Day 1: San Francisco
A first day in SF. Finding the first Slack office. Meeting the team. Getting started on some work. Piecing together the problem to be solved. Coffee time.
Day 1: 5:30 am in Vancouver. Get up, get moving. Get the taxi to the airport to the flight to San Francisco. All of it a bit bleary.
Land midmorning into glorious sunshine. Hello, California! Get the taxi to the freeway to the office to get started. Onwards to meet the team and hopefully show them and myself that I had some clue about how to succeed with Slack. (Slack? Really Slack?) Arrive with a deep breath and try to find the door.
That first Slack office is worth some description. It was on Clementina, a half street that didn’t really go through many intersections but popped up again here and there in SOMA’s grid as a spur line between blocks.
The address I had been given led up an accessibility ramp to a glass door. Inside the door was a kitchen with two stainless steel tables. One table held snacks and cutting boards and kitchen appliances, a bowl of avocados. The second table held a fully stocked bar of liquor bottles and cocktail tools, a rainbow of liquids. I learned later that day that the pair of tables had come to the company through an auction of goods from a morgue. These were cadaver tables.
Through the kitchen was the main work area, a hangar-like cube of space whose ceiling was mostly skylights. The California sun blasted in by 10 am and so the team had stretched a parachute on cords across the centre of the cube to diffuse the blinding light. Desks were arranged somewhat orderly in a grid. A meeting area in a corner hosted a futon and a few chairs. Some folks had erected individual umbrellas to shield their screens from the light and glare.
I met Cal Henderson, the husband of Rebecca Reeve who I had worked with before and who had introduced me to Stewart in the first place. (See the Preface chapter, Pre-Slack: Meeting Stewart.) Cal was a bright, bearded programmer and the CTO.
I met Eric Costello, another bright, bearded programmer, whose focus was front-end engineering. I met Myles Grant, a third bright and affable programmer, but without a beard.
(Later I would learn each of them was remarkable, both at their respective and intersecting programming specialties, but also in diverse ways. Cal literally wrote the book on PHP programming on the bus ride of his daily commute. Eric had an English degree and had invented ways for websites to dynamically update their interface called DHTML that everyone now used and took for granted. Myles was a ranked swimmer and BBQ chef.)
The office was bigger than the team needed it to be and had a bit of a haunted feel. In the Glitch days the team had been three times as large.
In contrast to the empty office space, the people I met had a really nice feel, like a bunch of weirdos bonded through hardship. They had seen some bad days and stuck together. They each had special skills that complemented each other, and broad skills that touched their teammates’ respective areas of specialization. This overlap gave them a huge surface area of shared understanding to lean on. They knew each other well and could relate and interoperate.
The mood was upbeat. The team retained a very strong hope for what they could create together. They were tight. And for good reason. They were very good at what they did and they really enjoyed their work.
Introducing: Marketing
So what was I there for? I was new and had some new expertise to offer the team. I hoped I had an ability to help them succeed where they had failed in the past.
But this was a new product and it needed to find a new market. Glitch had been a game for consumers to play. Slack was a product for businesses to be productive.
We had to learn how to take a business-to-business (or B2B) software product to market. And soon. The clock was ticking. Like all startups, it was a race against time. Until we found our market, the money and the faith and the energy were all being depleted daily.
So we started with a lot of questions. I had questions and doubts about what I could do. The team had much more practical questions about how we could get started. The biggest question we all shared — how were we going to get customers?
First up, I wanted to make B2B marketing real and tangible for them. So we did an exercise that gave them some group work.
They broke into 3 groups and each independently talked about:
What was the last thing they had bought online? Describe the purchase process.
When did they first become aware they had a need or want for the product?
When did they first become aware of the product?
How did they find the thing they purchased?
How did they decide to purchase that thing instead of another thing (or nothing)?
Then we got back together as a full group to review the discussions. I liked to hear their answers about buying software or new computing. But I was far more interested to see how diverse and diffuse their respective purchase processes had been.
In our discussion it became clear that some parts of their decision they each knew. Some parts they had to figure out together. The purchase process proved complex, like they each had a piece of the puzzle and the puzzle only revealed itself as solvable once all the pieces had been shared.
I took some notes and we started to see some larger patterns emerge on how they purchased things. From those patterns, we started to create a shared understanding of how customers acquisition and conversion could work for our imaginary customers. After all, it had worked on them.
Throughout the discussion I added in some rough ideas from past marketing work that I thought might be applicable for Slack. It was fun to see how those tactics showed up in their purchase journeys too.
