This is my first long form article on a company. I felt that an explanation on why I am bullish on Asana ($ASAN) couldn’t be fit into a few tweets. This was a helpful article to articulate my thoughts and capture them for reference as the business evolves. As a long term shareholder, I plan to hold 3, 5, or 10 years plus but will continually check that the thesis remains intact quarter over quarter.
Of course none of this article is to be considered financial advice. I am not a financial professional and this is not a recommendation to buy, sell, or hold this or any of other stock. Please always do your own due diligence. Feel free to challenge any of my thoughts on this company.
Overview
Asana’s mission is to:
I love this mission. It’s simple, easy to understand, and ultimately something most can relate to. Asana is a work management platform that enables teams to orchestrate work, from daily tasks to cross-functional strategic initiatives. Asana can be used for everything from running a marketing campaign to developing a new software feature to onboarding new team members. Most of these team members we would define as knowledge workers and they all have one thing in common no matter what kind of work they are doing… they end up doing FAR too much busywork also known as work about work. Asana aims to eliminate this major time suck and increase mission alignment, employee engagement, and get people actually focused on the things they were hired to do (which isn’t to attend status meetings and make powerpoints all day).
Few definitions to break this down:
1) Knowledge Worker - a person whose job involves handling or using information. You can visualize this person as someone who usually sits in front of a computer all day and is in meetings the majority of the time in person or zoom.
2) Work About Work - doing “work” like checking due dates, setting up or attending coordination / status meetings, managing dependencies across teams, etc.
These knowledge workers are growing in droves and are spending up to 60% of their time just doing work about work (6).
Solving this problem not only unlocks much needed productivity but also should reduce burnout and stress that many knowledge workers experience (6).
These knowledge workers need 3 things to collaborate successfully.
1) Coordination - who is doing what and by when?
2) Content - largely files like word, excel, and PowerPoint
3) Communication - email, messaging, and video conferencing
Asana fits into the puzzle by solving the first layer of coordination. This is a space that has largely been ignored as organizations have rushed to become more efficient in file management via sharepoint, box, etc. or communication like slack, Microsoft teams, and zoom. (6)
Today’s form of coordination largely happens within the context of files like spreadsheets and word docs that are almost instantly outdated as soon as it’s shared. If not outdated files, then legacy project management tools like Microsoft Project that are cumbersome and mostly just show a visual of how the work is complex. There is almost no coordination that happens with legacy tools without the dreaded meeting. And worse yet as an organization grows, this solution is NOT scalable.
Asana however is highly scalable and can eliminate much of this work about work nonsense! Just think about your organization… bet you have a few things on your calendar you’re not looking forward to. We’ve fallen into the trap of “this is how we’ve always worked” therefore very little gets challenged about it. Asana can break this soul sucking corporate habit we’ve all come to just accept as the norm.
Asana has over 1.5 million paying knowledge workers trying to remove work about work from their daily work lives. Asana's platform enables this by creating an unique real-time relational database they call the work graph. The work graph is made up of the following:
Units of work like tasks, goals, agenda items, and ideas
Information about these units of work (the metadata) - files, comments, and statuses
Relationships across the units of work - like how a task connects all the way up to a company objective
The people who get these units of work done
And the processes by which the units of work get done. Think templates, rules, required inputs, and automation
Once an organization has this real-time relational database / work graph by which all their coordination for work about work gets done, there is alignment top down and bottom up. This work graph database truly unlocks the clarity most organizations lack today. This was phase one of Asana’s long term vision however, Asana wants to take this vision one step further.
Their ultimate vision is marrying human intelligence with computer intelligence / artificial intelligence. Asana wants to serve as a powerful, intelligent tool in service of individuals, teams, and organizations—from optimizing how work should be done to predicting bottlenecks and suggesting ways to alleviate them. (9)
This may all sound like a bunch of buzzwords but it’s not. Asana’s long term vision to build an AI powered platform that will maximize human effectiveness by assigning optimal workloads. They want to be the brains of the organization using AI to BOOST human productivity. This isn’t some big brother AI but the kind that improves the lives of humans and works with humans to better the world around it. If they can truly solve the work about work problem in this fashion then this company will be worth far far more than it’s 11B market cap today.
