In this episode, we look at how to use Jobs-to-be-Done innovation methods to beat Slack. Slack is an example of an extremely successful and fast-growing company that is now a fierce public competitor. We use JTBD to explore how to beat this leader in business communications.
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Key moments from today's topic on how you would beat Slack with Jobs-to-be-Done:
00:00 Jay Haynes and Jared Ranere review the market share of Slack, why it appeals to its users and its competition.
02:49 Jay and Jared discuss the product strategy of Slack.
09:25 Jay and Jared talk about finding the right customer to target.
16:00 Jay and Jared cover why Slack was successful in the first place.
23:47 Jay and Jared summarize how to beat Slack by using Jobs-to-be-Done theory
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Follow Jared Ranere on Twitter: https://twitter.com/jaredran
Welcome to our podcast, how would you beat? In each episode we pick a company and talk about how you could use jobs-to-be-done innovation methods to beat that company's product. We'll discuss innovation theory and explain the methods so you can put the theory into practice at your company. I'm Jay Haynes, the founder and CEO of thrv, that's thrv without the vowels thrv.com. We help product marketing and sales teams use jobs to be done innovation methods to build market and sell great products. I'm here with my colleague, Jared Ranere. In this episode, we're going to look at Slack. Slack has obviously been a very fast growing company and is now public has about a $14 billion market cap. So how would you use jobs to be done innovation methods to beat a fast growing company like Slack?Jared Ranere :
Yeah, it's interesting to look at their origin story. So Stewart Butterfield, the Slack CEO and founder originally raised money to build a massive role player game called Tiny Speck. It wasn't succeeding and with money left in the bank, they decided to reallocate the cash to a product that they had been working on to communicate internally. They had really souped up their ICQ, their internal chat app, to enable their remote workforce. And they thought this was a nice product, and they decided to invest in it and make it user facing for external customers. And the growth was incredibly Swift. So in February of 2014, they launched with 15,000 daily users. And within six months, they grew to 171,000 daily active users. And a year later, they had 500,000 daily active users. And this kind of growth accelerated and continued until their IPO they went out at $37 a share today, their market cap is 14 billion. And they're trading at $26 a share. So their price per share has gone down what has happened, it has 12 million daily active users. And Slack says that those users are connected nine plus hours per day, and that they have 90 minutes of active use per day. So that's a lot of engagement. But they're, they're trading at a lower price today. Why is that? Well, Microsoft launched Microsoft Teams, it's a very similar product. And it's a head to head competitor. Their strategy is to build it within the larger Microsoft Office Suite where they have captive built in users. And they announced that they reach 20 million daily active users recently. So is Microsoft strategy, the best way to beat Slack?Jay Haynes :
Yeah, that's a great question. So just a little review of what strategy is. So if you're on a product marketing or sales teams, it's always good to review product strategy. Just so you know what your company's product strategy is. And we like to break product strategy into six main elements. So who's the customer? Who you're selling to? What's the market? What's the underlying market that you're in? And this is crucial, what is the underlying jobs to be done? How big is that market? What's the size of the market? What segment are you targeting? What unmet needs are you going to satisfy and what is the customer value that your product is going to create? So that's how we like to think about product strategy. And if you would review Slack's product strategy, what is it today? What is their product strategy? Well, you can you can look at company's websites and their marketing information and what they say about themselves and literature and you can figure out what their product strategy is. And in this case, Slack obviously is targeting business professionals. They are looking at a lot of different business areas engineering, financial services, sales, IT, marketing, customer support, HR, project management and media. Are the nine main areas that they are looking at just from their website? And so you'd want to say okay, well, the job that they're targeting their strategies to help communicate with colleagues to discuss collaborate, share. So, from their perspective, it looks like they're in a communication market. And that's how they've defined that. And obviously, people communicate all over the world, certainly business professionals do every day. There are millions and millions of business professionals, and, you know, even around $5 a month, this is a very large market, if you define it this way. And the segment they're targeting is really teams looking for efficiency. That's how I would look at it from their, their standpoint, what they're marketing to, and the unmet needs, as they would define them are really this kind of email overload hard to find relevant information. And the value of Slack at least from their strategy is to reduce information overload, so this is their perspective. Now, is this the right way to think about strategy? And if that is their strategy, how would you beat it? How would you come up with a different product strategy to beat Slack?Jared Ranere :
