November 7, 2016

Slack’s Active User Slowdown Raises Eyebrows

A couple of weeks ago, Slack posted an update to their blog with some growth numbers. This type of post isn’t unusual, but the data within the article raised eyebrows.

From May 25 to October 20 of 2016, Slack grew its daily active users (DAU) and paid seats by roughly 33 percent, which is phenomenal. But it’s not as phenomenal as the 50 percent growth in DAU and 63 percent growth in paid users realized in the preceding five-and-a-half months.

ALSO READ: 6 Slack Alternatives to Try Before You Commit

Now, it’s tempting to shrug at these numbers the same way some people shrug when Apple only reports $46.9 billion in revenue instead of $47 billion.

But Slack’s slowdown, albeit relative, arrives at what could be a critical moment for the company, and perhaps for the entire workplace collaboration industry.

Workplace Competition

Slack’s dip comes only weeks after Facebook announced Workplace, the proverbial “Facebook for work” platform that could be the most formidable challenger for Slack’s crown in the coming years.

facebook releases workplace

Facebook’s Workplace could be Slack’s biggest competitor.

Yes, Microsoft launched Teams last week — a move which provoked an ostentatious response — and Uber dumped Slack earlier this year for Atlassian’s Hipchat. But Workplace is the only competitor that offers a platform capable of convincing people to use it the way they use Slack — i.e. for ten hours every day.

Slack still has a sizable lead in almost every way compared to Workplace, though there could still be uncertainty about enterprise viability. Slack works for eBay, Airbnb, LinkedIn, and TIME, but not for Uber. Why? 

These massive companies are prime targets for Workplace, and they’re exactly the type of customers Slack needs to keep acquiring if the company is going to justify its $3.8 billion valuation.

The plan so far has been to invest heavily in an app ecosystem (a la Salesforce) while it woos more enterprises. This strategy is sound, because it puts Slack at the center of a number of workflows, giving it not only a market lead over Workplace, but a technological lead as well.

GIF Overload

Poetically, the incredible usage metrics that set Slack apart from other business solutions pose the greatest threat to its continued success. It’s become clear through a number of essays and articles that the unfettered access Slack enables between colleagues is both a gift and curse.

Much of Slack’s branding centers on eliminating reliance on email and meeting for communication. Slack promises the less time you waste on these artifacts, the more time you can spend getting work done.

Maybe

Is this true?

But reports from the field assert this isn’t always, or even often, true. One of the most articulate essays on the subject comes from TeeJay VanSlyke.

VanSlyke writes: “When there’s an unspoken, implicit expectation that we’ll be on Slack all day long, we begin to measure our personal productivity in terms of our response to chatter instead of in terms of the completion of our most critical tasks. We lose control of our time, and what was once creative intentional work turns into a constant stream of opinions, anecdotes, and noise.”

Where meetings are confined to certain times and email is mitigated by simply closing the inbox, Slack is another office unto itself. If you’re not on Slack, then where are you?

As a counterweight, IBM researched this very idea across its organization and found that a segment of social media usage was positively correlated with performance ratings.

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Productivity is difficult to measure, but Slack’s effect on it will will determine its utility to an organization — enterprise or otherwise. Slack’s slump will be inversely proportional to its ability to convince customers that it is, in fact, a step forward for workplace collaboration.

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