One key aspect to this vision coming together is management so let’s take a look at the founders and a bit of Asana’s history next!
Management and History
Co-founders Dustin Moskovitz and Justin Rosenstein were early employees at Facebook and Google. They recognized early the struggles of knowledge workers and had both separately created tools for Facebook and Google. Later they found out that this was a common story of the early 2000s in silicon valley as engineers were empowered to solve their problems, many of which struggled to coordinate effectively. (7)
The year was around 2004 to 2005 and Dustin was managing some teams at Facebook. Facebook was scaling rapidly and this work about work problem was becoming quite pesky. He started documenting things in 1 on 1 meetings with his direct reports every two weeks who would have a 1 on 1 with their direct report every two weeks so at the end of 4 weeks he would have a good idea of what was happening at Facebook. This wasn’t good enough! (7)
He was always a month behind and frustrated. It’s still true today that in most organizations the higher up you go, the less is truly known about what is going on. Dustin wanted something more real time and so he went to his software roots. He built something rudimentary and he started to use it to fill the information void. (7)
However, it quickly became tedious and a full time job for him to just keep it updated. He thought that if he could get those closest to the work to keep it updated, then he would be able to see the whole picture clearly. (7)
He met up with Justin, who was at Facebook now, and together they started to solve this problem. Justin said, “When I ask people how much time they spend not doing their job—time spent on ‘work-about-work’ or phone calls or e-mails—people regularly tell me 60, or even 90 percent. (13) ” Together they created a simple project management tool that became more popular than their wildest imagination.
“Every time you walked through the office, you would see people interacting with this system on three out of four monitors; this reminded me a lot of the early days of the Facebook product, when walking through a campus computer lab meant seeing it up on all the displays.” – Dustin Moskovitz, co-founder (13)
Because of the popularity, they soon were faced with the issue of do they build this internally and dedicate a team to solve this for Facebook OR is this a big enough idea they should go and pursue it full time.
As noted in their S-1 filing, "We left Facebook and created Asana to address our own pain: We love working on big ideas, but we loathe the annoying busywork required by their execution." (9) Together they started down the path of creating what we know today as Asana in 2008.
Both founders have been working on this vision touched on in the overview section. Since the beginning, they have been long term focused. Let’s dive deeper into this vision and why it is critical to the investment thesis.
The Founders of Asana’s Vision
I love how future forward Dustin and Justin are. They imagine a world where entire organizations are aligned, engaged, and connected to their mission. As of this writing, they have now accomplished phase 1 of their vision, the work graph (9). No longer does it ever need to be asked, “has someone started on this work?” or “when is this task due?”(12). Asana provides this much needed clarity for knowledge workers today. In the future, individuals, teams, and organizations will have Asana’s artificial intelligence take this clarity to the next level.
Individuals will be able to prioritize the most important work, set their intention of what to accomplish, and focus on that work without distractions. For example, Asana will automatically set their calendar based on their intention and prioritization so that they can focus on the most important work. No longer will individuals be lost in the current whirlwind of distractions. Asana will find the right balance between meetings and work so that an individual's calendar and to-do list are actually in sync. (24)
Teams using Asana will have enhanced clarity for complex coordination. Members of the team can catch up on work after coming back to the office with automatic highlights, something that can take entire days just to read an email inbox. Now the individual will be able to take a vacation and come back to the team without all the stress of what looms when they get back. Leaders of teams can stop meetings and can huddle. Huddles will be like a virtual assistant. Huddles will set a time to collaborate that works for everyone, publish a thoughtful agenda, and last only as long as is necessary. No more meetings just because! Meeting note taking will be a thing of the past because Asana will handle that for us. Other things the Asana of the future will be able to do is create a digital workflow following industry leader’s cues but tailored to your team’s needs. (24)
Lastly organizations will be aligned on strategy and employees connected to and enthused about the work. Today most employees are disconnected from the mission of the company. Goals get started in powerpoint but employees don’t feel it is tied to their work. No more, Asana uses a goals feature (live today) to operationalize the mission to know what the organization’s goals are, what tasks and people are working towards those goals, and see the progress in real time. 1:1s can be run out of Asana and connect these goals to the work. Additionally, no longer will it be someone’s job to have a status update. Asana will practically write it for you. And if there are blockers for meeting your goals as an organization, Asana will provide solution options for you to intelligently alleviate these problems. (24)
Take a look at these few videos going back years that help visualize Asana’s vision. Even if you are not a visual learner, these videos are a must watch. They are core to understanding the thesis.