Yeah, so it's really interesting to look at the way Slack describes what they're trying to do for customers. So there's this great quote where Stewart Butterfield says, We're selling a reduction in information overload, relief from stress, and a new ability to extract the enormous value of hitherto useless corporate archives. We're selling better organizations, better teams. That's a good thing for people to buy, and it is a much better thing for us to sell in the long run. We will be successful to the extent that we create better teams. So Slack is trying to create better teams, and in the words of this quote, by reducing information overload like Jay was talking about before. So that leads to a really obvious question. Are they successful at that? If you were a user of Slack, do you have less information overload? Or do you have more information overload? The degree to which Slack is succeeding there is the customer value it's delivering to market. And if you can understand that you can predict their long term success. So when you think about how the product works, it puts a lot of effort into making it really easy to communicate. I've used Slack in a bunch of different settings, and there is a lot of communication coming in. It's fast and it's furious. That what in one example, I was working with a team in Europe, and every morning I live in the East Coast of the US, I would wake up to piles of Slack messages. It was incredibly overwhelming. When they forgot that I wasn't on their same timezone. They would message me over and over again. And I would wake up with a lot of anxiety, and a lot of information that I would have to digest before I could even get my work done, and I work on fairly small teams. I've also observed the Slack accounts of executives that work at much larger companies who are part of many channels and get at mentioned a lot. And they look at their screen of all the channels, and they just say, look at all these red dots everywhere. How am I possibly going to get through this? How do I know what to look at and what not to look at? And they just end up ignoring way more than they would ever ignore before in their email inbox. So what would be a more effective approach for reducing information overload? How can we do this better?Jay Haynes :
Yeah, that's that's a great question. And I think that is the right question. So I think Stewart Butterfield he's right. You know, of course, if you are helping teams be better. That's a great thing to sell. Like having more effective teams. Is is an amazing of course. And it is great in in some sense that is a very jobs to be done perspective on what they're doing rather than saying, Wow, we're, we're a messaging corporate messaging application, we have to do better at corporate messaging. That's not really the goal. And of course, this is one of the problems in adopting jobs-to-be-done is this idea that you're creating better teams? Sure. I mean, that's an incredibly high level goal. So you can almost say we're trying to create better lives for people. Right. Okay. Well, okay, how do you do that? What are you going to do if you were a product team? And you said, well, Slack is my competitor? How would I beat them because they're trying to create better teams. So are we want to create better teams, or internally Slack could do this as well and say, how do we want to continue to create better teams and that's gonna help make them more successful and and maybe have their stock go up since it's been down since the IPO. So let's look at this from a job student perspective to try and make it useful. So again, let's focus on the product strategy. This is this is a key element is having these six dimensions of a product strategy. So let's focus on the customer. And we've done this in previous podcasts and on our video about this but so who really is the customer here? Well, what's very handy is Slack recently has updated their website. So you can see there's different customers there. There's different job beneficiaries, as we would call them. So there's engineers, there's financial services people salespeople, IT, marketing, customer support, HR, project manager, media, their their nine different customers, so you could define those very specifically as been beneficiaries. And then what you'd want to do is really drill into each of those customers. Because is the job to communicate? Well, not really. And this is what's interesting about jobs-to-be-done and jobs theory. In this case, no one just wants to communicate. Communicating does not help a business achieve its goal, because the goal of the business is not more communication amongst the employees, which seems to be happening with Slack. And I agree, I think Slack can actually create a lot of information overload. In fact, personally, I don't use it because reason. It seemed interesting at one point to be a replacement for email, which has just gotten out of control, of course, but it really did create a lot of information overload. So back to the strategy. We know that for each one of these different customers, they each have different goals. They're not just trying to communicate. For example, you know, salespeople want to acquire customers they need to acquire customers fasters. Engineers need to build a product. HR professionals need to optimize the workforce, and marketing professionals of course, need to generate leads. So in each of these cases, these are extremely different goals. Now, communication is a great solution to this. But how would you go about figuring out how to beat Slack in just one of these? You could you could apply it to each one of these different customers, but just one, Jared, how do you think you would go about figuring out a product strategy in just one of these areas?Jared Ranere :
