3:24)

So, Emily, given how ubiquitous Slack is in our lives, do you understand why it has kind of failed to be everywhere for everyone? Why is it that it's everywhere for us and not everywhere for everyone? Is it a media thing?

C (3:45)

Yeah, I was thinking about this, Felix, because you posed the question in your newsletter. Even though you'd think in the pandemic Slack would have exploded and so many people would have started using it. And like I just said, I have been using it more. It hasn't exploded the way Zoom has. Zoom use has gone crazy. Zoom has really thrived in the pandemic. And I think the differences, or one of the differences, is that Zoom is something that was used by everyone outside of the weird world of enterprise software, outside of companies and outside of work, people have been using Zoom in all kinds of ways outside the work world. Like my family uses Zoom. Many people's families are using Zoom to do like holidays and events, and people are using it to do funerals and there's press conferences on Zoom, and there's that horrid word webinars on Zoom and Zoom. Zoom. Zoom has just had more universal pickup than Slack has. Slack just really hasn't gotten to the mainstream the same way that Zoom has in the pandemic. And I think that's part of the reason why it got gobbled up.

A (4:59)

I'm in a bunch of WhatsApp groups. I'm on a bunch of text threads. I have a bunch of groups of people that talk to each other and most of them are not on Slack. If I were to go to my cousins in Germany and say, hey, can we move off this WhatsApp group and can we all just move on to Slack because it's a prettier product or something, they would all look at me like I had seven heads. And I think that is one of the big differences between Slack and Zoom. Like in principle, Slack is has the same model, right? You can download it for free, you can use it for free, you can set up a little family Slack group if that's what you're inclined to do. But in practice, people don't do that. I am in a handful of different Slack groups. I'm in Slack groups with friends, which are fun, but that is not a super common use. Case in the way that having a quick sort of celebratory birthday Zoom during a pandemic, I think everyone has experienced that.

B (5:57)

Yeah. I mean, I also think that going into the pandemic, people had, as you said, they were using WhatsApp, they're using all of these other tools, have been using them for years to communicate with people, but people didn't already had set up channels of video communication. That's something that really only started for normal people outside of companies with the pandemic. So then it makes sense why Zoom could gain all this market share, whereas something like Slack is not going to be able to.

A (6:23)

And the other thing which I have learned about Slack in the day or so since my newsletter came out, is that a lot of people really hate it. It was incredibly popular in the early days when it took off among early adopter techie types who really loved the product and who loved how they could plug in all manner of plugins and use it to do very powerful things. But it turns out that just normal folks who work in offices really don't like the way that it kind of takes over your life and intrudes on your work life. They're like, I actually have a workflow and it is incredibly distracting and unhelpful and I don't want to be looking at GIFs all day. And what I think the advantage that Microsoft has is that it isn't fun. Microsoft Teams is not a fun experience where people love to goof off and play around. It is just another random work tool like Word or Excel or even Windows for that matter, which you just have to use because that's what you use at work. And it doesn't feel as intrusive in the same way. But tell me, because you're the person who uses it, how do you feel? Anna?

B (7:45)

Yeah, I mean, I don't dislike Teams as much as I dislike Teams a few months ago, now that I've kind of figured out for the most part how it works. But I do think that the one annoying thing about Teams, and I imagine is the same with Slack, is that when you're sent an email, you can respond to that email or you can respond to that email later. If somebody sends you something on Teams, you feel like you have to respond in that moment or you're being rude. It's like somebody tapping you on the shoulder and you not looking and responding. And I will say that that is not always great. Now, sometimes that is definitely a benefit, especially in the media where you're working on tight deadlines. It can be useful if you need to get somebody very quickly, but it can also be frustrating.

