The Grumpy Troll

Ramblings of a grumpy troll.

Slack Tax

Chambers of commerce should be urgently talking with the FTC to try to stave off an imminent forced tax on their members, by Slack.

NB: I have no vested interest in any company mentioned here, unless my retirement index-tracker fund has done so, in which case I'm probably hurting myself by writing this.

Slack as a company makes Slack, the product. It’s for team communications and basic use is free but there are paid tiers which bill per active user. They’re scrupulously fair about tracking as users become inactive and issuing billing credits so that you don't pay if people aren't using it.

The Slack product is good. Some years back when it was new, I mistakenly objected to our company trying Slack to solve “get everyone using a team chat” because we'd tried two other products and only the engineers would actually use them, so I believed the problems were cultural and shuffling deck chairs by trying the latest trendy chat tool was avoiding addressing the real problem. I was persuaded to give it one more try. I was wrong: the ease of use and fun quirkiness of Slack made it enticing enough that the entire company got on board. For a while it solved our problems (right up until dropping the gateways for IRC & XMPP killed the accessibility solutions our blind employee was using).

If a company wants to use Slack, that's their call to make. Competition is good and freedom to choose matters. There are competitors (eg Mattermost; or Microsoft Teams) which creates an open marketplace.

The problem comes when suddenly a company has no choice and in order to be viable they are forced to buy a particular product, licensed per user. Much like MS Office was effectively mandatory and changing document formats kept locking out competitors, Slack is making that transition with a new paid feature.

Barrons extracted the critical part from a recent Slack blog post:

“I've been making network-based software for a living for the last 20 years,” Butterfield wrote. “Over that time I've worked on a lot of great projects directly, and have seen many more from the inside, as an investor, board member or just as a friend. I have never been more excited about a product or its product market fit than I am about shared channels.”

Shared Channels let you link together Slack teams. Within a company, great. Between companies … it's attractive. But you can only link together Slack teams. It is not an open protocol and competitors are not welcome. There's no fundamental reason why you can't bridge to other products but that's not compatible with this Silicon Valley investment.

I've seen Shared Channels in beta used by a company to set up links with customers and vendors. Important business links get Slack links. There might be only two or three people routinely in such a channel, enough to avoid a single person dependency, but there's an implicit expectation from both sides that when there's a problem, other needed people can be brought in quickly to help solve it.

Shared Channels are undeniably useful, although there are cultural mores which need to be established to prevent abuse by larger companies treating employees of their business partners as their own, to delegate work to. Any company about to set up a direct synchronous communication system open potentially to “all their employees” and “all employees of all important business partners” needs to take seriously the problems that can arise from that. Synchronous communication is disruptive and it takes solid ground rules to keep productivity from being damaged by just a few people who don't follow cultural expectations. When not all the people are your own employees, that will get harder.

The core problem though is that with Shared Channels there is effectively no choice. Slack has a critical mass of customers and Shared Channels turns that into a network effect, locking out competition. Who will pay for two team communication products, or try to maintain one paid and one free, when they can “just” use one? You can't sanely just use Slack for a few liaison people because much of the value is the ability to pull in other people to solve problems in a hurry.

So with Shared Channels being a paid tier feature which excludes other companies’ team chat, and the expectation being that all employees are on the same team chat, suddenly we don't have a good product winning in an open marketplace. Instead, we have the current market leader setting up a major barrier to competition and locking themselves in, while making sure that each company trying to choose just has to use what all their business partners are using.

Those monthly per-user fees start looking a lot like a tax on doing business.

There's an easy fix: ensure that Shared Channels use a documented protocol and that Slack teams are freely able to link to other products, not just teams hosted by Slack.

-The Grumpy Troll

Categories: competition corporate behavior market lock-in slack team chat