Right? So you've got a look at who these customers are, what are they trying to do? And who's struggling the most? And why. So if you are a salesperson and you're trying to acquire new customers, what about it is making it hard for you to do that? So, for example, if you need to need information to close a deal? Do you have a hard time figuring out your prospects budget? Do you have a hard time figuring out who the ultimate decision maker is? Is it hard to figure out when they want to close? Have they signed things yet? There is quite a bit of information you need to quickly and effectively close a deal? But does that going to come from internal colleagues all of that information? Maybe you need to coordinate with them on delivering things. But the more time you spend communicating with your colleagues, in fact, the less time you spend communicating with your customers and potentially getting the information you need. So you really want to focus on what is the problem? What is the the salespersons key struggle in trying to achieve their goal? Right, and and let's put it this way, if you were a salesperson, and you spent all day communicating with your team, your team might really like you. But are you going to keep your job? You got to close some deals. So in what ways Slack has that? That's the thing through in what ways are we actually helping the salespeople get the exactly the information they need when they need it, and no more. And there's a competitor threat from other products that could help them get that kind of information.Jay Haynes :
Yeah, it's interesting. I I definitely agree with that. I think if you just looked at the sales professionals using Slack, I think that's a great example. And and really is true across all these different customers. So in other words, if you could do less communicating to achieve your goal, would you? In other words, that's how you could become a better team by having fewer Slack channels and fewer streams of communications, because a very efficient team can, by definition, achieve their goal quicker. So how could a competitor to Slack look at sales teams or engineers or it people or HR marketing, whoever it is, and say, Hey, we're going to help you generate leads faster optimize your workforce? close deals etc. Without having to use a generalized communications platform. And this might be where Slack actually goes, they're starting looks like they're starting to divided up into these different functions, which is good. But if you were to compete with them, and you said, Hey, we want to build something that helps marketing teams, sales, engineering teams, whoever you would want to start by looking at that job, the main goal to try and achieve this is not not just communication. And that's where you break it down. And as you said, Jared, figure out who struggles and then from there, look at all those metrics about their struggle and say, This is the new thing we can do that's going to help them get that job done faster and more accurately,Jared Ranere :
Right. And it's fascinating when you think that way, because when people look at the competitor threats to Slack, they look at Microsoft Teams, they look at HipChat, they look at Google hangouts meet, they look at other communications applications. But the real threat to Slack or any of those products today is not a different way to communicate more faster. But a solution that enables you to not have to communicate much at all. And in fact, that would reduce information workload. If you have less information, then you have, it reduces. It's just, it's almost so obvious I can barely articulate it. Because the the solution to reducing information is not to make it super easy to produce more that if you think about it from first principles aspect, it's it's obvious on its face, yet, it's where we are today, right? It's easier to write a chat into Slack than it is to compose an email. And that can feel good while you're doing it. But it doesn't solve the larger problems at hand. And I think this is Where we can start to talk about consumption jobs, Jay? In other words, why was Slack successful in the first place? It is incredibly easy to use. So why did Slack succeed? And things like Google Wave fail?Jay Haynes :
Yeah, that's that's a great question. And and, you know, when we're looking at this podcast when we're looking at jobs theory and how it can help product teams, we also don't want to lose sight of the fact that Slack is clearly satisfying some need. So what is it? Companies don't grow this fast and become this successful in such a short period of time without really helping people get a job done? And I do think teams are looking to be more efficient every single day every team wants to be better. In fact, most cases, your job depends on you being better and better and improving. So I think there is a real need there. I think one of the issues is that we've gone from email which has clearly just become overloaded. And I would agree the assessment, of course, it's information overload. Everybody has too many emails. And the problem, one of the reasons that email is so inefficient is of course, because it doesn't help you get the job done. Someone I forget who it was, but they said, an email