In a world with 2.6 billion email users that send over 205 billion emails per day how did a communication startup gain over 1 million daily active users in just two years?
At its core Slack is an internal communication platform changing the way businesses and teams work. Since its launch in 2013 Slack has seen the kind of growth that every Silicon Valley tech startup or investor hopes for. It is the fastest company ever to get to a $1 billion valuation, achieving the milestone in just 15 months. But does Slack deserve its outsized valuation?
Unlike many other unicorn startups with multi-billion-dollar valuations, Slack’s growing adoption among business users is translating into real revenue. Out of 1 million active daily users Slack has 300,000 paid seats and more than $25 million in annual recurring revenue.  The success has certainly convinced investors and rewarded Slack with its current $2.76 billion valuation.
Image from: https://fortune.com
Slack has been so successful because of tight alignment between its business and operating models.
Value Creation: Slack makes lives easier by offering simple, easy-to-use team communication that provides a more enjoyable and efficient experience than email. One only has to look at Slack’s “Wall of Love” to learn why so many users adore Slack. For example, Slack increases collaboration, people can easily stay engaged in work conversations wherever they are, it improves efficiency of meetings, facilitates remote teams, offers better prioritization of messages, helps build team culture, and the list goes on and on.
Image from: https://twitter.com/slackhq/timelines/402603838554644480
Value Capture: Slack successfully utilizes “freemium” pricing in an advertising dominated world. Slack draws users in by offering a free version of its platform that is easy to sign up for and delivers a lot of value. As teams start using Slack, information on the platform’s value spreads organically through word of mouth and because it is free and easy to test more and more people try it out. In addition, as more communication and data is archived in the platform it makes it a hassle for teams to leave. This leads to a “stickiness” in that the more your team uses Slack the more valuable it becomes for your company. Teams fall in love with the platform, using it becomes a habit, and over time many opt in to paying for the premium model that offers even more capability and value.
Image from: https://slack.com/pricing
Slack’s operating model aligns with its business model to deliver on its value proposition of making customer’s lives easier. Slack does this through great user experience and device and service integrations that position Slack as the platform to dominate work and drive users toward premium subscriptions.
“For decades, team communication software has been a race to the bottom with clunky and cheap solutions that offer far more frustration than value. We want to change that by offering you a product that just works.”
User Experience: Not only does Slack offer an exceptional user experience through its technology, which offers a platform that is intuitive, and easy to use for even the least tech savy person, it also invests in its customer experience offline. Its customer experience team is the largest at the company and is located around the world so users can always “talk to a human”. In addition to quickly dealing with customer issues Slack takes it a step further and preempts issues. For example, if a company pays for 10 users but only 9 are active, Slack automatically issues a credit to your account. The user doesn’t have to be on top of their usage but they can trust that Slack has their best interest at heart. Furthermore, Slack is always listening to customer feedback and rolling out new product improvements to keep on the cutting edge of business innovation.
Integration: Slack has brilliantly positioned itself as the central tool of business. Not only does it provide the internal company communication platform by replacing email, instant message, chat, etc., it also seamlessly integrates any other application your business may use including google drive, dropbox, mailchimp, twitter, etc.  Slack pulls all of the information from these tools into its platform and viola it is the one tool your company can not live without. In addition, Slack seamlessly integrates across devices so users never have to be out of touch. This integration places Slack at the center of a person’s work day and it is easy to justify a 22 cent daily expense to make work and life easier.
Slack’s ability to align its business and operating model around making customers’ lives simpler and more productive will solidify its place amongst startup success stories for years to come.
 Email Statistics Report, 2015-2019. Rep. The Radicati Group, Inc. <http://www.radicati.com/wp/wp-content/uploads/sites/4/2015/02/Email-Statistics-Report-2015-2019-Executive-Summary.pdf>.
 Kim, Eugene. “Here’s Another Chart That Shows Slack’s Incredible Growth.” Business Insider. Business Insider, Inc, 19 May 2015. <http://www.businessinsider.com/heres-another-chart-that-shows-slacks-incredible-growth-2015-5>.
 Macmillan, Douglas. “Slack’s Valuation More Than Doubles to $2.8 Billion in Five Months.” Digits RSS. WSJ, Mar. 2015. <http://blogs.wsj.com/digits/2015/03/26/slacks-valuation-more-than-doubles-to-2-8-billion-in-five-months/>.
 List of slack integrations: https://slack.com/services/new