In 2011, indie game studio Tiny Speck launched Glitch, an anti-combat MMO which failed to gain any interest. Due to the team being located in three locations, it built an instant-messenger during development to better communicate online, which became a hub of activity.
Seeing the opportunity, co-founder and CEO Stewart Butterfield shut down Glitch in 2012 and began to work full-time on the messaging app, which would become Slack.
This was Butterfield’s second time pivoting a failed game project into a successful tech product. In 2002, his video game studio Ludicorp started work on Game Neverending, which never made it to launch. Some of the game’s features were used to create Flickr, which he sold to Yahoo in 2004 for $25 million.
It is worth noting the similarities between Slack’s founding and Discord. Both were run by entrepreneurs who had made millions from their previous venture (Flickr and OpenFeint) and then released a video game to muted reception. That failure inspired both to launch communication tools.
Originally beta testing the app with a few organisations, Butterfield saw the potential of Slack as an answer to the many disparate ways employees communicated. Instead of meetings, e-mail threads and phone calls, everything could be done through one application.
According to Slack, using the app reduces emails by 32 percent and meetings by 27 percent.
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Find out moreAfter a year of privately testing the app, Slack launched publicly in February 2014. It was an instant success, receiving 8,000 requests in the first day and 15,000 by the second week. Slack had to stagger the launch, as it added more server capacity to meet demand.
As Slack added more organisations, word of mouth accelerated demand, as many media organisations were the first to use the app and wrote positive reviews of it. It grew at a rate of five to 10 percent a week in the first year. Slack reached unicorn startup status in 2014, and its value almost trebled the next year when it was valued at $2.8 billion.
Slack’s first few years were led by the app’s user experience, which was easier and modern compared to Hipchat or Campfire, the two other notable online chat tools used at the time. In 2016, Slack debuted a flurry of new features to push it beyond the competition, including an app and bot ecosystem.
The use of bots made it easier for managers to relocate most of their operations to Slack. Managers could track employee time off, send surveys, receive and forward emails, and talk to clients through the app.
Business tools, such as Google Drive, GitHub, Asana, Zapier and Salesforce, are all integrated into Slack as well. Some have built an app inside Slack, allowing users to stay on the platform, while others simply inform users of any changes or updates to files.
There are over 2,000 apps and 750 bots on the Slack App Directory.
…
The future looked great for Slack, and then Microsoft announced Teams.
For the past three years, Slack and Microsoft have gone back and forth at each other, with most of the barbs coming from Slack. Butterfield has said Microsoft is ‘unhealthily preoccupied with killing [Slack]’ and recently filed an anti-trust lawsuit, due to Microsoft use of the Office 365 platform to accelerate Teams adoption.
While Slack has grown steadily in daily active users (DAUs), from six million when Teams launched to 12 million in 2020, Microsoft Teams has surged ahead, currently at 75 million DAUs. This is partly due to Microsoft marketing Teams as a catch-all solution for people and organisations affected by COVID-19.
Butterfield has also accused Microsoft of “fudging the numbers” by saying a Teams user is active simply for having the app open or using it for less than 10 minutes per day. Microsoft has refuted those claims.
Microsoft appears set on making Teams the communications platform for everyone, but that doesn’t necessarily mean Slack will be crushed. As Butterfield said in 2019, 70 percent of the company’s top 50 biggest customers use Office 365 in tandem with Slack.
It has taken some of the shine from Slack however, which was the darling of the tech industry. From a high of $23 billion post-IPO, Slack is now valued at $17 billion.
We have collected data and statistics on Slack revenue, usage and organisations. Read on below to find out more.
Slack Overview
| Launch date | 14 August 2013 |
| HQ | San Francisco, California |
| People | Stewart Butterfield (co-founder, CEO), Cal Henderson (co-founder, CTO) |
| Business type | Public |
| Industry | Business communication |
Slack Revenue
| 2014 | $12 million |
| 2015 | $30 million |
| 2016 | $100 million |
| 2017 | $200 million |
| 2018 | $221 million |
| 2019 | $401 million |
| 2020 | $630 million |
Note: Slack’s fiscal year runs from March to April. Q4 2020 results were published in March 2020, so yearly revenue for 2020 consists of April 2019 to March 2020.
Sources: Slack, Business Insider, (2), BC Technology, QZ
Slack Profit
| 2017 | ($146 million) |
| 2018 | ($140 million) |
| 2019 | ($138 million) |
| 2020 | ($91 million) |
Note: Parentheses indicates loss.
Sources: Slack, VentureBeat
Slack Valuation
| 2014 | $1.1 billion |
| 2015 | $2.8 billion |
| 2016 | $3.8 billion |
| 2017 | $5 billion |
| 2018 | $7.1 billion |
| 2019 | $23 billion |
| 2020 | $17 billion |
Sources: VentureBeat, TechCrunch, (2), (3), FT
Slack Total Funding
| 2011 | $15 million |
| 2014 | $164 million |
| 2015 | $283 million |
| 2016 | $491 million |
| 2017 | $904 million |
| 2018 | $1.3 billion |
Source: Crunchbase
Slack Daily Active Users (DAUs)
| 2014 | 0.4 million |
| 2015 | 2 million |
| 2016 | 4 million |
| 2017 | 6 million |
| 2018 | 8 million |
| 2019 | 12 million |
Sources: CNBC, Statista, BC Technology, Fast Company, The Verge
Slack Paid Users
| 2014 | 0.07 million |
| 2015 | 0.13 million |
| 2016 | 1.25 million |
| 2017 | 2 million |
| 2018 | 4 million |
| 2019 | 6 million |
Sources: CNBC, Slack, BC Technology
Slack Organisations
| 2014 | 30,000 |
| 2015 | 60,000 |
| 2016 | 120,000 |
| 2017 | 330,000 |
| 2018 | 450,000 |
| 2019 | 640,000 |
| 2020 | 750,000 |
Sources: Slack, TechCrunch, Fast Company, The Verge
Slack Paid Organisations
| 2017 | 50,000 |
| 2018 | 60,000 |
| 2019 | 88,000 |
| 2020 | 112,000 |
Sources: Slack, TechCrunch, (2), Slack IPO
Slack vs Microsoft Teams: DAUs and Organisations
Note: Some of Microsoft Teams surge in DAUs is due to non-corporate usage, which may not stick post-COVID. Slack counts both free and paid subscribers for organisation total.
Slack other key stats
- Slack generated $630 million in revenue in 2020 (Slack), and expects to reach $4.2 billion in 2025
- Slack has lost $6 billion in market cap since going public (FT)
- 14 percent of organisations pay for Slack
- The app is used by 65 of the Fortune 100 (Slack)
- Some of the largest businesses using Slack include IBM, Amazon, PayPal and Airbnb
- Users are active for 90 minutes per day on weekdays (Slack IPO)
- Using Slack reduces emails by 32 percent and meetings by 27 percent
- 1.5 billion messages were sent on the service weekly
- Slack’s ‘North Star’ metric, which is when a user sees value in the app, is 2000 sent messages, according to CEO Stewart Butterfield (Medium)
- Over 500,000 registered developers use Slack
- There are 2,000 apps and 750 bots in the Slack App Directory (Slack)
