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It's very similar to Salesforce's Heroku move. They either just don't care about that sales funnel and they remove it completely or they will keep squeezing unt

It's very similar to Salesforce's Heroku move. They either just don't care about that sales funnel and they remove it completely or they will keep squeezing until they kill it.

michaelje 4y ago
Very.. Salesforce bought Slack in 2021.
speed_spread 4y ago
But just think of the promotion opportunities!
iratewizard 4y ago
Salesforce doesn't care. There about to roll out slack-first infrastructure that turns slack into the only chat-based CRM. Their core users aren't on the free model. They're paying a small fortune for Salesforce and see Slack's cost as a drop in the bucket.
kristianc 4y ago
I would say they are acutely aware of the sales funnel. They weren’t making any money from those users who were ‘happily using Slack’s free tier for years’ and neither was there any prospect of converting them into paid users in the coming years. Very little point in keeping users (and paying to maintain them) who are going to be perpetually at the top of the funnel.
- xyzzy123 4y ago
  I think it's complicated; the fact that I use a free slack instance for note taking / bots is one thing, but I'm on 2 company slacks right now (paid), 2 non-profits (1 paid 1 not) and a handful of open source communities. Am I a user who won't convert? Everyone on a free slack instance is NOT using a competitor's product. There's a tipping point where having to check multiple apps will push people towards consolidating in a single client if they possibly can, which (in the long term) may not be slack if it doesn't support "ad hoc" communities or personal use-cases at a reasonable price.
  - eastbound 4y ago
    This. Companies should be charged, sure; but an upside of Slack is that I can use various tech community’s Slack, the union’s Slack, and the coworking’s Slack in the same app. None of them can pay, and they should be sponsored by our usage of Slack for our main job.
    - radicalbyte 4y ago
      They can all better use Discord, whose model works on a per-user (not per-user-per-community) billing model. So less good at separating money from corporations but better aligned with non-commercial organisations as you don't need to pay $2k/month as none-profit just to keep chat history.
  - kristianc 4y ago
    > I think it's complicated; the fact that I use a free slack instance for note taking / bots is one thing, but I'm on 2 company slacks right now (paid), 2 non-profits (1 paid 1 not) and a handful of open source communities. Am I a user who won't convert? Everyone on a free slack instance is NOT using a competitor's product. I’d suggest the answer to that is probably no - an open source community is by its very nature going to want costs and overheads down, and all but the largest non profits and NGOs are going to try to get by by stitching together free tools and services. The one that is paying in your example is the one in Slack’s target who is going to be most likely to pay. Does Slack care about a few open source communities potentially churning? Probably not. Does it care about lowering average Time to Revenue? Absolutely.
  - luckydata 4y ago
    I guarantee you that the people making that call have thought about it and decided it's not worth it anyways.
  - bootsmann 4y ago
    > Everyone on a free slack instance is NOT using a competitor's product. Arguably this is even worse from slaks POV, no? Everyone on free slack is on free slack because they aren't willing/able to pay and slack would indirectly benefit if those customers were freeloading (and incuring costs) for their competitors.
- thejosh 4y ago
  Salesforce doesn't even care about paying customers. Heroku has stagnated for years. Recent Heroku massive mistakes they've been making have been absolutely terribly handled by them. They also own Tableau, which has stagnated as well and is pretty badly handled.
- zigzag312 4y ago
  They were saving them advertising money.
- LtWorf 4y ago