A (8:27)

Yeah, it's very difficult in Slack or in teams to differentiate between. This is incredibly urgent. We need to do this now. And here's a stupid joke that I dropped into the channel because, you know, we're having fun here. Especially when a single channel can be used for both purposes, which are, you know, they should be like, it's important to lighten things up occasionally. It can be very difficult to try and get your mind in the right space. And if you're trying to concentrate on work and not be distracted. Both of these products are suboptimal. And then on some level, I think that the post pandemic life, once the pandemic has gone away and people start going back into offices again, one of the things that people will love to be able to do is really use these things much less. And they might well be associated with like, oh, remember that terrible software that annoyed me so much during the pandemic? I'm so glad I don't need to use that anymore.

B (9:23)

I don't know about that. I think that people certainly will use these things less for the obvious reason that they will be in a room with other people. But I think that these habits have been pretty ingrained. And also before the pandemic, we were being pushed to use teams more and more, and I think that has been happening at a lot of companies. So as everyone says, with everything in this crisis, I think it has accelerated something that was already happening.

C (9:49)

I would add that the reason Slack was just sold for so many billions of dollars is because it is the rare piece of enterprise software, office work software, that's actually pretty good and intuitive and easy to use. I remember at HuffPost first we went to a product called Slack Campfire that I guess didn't really take off. And then we moved to Slack. But it was so much more productive to talk to your team on Slack versus what we had been doing before, which was like an amalgam of like emails and gchats and this and that. It was truly a breakthrough product for our workplace. And I think it's this business model Slack had and a few other software products where it's like people in the office start using it on their own and then you kind of like force the IT manager to buy the product. And that was like Slack's innovation. But it's also its limitation because at the end of the day, the IT officer and the people at the top of the organization, they're going to go with the product that is bundled with all the other products, even if it's like the crappier product. So this is kind of like the best thing in a way that could happen to Slack.

A (10:58)

Yes. So the great advantage of Teams and the reason why Teams is now so much more popular than Slack Slack and has massively overtaken Slack is simply that it is perceived by senior management to be quote, unquote free. Now, nothing is ever free, but the fact is that if you have an enterprise license for Office, then Teams comes with it, so you don't need to pay extra for Slack. And so if you're on the Slack sales team and someone's like, why should I pay for Slack when I get Teams for free? It's hard to come up with a compelling answer. Teams integrates into the Office suite you already have have and it doesn't involve paying more money. And maybe at the margin it is a slightly prettier and better designed product. But corporations don't love paying money for pretty embedded design.

B (11:48)

Definitely. Bloomberg has certainly taught us that.

C (11:52)

The other thing Shira Ovid pointed out at New York Times, which is just so true, is like the client for a product like Slack or Teams is not even the person that really is using it that much at the company. Like Slack And Teams are selling to these IT managers and to these senior executives who are making decisions about about products that they aren't really the end user for, which in the end gives you a worse product. Like email, for example. I remember the battle days when I was at the Journal and I had to use Microsoft Outlook for email. And it was, you know, I didn't know that there was a better world out there. But then when I finally got to HuffPost, we started using Gmail and I was like, oh, this is the brave new world. And then I had learned that when the company was bought by whatever big company bought it first, aol, they had to beg to use Gmail because the big corporate overlords wanted Outlook. And it was like a whole struggle and it seems like it's always a struggle to use the most user friendly stuff at these big corporations. They want to steer you into the wonkiest worst software products that are out there.

A (12:58)

I remember when I worked at Conde Nast and even before that I worked for a couple of companies where you got your email address and then they gave you a certain amount of email, like a quota of email. And then like every so often you would get these rude automated messages saying like, you have reached your quota for the amount of email you're allowed to have. Please start deleting lots of emails. And you're like, how is this a productive use of my time? But they were like, oh, no, we can't allow you to use more than X gigabytes of space. Space is exp. It was insane.

B (13:33)

Well, two things. One, I would say every job I've basically ever had, I've used Outlook for work email, and I actually vastly prefer Outlook. I'm just going to go out on a limb and say that I can't stand Gmail. But I would also say that we are still seeing a lot of companies saying that you can't keep all of your emails, that they will still put limits, but now I don't think it has as much to do with cost as it does with security, that it's better to just say, okay, everybody, you can only keep three months worth of emails. Everything else just gets deleted.

