Is the business apps market a “winner takes all” market, or is it a market of “horses for courses”?
Earlier this year, I met a friend at a conference, and he told me how Slack is the only business collaboration app that will exist in the market in a year or two. He then thought for a moment, and rephrased, “it’s the only business app. period. Everyone else is toast.”
I’ve been hearing this, and similar sentiment from a lot of people in the tech scene. Slack is so great, and moving so fast, that it will take over the market, in a “winner takes all” scenario. With some fresh $200M in the bank, and a great CEO and team, it may sound like the only outcome possible.
Being the contrary skeptic that I am, and given what I see as the founder of Workgroup, I thought I’d weigh in on why I believe Slack, is actually going to take only half of the market… and why this market will grow dramatically.
First, what makes Slack successful
In one word. Execution. It’s just a very well designed product. At its core, it took the concept of persistent channels — where teams communicate in real time — to a new level. It then used API based integrations to turn Slack into a central platform, and wrapped it all with a cheeky, fun attitude.
To the investor community, it proved that business collaboration platforms can drive real benefits and value to teams, and that the potential growth and revenue for this type of solutions is massive.
However, Slack has some limitations, which may mean, that the better it gets at what it does, the less suitable it becomes for large parts of the market.
Now, I’m going to list a set of issues that make Slack unsuitable for parts of the market, and for each item, there is a potential “solution” to how slack can “fix it”. However, fixing those issues will always have a cost, the cost of complexity. There’s a limit to how flexible, and “we-do-everything”, a product can become without compromising its core offering, making itself “too complicated” to the point that its not so great anymore (I’m looking at you Microsoft).
First, let’s talk about team sizes
The Slack website suggests: “Organize your team conversations in open channels …everyone has a transparent view of all that’s going on.”
Transparency is great, and having fun conversations is… fun, but beyond a certain size, channels become SO noisy, that the productivity advantages dissolve as channels turn into huge time sinks, or worse, a source of stress.
One of the characteristics of Slack is that you need to be on top of the conversation all the time, or you loose it. If you dreaded opening your email inbox after a week on holiday, going into Slack is not going to be much better.
This means that while Slack is valuable for small-medium teams communicating mostly among themselves (such as code devs), it will have to play an interesting balancing act as it goes up the value chain and into larger and larger organisations.
Slack is reportedly adding the features needed for the Enterprise, from team directory to security, but will its core values of keeping things simple, pleasant and more productive, still hold true in the enterprise? that remains to be seen.
I believe that’s the key challenge Slack will focus on — that’s where the big money is to justify the $3.8B valuation. It will also face some tough competition there from entrenched major players with a lot to loose.
Teams Vs Workgroups - Internal communication, Vs external.
Slack is built for teams (“a messaging app for teams”). By definition, that leaves out what I call “Workgroups”. Where a team is an organic unit inside a company or an organisation, a Workgroup is a wider term, which includes any group working together, even on a small, time-limited project, and regardless if they are in the same company or not.
For that reason, you will find that even the most die hard Slack fans, still use email for most of their external business communication, even though a lot of this communication is workgroup-based, and suitable for a collaboration app.
Slack does support adding people as guests (paid option), and is (reportedly) working on better ways to invite them, but it’s an architecture problem: Slack is built around teams, and advocates transparency inside them (anyone who’s been on multiple Slack team understands the pain). At its core, Slack isn’t a network of interconnected groups. On email, adding anyone to a conversation requires just adding them on CC. It’s a network. For a collaboration app to replace email for external communication, it needs to be a network, not a collection of siloes.
Therefore, for internal developer teams, Slack works. But for many industries and business roles, a lot of the work is external, I’m talking about business people, lawyers, investors, PR Agencies, freelancers and so on. For these users, a networked, workgroup-based solution will be much better suited than a team solution.
Geeks Vs Normals, Or, what is the meaning of “simple”
Slack grew out of geekland, practically all of its initial devoted user base came from very tech-oriented companies and startups. Everyone who lives and breaths tech, thinks Slack is the simplest, most intuitive software on the planet, I mean what could be cooler than typing “ /giphy funny” and getting a funny GIF (the answer is a GIF button, like Messenger offers).
That’s why many industry players are surprised to learn that many non-techeys do not find Slack that simple to use at all. In fact, many I spoke to, see it as very complicated, and as a strong reason for not adopting it.
I believe there is a huge place in the market for a MUCH simpler version of this functionality, one that every user of personal messengers can feel at home with. It is yet to be seen how Slack will bridge the gap to the more general user base. I believe that in order to do that, it needs to simplify and clean, rather than add features (which may contradict the drive to the enterprise).
Slack, for now, is mostly a US phenomena, it’s currently not localized, which means it practically can’t go into many markets, although that’s relatively easy to fix. Still, if you look at any other messaging market. regional players are very strong, and for a good reason. What’s cool, cute and funny in the valley, may not necessarily be so in Japan.
Take for example chat bots, which are now attracting a ton of hype, If you built a talking bot in English, you’re still a long way from deploying it in Germany or in China.
And finally, the numbers
Slack has nearly 3M daily users at this time (3.5X what it had last year). While amazing and hugely impressive for a business application, the top consumer messaging apps, actually grew MUCH faster. Take Telegram, a messaging app that entered a consumer market saturated by WhatsApp, with a similar product to WhatsApp, still amassed 100M users with a much faster growth curve than Slack, and I’m not even talking about Whatsapp, or WeChat initial rise to glory.
Why? well for one thing, because Slack requires a whole team to fully embrace it, or it doesn’t work. When that’s done, it doesn’t “naturally” jump to the next team. Consumer messaging apps spread freely to groups of users.
What if, just if, someone can crack the code for a business collaboration app that grows directly from users to groups of users?
So what am I really saying here?
I’m saying the mass market business for real-time communication / collaboration apps has just begun. It’s not a question of “if”. Young people don’t email. It’s just a question of timing and the solution mix.
Slack proved business-messaging trumps email, but as is the case with consumer-messaging, there is room for at least 5–6 more strong players, each offering a variation of the experience. to fully cover this global market of hundreds of millions of potential users.
In this space, we designed our own app, Workgroup, to simply replace group-emails with the simplest possible real-time communication.
It’s much simpler than Slack, and it has no teams — it’s a network, where anyone can open a workgroup with anyone in seconds, and discuss any business subject, deal or project.
In my vision, every email conversation with people on Cc - represents a potential workgroup, which we can help communicate more efficiently.
So when we look at what happens on our platform compared to Slack — our workgroups tend to be: smaller (usually 3–9 people per workgroup), more practical (much less noisy, because they involve external people), more subject-oriented (less generic rooms), much easier to create and join (so workgroups are created on-demand, and can finish when a job is done), and overall, much simpler to use (less features and complexity).
And to sum up, here’s why I think this market is so exciting!
You can log into Workgroup here : web.workgroup.im (it’s so simple, you don’t even have to register).
About me: I am the Founder and CEO of Workgroup. http://www.workgroup.im. Prior to Workgroup, we released an email app called TL;DR, which gave us an in depth understanding of the email market, and led us to the development of Workgroup. Before Workgroup, I designed several products, including EverythingMe, an Android app which generated 15M downloads.