How a side project changed the way we communicate

A brief study of Slack from it’s beginnings.

Slack began as an internal tool used by a small video game company in Vancouver, BC. Out of this now defunct company, called Tiny Speck, came the first release of Slack to the outside world in 2013. The name stands for “Searchable Log of All Conversation and Knowledge”.

Like many startups, Tiny Speck relied on Internet Relay Chat (IRC), a popular protocol for chatting and messaging on the internet. While no longer based on an IRC-backend, Slack began with IRC and innovated greatly on it. As they developed it internally for four years, they realized that their email usage was reduced significantly. Also, this tool helped generally with productivity.

Slack provides a great interface for teams by providing unique web addresses to each team. This has turned it into a community platform. It now competes with services such as bulletin boards, Facebook and LinkedIn, which had been previously used as the common communication medium.

They were able to attract a significant user base as many people began to realize its value. It grew significantly since their launch in 2013. After attracting 8,000 users in the first 24 hours of their launch, they quickly grew to sign up 10,000 new daily active users each week by 2015. By now, they had moved their headquarters to Silicon Valley, California, presumably because of the easy access to venture capital. They reached a $1 billion valuation within 1.5 years of launch and, in the process, became the fastest company to do so.

It was recently announced that 77% of the Fortune 500 companies use Slack. As we see it, they accomplished this change in a few ways. As a background, Slack can track their user base by domain, number of channels and usage stats. They also can track the mobile usage and possibly, locations of their users. Based on this data along with a business strategy plan, Slack pivoted and turned its strategy to reach a broader market.

They adopted the freemium model of offering their basic service for free. Usage of Slack expanded as users began to realize its true value. The number of paying users thus expanded in a bottom-up fashion even as the overall number of users grew at a rapid rate.

During this initial 1-2 years of rapid growth, Slack was used mostly by technology startups composed of mainly younger generation techies. These initial users were not too accustomed to using email anyway. So, adopting a “cool” new application like Slack did not take much convincing.

As people signed up for their free version, their salesforce reaches out to the primary user. After understanding the user requirements, they can share analytics data emphasizing user success. Thus they inform the users of the value of potentially signing up for the paid version.

They have also begun to offer guest accounts to freelancers and vendors of customers. These guest account users become disseminators to other clients, thus expanding Slack’s user base.

Finally, they built their mobile app to capitalize on the ever-growing usage of smartphones. By making it easier for folks out on the field to ask questions and get updates on progress, Slack also turned out to be a good alternative for text messaging.