The tech world is home to a lot of flashy, heavy-hitting names. Google, Facebook, Amazon, and Apple are the companies we’re all familiar with, but the industry is rife with fresh and innovative startups, all vying to be ‘the next big thing.’ One company has been raising a lot of eyebrows simply because it has been able to carve itself a niche in servicing the startup community itself. In the process, it has been able to become one of the fastest-growing small businesses of all time.
That company is Slack, and it was founded by Stewart Butterfield, a Canadian also known for being one of the minds behind photo-sharing platform Flickr. Slack is a communication tool, used by businesses and other organizations for inter-organizational chatting, emailing, and more, and has been adopted by swaths of business due to its ease of use, clean aesthetics, and easy learning curve. (Full disclosure, The Cheat Sheet uses Slack as well!)
But what has people really buzzing about Slack is that it’s been able to attract not just a lot of users, but a lot of money, very quickly. In fact, the company has raised its valuation to $2.8 billion — up from $1.12 billion six months ago — making it one of the most explosive startups in the tech scene. Slack is actually the fastest company in history to reach the $2 billion valuation mark, and being the first company to do anything in a crowded tech industry is a fairly impressive feat.
Butterfield, a man with decades of experience in the tech field, isn’t all that surprised about his company’s success, however. In an interview with Business Insider, he says Slack has been able to become so valuable so fast for three primary reasons.
“One is that over the last five to seven years, companies have been able to scale really quickly in terms of revenue,” he told BI, referring to the fact that capital is much easier accessed in the current business climate than in the early 2000s or late 1990s. “The second thing is that the investment environment is very hot. Our current valuation of $2.8 billion — if we were in the same position a couple years ago, it would be half as much,” he continued.
“And third, there’s Slack. We’ve been crazily successful. Since we came back from the holidays, we doubled. That means that all the growth we had in 2014, we had again in a little over 3 months, and that’s not usual,” he said. “We’ve had over 5% week-on-week growth for the last 70 straight weeks — and that has just continued.”
While Butterfield can give us an inside perspective at how he’s managed to rapidly and efficiently build his company into a budding juggernaut, there are those on the outside of the company who think it’s rather obvious how he did — by taking proven methods and reinventing them for new types of businesses.
“Stewart and the team at Slack have taken a page out of the consumer playbook and revolutionized business communications by taking a generationally-different approach to messaging,” Mike Volpi, partner at Index Ventures and Slack board member, said in a statement according to CNBC.
That’s what’s really important to realize about Slack: the company is solving a problem that all businesses have with communication, but they’re doing it in a way that makes sense and is easy to understand for a new generation of entrepreneurs and workers. While many startups set to out to solve problems for end users, Slack is seeing what they can do for businesses.
With that in mind, can we expect more Slacks? Will there be an influx of new startups that cater toward helping other startups succeed? Paypal is a company that immediately springs to mind as a method for revolutionizing payment systems for small businesses, along with Square. There are others out there as well, helping take on things like customer service and productivity. Clearly, this is an area in which Slack will see some serious competition, and also where there is a lot of money to be made.
If Slack can effectively double its value as a company in less than six months, there’s no better sign that the gold rush is on. The question is, how far can Slack go, and which startup will blow up next?
Follow Sam on Twitter @Sliceofginger