A (14:04)

Huh. I will say the one thing I like about the move into the cloud is that the front end and the back end have been disconnected. You can use Gmail to check your Outlook mail, you can use Outlook to check your Gmail. Whatever kind of front end you prefer, you can use. And whatever backend the company prefers, they can use and they don't need to match anymore. And that is a great leap forward.

C (14:26)

Hmm. Do we need to talk about Salesforce at all? Because I saw a lot of chatter on Twitter about, what is Salesforce? What the heck does it do? I don't even know what it does. What is CRM? What is SaaS? All these weird words, let's do it.

A (14:46)

What is, what is CRM and what is SaaS? Because Salesforce is interesting in that it basically invented SaaS, the cloud, all of these things that are now ubiquitous. It kind of got there first. It really was the first company to sell software as a service rather than as a program that you just download and buy for a fixed amount of money. That was its great innovation and it's done very well about that now. The software it developed was known as CRM, which stands for customer Relationship Management. It's basically a way of if you're selling anything to any anyone, you want to know who you're selling stuff to and what they have bought and all of the different ways in which they have had contact with your company in one place. And so that's why you need CRM software to deal with that. And Salesforce makes that CRM software. And it has since expanded from that core CRM product into a whole bunch of other things to the point at which it is now beginning to compete with Microsoft. And so that's why it bought Slack, so that it could compete with teams. Both Salesforce and Microsoft sell massive suites of software to large corporations. And Microsoft has really adopted the Salesforce model. Now, you can't pay for Microsoft Word and just download it and use it forever like you used to be able to. It's now software as a service. You pay them a monthly amount per user, per month. And that's how all software works. And Salesforce was really ahead of the game on that.

C (16:27)

Yeah. And I think this purchase of Slack, like you said, was a way to compete against Microsoft. But it's worth pointing out that at one point, Microsoft was considering buying Salesforce, or Salesforce was pitching itself to Microsoft for purchase, and it never kind of worked out. And the relationship between the two companies, someone described them as basically frenemies. And this is, I think, important component of what's going on here.

A (16:51)

It's very common in Silicon Valley. It's like the relationship between Google and Apple, you know? Yes, frenemies. Let's talk about nasdaq, Emily. This is right up your alley. They just came out and said that 75% of the companies that are listed on the NASDAQ Stock Exchange don't have what they call two diverse directors. Basically, one who is a woman and one who ticks various other boxes, like being gay or a person of color, which is, you'd think, a pretty small lift. But apparently the vast majority of NASDAQ companies have failed to get even that far in terms of board diversity. What do you make of this, and what do you make of their proposed solution to this problem?

C (17:39)

Their proposed solution is it's kind of squishy. They're asking all the companies, 3,200 or so companies on the NASDAQ, to produce reports about diversity on their boards. And if they can't do that, they have to explain why. They're also saying companies should have at least two, like Felix said, two diverse directors on the board, one woman, one from an underrepresented group. And obviously these can overlap. Right. We know about intersectionality here at Slate Money.

A (18:07)

You can have, like a woman of color, but that's still only one slot. You still need two warm bodies on the board.

C (18:13)

Yeah, you can't double, I think. I mean, this is very much on trend. We know California has a law now that requires gender diversity on boards. We know that Goldman won't take your company public anymore if you don't have a woman on your board of directors. So I think this is, you know, it's like the next logical thing step that's going to happen. And obviously not obviously, but I do think it's a, it's a good thing. I mean, a lot of people will say quotas are bad because then, you know, whoever gets chosen, whatever woman or person of color gets chosen for the board is going to be seen as kind of like a token or, and there might be some of that, but I think sometimes you have to push hard to get diversity, especially in this world, this little exclusive corner that's so powerful of corporate America. So I think it's, you know, generally a good thing. And then there's going to be pushback from places. You know, the Journal already, its editorial page already wrote some, like, snarky thing about the quote, unquote, woke Nasdaq. And people are going to complain that this is like, tyranny. But I mean, the proposal from NASDAQ is pretty gentle. If you don't, if you don't do this, you have to just explain why. It's not like if you don't do this, you're automatically out of the nasdaq. It's like it's more gentle than that. Plus, the SEC still has to sign off on this.