in your inbox is a task assigned to you by somebody else. And I've always loved that because you're trying to get things done you're trying to achieve your goals, you know, get all these jobs done. And someone else send you an email and now you have to look at that email you have to read it you have to think about it, there's there's some action you need to take, you know, it takes up mental capacity, you actually might have to go do something for someone else. And it's, it's, you know, it's exhausting. So I get that there is that information overload. But at but as you said, the solutions should get rid of the communications so that you can communicate less, but achieve your goal quicker. So what we need to do is figure out first what those goals are. That's what we've been talking about, of course. And then how to get there. And Slack. I think you're right. Jared, back to your point. From an interface standpoint, it was beautifully designed. It was beautiful. And I think that's a great question. Why did Slack succeed when Google Wave failed? Not everybody may remember Google Wave. But I think it was launched 2010 2009, something like that. So a few years before Slack. And it was a lot of engineering effort. It was supposed to be this new way to communicate, it was gonna replace email. And in fact, if you listen to the ad for Google Wave, it really was very, very similar to Slack. But as, as you know, of course, Jared, we break jobs down into functional jobs, emotional jobs and consumption jobs. jobs, and consumption jobs include interfacing with the product. Now no one buys a product to interface with it. Of course, you buy a product to achieve some goal to get a job done. But interfacing can be extremely important because the interface is essentially, in between you and achieving the goal and at the interface is so bad and so hard to use. You can't achieve the goal. And I think what you're saying, Jared is that one of the things that differentiates Slack is all of those elements of interfacing with it, and even learning to using it and sinking across your devices because you need to communicate not just sitting at your desk, but mobile, etc. And all of those consumption elements were really effective. They did a really good job on those consumption elements, while having this perception also, that communicating through Slack was going to be a better way to be a better team.Jared Ranere :
Yeah, it did. We're really effective at the learn to use job. So the Slack bot was a terrific innovation that did two things. It taught you how to use the product by giving you suggestions about what you should do with it through the interface of the product. So by learning to use it, you are using it at the same time. And it also solves what is sometimes called the empty party problem, right? The when you have a social product, social in nature, you need to have more than one user in it to get value. So the first user is sitting there going, what do I do with this thing? What's the point of having this if I don't have anybody to talk to and the Slack bot was the first person you spoke to. So it automatically gave you an interlocutor somebody else to talk to and to use the product with and by using it with the Slack bot. You learn how to how to be successful with the product and how to achieve goals through it gave you great suggestions. It was also friendly. So there are a bunch of emotional needs that Slack helps you with. So for example, on the the marketing website for salespeople, it talks about celebrating deals, right, this might be a really fast way for you to celebrate deals. And if you think about a remote sales team, you're sitting there in a room by yourself, maybe you're doing inside sales, or you just finished a meeting and it went really great. And now you're just on your way to the airport. It does feel nice to celebrate that with your team in some way. And Slack gives you a really fast way to do that. And so those emotional needs are another way in which it creates engagement and creates users. Now again, both of those have to be in service of getting more done with your team. If those emotional needs satisfaction features and things like the Slack bot that helps you consume the product don't help you be more productive at the same time than that they're all for not.Jay Haynes :
Yeah, I think that's great. And, and I think the emotional piece of it is actually important, both positive and negative emotions. So and and you can see this of course on on other, essentially social communication applications like Twitter and Facebook. It's, it's creating negative emotions that fear of missing out and that dopamine hit where you just need more stimulus. And Slack certainly has those elements, which I think are a huge risk. Going forward. I think we may look back, you know, 10-20 years from now and say, Wow, I can't believe we all use these platforms that just got us addicted. It's actually not surprising that we're using them. It's surprising that more competitors didn't evolve faster to help us actually achieve the goals we're trying to achieve, rather than just the goal of using the application. Because every venture backed new company wants you to get addicted, which means that their negative emotions. That those addictions, you know, kind of by definition of addiction as a negative thing, and they are getting very good social platforms are getting very good at being able to get you to come back. In fact, a little notification, you know, red dots to pop up everywhere. I absolutely turn them all off on my phone. I have almost no notifications on my phone. I don't want things notifying me ever. Because I'm aware of this. I'm like, that's not productive for me to be checking all these notifications. 24 hours. Yeah.Jared Ranere :
