Slack’s Product Funnel Fit

“Product To Funnel Fit”- How It Drives Growth For Slack

Introduction

How many times have you received a vendor email asking for 15 minutes of your time? Or a vendor phone call in the middle of a meeting soliciting your interest to learn more about a product? How do these emails and phone calls make you feel — or better yet — when was the last time it worked? In today’s market, prospects don’t have time to be marketed and sold to in annoying ways.

Where does this new reality leave vendors? It’s actually quite simple: to realize hyper growth, vendors must eliminate sales friction. To get a buyer’s attention today, it’s not enough to look at product/market fit. In today’s competitive climate, successful vendors are designing solutions that achieve what I call product/funnel fit — the capability to let potential buyers experience products quickly in the sales process, with little to no friction. This product-led approach has significant advantages to both the potential buyer, in letting him/her experience the solution, and the vendor, in accelerating growth and revenue.

To illustrate the value of designing products with product/funnel fit in mind, let’s examine Slack’s journey to hyper growth. (Quick disclaimer, I do not hold any Slack equity nor do I have any affiliation with the company.)

A Case Study: Slack

Founded in 2009, Slack (Searchable Log of All Conversation and Knowledge) falls into the Workstream Collaboration (WSC) market, as defined by Gartner. Slack recently filed their S1 for an Initial Public Offering (IPO) and has demonstrated phenomenal growth.

How did Slack grow so quickly? The company brilliantly optimized product/funnel fit.

Product/funnel fit is the product having inherent features to accelerate sales motion and drive growth. It centers around the following product attributes:

• Intuitive Experience. Capability to use the product intuitively.
• Persistent Engagement. Product is used multiple times per day.
• Virality Effect. Users organically enroll more users within the product.
• Easy Discoverability. Ability to easily search for information within the product.
• Knowledge Transparency. Capability to access historical and accreditive knowledge from users.
• Application Extensibility. Rich Application Program interface (API) for third party application integration.

These product/funnel fit attributes helped Slack accelerate time to value (TTV) and time to revenue (TTR), which translated into a phenomenal growth rate. Here’s a closer look at how Slack measured up against each attribute. Keep these in mind as you examine your own product.

Intuitive Experience

Slack delivers an impressive end to end user experience (UX) to deliver value quickly. The experience spans across initial onboarding to ongoing utilization and is simple, elegant, and intuitive. Vendors looking to quickly maximize enterprise value (EV) should design their products to deliver user value quickly. This velocity will enable sales and marketing teams to capitalize on the prospect’s positive emotional response to drive revenue and growth faster than their competition.

Persistent Engagement

In certain use cases, many Slack users appear to prefer the product over email. The capability for Slack to be persistent in their users’ daily workflow drives up the value of their product. Slack’s Daily Active Users (DAUs) in a 24-hour period, who either consume or create content, exceeds 10 million. Vendors should explore how to drive persistent engagement in daily user workflows, focusing on DAU metrics, to become a defacto platform.

Virality Effect

Slack’s product has an inherent network effect. That combined with a thoughtful marketing plan drives a bottoms up sales strategy that accelerates growth. Vendors should explore how their product can introduce a network effect and easily convert users into mini sales reps to support growth.

Easy Discoverability

Slack unifies collaboration data into one platform. Such capability makes it easy for users to discover data across their collaboration graph to take manual and automated actions. Vendors that can make data within their product easily discoverable stand to make their products more valuable.

Knowledge Transparency

Slack operates as a system of record (SOR) of the users knowledge graph. The more users collaborate and share data, the more value Slack holds. Vendors that can act as a SOR and become accretive over time stand to gain a competitive advantage over point product systems.

Application Extensibility

Slack’s modern architecture allows for API third party application extensibility. Current tools, like traditional email, that don’t have extensibility are doomed to fail as all tools must fit into existing workflows via APIs. Vendors that deliver robust API capabilities and allow for third party integrations stand to enhance their value within their ecosystem.

Summary

Slack is a great case study in the value of product/funnel fit. As their S1 demonstrates, this product-led approach translates to a rich enterprise value over time. As a startup or established vendor developing products, incorporating product/funnel fit from the beginning is critical to overall success.

Ask yourself these questions to see if you can optimize for product/funnel fit.

1. Does my prospect have a positive user experience from initial onboarding and usage?
2. Does my product deliver an emotional reaction of “wow”?
3. Do my users feel like they have to engage with my product on a regular basis?
4. Does your product make it easy to share and engage with others?
5. Can your product make your current users mini sales reps within their organization?
6. Does your product become a repository of knowledge and is it it easy to access that information?
7. Can your product easily integrate with existing applications via standard APIs?
8. Are the APIs well documented for power users?
9. If I invest in product/funnel fit, how much can I increase TTV and TTR velocity?
10. What is blocking my product from having product/funnel fit features?

Freddy Mangum has held various C-level roles in high-growth companies that have experienced successful exits. The intent of this blog is to help the fellow leaders better understand one another so that they can execute more effectively and build great businesses. Freddy currently advises C-suite staff on go-to-market and mentors founders through programs like the Stanford Incubator (StartX).

Want to read other blog posts in this series? See Freddy Mangum’s articles on Medium here.