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<\/a><\/p>\nAlthough Slack’s messenger product began as a simple 1-to-1 and 1-to-many group messenger, it quickly expanded its product offerings to help businesses run entirely on the Slack platform. After a year and a half of pure messaging, Slack started to integrate with common software tools used by many businesses – Dropbox, Box, Github and Zendesk were among the first 3rd<\/sup> parties\u00a0to integrate. These initial partnerships encouraged a select group of enterprise SaaS companies to build integrations directly into Slack to make life easier for professionals to work more seamlessly across products. The result of these integrations was an opt-in solution for any company already subscribing to one of these software solutions.<\/p>\n These first\u00a0integrations ultimately served as the underpinning for what eventually became the Slack Platform: a robust ecosystem of bots, analytics, customer service, file sharing and other productivity tools for enterprises. The platform itself is an open forum for developers to build on top of Slack, using the company\u2019s API to integrate tools and features that integrate easily into Slack.<\/p>\n —<\/p>\n The benefits of this platform are a tremendous advantage for the company itself, its customers and its platform partners. Indeed, the company has seen 3.5x annual user growth since the platform launched almost 2 years ago.<\/p>\n Slack:<\/strong> Slack benefits because they can provide a highly customized solution for businesses based on software that that the institution is already using, without the cost of developing a customized IT product for each individual company. The platform\u00a0provides a major opportunity for Slack to cross-promote itself on other products, and for these\u00a0companies to promote themselves to a large, captive audience of enterprise users. Slack is notorious for having no sales team and no marketing budget, and yet this symbiosis is helping them attract customers effectively.<\/p>\n In addition, by developing a platform that integrates with B2B SaaS tools these companies are already using, Slack has turned itself a service with high switching costs. The platform model means that Slack is the hub and portal for a user\u2019s daily business activities. Furthermore, by making other tools integral to the holistic product experience, Slack has diminished any benefits of multi-homing: \u00a0the added benefits of purchasing and installing\u00a0chat programs like Slack, Hipchat, and<\/em> Basecamp is minimal to negative. This means that companies making purchasing decisions will choose just one product to implement, and Slack\u2019s platform makes it the most appealing option.<\/p>\n Customers:<\/strong> Slack\u2019s customers are the beneficiary of indirect network effects – Slack gets better the more apps are available for integration. The product is a closed channel within companies, meaning that a user cannot communicate with people outside of its direct organization (usually authorized with an email address or a special invitation code), so unlike other social platforms, Slack doesn\u2019t necessarily benefit from the direct network effects of more users on the platform.<\/p>\n Instead, the more 3rd<\/sup> party integrations are built on Slack, the more\u00a0functionality and use customers\u00a0get out of the product. The benefits go both ways: customers of these enterprise SaaS\u00a0tools drive increased adoption and usage of Slack. The inverse\u00a0is true – Slack can encourage its own\u00a0customers\u00a0to adopt the 3rd<\/sup> party products featured on its platform. Thus, users of large B2B SaaS tools are encouraged to\u00a0develop for Slack because of the cross-channel benefits.<\/p>\n <\/p>\n Developers\/3rd parties:\u00a0<\/strong>Platform providers are encouraged to develop integrations for Slack to make consumption of their own products as fluid as possible. Box, for example, wants as many files uploaded to its service as possible. Given Slack\u2019s position as a daily enterprise tool on which thousands of files are shared daily, Box benefits from being the file sharing tool of choice for a company’s customized instance of Slack. Developers are building directly on top of Slack, including HBR, which has built a custom bot to send relevant insights based on current issues or conversations.<\/p>\n To entice developers to build for Slack, the company established an $80M fund in 2016 to\u00a0aid small companies building on the platform. Although independent 3rd<\/sup> parties might be concerned about favoritism or prominence for apps funded by Slack for the Slack platform, everyone benefits from more robust, frequent usage of Slack. As a result, everyone benefits if users spend more time in Slack, meaning 3rd<\/sup> party app providers are still incentivized to produce integrations even if they are not directly funded by Slack.<\/p>\n —<\/p>\n It\u2019s not all rainbow hashtags for Slack\u2019s partners. These 3rd<\/sup> party developers run the risk of having Slack copy their features. Products like Bluejeans offer a Slack integration for videoconferencing, but Slack launched its own in-product video conferencing feature in June 2016. Although Bluejeans has proprietary relationships with its customers integrating within Slack, it won\u2019t be long before enterprises using both Slack and Bluejeans decide multi-homing doesn\u2019t make sense, and that it\u2019s easier to consolidate onto Slack. While most of these enterprise integrations are complex and therefore, secure from imitation, there\u2019s no guarantee Slack won\u2019t come in and try to recreate the value provided by\u00a0some of their platform partners.<\/p>\n <\/p>\n Sources:<\/p>\n Slack's humble beginnings as a feature within a game soon became a product with a cult-like following. Is its rapid growth a result of its platform for 3rd party enterprise SaaS integrations, and does that raise switching costs as the platform becomes the home base for the modern enterprise?<\/p>\n","protected":false},"author":887,"featured_media":3618,"comment_status":"open","ping_status":"closed","template":"","categories":[1149,188,1067,219,377,944,279],"class_list":["post-3617","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-api","category-b2b","category-enterprise-software","category-messaging","category-multisided-platforms","category-saas","category-slack"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/growing-businesses-in-the-age-of-platforms\/","yoast_head":"\n<\/a><\/p>\n<\/a><\/p>\n\n