Hey, I'm Dan! I invest in startups at Madrona and write the DL, a weekly newsletter about tech in the Pacific Northwest

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Slack vs. Microsoft

Stratechery wrote a great article this week on the future of Slack. He starts by going back to that time Slack took out a full page NY Times ad to throw shade on Microsoft Teams (and points out that now Teams has 75M DAUs, while Slack’s last reported number was 12M).


He says the obvious reason that Teams succeeded was that Microsoft gave it away for free. And then, just like Facebook created Insta Stories so that its users would never have to try out Snapchat, Microsoft was able to keep its customers off of Slack and never had to convince them to “switch.”


While many people in tech world love the idea of “best of breed” apps for everything, Microsoft has shown that bundles can create a situation where the whole is greater than the sum of its parts (especially during a time when IT budgets are getting cut).


He goes on to argue that Slack expanding “horizontally” by allowing organizations to communicate with one another on Slack makes much more sense than trying to compete with Microsoft on becoming a “vertical” productivity platform. And that’s why Slack is releasing Slack Connect.


I think the strategy makes sense, but Microsoft has a product called Outlook that already works “horizontally” across any organization. Of course email isn’t chat, and it seems like the the vision for Slack Connect looks more like Bloomberg chat than email. It’s an exciting goal, so let’s see if it works!


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