Slack took the world by storm in 2014 and became a powerhouse in the world of technology. If your work involves coordinating projects with colleagues throughout the day, then you've probably come across this app. However, did you know that Slack has its roots in a failed video game? So how did a twice failed video game turn into the fastest-growing SAS startup in history? How did Slack become a unicorn in just 8 months of its launch?
While Slack has successfully battled numerous groundbreaking partnerships with Salesforce, one of the world's leading customer relationship management platforms, the partnership empowered sales and support teams to collaborate more effectively. Bridging the gap between communication and customer relationship management, the partnership not only expanded Slack's reach but also solidified its position as a vital tool within the Enterprise ecosystem. Subsequently, Salesforce acquired Slack for 27.7 billion in July 2021.
As of 2023, Teams was used by 320 million monthly active users, making it by far the most popular business communication platform, vastly outperforming Slack's 54.1 million monthly active users. On the other hand, Google Meet had 300 million monthly active users and Google Chat had over 100 million active users per month. Is Slack in danger of losing the battle to tech giants?
While Teams and Google Workspace tend to lead within enterprises and government organizations, Slack is preferred within the startup sector and by companies with 20 to 49 employees. Some notable Slack users include IBM, Airbnb, Lyft, Shopify, Pinterest, ZenDesk, Uber, Etsy, and Accenture.
Slack is also considered to be more innovative, easier to integrate with third-party apps, and more user-friendly. Its channel organization allows for flexible and organized discussions, offering a structured way to follow specific topics or projects.
The platform excels in workflow automation with tools like the Slack Workflow Builder, enabling users to create custom automation without extensive coding. Additionally, Slack's advanced search and discovery capabilities, guest access for external collaboration, and unlimited message history contribute to its popularity as a preferred communication platform.
Slack was valued at $26.5 billion in 2023. Despite the increasing competition, Slack is certainly not slacking off. What do you think about Slack? We'd love to know your thoughts in the comment section. Also, if you enjoy what you're watching, please don't forget to drop a like and subscribe to this channel.
Competitors over the years, how does it continue to thrive despite the world's biggest tech giants Microsoft, Alphabet, and Meta in the collaborative workspace market? Let's get right into it.
Chapter 1: The Very Beginning
To trace the roots of Slack, let's learn a little more about the driving force behind it, its founder Stuart Butterfield. Stuart was born in 1973 in British Columbia, Canada, in a house with no running water or electricity. After moving to Victoria, Texas, at the age of five, his parents bought him a computer. It was love at first sight, igniting a passion that saw him teaching himself to code by the tender age of 12. His dedication to coding didn't end there. After getting a college degree in 1998, Stuart worked with Jason Classen, a longtime friend, to build a startup called GradFinder.com.
The site launched in the year 2000 to help college graduates connect with other graduates from the same university. Despite being something similar to Facebook's beginnings, the project wasn't a long-lasting endeavor, and they sold the company to a new group, HighWire.com.
Following the acquisition, Stuart worked as a freelance web designer, giving him the time to think of his next big break. Two years later, in 2002, Stuart had an idea that he believed would be groundbreaking. He had an idea for a video game, but not just any game. This game would be different from other games of the time. It would involve no form of combat but instead would focus on creativity and cooperation. Around that time, he also married blogger Katrina Fake, and shortly after their honeymoon, they founded Ludicorp, an online multiplayer gaming startup.
With Jason Stewart's partner from GradFinder and a few other friends, the new group started to develop their game, which they named Game Never Ending. An atypical role-playing game primarily based on social interaction and object manipulation, Game Never Ending was lighthearted, humorous, and true to the developers' wishes of a game without combat.
There was no way to win or lose. However, the aftermath of 9/11 and a tech bubble burst in 2002 left no room for venture capitalist interest in video game companies. Opting to self-fund, the team faced challenges as progress stalled and funding dwindled, leading to the realization that Game Never Ending required a strategic pivot for success.
