Slack App Quotes

Here’s some startup pedagogy for you: When confronted with any startup idea, ask yourself one simple question: How many miracles have to happen for this to succeed? If the answer is zero, you’re not looking at a startup, you’re just dealing with a regular business like a laundry or a trucking business. All you need is capital and minimal execution, and assuming a two-way market, you’ll make some profit. To be a startup, miracles need to happen. But a precise number of miracles. Most successful startups depend on one miracle only. For Airbnb, it was getting people to let strangers into their spare bedrooms and weekend cottages. This was a user-behavior miracle. For Google, it was creating an exponentially better search service than anything that had existed to date. This was a technical miracle. For Uber or Instacart, it was getting people to book and pay for real-world services via websites or phones. This was a consumer-workflow miracle. For Slack, it was getting people to work like they formerly chatted with their girlfriends. This is a business-workflow miracle. For the makers of most consumer apps (e.g., Instagram), the miracle was quite simple: getting users to use your app, and then to realize the financial value of your particular twist on a human brain interacting with keyboard or touchscreen. That was Facebook’s miracle, getting every college student in America to use its platform during its early years. While there was much technical know-how required in scaling it—and had they fucked that up it would have killed them—that’s not why it succeeded. The uniqueness and complete fickleness of such a miracle are what make investing in consumer-facing apps such a lottery. It really is a user-growth roulette wheel with razor-thin odds. The classic sign of a shitty startup idea is that it requires at least two (or more!) miracles to succeed. This was what was wrong with ours. We had a Bible’s worth of miracles to perform:

book and pay for real-world services via websites or phones. This was a consumer-workflow miracle. For Slack, it was getting people to work like they formerly chatted with their girlfriends. This is a business-workflow miracle. For the makers of most consumer apps (e.g., Instagram), the miracle was quite simple: getting users to use your app, and then to realize the financial value of your particular twist on a human brain interacting with keyboard or touchscreen. That was Facebook’s miracle, getting every college student in America to use its platform during its early years. While there was much technical

To put WeChat in an American context, it’s as if one single service combined the functions of Facebook, WhatsApp, Facebook Messenger, Venmo, Grubhub, Amazon, Uber, Apple Pay, Gmail, and even Slack into a single megaservice.

The team spent several years working on Glitch, but it never caught on with a mainstream audience. The game was shut down in 2012 due to a lack of traction. Butterfield and his team had spent nearly four years working on a failed project. It was a painful setback—but it wasn’t “game over.” While working on Glitch, the team had built an internal productivity tool to streamline communication, and it was very effective. Instead of shutting down Tiny Speck, Butterfield decided to refocus the company around the productivity tool. They would polish and retool their internal app for external distribution, selling it to other companies with a SAAS (Software as a Service) pricing model. They called the new product Slack. The early traction for Slack was outstanding. In 2014, the company (now also known as Slack) raised $42.8 million in a new round of funding from several top tier venture firms. Later that year, they raised another $120 million, valuing the company at over $1 billion.[33] Your project might fail. But if your project fails, you don’t necessarily need to abandon your underlying passion. It’s like driving. When your car stops running, you don’t give up on the prospect of ever driving again—you get a new car so you can get back on the road. Butterfield knew he had a passion for startups, and he knew that startups were tough. When his vehicle broke down, he didn’t stop driving. He took his broken car to the dump, got a new one (with far more horsepower), and slammed his foot back down on the gas pedal.

Bundling eventually stopped working for Microsoft. After the antitrust investigation, the company maintained its dominance on the PC operating systems market, but it lost control of many other markets. Eventually the industry jumped from PC to mobile. Microsoft tried to exactly replicate the network effects it had before—an ecosystem of hardware manufacturers who paid a licensing fee to run Windows Mobile, and app developers and consumers to match—but this time it didn’t work. Instead, Google gave away its Android mobile OS for free, driving adoption for phone makers. The massive reach of Android attracted app developers, and a new network effect was built, derived from a business model where the OS was free but the ecosystem was monetized using search and advertising revenue. Microsoft has also lost the browser market to Google Chrome, and is being challenged in its Office Suite by a litany of startup competitors large and small. It continued to use bundling as a strategy, adding workplace chat via Teams to its suite—but it hasn’t achieved a clear victory against Slack. If bundling hasn’t been a sure thing for Microsoft, it’s an even weaker strategy for others. The outcome seems even less assured when examining how Google bundled Google+ into many corners of its product, including Maps and Gmail, achieving hundreds of millions of active users without real retention. Uber bundled Uber Eats across many touchpoints within its rideshare app, but still fell behind in food delivery versus DoorDash. Bundling hasn’t been a silver bullet, as much as the giants in the industry hope it is.