The future of work with Asana: meet the navigation system for your organization (24 minutes)
Justin Rosentein: Unveiling the Future of Asana (11 minutes)
As you can see from these videos they have a bold phase 2 vision and not one they just conjured up when they went public to wow potential investors.
They have designed with phase 2 in mind since the beginning. In fact Dustin and team made the executive decision to go back and re-architect the entire product taking away half of their development capacity because they fundamentally believed in building the proper foundation to enable success for knowledge workers today. (7) I think this current execution and the intentional future vision differentiates the leadership team and the product in a way that is unmatched from other competitors.
Beyond their long term product vision it’s clear that Asana’s leaders care about it’s future. They took Asana public via direct listing with no lockup period (9) and recently announced in conjunction with Twilio that they will be listed on a new long-term focused stock exchange called the Long-Term Stock Exchange (LTSE) (21). These actions tell me that Asana is mission driven and it’s reflected in its culture.
Culture
Glassdoor is a good proxy for insights into the company culture and employee happiness. Glassdoor gives quite high marks for Asana and Dustin with a whopping 96% recommending Asana to a friend and 100% approving of Dustin as the CEO. Does it get any better than this? Reading through the reviews, it is clear that Asana is a special place.
Taking a few excerpts it’s quite stunning! (25)
Everyone is so warm and welcome, onboarding process was smooth, and you are given a lot of ownership from the get-go. Asana walks the walk when it comes to its values and mission, and I feel unbelievably lucky to work at such an extraordinary place where the mission, people, culture, values, product and customers are all incredible and inspiring.
This is one of the best companies that I have worked for and I have enjoyed every minute of my time here so far! I have some great partners that I work with and I am always being put up to new challenges and hard work really does pay off. The culture is amazing and they really put their employees first. They have encouraged their employees to take the time off that they need to recharge especially during the pandemic. They are taking the return to office approach very seriously and I am so excited to get back into the office.
Great people and product, people go out of their way to help each other and collaborate. Company is growing and yet still has been able to maintain the culture we’ve had since the beginning.
Outside of Glassdoor, we can see Asana has been a great place to work. Asana was recently named #14 on Employees’ Choice Award and #1 on G2’s Grid Report for Project Management list. Earlier this year, Great Place to Work and Fortune awarded Asana the #1 Best Small and Medium Workplace in the Bay Area and #14 Best Small Workplace in Ireland. Last month, Asana was named #15 on Fast Company’s prestigious annual list of the World's Most Innovative Companies for 2021, including a #1 ranking in the Workplace category. (23)
Another plus is that Asana’s leadership team is fairly young which bodes well with long term oriented investors. Dustin is 37, Justin is 38, and many others are in their 30s or 40s. To me, this means the culture they have built can stay for decades.
I am a big believer you cannot replicate the intangibles. When your team enjoys coming to work, they do their best work. It’s a great way to keep and retain talent. Culture eats strategy for breakfast, operational excellence for lunch, and everything else for dinner. No matter how much cash you have on hand, you cannot buy culture and Asana has one of the best.
Management Ownership
I like to see high insider ownership especially in founders in my investments because it usually aligns me with insider’s goals. At the end of the day everyone wants to make more money and I believe that Asana’s leadership team has strong skin in the game.