A (19:32)

So the question which I have is, from what you might say, like a public policy point of view, it is very easy to see why this would be a good idea. And we've seen, as you say, precedents across Europe and in California and places like that. On the other hand, it does feel weird to me that the entity pushing this and effectively mandating it on some level, is a private stock exchange rather than any kind of public institution. It's not any kind of government. The stock exchange is just saying, like, this is what we want, and you go and with the very express intention of trying to push companies into doing what it wants. And that sort of puzzles, I wouldn't say concerns, but, like, is weird to me. Like, is that really the job of a private stock exchan. Do we want private stock exchanges to have that kind of power?

B (20:29)

I think I'd rather have it coming from private companies than necessarily a government mandate. And I think that in the United States, which is not really have a history of loving government mandates and has always had some suspicions about so much government power, it's not surprising to me that we're starting to get these more from private companies as opposed to the government.

A (20:53)

Also.

C (20:54)

Don't Nasdaq and other exchanges don't they have all kinds of requirements for the companies that list with them. Why not have this?

B (21:01)

They certainly do. And this would also be, you know, in a way it's kind of a public private because the SEC also would have to sign off on this. And look, you know, private companies are private companies. They can have whatever requirements they want that are legal. I think that when you start to have federal mandates, I'm not saying that at some point we might not need them. We might, but I just think people may actually bristle less at it when it comes from a private company.

A (21:28)

What do you think, Emily? The effect of this is going to be assuming that the SEC signs off on this. And I don't think that's a safe assumption. I think it will be non trivial to get this past the sec. But assuming they do say it's okay and assuming that the NASDAQ does implement it, I wouldn't be at all surprised to see a very large number of companies do exactly what the NASDAQ would like them to do, which is start hiring more diverse directors. Do you understand that mechanism? Do you understand like why they would start hiring more diverse directors and why? They haven't done so until now. But this change is the thing that would make them do it.

C (22:12)

I think I understand why they haven't. Some companies haven't hired more diverse directors. First, it's good to point out that the biggest companies in the US have done this. Amazon, Apple, Google, they're all good. But like this is not going to change anything at those companies. But there are these laggards and I mean it's not a hard thing to figure out. Most companies are still run mostly by white men. And when you're looking for people on your board, you turn to the people you kind of know and, and you turn to ex CEOs. Most ex CEOs are white men. So it's sort of like self perpetuating kind of thing. So this mandate, this effective mandate shakes that up. And finally is that last push that some companies need. And I think the effect will be that there will be more women and people of color and other minorities on boards. Whether companies will go beyond the bare minimum, I doubt it at first. And then the other question is what that extra bit of diversity all the way at the tippy top would mean for the company overall because there's no requirements or mandates for the C suite or for management or anything like that. And we know those areas of companies are still woefully women and minorities are still woefully underrepresented there. And it's not clear to me that these quotas I think we've seen in Europe, for lack of a better term, trickle down to the whole workforce. Right. I mean, you have to really make an effort there too. Like this isn't going to move that needle.

B (23:45)

Part of the problem is because quotas don't fix the problem, that you have discrimination at every level in society that creates all of these reasons. Also why it's sometimes you're more apt to have the kind of people from the most privileged groups tending to be on these boards. And so I'm not saying that it's.

A (24:07)

It's.

B (24:07)

I mean, it's good, obviously, if you have more diverse boards, but that does nothing to change all those other things.

A (24:14)

Let's talk a little bit about Amazon because I was particularly struck by a headline this week saying that Amazon has hired 420,000 people this year. This is a bigger expansion of the corporate workforce than has ever been seen in American corporate history or quite possibly global corporate history. No company has ever hired so many people so quickly. And Anna, I'm fascinated to hear what you think about that and what it means.