None of these rough ideas was particularly sexy or groundbreaking. But having them as part of the conversation helped to convey some of the basics of how B2B marketing could work.
We talked about public relations, contributed articles, advertising, word-of-mouth marketing, search engine optimization, landing pages, white papers, emails, testimonials, reviews. It all felt a bit like a job interview and a bit like a learning and teaching session, all rolled together.
As we talked, the challenges that we faced started to get clearer for me too.
What was Slack?
To start with, the key question: what was Slack? How could we go to market with a product that people loved but didn’t really know how to describe? Would some standard B2B marketing tactics actually work? If so, which ones, in what order and with what weighting?
The portmanteau word freemium had been coined already but was not yet widely used in B2B software sales. This was 2013. I can’t remember if it was a label we used in discussion that day, but it was certainly the mechanic we started to imagine that would lead our growth. People had to experience Slack to really get it. How could we help them get started?
Stewart flitted in and out throughout the day. He clearly had an idea about what he wanted me to accomplish. Yet beyond meeting the team, that goal was a mystery to me. In hindsight I’d guess that he wanted to show his team there was a new marketing approach to compliment their new business software, and he wanted to see if I was up to the job.
At the time, I had only a slight idea of how masterful Stewart could already be at some of the marketing tactics I would be responsible for starting. He knew the PR game, cold. He was already a very accomplished communicator and storyteller. He had some ideas about how to pitch the product based on conversations he’d had with friends, connections and warm introductions. He wrote very well.
In short, he was going to be my boss and he was already very good at the things I would need to do.
We broke for lunch and the team rose as individuals all clearly accustomed to eating together. Through the narrow SOMA streets we wound to a line of food trucks huddled in the shadow of an underpass. Señor Sisig was the top choice, a Filipino fusion operation with generous portions. I made conversation with my new teammates and went with the recommended option of adding a fried egg to the top of my Sisig Salad.
We trooped back to the office and ate at some vacant desks. I started to get to know the team.
We finished up lunch and settled in for another session, this one on measuring our results. We started with something called the AARRR framework (AARRR = Acquisition, Activation, Retention, Referral, Revenue – a metrics funnel for startups measuring customer acquisition). Then we moved on to working on some draft positioning statements to start to answer the key question: What is Slack?
As we worked on positioning, Stewart appeared and listened in and then started to participate with one group. We shared back our work to the team and I still have the notes from that session when everything was wide open and unknown and speculative. No one knew Slack. We didn’t even know Slack.
Did we answer the key question — what was Slack? Not really. We got closer but it was still pretty fuzzy. We still had much work to do.
We wrapped up and folks dispersed and settled into some individual work at their desks. I wrote some notes to try to capture the details of our conversations and educate myself. I’ve included those notes as an appendix at the end of this chapter, if you’re interested. They’re the real deal from that afternoon, along with some reflections I added in on the flight home.
At 3 pm everyone rose from their desks at once. Something was happening that was clearly understood by everyone and lost on me. Coffee run. We trouped out together to the California sun and walked a few blocks to a high-end speaker shop that happened to also have a cafe in the back — the team’s preferred coffee source.
The last thing I remember of that first day was leaving the office back to the bright sun. Stewart offered to call me a town car using an app on his phone called Uber. I had never heard of this option or service.
As we waited for the car he explained to me how I wouldn’t have to pay when I arrived at the airport. He would be charged for the ride through the app. He had just pushed the button on his screen and then the town car showed up. It was a bit magical.
I got into the car for the return journey home. I remember thinking to myself: okay, I don’t know where this is headed, but I’m going to roll with it. Uber. Sunshine. Filipino fusion. AARRR. Parachutes. California. Let’s go.
Up next:
Day 1: SF f2f Notes
I wrote the notes below on my first day at Slack and shared them with the Slack team, in Slack, the following morning. I’ve included them here, should you be interested. It’s probably only really interesting to deep insiders and / or startup nerds. YMMV. This is how the sausage got made. You’ve been warned!
Buying and Positioning and Marketing oh my!
Notes from our conversation about what is marketing and how marketing can work for Tiny Speck's new Slack product. (Originally would have been written with markdown notations (H2, #, *text*, etc.) for formatting because that’s how we would write in Slack at the time.)
Exercise 1: Buying on behalf of the company
Think of a time when you had to buy a product or service on behalf of a business. Could be a piece of software, choosing a lawyer, finding an office, hiring an employee. Anything where you made a decision to spend the money of a company.
How did you know you had a need?
How did you articulate / describe that need?
How did you find solutions to that need?
How many options did you consider?