Dustin Moskovitz (CEO and Co-founder) has almost half a billion of skin in the game and 8.64% of the outstanding shares.
Justin Rosenstein (Co-founder and Board Member) with 1.34% of shares outstanding
Adam D’Angelo (Board Member and CEO at Quora) with 1.18% of shares outstanding
Matthew Cohler (Board Member and General Partner at Benchmark Capital) with .33% shares outstanding
Tim Wan (Head of Finance) with .28% of shares outstanding
Together they collectively have over 663 million dollars and own almost 12% of the shares outstanding. I believe there is more than sufficient skin in the game to align our interests as shareholders.
Moskovitz and Rosenstein currently own around 56% of Asana's class B shares (9). This means that they together have a controlling interest in Asana. I view this as a positive since they have had the vision and built the culture but ultimately know that you as a shareholder will be beholden to the will of the founders.
It is also worth noting that Dustin pays himself $1 per year and is not motivated by short term profits (9). When asked about price increases on the Q3 2021 earnings call, Moskovitz replied “Just on a philosophical basis, we think it makes sense to raise prices when we've made a step-wise change in the amount of value that we're providing to the customer experience, so it typically comes after.” (22) This commitment to long-term value creation further cements why both customer and employees alike love Asana’s product.
Lastly, Dustin himself has been buying shares left and right. There is only one reason that a CEO buys shares… he believes they will go up! Look at these recent transactions!
Having established a solid vision and the leadership team to make it happen, let’s shift to see the market size.
Work About Work
Work about work is PAINFUL. It is unfulfilling work and takes up way more time than you imagine. Take a guess. How much do you think per week is spent on work about work? What does that cost an organization?
The answer was higher than I expected.
The average professional spends the following as a percentage of their day according to McKinsey analysis (18)…
28% of the work day reading and answering email
19% searching and gathering information
14% communicating and collaborating internally
And only 39% on role based tasks
Just diving into the 28% of time spent reading and answering emails that’s a staggering 2.6 hours spent and 120 messages received per day. And if you’re above average and an over-checker, you waste an extra 21 minutes per day. On average, professionals check their email 15 times per day, or every 37 minutes. All of this time spent on email is costly, some research suggests that it can take people up to 23 minutes and 15 seconds to fully recover after interruptions to check their email. (17)
Another report shows that it costs up to $11,000 per employee per year based on an average salary of $50,000 and 6 hours WASTED looking for information per week (5).
No matter how you slice it, work about work… isn’t working. Knowledge workers are some of the brightest minds on the planet and most are sick and tired of this BS. Asana themselves has an entire research team dedicated to understanding the plights of the knowledge worker and acknowledges just how bad the problem is. Take a look at these slides I showed in the overview from their investor presentation showcasing Asana’s internal take on the issue (6).
We definitely know that knowledge workers spend too much time on work about work but let’s dive a little deeper on that and see if the knowledge worker population is growing which will increase the total addressable market (TAM) for Asana.
Total Addressable Market
Knowledge workers are being hired in droves and expected to grow over the next decade. According to Industry Arc, the market is set to rise from $ 2.3B in 2018 to $ 5.6B by 2025 - CAGR of 12.7% (1) . And from the WSJ,
“ While routine jobs have gone nowhere over the past three decades, the number of people in knowledge work jobs has more than doubled, and there are no signs of that trend slowing. This strongly suggests that even though technology is eliminating some jobs, it's creating even more in different fields.
In fact, knowledge work occupations have been adding more jobs than any other year since the 1980s—about 1.9 million per year. The other categories are growing too, but only by about 100,000 to 250,000 per year.” (2)
There are approximately 1.25 billion knowledge workers in the world today (3). As an example of how this trend is continuing in an upward trajectory, take a look at this green line from the bureau of labor statistics (4). Not a 1-1 with knowledge workers but there is strong evidence going back several decades that this trend is in full swing. With the emergence of AI and robotics the trend will only continue as it disrupts and displaces existing jobs. My theory is that this disruption will continue to accelerate the transition of overall jobs to knowledge workers and create entirely new roles and industries not seen today.