  It's not that simple. People who are used to slack will pressure their boss to buy slack for work. The slack company will just see a boss reaching out and buying. They will not relate it to the fact that it's the employees requesting it. Bosses want to use microsoft teams, because it's included in the company's subscription. They accept to use slack because of the employees. But if the new employees will not even know slack exists… they will not be asking for it.
  - ivan_gammel 4y ago
    It is not that simple too. Tools used for reasons outside of work may not always be perceived as good tools for work. And tools used professionally are not always considered to be good for use for personal reasons. If someone have met Slack for the first time at their job, they may recommend it at their next job, because they associate it with work - this conversion channel is pretty clear and established. But the conversions work<->personal are not so obvious and may perform worse. I'm pretty sure Slack marketing team controls awareness part of the journey and they understand well their conversion funnel. Ditching some non-converting users is a bold move, but it may be worth it and it may fit well in whatever sales strategy Salesforce has in mind.
    - ImPostingOnHN 4y ago
      it's not that simple either: tools used for reasons outside of work may be perceived as good tools for work; and tools used professionally are sometimes considered to be good for use for personal reasons. tl;dr it doesn't need to be true always, only sometimes, which it is
      - ivan_gammel 4y ago
        Well, if I wasn't clear enough: the fact that someone have used a tool for personal reasons and may recommend it as a good tool for work is not enough to justify spending on those personal use cases. You need this to be a healthy conversion funnel and valuable brand awareness channel, otherwise you are wasting money. To make a call you need data from marketing research and I would assume that Slack marketing team knows more about it than HN crowd, simply because they are in position to have this data and HN crowd is not. It can be the case that they are not acting professionally, but I would not assume unprofessional behavior by default.
nikanj 4y ago
I fail to see how letting crooks mine cryptos on Heroku’s free boxes would lead to improved sales. Slack is a different story, but all hosting/CI/etc providers have been pulling back free offerings as they get abused for crypto mining
matchagaucho 4y ago
In Heroku's case, it could be argued the free users were a net-negative liability, causing service outages, DNS issues, etc...
- e3bc54b2 4y ago
  What? Those free users are practically providing free infrastructure testing. Those low-no profit margins are hiding a lot of stuff underneath. Intel and Cloudflare are famous for reaching scale by using cheap/free end of the market to expand and solidify their positions.
  - matchagaucho 4y ago
    Speaking more to the torrent and zombie bot farms, and the abuse of free dynos. For legit freemium users who to "try before they buy", indeed... it's a sad day for Heroku to lose this audience.
bayindirh 4y ago
I think this, combined with Heroku, marks end of an era. These tools built themselves on being free (as in beer) up to a certain extent, and now they're big enough, and trust their momentum, so they change their stance. This will inevitably create some changes, both how they perceived and being developed, but we'll see... However, web application development is much easier and scalable infrastructure is democratized now. Their moat may not be as robust as they imagine. This will get interesting.
- joshspankit 4y ago
  They may not immediately recognize it, but they are “cashing out the social capital”
alex-korr 4y ago
They are doing something similar to Tableau. They have been actively rolling out features only available to subscription based customers - ie if you own perpetual licenses and only paying x% yearly for maintenance you are starting to get less product than their subscription customers. It is nuts and is driving us to actively consider PowerBI which is like Teams is included with the enterprise license.

