Why Slack may live to regret its smarmy letter to Microsoft

Stewart Butterfield, Slack

Slack has always been easy to like. The fast-growing team communication startup had a classic underdog story, with its founders falling ass-backwards into enterprise software following a failed effort to build a video game. It’s led by Stewart Butterfield, one of the kindest and most self-aware founders in Silicon Valley, who had previously given the world Flickr and then gone through the wringer after its acquisition by Yahoo. And it makes a genuinely useful product — the company may not have killed email yet, but it does seem to be reducing the volume.

Today 4 million people use Slack every day, the company is on pace to generate $100 million in revenue this year, and investors have valued it at $3.8 billion. But as of this week, it also has a major competitor: Microsoft, which unveiled its Teams product Wednesday at an event in New York City. It’s like Slack, but with a few key twists: threaded conversations, deep integrations with Office, and (if you’re already an Office 365 subscriber) available at no extra charge.

Slack could have done what most companies do when a competitor rips them off, and said nothing. (This was Snapchat’s approach recently when Facebook began looting it for parts.) Instead, in the dubious tradition of Apple and uh, Rdio, the company published a remarkably smarmy full-page ad in the New York Times. The ad was a mistake on Slack’s part — one that immediately put a yet-to-launch product on equal footing with its own, while still managing to cast a $461 billion company as the scrappy upstart. For a company that brags about how thoughtful it is about language, this week's letter is a regrettable unforced error. (The company declined to talk to me about the letter.)

Slack's letter adopts the tortured conceit that it will give Microsoft advice about how to build a team-communication app. This puts the company in the odd position of having to pretend it is not just rooting for a competitor but offering material support. "We’re genuinely excited to have some competition," it begins — "genuinely" not being a word we usually feel the need to add when we’re being genuine. But soon the letter's actual point, which is to anxiously brag about Slack, peeks through the clouds. "All this is harder than it looks," Slack warns. And then the company straps on its wax wings and flies into the sun.

"First, and most importantly, it’s not the features that matter," the company says. This is transparently false. Before Slack added features, the underlying product was called internet relay chat, and it was about as mainstream as a Github repo. Slack’s original insight was that if you pulled enough external services into a chat window, you could turn it into a kind of command console for your organization, and it would suddenly feel accessible to the average person. And so it created that — by adding features. You might even say that it added those features first. And most importantly!

What follows is a series of observations so obvious that they can only read as condescending. It reads like a high school essay on teamwork: "Communication is hard, yet it is the most fundamental thing we do as human beings," Slack writes. (As I read this I imagined Microsoft CEO Satya Nadella, who has two master's degrees, furiously nodding and scribbling down notes. "Cortana, remind me to send Slack a thank-you note," I imagine him barking into his Surface Studio. "They have done us all a great service this day.")

Slack goes on to say that "an open platform is essential" — an intriguing point to make for a company that bans third-party clients and maintains total control over which apps are listed in its directory. In any case, the joke was on Slack, as Microsoft Teams allows integrations with approved third parties just like Slack does.

For its big conclusion, Slack declares that the secret ingredient in great enterprise software is — paging Professor Frinklove. "If you want customers to switch to your product, you’re going to have to match our commitment to their success and take the same amount of delight in their happiness," Slack writes. This is wishful thinking: I bet Netscape told itself the same thing about Navigator the day Microsoft bundled Internet Explorer with Windows. Microsoft can scoop up millions of users just by bundling Teams with Office 365, and that's exactly why the company did it.

A day later, the main thing people know about Microsoft Teams is that it fills Slack with existential dread — which is, of course, a compelling reason to go try it out. Any heightened market awareness Slack gained from advertising in the Times is overshadowed by the anxiety bubbling up from every word in its letter.

The truth is that at this point there's no particular reason to believe Teams will sway Slack’s fortunes one way or another. Maybe it will blunt the company’s already-slightly-slowing growth, particularly for the 85 million people who already have Office 365 subscriptions. Or maybe it will evaporate into the ether, like Yammer, which Microsoft spent $1.2 billion on to seemingly no effect whatsoever.

In any case, there’s nothing to be gained from posting disingenuous open letters to the competition. The last tech company we saw do it was the similarly beloved music streaming service Rdio, which "welcomed" the arrival of Apple Music with a note on Twitter.

Rdio put a lot of love into its product, too. It died last November.

Comments

What follows is a series of observations so obvious that they can only read as condescending. It reads like a high school essay on teamwork

And those two wonderfully-crafted sentences sums up Slack’s entire bungle.