B (24:51)

Yeah, I mean, partly it's because we're in this bizarre moment where so many companies and so many retailers have literally not been able to operate at the same time that Amazon could because of the way that the pandemic and lockdowns worked. So I think that's part of the reason you're just seeing this bizarre situation. But again, it's an acceleration of something we were seeing beforehand. And the concern is twofold. One is the potential monopoly of Amazon in E commerce and then the monopsony.

A (25:22)

Potential monopoly. I think they have a monopoly in E commerce. They have like half of the E commerce market right now.

C (25:27)

Yeah.

B (25:28)

The other issue, and I think to me, almost at this stage, maybe more concerning, is the monopsony issue and the idea that you really may only have this like one company hiring. And while on the one hand Amazon does pay better than a lot of retailers do, and their minimum wage is about on par with, if you look at what a lot of the kind of median or warehouse sellers are for, not managers, but kind of people who are doing more of stocking the shelves and delivering, on the one hand you say, okay, but there's not going to be that much pressure on Amazon to increase wages. There has been some. We've seen bonuses. But if you're basically the only game in town, you're the only one hiring that does put workers at a Disadvantage.

A (26:12)

One thing I wanted to point out was that the 400,000 new employees is not everything. You know, there's like 500,000 delivery drivers who aren't on payroll. There's another 100,000 temporary workers who've been hired just for the holiday season who aren't counted in that big full time employee number. So this isn't just some weird like, we need to ramp up to respond to the pandemic thing. These are the actual full time permanent jobs that they've included. And there's even more contractors like you can think of. I'm sure that during the headlong years of Uber growth, you know, when Uber was growing super fast, I'm sure the number of drivers that they signed onto their platform was growing at some astonishing rate as well. But those weren't permanent long term employees on payroll. This is a real move away in some way from that model of like, we just want to outsource the people to call them self employed and that kind of thing. There is a sort of whiff of old fashioned paternalism here. Like actually, yeah, we want to take all of these people working in warehouses and saying like, yeah, make them part of the family.

B (27:25)

Well, but I also think that that is partly because of the pandemic. Because what the pandemic has done is it shifted people's habits. It shifted so much more commerce online. People are buying things more online. That is going to continue afterwards. Amazon has taken over even more of this market. So thus it's not just that they need more workers right now, they will need more workers moving forward.

A (27:48)

And this is something we talked about on Wednesday in the live show when we mentioned Black Friday and we were saying, you know, this is a inflection point in the way that people shop. People don't run out to physical stores in the way that they used to and probably never will. Isn't that what you're saying, Emily?

C (28:05)

Yeah, I mean, I think what's happening with Amazon is one of those changes, pandemic changes that is probably going to stick. Amazon has seen an explosion in sales in this pandemic while other people have seen shrinking and it's going to stick around. So what Anna was saying feels absolutely correct. Like these full time hires are purposeful and strategic and are going to be lasting. And I think the Times estimates that in about a year or so, Amazon will overtake Walmart as the country's biggest employer. And I feel like if you look at the actual number like a half a million drivers for Amazon that aren't technically Amazon employees that's already massive and possibly if you included all those numbers bigger than Walmart. And yeah, I think it's going to not be so great in the long run for innovation in the country to have Amazon dominate retail like this. Just like it wasn't great when Walmart dominated retail. And that came with its own host of problems, if you'll recall, the 90s.

B (29:08)

Yeah, I mean, I know I'm like the resident Amazon apologist here and partly because I buy everything on Amazon. But yeah, I mean, the amount of power this one company is going to have, especially coming out of this crisis, I think should concern almost anyone on any part of the political spectrum, because that's not how a kind of vibrant competitive economy is supposed to work.

A (29:32)

The one thing I want to add here is that Amazon is the 1 mega cap company, it's the one like trillion dollar company in the world that has never paid a dividend, has not spent a bunch of money buying back its stock. In fact, it hasn't bought any stock in the past eight years and is actually finding places to invest free cash flow. It is taking a bunch of money that it's making and it's making a bunch of money and it is plowing it effectively back into its business by doing things like hiring people. And that is very, very uncommon. We're in this crazy world right now where people are like, what are we meant to do with our stock? We're going to spend it on buybacks, we're going to try and invest it in bonds and they all have negative yields as a result because everyone has nothing better to do with their money. Amazon is the one place which actually has something better to do with the money. And they're taking that money and they're using it to hire people. So on that level, it's one of the few bright points of the economy.