Though Game Never Ending was able to attain a cult following, it wasn't a huge success, and it was time to move on.
Chapter 2: The Launch of Flickr
Ludicorp launched Flickr, a groundbreaking image sharing site, marking the onset of the Web 2.0 era. As a pioneer in cloud-based photo sharing, Flickr introduced revolutionary concepts, including tagging, user authentication, and permissions, laying the foundation for later platforms like Facebook, Instagram, and Snapchat. The platform's immense impact led to its acquisition by Yahoo in 2005 for an estimated $22 to $25 million.
Following the success of Flickr, Stuart assembled his core team and returned to his initial project to create an artful non-combat multiplayer online role-playing game. In 2009, he founded Tiny Speck. Tiny Speck's first product was an online role-playing game called Glitch. Glitch launched on September 27, 2011, but would unlaunch that same year on November 30th to improve its gameplay. In November 2012, following a decline in revenue and user retention, an official announcement was made on the closure of Glitch with a cessation scheduled for December 9, 2012.
Nevertheless, the Glitch team realized that they had something special in their communication system and had struck gold without even knowing it. It had proved markedly superior to conventional email-based communications and became indispensable to their workflow.
Chapter 3: Slack - A New Pivot
Sensing potential, Stuart pulled off a pivot more massive than his first one. The team got to work on an instant messaging system, and in 2012, Stuart announced that their upcoming product would be named Slack, derived from the phrase "searchable log of all conversation and knowledge."
After privately testing the app for a year, Slack was launched publicly in February 2014, and it was an immediate success with 8,000 users on its first day. How did a new platform get 8,000 users in just 24 hours? Slack's swift customer acquisition can be attributed to factors such as the team's established record with Flickr, generating credibility; an initial marketing focus on tech-savvy communities and early adopters; intuitively designed user interface, and the product's ability to fill a market gap for team communication and collaboration. Slack gained a million users in a mere 18 months following its launch.
However, Slack was not the first in the innovative communication systems domain, with predecessors like Yammer, Campfire, and HipChat already establishing user bases. It had to excel in resolving communications challenges to ensure its success amidst a burgeoning field of contenders.
The company renamed itself Slack Technologies in August 2014, and by October, the company had raised $120 million in venture capital and was valued at $1.2 billion just 8 months after its launch. But how could Slack, just another messenger app, raise hundreds of millions of dollars? The answer was simple: Slack made work fun.
It didn't stop there. In April 2016, Slack signed a deal that raised $160 million in funding, valuing the company at almost $2.8 billion. In the years that followed, Slack established itself as the fastest-growing SAS startup in history.
Chapter 4: The War with Tech Giants
Slack couldn't have assumed exclusivity in targeting this market, especially after inadvertently turning Microsoft into a competitor. A company that had contemplated an $8 billion bid for Slack in early 2016, Bill Gates personally intervened against this acquisition, advocating for improvements to Skype for Business.
Microsoft eventually unveiled Teams as a direct rival to Slack, launching it globally on March 14, 2017. Microsoft, which already had the customer base and Salesforce to conquer the market, made it free by bundling it with Microsoft Professional Suite. The other tech giants weren't far behind. Meta launched Workplace in 2016, and Google launched Meet in 2017 as an enterprise-friendly video conferencing version of Hangouts and enhanced Google Chat to directly compete with Slack.
Facing new competition, Slack stood firm, confident in its unique value proposition. Rather than stepping back, it entered the ring prepared to contend with the largest companies globally.
To stay ahead, Slack prioritized innovation, introducing enterprise-focused features like key management and advanced analytics. In a strategic move, the launch of Slack Enterprise Grid in 2017 addressed the specific needs of larger organizations, offering enhanced security and compliance features. This bold step showcased Slack's commitment to providing a secure and scalable solution for enterprises, reinforcing its readiness to tackle corporate challenges.
I can go on to talk on for a lot more but i think for now we got a good idea in slack's amazing story.
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