How Slack Became Boring
In the war for the remote office, why isn’t the hyped messaging app pulling a Zoom?
It’s no secret that the arrival of the coronavirus earlier this year smashed the fast-forward button on the acceptability of remote work. For a certain class of white-collar job, working from home has become the default, and it’s not clear when offices will fully reopen. That’s been a major boost for some businesses — maybe most notably video conferencing tool Zoom, which transformed in a matter of months into a wildly popular, and wildly profitable, fixture of everyday life. It not only became a core part of the virtual office, it transcended it.
Another obvious winner, it would seem, should be Slack, the widely known workplace collaboration and messaging startup launched in 2013. While Slack has reported increased usage in the pandemic era, that has come with caveats and disappointments — for Wall Street, at least. Zoom’s stock has more than quintupled from $67 to more than $400 this year, for example. Slack shares, on the other hand, nose-dived after its most recent earnings report, and now stand at around $26, down from a bit over $34 in early September, and roughly flat for the year.
The weird thing is, Slack’s numbers weren’t really bad. The company reported $215.9 million in revenue, up 49% over last year, and above Wall Street estimates. It has 130,000 paying customers—including Amazon, Verizon, and IBM, among others — a 30% annual increase. And its latest product, Slack Connect, which lets companies use the platform to communicate securely with vendors and clients, is a smart idea that’s bringing in new customers. The company even raised its guidance for its third quarter.
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The catch is that there was no eye-popping spike, which underscores a deeper issue: Slack is no longer a thrilling and potentially disruptive newcomer storming the marketplace. It’s a (very) familiar fixture of the marketplace. In fact, one challenge can be found in the fact that in…