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These slides use concepts from my (Jeff Funk) course entitled Biz Models for Hi-Tech Products to analyze the business model for Slack, a supplier of collaborative tools for teams. These tools offer a new form of mail service that is very different from that of traditional e-mail programs such as Microsoft Outlook, G-Mail, and Yahoo-Mail. Slack designed its mail service for the cloud computing environment, as opposed to the traditional in-house computing environment. Accessing documents from the cloud is easier with Slack’s service than with Microsoft Outlook as is enabling apps for Slack’s service and reading messages. Reading messages is easier because they are organized by person (like instant messaging on smart phones) as opposed to time. By measuring usage, Slack can charge by active user thus reducing the risk of trying Slack, particularly for individuals, who are the main market for Slack. These slides describe the value proposition, customers, method of value capture, scope of activities and the method of strategic control for Slack.

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  1. 1. MT4002: Slack Lau Lee Hong Huang Ming Chien Lim Yu Ke Xia Yiping Shi Lei
  2. 2. Content 1. Background - Team Collaborative Tools 2. Problems in Corporate Team Collaborations 3. Slack and its Competitive Advantage 4. Value Proposition, Customer Selection, and Methods of Value Capture 5. Business Model - Corporate R&D, Open Innovation and New Business Models
  3. 3. ➔ High Valuation at $2.8b ➔ Productivity applications for projects ➔ Examples ◆ Email, Whatsapp & Google Docs Background - Team Collaborative Tools
  4. 4. Problems in Corporate Team Collaborations ➔ Emails were used but poses the following problems: ◆ Disorganised responses ◆ Very few functions for specific collaborative purposes ◆ Unable to selectively choose notifications ◆ Messages are not real-time ◆ Hard to search through contents of the file attachments ➔ Multiple softwares are used concurrently, but not synergized
  5. 5. Slack and its Competitive Advantage ➔ All-in-one Dashboard ➔ Real-time, on multiple platforms ➔ Deep capabilities like chat profiling and seamless external integrations
  6. 6. Live Demo
  7. 7. Value Propositions Slack is an app that assist in internal communication and collaboration. It allows communication to be more direct and transparent across the workplace.
  8. 8. Value Propositions - Collaboration Ease of working on documents and files like word, photoshop, PDF, JPG, txt, google docs, etc. Able to comment directly on the files so that others can see the right comments on the right files. Google docs will remain updated to the latest version once shared.
  9. 9. Value Propositions - Search Slack enables easier and faster search as it index the contents of every file people share. Instant search is available for contents in a PDF, word document and Google docs. All conversations can also be searched as well.
  10. 10. Value Propositions - Chat One to One Similar to WhatsApp or messenger, people can chat privately with each other. Private groups Private group chats are available for communication on specific matters within a department or group in a company. All (#channels) Channels are used to discuss something or share information that concern everyone. Each person can subscribe to the channels that they want to be in.
  11. 11. Value Propositions - Notification Notification from other services can also be received via Slack. For example: A new document in Google Drive New survey response New post from RSS feed Users can assign notification to private groups and channel as well.
  12. 12. Value Propositions – Additional functions Customizable emojis Reminder when sending messages to people in different timezone so as not to disturb others in their sleep Setting reminder messages Automated reply
  13. 13. Competitors Yammer HipChat
  14. 14. Yammer
  15. 15. HipChat
  16. 16. HipChat vs. Slack Source: Slack vs HipChat Review
  17. 17. Customer Selection
  18. 18. Method of Value Capture ● Freemium model allows anyone to download and use but charges for added functionalities ● Free functions: ○ Search and browse through 10,000 messages, 10 service integration, etc ● Standard functions ($6.67/user/month) ○ Unlimited service integration, allow guest access, able to forward emails to Slack, etc ● Plus functions ($12.50/user/month) ○ Support for external messages and archival solutions, compliance exports for all message history, 24/7 support with 4 hour response time, etc
  19. 19. Method of Value Capture ● Users create value ● Free trials - ○ Slack gives free credits through events (limited period) and friend recommendations ○ Users may get locked into using the standard or plus plans while integrating more than 10 services and allowing guest access ○ It may be difficult to remove the integrations after using them
  20. 20. Method of Value Capture ● Fair Billing Policy ○ Unlike most companies that charge the full cost despite not utilising the products, Slack charges users based on how much is the usage. ○ When paid users are not using Slack or users become inactive, Slack adds pro-rated credit to the company's’ account.
  21. 21. Method of Value Capture ● Slack for Non-Profit organisation ○ Gives standard plan free of charge to non-profit organisation ○ Give support to people who are doing good things ● Slack for Education ○ 85% discount for Slack’s annual plans for education institutions or student groups
  22. 22. Interface Standard - Closed source Integration APIs Classification Web API Real Time Messaging API DIY Integration Tools Type(s) HTTP/JSON based API WebSocket-based API Slackbot Remote Control Incoming & Outgoing Webhooks Custom Slash Commands Who Any members of the community Function(s) More flexibility and customization to build applications that interact with Slack. Build applications to send messages as a user. Receive events from Slack in real time. Real-time messages to public channel as Slackbot. More customization and formatting. Define trigger words to perform actions outside Slack.
  23. 23. Network Effects - Intrinsic Value and Utility Type Direct Effects Indirect Effects Description Value of Slack directly increase with usage ● Public + Private Communication Channels ● Efficient communication within organization and teams Integration usage to Slack increases the value of its network, which can in turn increase the switching cost of the entire Slack platform. ● Integration Google drive, Dropbox and etc. Critical mass achieved with organization adoption Reduce transaction cost Channels to ensure capacity To capture new users: Switching cost reduce due to integration with other softwares. To sustain user base: Switching cost increase when more information is stored in Slack.
  24. 24. Business Model - (Value capture) SaaS SaaS - Software as a service Software licensed on a subscription basis, centrally hosted. With subscription fee charges, commonly monthly or annual fee. Vendors able to provide freemium model for limited functionalities.
  25. 25. Business Model - Value Proposition Tackling actual user problems instead of selling its product. Through a price model of - Charging company with the actual users of the application, instead of the regular “per seat” model; Charging by actual usage time; Provide freemium service of up to 10,000 messaging histories; By adapting to evolving customer needs.
  26. 26. Business Model - Suggestions Cloud Solutions Crowdsourcing Behavior Analysis Customized Services Fiverr Open Innovation Big Data Customization
  27. 27. Business Model - Suggestions | Customer Selection Resource Pool Resources & Information Pool
  28. 28. Business Model - Suggestions | Resources Pool Open Innovation Cloud Solution Large solution base available Company experiences/suggestions Crowdsourcing Crowdfunding, a general search for answers & resources etc. $ Commission
  29. 29. Business Model - Suggestions | Information Pool “BIG” Data Customer Behavior Behavioral analysis based on collected data and preferences $ Subscription; (Targeted) Advertising Data Pool Integrated platform of company profile, job offering & application
  30. 30. Business Model - Suggestions | Service Customization $ Portfolio / Feature Pricing Customizable Services Provide services as desired (Personalization; Expansions; Open APIs) e.g.: Plug-in to company’s website.
  31. 31. Slack: Be less busy
  32. 32. Questions & Feedbacks