Author(s): Raghu Gopal
Earlier this month, business collaboration firm Slack received a $200 million funding round that was led by Thrive Capital, with participation by GGV Capital, Comcast Ventures and existing investors, including Accel, Index Ventures and Social Capital.
Slack provides a centralized instant messaging tool for businesses, aiming to reduce time spent on e-mail. The service works with most mobile devices and is free to use, with the option to upgrade to premium versions that offer more features and support more team members. The software allows users to upload and collaborate on files, and also has a search function to retrieve past conversations.
The company's success can be attributed to its recognition that people are becoming more comfortable working in a mobile environment. Messages on Slack tend to be short and casual, much like the mobile text messages that people favour over e-mail. The service creates a perception that keeping in touch with co-workers is effortless and social.
By marketing its product as a tool that can replace e-mail, Slack has become popular among tech companies like Samsung and Salesforce, media companies such as CBS and BuzzFeed, publishers, as well as Harvard University and the US government. There have been other start-ups with similar features in previous years, but none has received the same level of enthusiasm as Slack.
The business collaboration space is becoming increasingly competitive, with established players such as Box, Dropbox, Google and Microsoft focused on several aspects of the market. Facebook is also making inroads with its Facebook Messenger, Facebook at Work and WhatsApp platforms. Facebook at Work has been recently deployed by Royal Bank of Scotland and the Financial Times, for instance. Additionally, WhatsApp recently announced a range of security and encryption features that will appeal to enterprises. According to our Employee Mobile Technology Survey 2015, WhatsApp is the fifth most-used app at work after Microsoft Office, DropBox, Skype and Google Docs.
Slack's ease of use and viral expansion could allow it to become a major player in the future of business collaboration and communications. It won't be easy, however, as it will need to both compete and cooperate with the industry giants that are eyeing this lucrative segment.