Of these 1.25B knowledge workers, Asana only has captured 1.5M paid users or less than 3% of the current total addressable market. (3) (6)
Comparing this to Smartsheet’s estimate from 2017 of 865M knowledge workers we can see even with an outdated conservative estimate the TAM is still ginormous, leaving tons of room to grow.
Lastly, if we think back to March 2020, everyone largely was working in the office. Office work was largely understood. Then Covid happened and the world went remote. Remote work now is understood. As the world opens back this hybrid approach is largely an unknown quantity. Asana works well in all 3 environments but I think brings out the best in an organization if they are working in a remote or hybrid setting. As we can see from these results from Zoom’s survey there is quite a mix among the answers. Asana is uniquely positioned to capitalize on the knowledge workers new work models and improve coordination across the organization eliminating much of the work about work.
With a huge problem and a giant TAM there is a lot to like here, but what does the competitive landscape look like?
Competition
Using a data driven and objective approach, we can see Asana is considered a leader in much of the research I have come across.
Forester has them as a leader with a strong strategy and current offering mix (14)
G2, a site that rates and compares software based on user reviews has Asana rated as a top leader in work management software (15)
It is also clear from Google search trends that Asana is number one worldwide by a mile attributed to 42 percent of their revenue coming internationally.
It is also telling that when you look at the United States which is a much more competitive market for Asana that they have the lion share in places it counts for tech forward companies such as Silicon Valley. Many companies in the United States follow best practices and use software that is first adopted in the Silicon Valley. It is worth noting that search interest in the United States falls behind Smartsheet for the moment however as the products differentiate in time I believe Asana will emerge on top again.
As we can see, there is a lot of competition in the market like Monday.com (MNDY), Smartsheet (SMAR), Atlassian with Trello and Jira (TEAM), etc. Two things are clear to me.
1) Asana is taking off with parabolic growth and I’m not going to fight the numbers when this is a multi winner space with a huge TAM.
2) I do not believe any other competitor has the caliber of leadership or vision to revolutionize coordination via AI like Asana. Once your AI has a head start learning it’s not easy to catch up. So even if others do shift later to adopt AI I do believe this work Asana is doing now will create a market leading position with a cushion measured in the low number of years.
Business Model
Asana has a self-service model which is great for horizontal use cases in a team and plants the seeds in an organization. After teams are seeded, direct sales will get involved to land and expand within the organization. (6)
It’s a much easier sell to an organization’s leadership team when their teams are already using the product and Asana is using this to their advantage. As they expand more and more their net retention rate continues to expand. More on that in the next section on pricing. Interestingly, among their largest customers today, virtually all came to Asana initially using the free trial or through an upgrade from the Basic level. (6)
Asana generates revenue from subscriptions on their cloud-based platform. They offer four levels of subscriptions and 3 paid options. This serves the varying needs of paying customers and scales up in features that add value the more adoption there is in an enterprise. (8)
Asana already has some big names using their product. What’s nice is they haven’t even really turned on the marketing for large enterprises yet. They have been landing and expanding in smaller organizations like my startup. As we scale, so do they with us. That said, they do have some recognizable names already at a more enterprise scale (16).
