Salesforce buying Slack for $28B must have seemed like one of the oddest combos of 2020
But it wasn't. Slack had already become quite an enterprise solution ... without leaving behind its freemium and developer/product-centric roots.
5 Interesting Learnings from Slack at IPO:
But it wasn't. Slack had already become quite an enterprise solution ... without leaving behind its freemium and developer/product-centric roots.
5 Interesting Learnings from Slack at IPO:
#1. By the time Slack IPO'd, freemium had become more of a lead-gen tool that a revenue stream.
Only 8% of Slack's revenue was from Free-to-Paid at IPO. Just 8%.
Only 8% of Slack's revenue was from Free-to-Paid at IPO. Just 8%.
#2. By IPO, Slack already had 575+ $100k+ ACV customers.
And $100k+ deals were already 40%+ of Slack's revenue at IPO.
That was up from just 22% enterprise 2 years earlier.
And $100k+ deals were already 40%+ of Slack's revenue at IPO.
That was up from just 22% enterprise 2 years earlier.
#3. Even a world-class freemium product can't eliminate selling and sales cycles.
By IPO, it's $100k+ Enterprise Grid deals took "multiple months" to close.
Selling is selling.
By IPO, it's $100k+ Enterprise Grid deals took "multiple months" to close.
Selling is selling.
#4. Slack's NRR at IPO was a world-class 143% at IPO.
It dipped to 125% at $1B ARR, but still has always been world-class.
Without this, Slack would still have grown, as its new customer acquisition rate was just as high.
But it wouldn't have grown nearly as fast.
It dipped to 125% at $1B ARR, but still has always been world-class.
Without this, Slack would still have grown, as its new customer acquisition rate was just as high.
But it wouldn't have grown nearly as fast.
#5. Slack raised a ton -- but it didn't burn that much cash on the way to IPO.
Slack wasn't as efficient as Zoom, but at $600m+ ARR is burned only $97m a year. While investing heavily in enterprise sales.
A viral component really, really helps with CAC. A lot.
Slack wasn't as efficient as Zoom, but at $600m+ ARR is burned only $97m a year. While investing heavily in enterprise sales.
A viral component really, really helps with CAC. A lot.
A few bonus learnings at IPO:
#6. Slack had to do SLAs for its enterprise customers. So don't think you won't have to.
#7. 35% of its revenue at IPO was outside the U.S. -- and had been for years. So go where the markets take you.
#6. Slack had to do SLAs for its enterprise customers. So don't think you won't have to.
#7. 35% of its revenue at IPO was outside the U.S. -- and had been for years. So go where the markets take you.
#8. "Fair billing", i.e. consumption-based used, was still the overall norm at IPO. But larger customers had moved to fixed contracts.
#9. By IPO, Slack had rolled out the full enterprise playbook. A field sales force. Solution engineering. Demand gen. Webinars. Etc.
#9. By IPO, Slack had rolled out the full enterprise playbook. A field sales force. Solution engineering. Demand gen. Webinars. Etc.
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