So I think the only way I interface with my phone is through the notifications. It was in other words, I have no agency when I use my phone, right just being told what to do by right.Jay Haynes :
Now if those notifications here's actually interesting way to think about it from a jobs-to-be-done perspective. So what is the strategy right to beat Slack and communication apps in general Microsoft Teams or whoever and it would be to focus those notifications really are the things that help you achieve your goal is this going to help you generate leads, if you're a marketing person is this notification gonna help you close a deal faster if you're a salesperson, you know, develop and build a product if you're an engineer, you know, solve sort of some sort of engineering problem, those notifications can be incredibly valuable, designed to specifically give you fewer notifications, right? That's the difference is that if you're trying to achieve your goal, and if you're building a product to beat Slack, or just to be in this market, you are really any market, you want to help people get the job done as fast and accurately as possible and not use your product anymore. And we see this a lot. And we work with teams. It's like they're designing stuff to have someone use their product, and even look at the metrics that Slack puts up, which is people are so engaged with Slack, 9 hours a day, 90 minutes of active use and all those daily active user numbers. Well Actually, those aren't necessarily good numbers. Because if you're spending all your time on Slack, you're actually not doing your job and getting the job done, you know, that you need to achieve. And that's that's a real risk.Jared Ranere :
Yeah, I've actually heard executives talking about that, that they might have a Slack productivity problem, not a Slack productivity solution. And that's scary. So if I'm on the Slack marketing team right now, I'm working really hard on trying to figure out how every minute spent on Slack increases productivity across other key company goals. Or also eventually, people like the CFO might say, Hey, I don't think we should pay for this anymore because we're actually losing money if unless you can demonstrate to me that we're getting an ROI on the time spent on Slack.Jay Haynes :
Yeah, that's exactly right. And it'd be interesting for Slack to try and publish those numbers because that would be an opportunity for them to say we really are making your teams better. Because, you know, in business, there's only there's only 2 numbers, your revenue and your expenses, you know, and there's things like working capital and obviously, but but it comes down to are you generating more revenue? Are you lowering costs and creating more profitability? And it would be interesting to look at that ROI number of time spent on Slack because, of course, if it is creating better teams great, they should continue to grow and focus on it. But if people find out while they're just spending too much time on Slack because of the fear of missing out and all the dopamine hits, and it's taking away from their productivity that that is where a competitor, that's how you would beat Slack back to our jobs-to-be-done strategy, you would beat them by saying we're gonna produce real ROI that helps people get their jobs done, and they don't use our application. Right. What they do is they get the job done, and the application just helps them get it done really effectively. You don't have to live in the application to do achieve your goals. SoJared Ranere :
my favorite notification is the DocuSign notification that says, this deal has been signed. Yeah, right. I don't have to go look at anything nice. IJay Haynes :
know that I got my job done. Job done goal achieved. Yeah, that's great. Okay, so just to wrap this up, if you were to go about trying to beat Slack, or really any of these communication companies, whether it's Microsoft Teams or communication products, of course, the goal is not to focus on communication, because that's not the job. That's not the end goal. The job to be done is something like salespeople, acquiring customers, engineering, engineers, developing a product marketing people generating leads, etc. And then you would want to size those specific markets. And what's interesting is in a lot of those markets, people might be willing to pay more than 5-10 bucks a month, there might be a real willingness to pay to get those jobs done faster, more accurately, the segmentation, you could figure out who struggles the most amongst customers within those individual markets and across those markets. So you could do a basically market analysis solution to look for the biggest growth opportunities. And we haven't talked too much about unmet needs, but we will more in the future but the unmet needs are the actions and variables within the job that people struggle with. So, you know, what are the unmet needs for salespeople, engineers, HR, marketing etc., and then measuring the value of the product ID that you have. And this is the key does it help them achieve those goals faster, and more accurately than when they're sitting in Slack all day? So that's how we would build a product strategy to beat Slack. Thanks for listening to our How would you beat podcast visit us at thrv.com. That's thrv.com to get our free how to guides and try our jobs-to-be-done software for free.