If I were looking for collaboration / communication software, Slack’s letter would completely turn me off from wanting to use their product for two huge reasons.
1) The arrogance and attitude. It reeks of millennial entitlement, laziness, and the "I’m so clever and creative" when your product is a modestly better rehash of actual brilliant people’s ideas. (This last part is an epidemic in cloud / web / smart phone software development circles)
2) They don’t seem long for this world.

Millennial entitlement? Are you a baby boomer by chance?

Seriously. Founder of slack is 42 according to Wikipedia. I imagine that as many millennials worked on Teams as they do on Slack, so I really don’t understand where aaronb1138 got this from.

That said, yeah, it was arrogant, and the Silicon Valley attitude is quite replete with this sort of thing. So much so that Silicon Valley the show makes jokes about it constantly.

I think he was simply referencing the stereotype to make a point, even if it was distasteful.

His comment wasn’t "distasteful" unless you’re an easily offended millennial. It was just arguably inaccurate, depending on what he meant by "reeks of". But it’s open to interpretation.

The letter’s obviously extremely immature and unbecoming of a company run by adults – immaturity comes in all ages but let’s face it, the literal definition of it is "not fully developed", which has to do with age. But if this was actually approved by a 42 year old, then he’s still got some growing up to do.

unless you’re an easily offended millennial

/eye roll

His comment wasn’t "distasteful" unless you’re an easily offended millennial.

Please tell me you at least have an inkling of how circular the logic of this played out phrase is. I really don’t mind if you think millennials are "easily offended" but it just seems silly so suggest that any generation, when insulted en masse, would not be at all offended.

why would an individual be offended by such a thing? is the generation they’re born in what defines them as individuals?
Maybe it’s just me, but I wouldn’t give a shit if someone said something mean about my generation to make a point. It’s saying nothing about me, personally.

(But — why he’d pick millenials in particular is another question)

Many people take offense when any subgroup they belong to is made fun of.

While I definitely agree with you to a certain extent (I certainly don’t define myself by my generational designation) there is a notable difference between A) stating, apropos of nothing, that a generation is lazy and entitled and B) identifying an individual as being part of a generation and then saying that because they are part of that generation they are lazy and entitled.

It’s corny and played out after years of "Millenials are ruining _________" articles.

I think the joke that Silicon Valley is telling is that none of those are actual jokes.

The attempt to welcome Microsoft Teams and at the same time displays arrogance by Slack is very dubious and people can easily see through them.

I think it is time to accept the mistake and forge ahead to be innovative with its services. Perhaps, the company would need to find a new way to make Slack profitable or look for a potential buyer.

In other words, they were "Slack-splaining"?

Yap, this might be the dumbest action in the recent history of a startup. Wonder if it was really the idea of the CEO.

He’s defending it pretty vociferously on Twitter. Either way, he’s on the hook.

Haha, yeah he actually replied to me! Fair enough, if you’re going to do something, best to own it.

"Vociferously". I really like that word. Dunno why.

Sorry, I’m not actually contributing anything to the conversation.

I’ll continue not contributing by saying that I learned cool new word today thanks to ench and I appreciate it.

Wonder if it was really the idea of the CEO.

He obviously approved it, so it’s all on him.

I think it’s difficult to define Slack as a startup as they have raised 539+ Million in funds. However, I did agree with Casey, the letter was probably not a good move.

Do we know if they are profitable yet? Seems like they are still living on investment capital, meaning they aren’t self-supporting. This isn’t necessarily a definition of a startup, but a three year old company relying on investors feels very "startup-y".

Sorry, but as mentioned in the article, Slack is basically IRC + integrations. IMO with threaded conversations, MS is already having an advantage in the IRC part. With its deep integration with Office, it’s further having a huge leap in the real productivity apps part – the rest of the (semi-)useful integrations will most likely follow.

Combining this with an apparent price advantage for every business running on Office365 (and a huge incentive for non-365 customers to switch to it, considering it offers so much more than Slack with just a 50% premium), I don’t see much hope for Slack. Certainly, they should focus on innovating instead of those childish ads.

I don’t think they could stack up features fast enough. Threaded conversations are one thing, but the video conferencing Microsoft’s rolling out is being supported by knowledge on the subject from Skype and to a lesser extend MSN Messenger. Plus there’s the office integration which will expand over time.

Also, Office 365 is $8.25/mo per user for the basic plan, $12.50/mo per user for the premium plan, and both will have access to the Slack competitor as well as Office apps. Slack alone costs $6.67/mo per user, and $12.50/mo per user. Slack’s either slightly cheaper or at cost with Microsoft’s offering depending on what plans you’re using, and if you’re already paying Microsoft for Office 365, why would you continue to pay for Slack?

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