The iMessage for Businesses

If you already use Slack for work, most of this won’t be new to you. For those of you who have never used Slack and are not aware of its network effect, the simplest way to describe it is: “iMessage on steroids for businesses.” Android phone-toting readers in the US will inherently hate this analogy but grasp perfectly well what I am saying.

Functionally, Slack is more than simply a company chat app, just like iMessage is more than a mere texting app. Slack is designed to provide a one-stop solution for all enterprise collaboration needs. This includes integrating with all the software you use at work, be it Salesforce, Zoom, GSuite, Office 365, or something else. In fact, it integrates with most of the 1,800+ apps a company could possibly use. You can think of Slack as the control tower of a workplace, so to speak. It has shared channels that give workers the power to collaborate across organizations and the necessary enterprise management tools to scale.

Interestingly, Bill Gates and Satya Nadella passed up on the opportunity to buy Slack in 2016. In response to this new competition, Microsoft pushed out Teams in 2017. We should note this was not the first time Microsoft had tried to tackle collaboration. Its efforts have spanned more than a decade, starting with Communicator in 2007. It was followed by Lync in 2010 and Skype for Business in 2015 before Teams emerged, borrowing heavily from Slack. While Teams has its benefits, such as working perfectly with Office 365, a wise Redditor once hit the nail on the head by observing, "Slack works. Teams creates work." One problem is that companies no longer stick with Microsoft products - on average, they use over 163 apps, most of them not integrating with Teams.

We tried Teams and hated it. The best way to describe the difference is by saying that Slack has the finesse of a consumer product whereas Teams is clearly a B2B product and an inferior one. But does it matter when Teams is free with Office 365? Are the benefits so much greater that companies would be ready to spend more to use Slack? We'd argue they would as long as they are willing to invest in their employees.

The power of the network effect and the moat a communications tool can organically create can be hard to imagine. A good example most people can relate to is the dominance of iMessage in the US. Any Gen-Z or Millennial knows of ousted friends or has done the ousting themselves because of the dreaded green bubble, which shows up when an iPhone user is texting with an Android user. The green bubble limits chatting functionality to traditional text. Benign as this may seem, families have been torn apart, buddies unfriended and hearts broken because of the green thing. We only half-jest because its effects are very real. There is even research which indicates that not having iMessage in the US is detrimental to your dating life. And good luck getting a US iPhone user to download another chat app – it’s like pulling teeth!

Let’s consider a similar scenario in a corporate setting. This time, however, the communication tool is Slack, and employees can start using it for free on all platforms, so there is no excuse for not having it. But suddenly, somebody wants them to download Teams. That same judgment iPhone users pass when a green bubble appears is magnified because this time, people are pressed to download and use an inferior product. Slack is available for free - if a company doesn’t pay for the premium version, its workers can keep using the free one. This is called a freemium model. This in addition to Slack’s first mover’s advantage and polished product has made Slack the default communication tool for work. Further evidence of Slack’s dominance shows in Microsoft’s willingness to take drastic steps to defend its own turf by banning the use of Slack for its own employees. There are many companies that compete with Microsoft, but few are completely banned within its own walls and it’s not hard to imagine why.

Microsoft claims Teams has more users than Slack to represent market leadership, but this is a weak argument. Android beats iOS on numbers as well, but we all know this doesn’t tell the whole story. Not all users are created equal. Besides, can we all be honest here? Nobody has ever said, “Let me Teams you.” If employees had a choice, they would be using Slack, but, alas, they rarely do. Microsoft Teams comes free with Office 365, meaning it doesn't require lengthy budget approvals. Companies looking to get by with software that is “good enough” will use Teams because…well, it's free. Companies looking to invest in their employees will undoubtedly choose Slack.