Pricing and sales
As of Q1 2022 earnings Asana has 11,272 customers spending $5,000 or more on an annualized basis, up 53% year-over-year. Growth in their larger customers is even stronger. They have 485 customers spending $50,000 or more on an annualized basis, which accelerated this quarter to 92% year-over-year. (6) Below is a great example of why larger companies are growing faster once they begin the adoption process. Hockey stick growth :)
Revenue from customers spending $5,000 or more represented 64% of revenue in Q1, compared with 56% in the year-ago quarter. This part of their business grew 82% year-over-year and overall dollar- based net retention rate was over 115%. Among customers spending $5,000 or more, their dollar-based net retention rate was 123%, and among customers spending $50,000 or more, their dollar-based net retention rate was, again, over 140%. This further demonstrates how successful Asana is with their land and expand strategy as well as how Asana is resonating, particularly with their largest customers. (22)
Currently Asana has over 100,000 paid users in 190 countries with 42 percent of revenue coming outside the US. No single customer accounted for more than 1% of revenues. Asana has as close to zero concentration risk as you can get. (22)
Growth
Asana revenue has been improving year over year and has been in a bit of a downwards trajectory in terms of growth year over year. My belief is that with the majority of Asana’s customers being small and medium businesses (SMB), their growth was declining hence the shift to enterprise in addition to their core focus of SMBs to land and expand. We can see as the economy opened back up they improved their numbers and even raised guidance this last quarter 8 percent representing 48-50 percent growth due to continued momentum in enterprise and the flywheel effect of the Work Graph data model. All signs point towards their strategy paying off and continued growth for years to come.
Over the last few years gross margins have continued to expand to a best in class 90%. Clearly operating leverage is in full effect which should help in time with profitability. A best in class gross margin profile helps Asana invest aggressively in R&D (AI) and invest in other current high growth areas (enterprises).
Even with a superb gross margin profile, Asana still has severely negative operating margins as they invest in research and development (AI) and sales and marketing. This investment is geared to drive growth and they are not optimizing for profitability at this time. They are looking to take market share as they should with such a massive untapped TAM. With these gross margins according to their investor day, Asana expects to achieve free cash flow margins of more than 30% in the long-term. (19)
Valuation
Currently Asana’s valuation is quite elevated. Dustin has been buying seemingly every day which is very bullish but we are nearing a valuation that demands perfect execution. I opened a starter position (1%) when they traded at an EV/Sales around 24 which was a little elevated for my liking. I hesitated when it was in the mid teens as I had not completed my research. That was a mistake because I knew enough to know it was a low risk entry at that valuation. Lesson learned. I was hoping to have more time to add but as Tom Engle from the Motley Fool says, "If a company is the next big thing, a little position is all I need. If it isn't the next big thing, a little position is all I want." (20) I will not be chasing this stock price but will be adding very aggressively if it gets back down a EV/Sales in the low 20s to mid teens.
Is Asana Anti-Fragile?
@Brian_Stoffel_ has created an anti-fragile framework and I decided to take Asana through it with my own views. Anti-fragile companies are able to weather a downtrun better so I always like to run my companies through this quick framework to make sure I am not missing something I should have caught. This is my own ranking, feel free to do your own. Let me know if you come up with a different opinion on it’s fragility.
Barbell Method
Mission Statement (-1 to 2) 2
Moat (0 to 8) 4.5 due to light network effects, switching costs, some low-cost advantages (especially to get started as a small team / company), and economies of scale
Optionality (0 to 3) 2.5
Financial Fortitude
Financials (-1 to 1) -1
Cash and Investments= 368M
Debt = 613M
Free Cash Flow = -7.4M
Concentration (-3 to 0) 0
Skin In The Game
Glassdoor(-1 to 1) 1
Founder (0 to 1) 1
Ownership (-1 to 1) 1
Score: 11
Scale:
Fragile 4-7
Robust 8-11
Anti-Fragile 12+
Overall this is a good score that would be great if they improve their financials. I find often in investing you need to skate to where the puck will be like hockey. I believe Asana could become profitable and am willing for all the other strong reasons to think this is still a reasonable investment.
My Personal Experience
Always anecdotal but figured I’d throw in my professional experience since this is my area of expertise. Much like Dustin and Justin, I too created a custom developed work management tool for a fortune 100 business. I started my career in Product. Someone in Product typically owns the business strategy behind a product, its functional requirements, and generally manages the launch of new features.
My first product was to build a work management tool that we could use for all technology products that would be built using agile methodologies going forward. Agile in software development you can think of as iterative development with tight feedback loops usually measured in days to weeks. Traditional software was built linearly where all requirements would be gathered up front, then built, then feedback after months to years of building.
