Comment by mbb70
10 hours ago
>> "almost no competition"
>> "costs way too much"
>> "It's not like chat is a hard problem"
Surely these statements can't all be true. Since Slack is expensive and has little competition, I think chat is a harder problem than you think.
Its not hard. Its capital intensive with a low profit margin. So it doesn't attract a lot of competition because you can make more money in other ways that have moats. There are at least a dozen other chat apps, some of which are decades old.
To have a successful chat business, you need the network effect of lots of users (big marketing spend), you need lots of capital for operations (big spend on disks and compute) and after all that you get only a few dollars per user. Its just not a great business on the balance sheet. Notice that quality software doesn't even get a mention in this niche.
> Its just not a great business on the balance sheet.
I think that's probably what makes it hard.
You can offload the cost of operations to the end user if you’re B2B. Sell the software as licenses the old school way and offload the cost by allowing users to run their own instances either on prem or on cloud.