“More productive, more transparent, more efficient, and no more email. That’s Slack.” Bold words from what Time magazine dubbed the “Email Killer,” but so far it seems they have the technology to back it up. With over $500 million in funding and 5 million daily active users, it seems like there is no stopping the San Francisco based start-up.

Starting back in 2009, Slack presented itself as “team communication for the 21st century,” allowing its users to build complex team channels for zero cost to the user. Now that they have seen significant growth, with over 1.5 million people are paying to use their service, the sky is the limit when it comes to where they will go next.

It’s obvious that Slack is doing something right and the numbers back them up, but what can we learn about product and business development from this rising star? Let’s take a look.shutterstock_364326251

Smart is the New Sexy

Ever since the release of the first Mac computer back in 1984, the world has continued to change in faster and bigger ways every single year. With the advent of smart phones and super powerful computers, the difference in our day to day lives compared to that of our grandparents is the largest in human history.

A large driving force for this development has been making the new sexy thing. The technology that everyone has to get their hands on as soon as it was released.

For a very long time, the leader in this field has been Apple. Constantly bringing improved versions of old technologies and developing new products has been what has kept them at the top.

However, times are changing. Now, more and more, we see that it’s not always about being sexy, it’s all about being smart. Slack is a perfect example of this trend.

“It’s not always about being sexy, it’s all about being smart.” 

Slack has taken something boring like email and not only made it better, but they have done it with a surprising lack of sex appeal. The core tenants of what make Slack appealing is that it works the way that we work. It was made for the 21st century employee.

According to Dan Norman, author of The Design of Everyday Things, future technologies won’t give us more things to think about, they will allow us to do more things without thinking. Slack has built a platform that does most of the thinking for you, allowing you to be more productive working on things that actually matter.


Saying You Are Making the World a Better Place and Actually Meaning It

Every start-up out of San Francisco seems to believe that they are going to change the world and make it a better place, no matter what their technology is. So much so that HBO’s Silicon Valley made it a joke in their show. However, for truly revolutionary brands like Slack, it seems like they actually mean it.

Slack CEO Steward Butterfield has high expectations for his company, stating that he wants to do for working people what Microsoft has done over the last 20 years. He also compared his company to another tech titan, Facebook, claiming that he wants to one day be worth more than them.

This somewhat egotistical and braggadocios nature is nothing new in northern California, but when studies from companies like Gartner back you up, you have earned a certain level of pride. According to their report, information technology spending in 2017 will reach over 3 trillion dollars, with somewhere around 10% of that going to companies like Slack.

Some of the largest deals and IPOs in recent memory, such as WhatsApp and Snapchat, signal a growth not only towards information technologies, but messaging and communication. Considering Slack mainly works with businesses and teams, their potential may not be truly understood even now.

“Their (Slack’s) potential may not be truly understood even now.” 

Even Facebook, a company that dominates its competition, comes nowhere close to reaching the staggering numbers that Butterfield has his eyes on. If trends continue and Slack can keep up its record of innovation, they might actually mean it when they say they want to make the world a better place.


Using Integration to Fight Obsolescence

Something that Slack understands better than anyone is that, like Great White Sharks, if you stop moving, you die. However, they have found that a key to staying ahead of the curve is letting others do their work for them. Slack’s integrated with hundreds of different apps including Google Dogs, Trello, and Lunch Train. Allowing these different companies to work within Slack’s simple program allows for the added complexity needed to stay ahead of the market.

This is not an accident. In an interview with Time magazine, Slack CEO Stewart Butterfield said “Every time we figure out the best way to do something, it becomes obsolete.” Having to continuously work against the clock is not unique to a company like Slack, but as a company still in the growing stages, it has a lot less room for error than someone more established like Facebook.

“Every time we figure out the best way to do something, it becomes obsolete.” Slack CEO, Stewart Butterfield. 

As a co-founder of Flickr, Butterfield is all too familiar with getting lost in a sea of new businesses and new technologies. Flickr was at one point the leading website for sharing pictures online, but now in an ageof Instagram and Snapchat, no one really knows what to do with the once popular site.

Now, as Slack is continuing to grow, keeping up with the latest innovations has been a key to their success. Butterfield learned the hard way with Flickr, being quoted as saying that Flickr’s innovation died when it was acquired by Yahoo in 2005. It seems as though he took the lessons he learned from this past failure and has made sure to not repeat them with Slack.