This changed my career path into several Agile coaching roles where I worked to help organizations improve their processes and outcomes in product development. These roles very much align with teaching knowledge workers how to coordinate effectively which is exactly what Asana is going after.
After a few years in these roles, I am back in a Product Manager role at a startup now. Taking all this experience together I picked Asana for our company because it not only would work for our engineering teams but also the rest of my organization. I did not know Asana was going public when I made this decision so my analysis was purely based on fit to our company. Boy am I glad they are public though because some of my best investments have been to invest in companies that are helping companies I work at succeed like Hubspot, Zoom, Datadog, and MongoDB. Our entire company uses it now and it is critical to our collaboration going forward.
Getting started was honestly one of the best free trial experiences I have ever had in my life. The friction was completely removed which is so critical for them to start their land and expand strategy. I was able to intuitively get started right away and add value in under 2 minutes. On the free trial you can invite up to 15 other team members as long as you have the same company domain. I strongly believe they have the most frictionless experience to start using a work management product on the market.
Risks
Negative FCF and operating margins
While FCF and operating margins are improving as of the last 2 quarters, they are still quite negative. FCF improved from -48.5% to -13.4%. Operating margins improved from -74.5% to -65.2%. If Asana cannot improve them as they hope to in the long term, profitability may be impossible. They are in growth mode, not profitability mode. That said something to keep an eye on.
Slowing growth
While growth trends have rebounded, it is not accelerating consistently. I do think because of their land and expand strategy that even with their current customer base if they never got another account, they could 10x revenue. I view this as a minor concern.
Failure to differentiate in the market
It is worth noting that with margins already being as high as they are approximately 90 percent and the competitiveness of the industry it is possible that Asana (unless they continue to release a more differentiated product especially when AI comes online) will have little pricing power in a competitive industry. If Asana fails to meet its vision of being the AI brains of an organization there may be significant risk that they do not gain adequate market share vs commonplace competitors.
Conclusion
I believe Asana is building something special and many are dismissing it as another work management tool. My thesis is Asana is able to differentiate themselves via the work graph today and artificial intelligence in the future.
There is a giant TAM that remains largely untapped as consumers use static and outdated products to collaborate. Long term work-from-home, hybrid, and office work tailwinds mean coordination is more critical than every. Asana is uniquely positioned as a pure play to capture the market like Box, Slack, and Zoom have in their respective content and communication segments.
Starting a free trial is frictionless and kicks off the land and expand strategy. It’s even more impressive how their expansion part of the strategy is working with a DBNRR expanding as a customer grows. Their hybrid business model is proven and effective with incredible gross margins nearing 90%.
I believe Asana has some of the most passionate leadership in the public market. I can feel their passion when they speak. They have created a strong culture and have an incredibly bold and robust vision for the future. Additionally, they have a proven track record of success at Facebook and Google. It’s these aspects of management that I believe will propel Asana to new heights.
I do believe the valuation is quite stretched at the moment due to momentum traders, Dustin being a net buyer often lately, and a monster quarterly report vs expectations. I am a net buyer on future dips.
Sources
https://www.industryarc.com/Research/Task-Management-Software-Market-Research-500596
https://executivesecretary.com/the-struggle-is-real-disorganization-can-cost-you/
https://investors.asana.com/events-and-presentations/default.aspx
https://www.sec.gov/Archives/edgar/data/1477720/000119312520228462/d855753ds1.htm
https://www.businessinsider.com/asana-productivity-filed-s1-to-go-public-via-direct-listing-2020-8
https://blog.zoom.us/new-survey-what-people-really-think-about-hybrid-work/
https://www.smartsheet.com/sites/default/files/RES142468.pdf
https://www.google.com/amp/s/hbr.org/amp/2019/01/how-to-spend-way-less-time-on-email-every-day
https://www.youtube.com/watch?v=WEgVeEviy4E&t=1s
https://www.glassdoor.com/Reviews/Asana-Reviews-E567443.htm
This was great Blaine!