How Slack Built a Billion Dollar Business in 2 Years

How using early feedback grew Slack from a $0 to $1 Billion valuation.

How Slack Built a Billion Dollar Business in Just 2 Years by Ryan Robinson ryrob on About Entrepreneurs
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Right now, Slack has been proclaimed as the fastest growing B2B SaaS company in history.

It's a classic example of a product designed to fill a niche that was begging for a more creative solution to messaging. What makes the founders of Slack so extraordinary is that they very regularly incorporated early feedback from their target users, into shaping what their product would become.

When starting a business, most entrepreneurs get so excited by the prospect of rushing to market with their great product or service, that they forget to put in the due diligence to actually validate their idea.

Slack's founders did this all while undergoing continuous beta testing, to make necessary changes and tweaks to their system on the fly.

By listening so closely to users, founder Stewart Butterfield and his empathetic team of developers, designers, and programmers grew the company from a side project meant to facilitate the production of an online game, into a tech juggernaut with 200,000 paid accounts and counting.

Slack sought early feedback because they quickly discovered their team communication app functioned very differently when it was being used by a tiny startup of three, versus a larger, more established business such as Rdio, one of their first clients.

When Slack had their initial preview release in August 2013, they made constant tweaks based on an endless stream of feedback from users, much of it via their Twitter page. As they focused their efforts on improving user experience based precisely on what their customers were telling them, they began fulfilling their mission to eliminate the much dreaded endless email thread.

They are successfully teaching companies how to eliminate internal email.

There are several examples of Slack following early user feedback to implement useful changes with their core product offering. Users wanted integrations with other popular tools such as Dropbox and Google Drive. It goes without saying that a one-size-fits-all messaging tool without the ability to share important documents would be useless.

In order to boost team productivity and morale for users, many early Slack subscribers made it known that they wanted a system which provided intermittent variable rewards, such as peer approval and instant notifications of file uploads.

Slack sold itself as a solution to spending less time answering emails, not more. These features, which are so fundamental to the platform as it is today, are what allowed the company to pull in thousands of new users at an astounding 35% growth rate in daily active users from the first day that 8,000 people signed up to use it.

What's more, is that soliciting early user feedback helped the team understand how new companies would discover and implement their tool.

It quickly became apparent that it was easier for mid-level management to sign up their individual teams for the service. So, rather than shooting for company-wide implementation of Slack, they tailored their marketing strategy towards growing their user base with small teams and growing within companies from there. Even within existing Slack teams, internal growth is at an impressive 8% monthly - indicating that the tool quickly spreads through companies utilizing it.

The beautiful simplicity of their approach to growth, by focusing on user feedback early and often, taught Slack to adapt their product features to customer needs in real-time.

This reinforced not only the utility of the product itself, but also cemented its relationship with users and established a reputation as a SaaS product that did whatever it could to give users exactly what they wanted.

It’s not an accident. This winning combination of product-market fit and user-centric early feedback has made Slack the fastest growing B2B SaaS product in history.