{"id":7356,"date":"2015-12-09T23:20:12","date_gmt":"2015-12-10T04:20:12","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/slack-the-greatest-innovation-to-disrupt-the-business-world-since-email\/"},"modified":"2015-12-09T23:24:45","modified_gmt":"2015-12-10T04:24:45","slug":"slack-the-greatest-innovation-to-disrupt-the-business-world-since-email","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/slack-the-greatest-innovation-to-disrupt-the-business-world-since-email\/","title":{"rendered":"Slack: The greatest innovation to disrupt the business world since email"},"content":{"rendered":"

In a world with 2.6 billion email users that send over 205 billion emails per day[1]<\/a> how did a communication startup gain over 1 million daily active users in just two years?<\/p>\n

At its core Slack is an internal communication platform changing the way businesses and teams work. Since its launch in 2013 Slack has seen the kind of growth that every Silicon Valley tech startup or investor hopes for. It is the fastest company ever to get to a $1 billion valuation, achieving the milestone in just 15 months.[2]<\/a> But does Slack deserve its outsized valuation?<\/p>\n

Unlike many other unicorn startups with multi-billion-dollar valuations, Slack\u2019s growing adoption among business users is translating into real revenue. Out of 1 million active daily users Slack has 300,000 paid seats and more than $25 million in annual recurring revenue. [3]<\/a> The success has certainly convinced investors and rewarded Slack with its current $2.76 billion valuation.<\/p>\n

\"\"<\/p>\n

Image from:\u00a0https:\/\/f<\/em>ortune.com<\/em><\/p>\n

 <\/p>\n

Slack has been so successful because of tight alignment between its business and operating models.<\/p>\n

Business Model<\/strong><\/p>\n

Value Creation: Slack makes lives easier by offering simple, easy-to-use team communication that provides a more enjoyable and efficient experience than email. One only has to look at Slack\u2019s \u201cWall of Love\u201d to learn why so many users adore Slack. For example, Slack increases collaboration, people can easily stay engaged in work conversations wherever they are, it improves efficiency of meetings, facilitates remote teams, offers better prioritization of messages, helps build team culture, and the list goes on and on.<\/p>\n

\"Slack<\/a><\/p>\n

Image from: <\/em>https:\/\/twitter.com\/slackhq\/timelines\/402603838554644480<\/p>\n

Value Capture: Slack successfully utilizes \u201cfreemium\u201d pricing in an advertising dominated world. Slack draws users in by offering a free version of its platform that is easy to sign up for and delivers a lot of value. As teams start using Slack,\u00a0information on the platform’s value\u00a0spreads organically through word of mouth and because it is free and easy to test more and more people try it out. \u00a0In addition, as more communication and data is archived in the platform it makes it a hassle for teams to leave. This leads to a \u201cstickiness\u201d in that the more your team uses Slack the more valuable it becomes for your company. Teams fall in love with the platform, using it becomes a habit, and over time many opt in to paying for the premium model that offers even more capability and value.<\/p>\n

\"Slack<\/a><\/p>\n

Image from: https:\/\/slack.com\/pricing<\/em><\/p>\n

Operating Model<\/strong><\/p>\n

Slack\u2019s operating model aligns with its business model to deliver on its value proposition of making customer\u2019s lives easier. Slack does this through great user experience and device and service integrations that position Slack as the platform to dominate work and drive users toward premium subscriptions.<\/p>\n

\n

\u201cFor decades, team communication software has been a race to the bottom with clunky and cheap solutions that offer far more frustration than value. We want to change that by offering you a product that just works.\u201d[4]<\/a><\/em><\/p>\n<\/blockquote>\n

 <\/p>\n

User Experience: Not only does Slack offer an exceptional user experience through its technology, which offers a platform that is intuitive, and easy to use for even the least tech savy person, it also invests in its customer experience offline. Its customer experience team is the largest at the company and is located around the world so users can always \u201ctalk to a human\u201d.[5]<\/a> In addition to quickly dealing with customer issues Slack takes it a step further and preempts issues. For example, if a company pays for 10 users but only 9 are active, Slack automatically issues a credit to your account. The user doesn\u2019t have to be on top of their usage but they can trust that Slack has their best interest at heart. Furthermore, Slack is always listening to customer feedback and rolling out new product improvements to keep on the cutting edge of business innovation.<\/p>\n

Integration: Slack has brilliantly positioned itself as the central tool of business. Not only does it provide the internal company communication platform by replacing email, instant message, chat, etc., it also seamlessly integrates any other application your business may use including google drive, dropbox, mailchimp, twitter, etc. [6]<\/a> Slack pulls all of the information from these tools into its platform and viola it is the one tool your company can not live without. In addition, Slack seamlessly integrates across devices\u00a0so users never have to be out of touch. This integration places Slack at the center of a person’s work day and it is easy to justify a 22 cent daily expense to make work and life easier.<\/p>\n

 <\/p>\n

Slack\u2019s ability to align its business and operating model around making customers’ lives simpler and more productive will solidify its place amongst startup success stories for years to come.<\/p>\n

 <\/p>\n

Sources<\/strong><\/p>\n

[1]<\/a> Email Statistics Report, 2015-2019<\/em>. Rep. The Radicati Group, Inc. <http:\/\/www.radicati.com\/wp\/wp-content\/uploads\/sites\/4\/2015\/02\/Email-Statistics-Report-2015-2019-Executive-Summary.pdf>.<\/p>\n

[2]<\/a> Kim, Eugene. “Here’s Another Chart That Shows Slack’s Incredible Growth.” Business Insider<\/em>. Business Insider, Inc, 19 May 2015. <http:\/\/www.businessinsider.com\/heres-another-chart-that-shows-slacks-incredible-growth-2015-5>.<\/p>\n

[3]<\/a> Macmillan, Douglas. “Slack\u2019s Valuation More Than Doubles to $2.8 Billion in Five Months.” Digits RSS<\/em>. WSJ, Mar. 2015. <http:\/\/blogs.wsj.com\/digits\/2015\/03\/26\/slacks-valuation-more-than-doubles-to-2-8-billion-in-five-months\/>.<\/p>\n

[4]<\/a> https:\/\/slack.com<\/p>\n

[5]<\/a> https:\/\/slack.com<\/p>\n

[6]<\/a> List of slack integrations: https:\/\/slack.com\/services\/new<\/p>\n","protected":false},"excerpt":{"rendered":"

How a two-year-old startup is changing the way teams work with growth that every Silicon Valley tech startup or investor hopes for. <\/p>\n","protected":false},"author":539,"featured_media":7388,"comment_status":"open","ping_status":"closed","template":"","categories":[331,1163,37,94,215],"class_list":["post-7356","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-disruptive","category-freemium","category-innovation","category-startup","category-unicorn"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"\nSlack: The greatest innovation to disrupt the business world since email - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/slack-the-greatest-innovation-to-disrupt-the-business-world-since-email\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Slack: The greatest innovation to disrupt the business world since email - 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