How long did it take to make a decision?
Who else was involved in the decision?
How much did you spend?
Team 1
Bought a continuous integration service called Travis CI
1. How did you know you had a need?
Bugs in the mobile app that were pointed out to Brady. CI is a common way to fix that issue.
2. How did you articulate / describe that need?
We had tried it before for private stuff and it hadn't worked but then it was going to work for our situation.
3. How did you find solutions to that need?
They had a partnership with GitHub. That made us aware of them and gave them credibility. We had used it before as a non-commercial version.
4. How many options did you consider?
3 options: Travis, CI Simple, self hosting (Jenkins)
5. How long did it take to make a decision?
5 months (total time — very quick and easy to make the final decision because a test version had been set up 5 months prior)
6. Who else was involved in the decision?
4 people: Ali, Cal, Myles, Brady
7. How much did you spend?
$200 / month
Team 2
Bought help desk software called HelpScout.
1. How did you know you had a need?
Knew they needed a reliable system for help tickets. Easy to use. Build or buy? Not a chance we were going to build it.
2. How did you articulate / describe that need?
Used Zendesk previously. Established category of products – hosted help desk systems.
3. How did you find solutions to that need?
Online research - Googling online ticketing systems. Looked at what another company (Lift) does to solve the problem. Referrals / suggestions from Stewart who did search.
4. How many options did you consider?
3: Zendesk, HelpScout, UserVoice.
5. How long did it take to make a decision?
2 - 3 days to make a decision then a week of testing to make sure it was right. Total time was about 2 weeks.
6. Who else was involved in the decision?
5 people: Ali, Stewart, Cal, Myles, David
7. How much did you spend?
$100 / month
Team 3
Bought scalable hosting from Amazon called EC2.
1. How did you know you had a need?
Had to host somewhere. Core requirement of what we were building. EC2
2. How did you articulate / describe that need?
We need to have it. Ability to install any software. Easy to add capacity. Cheaper than hosting it ourselves.
3. How did you find solutions to that need?
Past experience. Using it on previous projects. Knowing about it in the market. Market knowledge. They are the market leader.
4. How many options did you consider?
There are competitors – Rackspace, Google Compute Engine, hosting it yourself – but everyone uses EC2 until they grow to a certain size.
5. How long did it take to make a decision?
A week. A day is what was remembered. It was understood that this was what they were going to do. There were really no alternatives.
6. Who else was involved in the decision?
4 partners: Cal, Stewart, Sergei, Eric, Myles
7. How much did you spend?
Couple of hundred a month. Over 5 years about a million.
Observations and Notes
Everyone mentioned the short-term cost of the product (/month) as the default answer to how much did we spend with the full lifetime value of the purchase (/month cost * # of months of use) only coming up with Amazon EC2
Body language – when asked to explain the purchase process it makes us feel anxious because we made decisions based on emotional reactions then have to make sense of them with reason / logic
We had some discussion about Aspirin-type products that relieve a pain and seem necessary to buyers vs. vitamin-type products that augment / increase something existing – we want as much as possible to move Slack towards an Aspirin-type product because it makes it an essential purchase vs. a discretionary purchase
Classic 4 Ps of Marketing
Derived from a physical world.
Pricing
Promotion
Placement
Product
5 Ps of Software Marketing
Iterate through these steps in sequential order. Once you have the first right, move to the second and so on.
Positioning
Product
Placement (distribution)
Promotion
Pricing
(Startups don't work this way because they build the product based on what they want to build, then find the positioning to take it to market.)
2 notes on software pricing
Pricing is last because no one knows what software should cost and everyone changes what their software costs as they learn what it should cost.
There is a traditional Valley of Death in software pricing ($5000 or less / year sells itself <-> $100000 or more / year and it's sold to you)
Exercise 2: Working on a Slack Positioning Statement
Positioning Statement Template
Answer these questions in order then string together the answers to create a positioning statement. Next, test your positioning against prospective customers. Does it resonate? Does it work? Do they want to try the product? Do they stick with the product?
For (who is the customer?)
Who need (what is their pain?)
Product X is (what is your product?)
That provides (how does it solve the pain?)
Unlike competitors (what competes with your product?)
Our product (what makes your product superior?)
The company also provides (what added punch is provided to seal the deal?)
Example from Mobify
For e-commerce leaders with more than $20-million in annual revenue who have 5% of customers visiting their website on mobile devices, Mobify is a mobile web platform that delivers an ROI in new revenues in less than 100 days.
Unlike proxy-based competitors like Usablenet and Moovweb that create a separate, m-dot website for mobile customers, Mobify works with responsive design and adapts any website to mobile devices (and any device).
