Slack’s product strategy put it on a trajectory for success. Slack began as a humble internal communication tool for a failed online game and ended up the fastest growing SaaS.
In just a few short years, the business messaging app Slack established itself as a communication hub. Its reputation as a fun work app that unifies people, by organizing searchable information in channels. Its tagline encourages workers to “be less busy” by communicating better.
Easy access to people and information doesn’t just make work fun, it makes it a lot easier. Maybe that’s why Slack rose quickly to a special work tool. While still privately owned, Slack had an evaluation of over $1 billion (also known as a unicorn).
We set out to understand how the idea for an internal communication tool grew into a successful one. In fact, Slack became the fastest growing SaaS of all time, which led to a Salesforce acquisition.
Origin and fast-tracked evolution
Slack, an acronym for “Searchable Log of All Conversation & Knowledge,” set out to “make work-life simpler, more pleasant, and more productive” by bringing the right people, tools, and information together. Today, companies like Netflix, Uber, Target, Intuit, and an astounding 65 of the Fortune 100, use Slack. The company boasts more than 169k paid customers and daily active users in more than 150 countries worldwide.
But before Slack set out to conquer the world (and vanquish email) with its fun-filled productivity app, it was just a twinkle called Glitch in Slack CEO Stewart Butterfield’s eye. Though this collaborative online video game eventually failed, Butterfield’s team knew they had created something unique in the internal communication system built by and for the Glitch dev team.
Thus, Slack was born. And then it took root and grew. Fast.
On July 21, 2021, Salesforce — the world’s leading CRM service provider — completed its acquisition of Slack in a $27.7 billion deal. Shares have since risen more than 6%. So far, Salesforce only plans to add the messaging app to its enterprise software suite without immediately changing Slack’s functionality, branding, or leadership.
Competition
Slack stands shoulder to shoulder with some pretty esteemed giants like Microsoft Teams and Google Hangouts Chat. Other competitors include RocketChat, Glip, Discord, Flowdock, Twist, Chanty, Flock, Ryver, and Mattermost. The communication space is a crowded, noisy one. And there’s certainly no lack of competitors trying to improve on the premise of Slack.
“Alex Ackermans, the founder of AntEater Analytics, doesn’t think there’s anything wrong with Slack. But he’s still trying to improve it with AntEater, an app he created that works on top of Slack to help surface important information. Users can ask AntEater who their company’s JavaScript expert is or to find that link for a story they were supposed to have read last week.”
What made Slack stand out from established players in such a crowded space? Let’s explore the company’s product strategy to see what makes it different.
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Product strategy: slip into the customers’ shoes
Before Slack rolled out to external users, the company used it internally to understand how users would experience it and what needed refining before release.
“By testing Slack on its own development team over a prolonged period of time, the company knew exactly how people were using its product long before unveiling Slack to the world—a crucial competitive advantage that propelled Slack to unprecedented heights of success,” writes Hiten Shah on the Nira blog.
Butterfield identified a key metric: 2,000 messages sent. In other words, the most significant indicator of success (customer loyalty + long-term use) was product usage. Shah continues:
“The Slack team knew that it took time for teams to start seeing Slack’s potential value. If users sent a certain number of messages through Slack—a total of 2,000 messages across an entire team—Butterfield and his developers knew with confidence that the team had really put Slack through its paces.”
The company continues to rely on its product to bring people and information together and align around a common goal. “At Slack, all work happens in channels. You never get an email from someone inside the company,” says Tamar Yehoshua, Slack’s chief product officer.
Built for enterprise companies
Slack was built with enterprise companies in mind, which is why security, reliability, and compliance are baked into the product. Slack was purposefully developed as a channel-based messaging platform to reduce email usage by 75%.
To say that Slack is customer-focused is a bit of an understatement. In 2019, Forbes magazine named Slack one of the most customer-obsessed companies. Yehoshua explains:
“Customer-centricity is a team sport. Everybody has to be focused on the customer. We get feedback from so many different places, but the key is putting yourself in the customers’ shoes.
According to Yehoshua, kicking off a new project starts with bringing engineers, product managers, designers, UX researchers, and customer support together.
Yehoshua continues: “One of the unique challenges we have is that we use Slack all day, every day. We don’t want to fall into the trap of thinking we know what our customers need, because not all our customers are like us. Not all customers understand the product as well as we do, or use all the functionality.”
It all starts (and ends) with getting to the heart of the customer’s pain, product use, and overall experience.
Serious about customer feedback
Of course, Slack uses its product to manage and prioritize customer feedback. One feed comes from Zendesk and automatically routes tickets into a Slack channel. A team can then claim the ticket by inserting a unique emoji (emojis are a vital part of the Slack lexicon) associated with that particular team.
Slack also has Twitter feedback channels labeled either “love tweets” or “beef tweets.” In addition, Slack’s structured, quarterly customer advisory boards also have channels using Slack Connect, which keeps the conversations going and the information flowing. There are also specific channels for feedback from small companies or large enterprises.
What to do with all this feedback? Yehoshua explains how Slack balances and prioritizes the flood/influx of feedback from all these channels and sources:
“You have to have an eye on the strategy. You have to think about it like, ‘This is what we’re trying to accomplish for our customers. What’s going to have the biggest impact for them?’ And then you have to focus the organization. You have to give them parameters. If you just say, ‘Here are all the things you could work on,’ and it’s a scattershot of a million items, it’s hard for people to prioritize. Instead, you give them a framework and say, ‘Here are the top three things we think are the most important for our customers and our business for this year, or this quarter. Within that, figure out what is the biggest leverage point for our customers.'”