The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.84 Because Buffett generally invests in low-tech companies like See’s Candies or Coca-Cola, the moat he refers to is often a strong brand or a unique business model. For software products with network effects, a strong moat means something different: how much effort, time, and capital does it take to replicate a product’s features and its network? In the modern era, cloning software features is usually not the hard part—replicating the complete functionality of a Slack or Airbnb might take time, but it is tractable. It’s the difficulty of cloning their network that makes these types of products highly defensible. I’ll use an example to think through the competitive moat. Let’s start from first principles, with an example of Airbnb trying to launch in a new city with no competitors in sight. As the early Airbnb team described, the Cold Start Problem lies in the difficulty of launching a new city to a Tipping Point of over 300 listings with 100 reviews. This requires real effort, because the minimum network size is quite large—contrasted to many other network types like communication apps, which might only require two or three people to get started. But once Airbnb has reached Escape Velocity in a market, the Cold Start Problem creates the defense against new entrants.

Your Competition Has Network Effects, Too To figure out a response, it’s important to acknowledge a common myth about defensibility and moats: that somehow, network effects will magically help you fend off competition. This is a myth repeated again and again in startup pitch presentations to investors and entrepreneurs. It’s a lie that entrepreneurs tell to themselves. It isn’t true—simply having network effects is not enough, because if your product has them, it’s likely that your competitors have them, too. Whether you are a marketplace, social network, workplace collaboration tool, or app store, you are in a “networked category.” It’s intrinsic in these categories that every player is a multi-sided network that connects people, and is governed under the dynamics of Cold Start Theory. Effective competitive strategy is about who scales and leverages their network effects in the best way possible. No wonder we often see smaller players upend larger ones, in an apparent violation of Metcalfe’s Law. If every product in a category can rely on their network, then it’s not about who’s initially the largest. Instead, the question is, who is doing the best job amplifying and scaling their Acquisition, Engagement, and Economic effects. It’s what we see repeatedly over time: MySpace was the biggest social network in the mid-2000s and lost to Facebook, then a smaller, newer entrant with a focus on college networks with stronger product execution. HipChat was ahead in workplace communication, but was upended by Slack. Grubhub created a successful, profitable multibillion-dollar food-ordering company, but has rapidly lost ground to Uber Eats and DoorDash.

REMEMBER THIS •​An effort pact prevents distraction by making unwanted behaviors more difficult to do. •​In the age of the personal computer, social pressure to stay on task has largely disappeared. No one can see what you’re working on, so it’s easier to slack off. Working next to a colleague or friend for a set period of time can be a highly effective effort pact. •​You can use tech to stay off tech. Apps like SelfControl, Forest, and Focusmate can help you make effort pacts.

Tencent had partnered with leading mobile carriers like China Mobile to receive 40 percent of the SMS charges that QQ users racked up when they sent messages to mobile phones. A new service could hurt Tencent’s financial bottom line and at the same time risk its relationships with some of China’s most powerful companies. It was the sort of decision that publicly traded, ten-thousand-person companies typically refer to a committee for further study. But Ma wasn’t a typical corporate executive. That very night, he gave Zhang the go-ahead to pursue the idea. Zhang put together a ten-person team, including seven engineers, to build and launch the new product. In just two months, Zhang’s small team had built a mobile-first social messaging network with a clean, minimalistic design that was the polar opposite of QQ. Ma named the service Weixin, which means “micromessage” in Mandarin. Outside of China, the service became known as WeChat. What came next was staggering. Just sixteen months after Zhang’s fateful late-night message to Ma, WeChat celebrated its one hundred millionth user. Six months after that, it had grown to two hundred million users. Four months after that, it had grown to three hundred million users. Pony Ma’s late-night bet paid off handsomely. Tencent reported 2016 revenues of $ 22 billion, up 48 percent from the previous year, and up nearly 700 percent since 2010, the year before WeChat’s launch. By early 2018, Tencent reached a market capitalization of over $ 500 billion, making it one of the world’s most valuable companies, and WeChat was one of the most widely and intensively used services in the world. Fast Company called WeChat “China’s app for everything,” and the Financial Times reported that more than half of its users spend over ninety minutes a day using the app. To put WeChat in an American context, it’s as if one single service combined the functions of Facebook, WhatsApp, Facebook Messenger, Venmo, Grubhub, Amazon, Uber, Apple Pay, Gmail, and even Slack into a single megaservice. You can use WeChat to do run-of-the-mill things like texting and calling people, participating in social media, and reading articles, but you can also book a taxi, buy movie tickets, make doctors’ appointments, send money to friends, play games, pay your rent, order dinner for the night, plus so much more. All from a single app on your smartphone.