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Strategic Insights From The Slack S1

26th April 2019

Because I’m a total nerd for business software, I just spent the last hour reading Slack’s S-1 (document detailed the public sale of their shares), which was filled today.

You can access that here: Slack’s S-1 Document

There are a few interesting points in this S-1, particularly their decision do a direct listing, meaning they will list on the NYSE without an underwriter negotiating the sale of their shares. As far as I can tell, Slack is using the public listing as a way to create overall liquidity for their shares and shareholders and show their commitment to build a long-term business. That’s opposed to more typical IPO’s, which are often used primarily as a way to raise capital for growth (they have more than enough of that in the bank). The document itself is fascinating — if you’re that way inclined I’d definitely recommend checking it out. My favourite part — and the part I want to talk about now is the section titled: ‘What Sets Us Apart’ on page 4.

A few quotes really stand out:

Under the heading Customer-centricity is the fundamental tenet of our company Slack explains “We built our software and user interface around the real needs of human beings.” This shows a strong belief in the idea of building a business that focuses on its customers and people first and trusting that the financial results will take care of themselves.

From a strategic perspective, the Growth Strategy heading is a goldmine. I think it’s worth emphasising both the bullet points they’ve used and the order they’re listed as showing deep insight into Slack’s strategic priorities.

Interpreting the growth pillars they discuss, this is how Slack view their growth plan:

These bullet points highlight a focus on product development first, then product distribution, and then lastly advanced tech capabilities. I think this focus on product distribution and incremental improvements instead of relying on world-changing technological advances happening in the near-term is an interesting distinction to think about.

Of course, no discussion on a document like this is complete without acknowledging some of the flaws, pitfalls and things to work on. Slack is not profitable — and its expenses have increased relative to its (rapidly growing revenue). It also lists no fewer than Microsoft, Google and Facebook as potential future competitors. It seems Slack has a long path ahead of it, but I’m definitely interested to see how that plays out with its people and customer first strategy.