__When they congratulate you for something that happened years ago...__ Thanks, I guess? __[Slack](https://robinhood.com/stocks/WORK)__ stock jumped 18% Monday after Business Insider [reported](https://markets.businessinsider.com/news/stocks/slack-stock-price-ibm-biggest-account-global-employees-messaging-platform-2020-2-1028890304) that it snagged __[IBM](https://robinhood.com/stocks/IBM)__ as its biggest client. Huge win, since IBM has *350k employees*.

__Then, trading of Slack stock was strangely [halted](https://techcrunch.com/2020/02/10/what-happened-to-slack-today/)...__ *Then*, this announcement from Slack cleared up the [situation](https://www.youtube.com/watch?v=l0ug31Ksku4): "IBM has been Slack's largest customer for several years..." Slack shares fell 8% after hours. Here's how Slack's relationship with IBM has blossomed:

- __2014:__ Some IBM teams start using Slack, testing the GIPHY and emoji-filled waters of the messaging platform (which launched in 2013).
- __2016:__ Slack [partners](https://fortune.com/2016/10/26/ibm-watson-slack-chatbot/) with IBM's AI tool Watson to improve that friendly Slackbot (and allow Slack developers to make other AI bots).
- __2019:__ IBM has expanded its usage of Slack over time, and (according to Business Insider) decides to go "all in." 
- __2020:__ Slack's relationship with IBM goes public/official. Kind of old news, but the BI report lifts Slack shares. Moral of story: all of IBM's employees use Slack now.
- __Either way__, IBM's usage of Slack validates the app's potential with massive corporations, instead of just start-up-y startups.

_IBM becomes Slack's biggest customer (again)_

Work

__A mutually beneficial relationship...__ Being chosen by one of the world's largest corporations is a big win for Slack, and its partnership with IBM has prepared it over the years to tailor to larger customers. IBM, on the other hand, is a 108-year-old. When developers at Slack-using startups see IBM's chatbot integrations, they might be more inclined to champion the tech IBM's trying to sell them. 

Slack soars on news that IBM is its biggest customer — falls on exact same news

__Building your brand...__ is not just a LinkedIn gimmick. SoftBank-backed __Brandless__, the ecommerce company that sold frill-less, sustainable grocery/homegoods products for $3 each, is shutting down. In 2017, Brandless launched with direct-to-consumer single versions of almost everything — minimalist basics from organic cashew butter to cruelty-free moisturizer, with no brand on the label. Then:

- __July 2018:__ SoftBank's Vision Fund (which also financed Uber, WeWork, and Wag) invests $240M, valuing Brandless at around $500M. 
- __January 2019:__ Brandless begins [raising](https://techcrunch.com/2019/01/23/brandless-introduces-a-9-price-point-with-the-launch-of-baby-and-pet-products/) its prices beyond $3, introducing higher-priced products like baby and pet food. 
- __October 2019:__  Tries to [expand](https://www.businessinsider.com/brandless-products-brick-and-mortar-stores-2019-10) its products into brick-and-mortar retail stores.
- __February 2020:__ Goes out of business.

__End "the brand tax"...__ That was Brandless' thesis: *Make products cheaper for consumers by saving on marketing costs*. Because if a product's not splurging millions on branding, you can give that $$$ back to customers. But Brandless didn't have enough word-of-mouth and customer loyalty to survive in the highly competitive direct-to-consumer market.


Close

__Companies are built on brand...__  Brand is so important that it often overpowers actual quality, price, *and reason*. Buying an $80 candle doesn't really make sense — but it somehow clicks if it's from Anthropologie or Goop. Especially for direct-to-consumer companies, where you're not seeing the product on a store shelf, branding is crucial (from Allbirds shoes to Warby Parker shades).

Brandless shuts down after failing to build a brand without a brand

__Praising the favorite child...__ __[Restaurant Brands International](https://robinhood.com/stocks/QSR)__ is a Canadian holding company, and also the parent of Burger King, Popeyes, and Tim Hortons. But RBI was especially proud of Popeyes, which outshined its siblings this year with a surge in sales.

- __Burger King__ opened the most new locations in 20 years, but sales were up __barely 3%__.
- __Tim Hortons'__ performance "did not reflect the incredible power of our brand," according to RBI — sales were __down 4%__ (*Sorry, mom*).
- __Popeyes__ sales jumped __34%__ driven by its viral fried chicken sandwich, which was [sold out](https://www.cnn.com/2019/08/27/business/popeyes-chicken-sandwich-sold-out-trnd/index.html) in 2 weeks and caused a chicken shortage that took months to re-supply. The proud parent [called](https://www.rbi.com/file/Index?KeyFile=402720224) Popeyes' poultry dish "iconic" and a "game changer in every way." *Thanks, mom*.

__RBI is latching onto trend foods...__ Popeyes Chicken Sandwich, like the Baby Yoda of food, was a huge win for RBI. Last quarter, the Impossible Whopper drove Burger King US sales up 5%. But trend foods aren't always successful — Tim Horton's Beyond Breakfast sandwich was [killed off](https://www.cbc.ca/news/business/tim-hortons-beyond-meat-1.5444703) after less than a year. 

Grub

__Profit-wise, RBI could do more...__ It's underperforming compared to __[Yum Brands](https://robinhood.com/stocks/YUM)__, the owner of KFC, Pizza Hut, and Taco Bell. Yum is the Lyft to RBI's Uber — both own 3 huge fast-food chains. And they both had about $5.5B in sales last year — but Yum made almost 2X the profit. RBI needs to boost sales and/or lower costs to super size its profits to Yum's levels.

Slack soars on news that IBM is its biggest customer — falls on exact same news

Get Your News

Subscribe and thrive