It's very similar to Salesforce's Heroku move. They either just don't care about that sales funnel and they remove it completely or they will keep squeezing until they kill it.

michaelje 4y ago

Very.. Salesforce bought Slack in 2021.

speed_spread 4y ago

But just think of the promotion opportunities!

iratewizard 4y ago

Salesforce doesn't care. There about to roll out slack-first infrastructure that turns slack into the only chat-based CRM. Their core users aren't on the free model. They're paying a small fortune for Salesforce and see Slack's cost as a drop in the bucket.

kristianc 4y ago

I would say they are acutely aware of the sales funnel. They weren’t making any money from those users who were ‘happily using Slack’s free tier for years’ and neither was there any prospect of converting them into paid users in the coming years. Very little point in keeping users (and paying to maintain them) who are going to be perpetually at the top of the funnel.

xyzzy123 4y ago
I think it's complicated; the fact that I use a free slack instance for note taking / bots is one thing, but I'm on 2 company slacks right now (paid), 2 non-profits (1 paid 1 not) and a handful of open source communities. Am I a user who won't convert? Everyone on a free slack instance is NOT using a competitor's product. There's a tipping point where having to check multiple apps will push people towards consolidating in a single client if they possibly can, which (in the long term) may not be slack if it doesn't support "ad hoc" communities or personal use-cases at a reasonable price.
- eastbound 4y ago
  This. Companies should be charged, sure; but an upside of Slack is that I can use various tech community’s Slack, the union’s Slack, and the coworking’s Slack in the same app. None of them can pay, and they should be sponsored by our usage of Slack for our main job.
  - radicalbyte 4y ago
    They can all better use Discord, whose model works on a per-user (not per-user-per-community) billing model. So less good at separating money from corporations but better aligned with non-commercial organisations as you don't need to pay $2k/month as none-profit just to keep chat history.
- kristianc 4y ago
  > I think it's complicated; the fact that I use a free slack instance for note taking / bots is one thing, but I'm on 2 company slacks right now (paid), 2 non-profits (1 paid 1 not) and a handful of open source communities. Am I a user who won't convert? Everyone on a free slack instance is NOT using a competitor's product. I’d suggest the answer to that is probably no - an open source community is by its very nature going to want costs and overheads down, and all but the largest non profits and NGOs are going to try to get by by stitching together free tools and services. The one that is paying in your example is the one in Slack’s target who is going to be most likely to pay. Does Slack care about a few open source communities potentially churning? Probably not. Does it care about lowering average Time to Revenue? Absolutely.
- luckydata 4y ago
  I guarantee you that the people making that call have thought about it and decided it's not worth it anyways.
- bootsmann 4y ago
  > Everyone on a free slack instance is NOT using a competitor's product. Arguably this is even worse from slaks POV, no? Everyone on free slack is on free slack because they aren't willing/able to pay and slack would indirectly benefit if those customers were freeloading (and incuring costs) for their competitors.
thejosh 4y ago
Salesforce doesn't even care about paying customers. Heroku has stagnated for years. Recent Heroku massive mistakes they've been making have been absolutely terribly handled by them. They also own Tableau, which has stagnated as well and is pretty badly handled.
zigzag312 4y ago
They were saving them advertising money.
LtWorf 4y ago
It's not that simple. People who are used to slack will pressure their boss to buy slack for work. The slack company will just see a boss reaching out and buying. They will not relate it to the fact that it's the employees requesting it. Bosses want to use microsoft teams, because it's included in the company's subscription. They accept to use slack because of the employees. But if the new employees will not even know slack exists… they will not be asking for it.
- ivan_gammel 4y ago
  It is not that simple too. Tools used for reasons outside of work may not always be perceived as good tools for work. And tools used professionally are not always considered to be good for use for personal reasons. If someone have met Slack for the first time at their job, they may recommend it at their next job, because they associate it with work - this conversion channel is pretty clear and established. But the conversions work<->personal are not so obvious and may perform worse. I'm pretty sure Slack marketing team controls awareness part of the journey and they understand well their conversion funnel. Ditching some non-converting users is a bold move, but it may be worth it and it may fit well in whatever sales strategy Salesforce has in mind.
  - ImPostingOnHN 4y ago
    it's not that simple either: tools used for reasons outside of work may be perceived as good tools for work; and tools used professionally are sometimes considered to be good for use for personal reasons. tl;dr it doesn't need to be true always, only sometimes, which it is
    - ivan_gammel 4y ago
      Well, if I wasn't clear enough: the fact that someone have used a tool for personal reasons and may recommend it as a good tool for work is not enough to justify spending on those personal use cases. You need this to be a healthy conversion funnel and valuable brand awareness channel, otherwise you are wasting money. To make a call you need data from marketing research and I would assume that Slack marketing team knows more about it than HN crowd, simply because they are in position to have this data and HN crowd is not. It can be the case that they are not acting professionally, but I would not assume unprofessional behavior by default.

nikanj 4y ago

I fail to see how letting crooks mine cryptos on Heroku’s free boxes would lead to improved sales. Slack is a different story, but all hosting/CI/etc providers have been pulling back free offerings as they get abused for crypto mining

matchagaucho 4y ago

In Heroku's case, it could be argued the free users were a net-negative liability, causing service outages, DNS issues, etc...

e3bc54b2 4y ago
What? Those free users are practically providing free infrastructure testing. Those low-no profit margins are hiding a lot of stuff underneath. Intel and Cloudflare are famous for reaching scale by using cheap/free end of the market to expand and solidify their positions.
- matchagaucho 4y ago
  Speaking more to the torrent and zombie bot farms, and the abuse of free dynos. For legit freemium users who to "try before they buy", indeed... it's a sad day for Heroku to lose this audience.

bayindirh 4y ago

I think this, combined with Heroku, marks end of an era. These tools built themselves on being free (as in beer) up to a certain extent, and now they're big enough, and trust their momentum, so they change their stance. This will inevitably create some changes, both how they perceived and being developed, but we'll see... However, web application development is much easier and scalable infrastructure is democratized now. Their moat may not be as robust as they imagine. This will get interesting.

joshspankit 4y ago
They may not immediately recognize it, but they are “cashing out the social capital”

alex-korr 4y ago

They are doing something similar to Tableau. They have been actively rolling out features only available to subscription based customers - ie if you own perpetual licenses and only paying x% yearly for maintenance you are starting to get less product than their subscription customers. It is nuts and is driving us to actively consider PowerBI which is like Teams is included with the enterprise license.