Slack defines itself on its website by what it does. And what the company does, its stock-in-trade, is “bring all of a company’s internal communications together in one place.” At the next layer of detail, the company website specifies that the Slack app provides real-time messaging, archiving, and search for modern teams.
But internally, Slack’s CEO, Stuart Butterfield, answered the question “What do we sell?” in an unexpected, impactful way. In an internal email he sent to all hands two weeks before launching the wildly popular Slack app, Butterfield asked his team to move past the idea that the company’s product is group chat software:
We are unlikely to be able to sell “a group chat system” very well: there are just not enough people shopping for group chat system (and, as pointed out elsewhere, our current fax machine works fine).
What we are selling is not the software product – the set of all the features, in their specific implementation – because there are just not many buyers for this software product. (People buy “software” to address a need they already know they have or perform some specific task they need to perform, whether that is tracking sales contacts or editing video.)
However, if we are selling “a reduction in the cost of communication” or “zero effort knowledge management” or “making better decisions, faster” or “all your team communication, instantly searchable, available wherever you go” or “75 percent less email” or some other valuable result of adopting Slack, we will find many more buyers.
Selling the New Normal
That’s why what we’re selling is organizational transformation. The software just happens to be the part we’re able to build and ship (and the means for us to get our cut).
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.
Now, Slack is a B2B company. Its customers are teams and enterprises full of people who want to excel at their work, people who want to make the most of their work life so they can be more productive, be more fulfilled, be more efficient, earn more, create more, and ultimately have more time to spend with their families and pastimes.
If Butterfield asked me, I would say that Slack doesn’t just sell a messaging product – they are solving a problem for both their organization and employees.
A year after Butterfield sent this prelaunch email, Slack was live with over 60,000 teams and over 700,000 paid seats. The app went from having 16,000 daily active users at launch in February 2014 to over 2.3 million daily active users in March 2016. The company has been valued at well over $3 billion. And Slack has been named by Financial Times as the first business technology to have crossed over into personal use since Microsoft Office and the Blackberry.
Most companies think they sell a product. To transcend the transactional, your company must expand the way it conceives of what it sells. Like Slack, your company must sell a possibility: it must sell a specific sort of transformation, a specific sort of behavior change, a specific sort of journey from a problematic status quo to the new levels and possibilities that will unfurl after the behavior change you help make happen.
I understand that this is asking a lot, to challenge a whole company to change the very way it conceives of itself. So let’s talk about why you should make it.
Product-First or Problem-First
You really only have two choices. You can be a product-first company or a problem-first company. There are companies that build things that they are good at building and then look to their marketing teams to get them sold. These are what I call product-first companies.
Other companies build things that people want or need to solve a real- life Problem they have. These are problem-first companies.
Product-first is the descriptor I use for companies whose entire identity, R&D pipeline, offerings, marketing, and internal cultural narrative are oriented around a focus on their products, their features, their pricing, and what the products do – their function or even their benefit to the customer.
- The dictionary name of the product might actually be part of the company’s name, whether it’s paper, software, bikes or shoes.
- The company’s brand guidelines are rigid and unyielding, even in the face of evidence that its brand messages and communications are not effective with customers.
- The company’s research program is the CEO taking things home and trying them out or a group of people charged with finding evidence to confirm the rightness of whatever the CEO has already decided to do.
- Product-first companies pride themselves on being very good at making their kind of product. They pride themselves on having great institutional knowledge of how to deliver the best versions of that product into the marketplace. They talk about themselves in terms of being the biggest, best, most innovative, or oldest producer of their type of product in the world.
Problem-first companies operate very differently. Sure, if you ask them what they sell, the literal answer might be a particular category of product. But Problem-First companies’ point of view is a fixation on solving a problem or set of problems for a particular customer audience or segment. They lead with that. They innovate by that. Their institutional knowledge is focused on knowing everything about the problem they solve and the people who have that problem. Their R&D program is a constant exploration of all the ways that this Problem could be mitigated at any given time, by their product or otherwise.
As our world grows ever more complex and the way customers interact with products changes, Problem-First companies are able to evolve in step with customers and with the market. They constantly evolve their offerings to meet consumers where they are and solve their problem, however that problem manifests itself at a given moment in time.
Excerpted from “The Transformational Consumer: Fuel a Lifelong Love Affair With Your Customers By Helping Them Get Healthier, Wealthier, and Wiser” by Tara-Nicholle Nelson. Copyright © 2017 by Tara-Nicholle Nelson. Used by permission of Berrett-Koehler Publishers. All rights reserved.