Prioritizing customer concerns
Keeping connected to customers rates high on the product team, so the company prioritizes regular meetings between product managers and customers. According to Yehoshua, there’s no substitute for the “emotional connection you get when sitting with the customer and hearing what they’re trying to do.”
Because Slack has many different types of customers, the company also has product managers who excel in working with large enterprises and PMs who understand how to work with smaller companies. Slack even has a dedicated product manager who manages all the customer relationships for the product team and identifies opportunities for engagement between other PMs and customers. And, yes, the company also has a Slack channel for just this purpose.
The pandemic’s influence on product strategy
Yehoshua contends that Slack’s product strategy hasn’t changed for years: At its core is the call to create a product that users love and scales to fit any environment. While the product strategy remains the same, “the tactics and the roadmap of how you accomplish that absolutely” change. You have to be able to pivot on a dime,” she says. “COVID happened, everyone went remote, and then we are like, ‘OK, our customers need something different.'”
During the surge in demand for communication tools to enable remote work brought on by the pandemic, Slack saw nearly 350% growth in native Slack calls and video meetings apps like Zoom, Webex, and BlueJeans that can be launched from Slack. Messages on Slack’s internal channels increased by 30% in a day, and this jump in use was mirrored in Slack’s customers’ channels, which were a mix of experienced users and new ones.
Slack response to the pandemic
Noting the explosion of Slack use internally and externally, Yehoshua says this was when the company pivoted its roadmap. Here are a few manifestations of what that pivot looked like in the product:
- Slack launched the Microsoft Teams Calls app that seamlessly enables users to start or join a Teams call from Slack.
- Slack fine-tuned its onboarding flow to ensure that new, less experienced users could get up and running fast and start experiencing real value.
- The company offered free online consultations for companies transitioning to remote workspaces. At first, any Slack employee could volunteer to give a talk, which boosted morale during a difficult time. Now the company has a dedicated team providing consultations.
Says Yehoshua, “We absolutely had to pivot and change. We also had to think about how we could help people with more asynchronous communication – because, as we all know, we hear a lot about Zoom fatigue. So we wanted to see how we could help with that problem in a different way and solve it in a way that’s authentic to our product.”
That’s pivoting on a dime.
In Uncracking Slack’s Product Development Strategy, Angeline Lim, associate product manager at Hackernoon, writes: “Product development is as much about learning as it is about building. Operating in an environment of inevitable change, product managers in Slack use a discovery-driven approach to learn, build, and measure its product continuously. They understand the company’s goals as circumstances change,” Lim explains. “It is this continuous learning from the environment that maintains and boosts the product’s growth trajectory as it feeds into the cycle of learning, building, and measuring in product development.”
Fastest growing SaaS in history
Of course, the pandemic surge of use and users wasn’t Slack’s first/only growth spurt.
Many consider Slack to be the fastest-growing SaaS in history. The company’s first product manager, Kenneth Berger, joined Slack back in 2014. Berger was in charge of managing the product’s functionality during a period of heavy growth. It grew from 100,000 to over a million daily users within its first year.
Users were dizzy with delight and loved talking about the product. Wading through the constant flow of feedback and prioritizing it was Berger’s arduous task. Doubling down on company goals helped guide the process.
Importance of customer insight
This excerpt from Slack’s First Product Manager on How to Make a Firehose of Feedback Useful explains how Berger dug deeper to gain customer insight and build a better product:
When Berger joined Slack, he faced an enviable problem: Product feedback was excellent.
“Early on, I sort of said to myself, ‘Okay, if everyone on Twitter says this is the greatest thing since sliced bread, what am I here for? How am I supposed to add value?'” So he sought out the people who weren’t saying anything. He knew that the company’s next step needed to be supporting larger teams. At the time, Slack users topped out at teams of 300 or 400 people. So Berger went to visit the largest teams he could find. “It was incredibly illuminating, because their experience was just so different than those very engaged users on Twitter who — surprise, surprise — were very similar to our team itself,” he says. What he learned was that, while these teams were getting a lot of value out of the product, they also had consistent frustrations. And most of those were actually pretty quick fixes. “It would have been so easy to just keep looking at the single source of feedback, which was so nice — everyone loved Slack! But that wouldn’t have been good long-term.”
Integrations Key to Growth Pre- and Post-Salesforce
In addition to learning how to manage and prioritize feedback effectively, Slack accelerates its growth via integrations. There are more than 2,400 apps available in the Slack App Directory.
Another contributing factor to Slack’s growth is the company’s continued focus on product adoption and detailed pricing. Shah writes:
“The key to Slack’s rapid, consistent growth was how the company approached adoption. Butterfield and his team were keenly aware of the difficulties in selling a product to teams as opposed to individuals. To combat this, they reduced as much friction as they could from the adoption process by virtually eliminating risk and keeping financial costs to the bare minimum.”
Before Salesforce, users knew Slack for its integrations with third-party apps. According to John Case, Forbes Councils Member, integrations will be “key to the value proposition of a Salesforce-owned Slack.” In Why the Salesforce Acquisition of Slack Isn’t Disrupting Collaboration (Yet), Case writes, “There is huge potential for workflow automation between Slack and Salesforce. This could significantly reduce the time employees spend finding and updating data on the CRM side.”
Takeaways
Butterfield and his team built the internal communication tool they wanted to use. It grew to become the world’s favorite productivity app because it is engineered to play well with others.
Trial by fire in the pandemic proved it could withstand the heat. Slack became one of the essential tools for companies struggling to keep its workforce productive. The tool allowed teams to collaborate from a distance.
Slack’s ability to pivot on a dime remains an essential skill for today’s organizations. We’ve seen how a worldwide event like a pandemic can catch companies off-guard and unprepared for quick moves. Will Slack be able to retain this agility as it transitions to the Salesforce family?
