How Slack became Silicon Valley’s fastest growing business app
Here are the early growth tactics used to earn a $3.8bn valuation in 3 years
In 2012, Ceo Stewart Butterfield noticed as software startups were rapidly growing, teams faced internal communication problems. They weren’t the first communication system, but solved the problem better than others.
Slack was founded at the right place, at the right time.
Here’s a general timeline:
Strategy 1: Defined a New Market
Slack wasn’t the first office chat app. Because centralized messaging systems like Slack hadn’t been around for that long, people didn’t yet understand why they needed them. They created a market where one didn’t yet exist by selling the innovation, not the product.
When they asked other companies about what they were using for internal communication 70% -80% said ‘nothing’. What companies were really doing was using an assortment of different tools and methods such as ad hoc emails, mailing lists, Skype chats, SMS, and more.
From the start, Slack focused on highlighting there was a problem. Most people didn’t even think of communication tools as a category of software. People didn’t know they needed a new/better way to communicate.
Butterfield commented;
“If you’re building a sales team for your startup, you know you will absolutely make a decision about what CRM to use. It’s a no-brainer. If you're a software development team, you are absolutely going to choose a system for source control. That’s a known category.”
For the case of Slack, while there were some apps on the market, they made communication software a known category.
Therefore for Slack, early growth primarily came through creating a market where there really wasn’t one, selling a solution to a problem that people didn’t know they had.
Strategy 2: Focus on Core Features
They initially focused on perfecting a few core features most important to their product vision and to their users. They assumed users wouldn’t notice everything Slack’s early iteration lacked if they did a great job delivering the key features. So they decided to focus more energy in becoming really valuable in a few key areas, rather than maybe being ‘just good’ in many.
They developed Slack around 3 things; Search, synchronization, and file sharing.
With search, it was the ability to find any conversations or documents at any time so people didn’t worry about losing important information. Synchronization allowed Slack users to pick up right where they left off no matter which device they were working on. When it came to file sharing, Slack chose to focus on the ability to quickly paste images or drag and drop files for a simple, intuitive UI.
This helped gain an edge over competition because they became the best at the things most important to their users. It helped them become essential to teams right away and increased early adoption.
Strategy 3: User Testing
Before their preview (beta) launch in 2013, they were begging friends at other companies to try slack. In 2013 they got 6-10 companies to use the platform. This allowed them to observe how the product functioned while working on core features and functionality.
They began to share Slack with progressively larger teams, observing how they functioned while making changes and improvements. This was crucial for them to understand how their product was used by teams of various size while building a feedback loop to improve it pre-launch.
During this time, they fine tuned their product before it was ready for their preview launch later in 2013.
Strategy 4:Word of Mouth
In August 2013, they launched their “preview release” receiving 8000 invitation requests on day 1.
Two weeks later they were at 15,000. By May 2015, they reached 1.1M users. This was mostly from word of mouth, mainly driven pre-launch.
With no sales or marketing teams, Slack only hired their CMO in late 2014, demonstrating the unlimited potential that word of mouth growth can have.
Strategy 4: Press
They got tons of press when they launched from sources such as TechCrunch, Fast company, VentureBeat and more. They referred to Slack as the “email killer” which got a lot of buzz.
This initial press was shared with friends across and was trending on social media, helping to drive the early influx of invites.
With more than 15,000 preview release signups, this growth lever was clearly effective.
Strategy 5: Twitter
Slack bet heavily on twitter. They created a “wall of love” where they retweeted all positive tweets/reviews of Slack on twitter. This exponentially boosted organic word of mouth, as a tweet/retweet were seen by thousands.
Strategy 6: Integrations
For teams to be more productive and efficient, Slack introduced integrations with the tools teams use on a daily basis (2015). Today there are more than 1500 apps in the slack app directory. Doing this was key for customer acquisition (appeal) and retention, overall making the experience on Slack even better.
The early Integrations largely contributed to Slacks website organic traffic. They created an individual landing page for each integration, which brought in high quality referral traffic.
Today Slack ranks on the first page search results whenever anyone searches a product with which slack integrates.
Slack Today:
12M+ active users in 2021
Acquired by salesforce for $27.7B by salesforce
Retention rate for paying Slack customers is 98%
Keys to growth success:
Defined their own market, identified unknown problems
Prioritized the 3 most important features
Observed users, building a constant feedback loop
Leveraged press and social proof to drive launch
I hope you like this breakdown of Slack’s very early stage growth!
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