Collaboration software is the new darling of Silicon Valley and based on recent valuations; some pundits are predicting a rough landing for the sector.
Arguably, the most significant recent funding round was carried out by automation and collaboration software, Smartsheet, who received capital at a valuation of US$850 million. While automation style software is seen as the next stage in the evolution of the sector and of employment as a whole, mass-market uptake is still yet to be proven and concerns are rife that this may be a case of, “it sounds good but holds no tangible and practical merit.”

The Collaboration Economy

As businesses struggle to find a happy middle ground between hiring armies of freelancers and keeping teams completely in-house, collaboration seems to be the sweet spot. With applications like Slack and DropBox encouraging reactive communication through mobile devices, managers can see the opportunity to hire cheaper, or more experienced practitioners without the restriction of location. The collaboration economy has meant that companies no longer need to be concerned about where they are located, or in many cases, even if they have a location at all.
But, this new theory is still unproven with regards to ongoing sustainability. Data is still being collected, and many are questioning whether the collaboration economy is just a fad, and if early, promising signs are, “false positives.” There is no doubt that business owners have become very excited over the opportunity to broaden their horizons, and many businesses have based their core offering on the, “you can work from anywhere,” promise.
If large businesses continue in the uptake of collaboration style employment, then there is another major issue – how will collaboration software evolve? So far, it has moved from being onboarding focused to management focused and now communication and automation are the two major problems that the software solves. But will the next stage in the sector’s evolution mean that existing providers will become obsolete, or will improvements happen in line with existing infrastructure?
All these questions mean that current valuations are based on a lot of hope, and that should cause concern for investors.