This constant fight against obsolescence is vital to any organization trying to keep up with the times in our digital age, but Slack has been able to do it through innovation and staying one step ahead by teaming up with other companies to share the lead. Companies who are finding themselves stretched too thin should take a note from their playbook and see who else is out there to team up with.

“If You Build It, They Will Come.”

This phrase from Kevin Costner’s 1989 film Field of Dreams has been misquoted almost as often as it has been used properly, leading some to even call BS on the entire concept. However, Slack has shown what can happen when you build a revolutionary product: it sells itself. This is not something that is easily done, but it is the reason why Slack has become the envy of fellow start-ups.

Unlike most companies who employ or outsource large sales teams, according to an article in Inc. Magazine, Slack does not have a sales team and 97% of their business has come from referrals. The company that only recently started advertising has grown almost completely organically, relying on word of mouth and the power of their product to do the work for them.

“Slack does not have a sales team and 97% of their business comes from referrals.”

Think about all of the money that they save from not having to pay for a sales staff and all of the money that goes into that. Instead of spending money on sales to make more money, Slack is putting its money back into product development to make sure that they have the best tech in the market.

This is something that Slack prides itself on and is the reason for their outrageous success. Harper Reed, CEO of Modest, one of Slacks first big customers, claimed that when he first used Slack it was “instantly apparent how much better it was than anything else we had.”

 “(Slack was) instantly apparent how much better it was than anything else we had.” Harper Reed, CEO of Modest.

Focusing on design, usability, and the “Wow Factor” has always been a cornerstone of any start-up, but Slack shows that your product doesn’t have to blow your mind with how far out there it is, it can do even more just by revolutionizing something we are all familiar with. As you start to grow your company, keep in mind that the product is everything, and if you are lucky, you won’t have to hire a sales team either.


Using Peer Pressure for You

Something that Twitter has done and Slack has perfected is using peer pressure and social isolation to their advantage. As is laid out in article by Satya van Heummen, the only way to use Slack is to do so 24/7, otherwise you will get left behind. With the constant stream of messages running down your timeline and the new features popping up every week or so, Slack doesn’t allow you to stop using it and they know it.

Slack allows for a perpetual stream of messages for any team and will save up to 10,000, but once you go past this number you have to pay in order to keep additional messages. As a smaller team here at Snyxius, ten thousand messages might take us months to get to, whereas a larger company might go through that in the span of a week or two.

“Slack doesn’t allow you stop using it (their platform) and they know it.”

Herein lies the brilliance of their business model. While allowing any team to sign up for Slack for free brings in all the new customers that they need, putting in a paid option after you have already gotten used to using the technology makes it a lot hard to leave. This is why over 400,000 users pay a monthly subscription to access their additional messages, adding up to over 45 million dollars in average revenue.

Instead of relying on the pull of additional features (which are also included) for the paid version of their product, the main reason people pay is for access to their own messages. Considering one of Slack’s main features is the ability to search through chats in order to find pertinent information, this is a huge draw for larger companies and they don’t seem to mind spending the extra cash in order to keep these archives.

Another huge reason for this focus for Slack is that 77% of Fortune 100 companies use their product. Companies this large have too many employees to ever use the free option, so for the time being Slack has a steady stream of revenue coming in month after month, year after year. Again, all of this without a proper sales team!

“77% of Fortune 100 companies use their product (Slack)… without a proper sales team!”

The great part about this business model is that is relatively easy to replicate, so before your company settles on another popular model such as a “freemium” service, consider what peer pressure can do for you.

The Next Slack

Slack has made a lot of smart choices based off the failures of other companies before them and for the most part it has made them the success that they are today. However, there is always going to be another company who comes along and does to Slack what they have done to others. Who will the next Slack be? That still remains to be seen.

If you want your company to be the next Slack, focus on these things:

  • Start designing smarter than your competition, focusing on the core aspects of what makes your company unique and sticking to it.
  • When you say they want to change the world, actually mean it. Set your expectations for what you can do high and your goals even higher.
  • Use integration with other companies to keep up with your competition, letting them do the work for you while you focus on what you do best.
  • If you build a quality product with a technology that is easy to use, people will want to either use your product or work alongside you to make it better. Never lose sight of that.
  • Use peer pressure and the ever-expanding breadth of social sharing to your advantage. Make a product that people will want to share and that will make those who aren’t feel out of the loop.

Slack’s success might be extraordinary, but it came from very simple practices that have changed the way many think about running a business. Now it’s your turn to learn from their mistakes and be the next game-changer