In addition, Mobify is open source and built from open web standards – HTML, CSS and JavaScript – so inhouse development teams have the power and control to easily build with their existing knowledge base.
Team 1
For: Autonomous teams that do not have an adequate communication solution.
Who need: Information visibility, archive, and retrieval.
Product is: Team Communication Software.
That provides: Real-time, transparent communication and file sharing among all team members with easy information retrieval.
Unlike competitors: Unlike email, unlike IM, unlike Skype, everyone is together, sees the same information at the same time, and is simultaneously available.
Our product: More attractive, convenient, and faster to use.
The company also provides: All content if fully searchable.
Positioning Statement:
For autonomous teams that do not have an adequate communications solution, Slack offers information visibility, archiving and retrieving of all your team’s communication.
Slack is team communication software that provides real-time transparent communication and file sharing among all team members with easy information retrieval.
Unlike email, IM and Skype, everyone is together in one application, sees the same information at the same time, and is simultaneously available.
Slack is more attractive, convenient, and faster to use than other enterprise communication solutions, and all content in Slack is fully searchable.
Team 2
1) For (who is the customer)?
knowledge workers (people who use computers for most of their work day)
startups, new companies, technical teams
2) Who needs (what is their pain)?
distributed teams that need to be in close contact
friction of team communication
information overload, overhead of messaging
too many different moving parts
3) Product X is (what is your product)?
a hosted web service with mobile and desktop clients
4) That provides (how does it solve the pain?)
real-time communication with file-sharing: centralized, persistent, and searchable
easy tools that provide better communication for your team
coordination of team efforts
a persistent archive of all of your team's decisions and communication
5) Unlike competitors (what competes with your product?)
everything that you put into slack is easy to find and always available
you never lose your place in the flow of team communication
the more you use Slack the more valuable it becomes (avoid information decay/noise)
who merely provide more ways to communicate, we provide better ways to communicate
6) Our product (what makes your product superior?)
combines the strengths of persistent, asynchronous communication (email) with real-time,
lightweight instant messaging (chat)
7) The company also provides (what added punch seals the deal?)
easy integrations with your existing company services
slack becomes the centre for your company's communication needs
a pleasant and well-designed user experience
Statement
Slack is a hosted real-time communication platform for teams that rely on computers for their everyday communication. It provides real-time messaging and easy file-sharing in a format that is centralized, persistent, and searchable.
Unlike with other communication solutions, everything that you put into Slack is easy to find and always available. We make sure you never lose your place in the flow of team communication. Additionally, the more you use Slack, the more valuable it becomes as it archives your team's decisions and conversations.
Slack combines the strengths of persistent, asynchronous communication (email) with real-time, lightweight instant messaging. It also integrates with your company's existing services and tools so that it can become the centre for your company's communication needs.
Team 3
Statement
For teams of up to 150 people who need to simplify their communication systems, Slack is a messaging and file sharing platform that provides archiving, search, sync and real time notifications.
Unlike chat-centric competitors, Slack's emphasis on search and file management brings more of the team's communication into the same place, saving time and effort.
In addition, Slack makes integrations with your existing systems simple, amplifying the value of every tool in your organization.
Value Proposition
need to identify attributes of target customers
need to find their points of promiscuity - what tantalizes them and makes them want to try a new product? what is the reward we can offer?
assumption: once one small team in an organization uses the product for X days it will spread
In a 500-person sized prospect company:
have freedom to access any website on the web
have freedom to install their own applications on their machine
have freedom to choose their own applications for workflow
price must be expensable to avoid budgeting process (< $500 / month)
have a BYOD strategy in place for people to use personal devices
trust people and not necessarily institutions - are developers or technical and so understand how distributed authority / credibility is (HN culture)
it's much easier to see in hindsight a company's positioning and value proposition
it also skews perception because of a survivors' bias - we only talk about the companies we know about that have reached some market traction
Could we use a rotating homepage strap statement from people who are already using the product to show how variable it is by showing their answers to the question:
What is Slack to you?
IRC on steroids
The fastest way to collaborate I've ever discovered.
Additional reading on marketing
Customer Development
Steve Blank's blog on customer development (his approach that's a companion to product development)
Longer Steve Blank presentation on customer development called Why Accountants Don't Run Startups
Pricing and Segmentation
Iterative Path by Rags Srinivasan is a terrific resource that's a little roughly written: http://iterativepath.wordpress.com
Behavioral Economics
Rory Sutherland in an interview (YouTube)
Positioning