B (30:26)

Well, yeah, Amazon has a long history of saying we're thinking long term, we don't think quarterly. The one thing though I would maybe point out is part of the reason that you've had a company like Apple buy back so many shares, it throws off so much cash. There just is not enough places for Apple to put that money productively. Honestly, for its shareholders, the best thing it could do is buy back its shares.

A (30:55)

Right, that's exactly my point, that Apple doesn't have productive uses of the capital, but Amazon does. That's the big difference between them. Agree.

C (31:02)

I did want to say my one thing, which is Amazon does pay relatively well even in the warehousing world. And I think this was in the most recent Beige book. Because Amazon is doing so much hiring in this warehouse space, other companies that do this work have been really scrambling to hire people and it is forcing the wage ceiling up a bit, which is not a bad thing. So that's, I feel, an unusual thing for me to say, but at least Amazon doesn't pay as badly as it, as it probably could get away with, and that's helping a lot of workers.

A (31:38)

Let's have a numbers round. I'll kick off this week. I want to start with 95 million, which is the number of dollars that Frank Slootman gets richer by every month. He is the CEO of Snowflake. It's another one of those cloud, enterprise software as a service, something, something, something companies that no one really understands. And he signed this contract when he came on the CEO a couple years ago. And according to that contract, he's getting this whopping great slew of stock options vesting every month. And every single month, the options that vest for him are worth about $95 million. Nice work if you can get it.

C (32:27)

That is obscene, isn't it?

A (32:29)

It is.

C (32:29)

In this economy, in this pandemic. Yucky.

B (32:32)

Blame the Fed. Why do you. Why do you think the shares are worth that much? I realize that's my answer to everything.

A (32:40)

Just imagine if Slack was worth that much on a multiple of revenues, it would be worth more than Amazon.

B (32:47)

My number is 20%.ancestry.com did this debt offering and for the first time ever, they actually have a voting cap. Blackstone is backing Ancestry.com and this is part of a buyout. And basically what it means, that is, if you were a very, very large holder and you held more than 20% of the outstanding bond, you would still only get to vote 20%.

A (33:22)

When do bonds vote?

B (33:23)

When you have consent solicitations. If you're saying, is there going to be an event of default? If you want to accelerate, that's how bonds work. A bond is a contract. So if you want to change something, you have to ask everybody to vote and then they have to vote. And that's actually one of the interesting things too, is because when you're doing consent solicitation, you get a consent fee. So there's a little bit of game theory here because you're like, well, even if I don't like it, if I think everyone else is going to vote for it, I don't want to not get the consent fee. So that's why, to me, this is a really bad sign of just how frothy these markets are and how borrowers have so much more power than creditors in a way that I think is not great for the markets.

C (34:05)

Emily okay, My number is 11.2% and that is we are recording this on Friday. 11.2% is the unemployment rate for African American men as of November. That was just announced Friday morning. This is a very high unemployment rate. I wrote about an interesting strategy proposed by one of Biden's economic advisers, Jared Bernstein, over the summer where the Fed would start taking into consideration black unemployment when making decisions about the economy. And I think that what's going on right now with the unemployment rate, where you see black unemployment still in double digits, while overall it's kind of sinking and seems like things are going better in the work world, this could be kind of like a game changing way of looking at the real economy.

A (34:58)

On which depressing note, I think that is it for us this week. Thank you for listening. I hope you managed to find gainful employment, especially if you're a black man. But if you're anyone, do keep on listening to Slate Money. It's free so it doesn't cost you anything. Do leave us the occasional nice note in the Apple podcast store app thing so that other people can find us. Many, many thanks to Jessamine Molly for producing this show from her seaplane Armada HQ in Brooklyn. Do keep on emailing us. The email is slatemoneylate.com and we will talk to you next week on Slate Money.