Video

Salesforce, Dropbox and Slack: Building and Monetizing A Partner Ecosystem (Video + Transcript)

gretchende@gmail.com'

Gretchen DeKnikker

We were pretty excited to bring together four industry powerhouses to discuss platforms in this amazing session led by the always charming Narinder Singh, co-founder of Appirio. Neeracha Taychakhoonavudh, SVP of Partner Programs at Salesforce, Ilya Fushman, General Partner at Index Ventures and formerly of Dropbox, and April Underwood, VP of Product at Slack delve into how you can build the right platform strategy, thinking about the problems that it aims to solve, and whether or not your product should even be a platform (like maybe don’t call yourself a platform without understanding what it truly means to be one).

The insights on how each of these companies became a platform and the business goals behind those decisions are pretty compelling. They also offer up a healthy reality check on what you should expect as a platform partner. And most importantly, the answer to your burning question,”What’s the name, movie, or person that represents your platform and what you think about the world?”  

Check out the full transcript below!

If you want to see more sessions from 2016, we’re releasing a new one each week. Subscribe here to be notified. And be sure to grab your tickets to the 2017 Annual NOW.

 

Transcript

[music]

Narinder Singh:  Welcome everybody to your final panel before your drinks begin for the evening. Hopefully some of you have already started. I know our panelists have. I’m really excited and privileged to be here today with April, Ilya, and Neeracha from three of the pioneer companies in the industry to talk about platforms.

As we were coming up here Jason was like, “It’s a bar theme. It’s a moderating.” I’m like, “I really don’t understand what’s going on.” I thought about it and I said, “Over the past nine years at Appirio I have bought people over 100,000 drinks and consumed zero in that period of time.”

I think I have the best ratio in the industry. It also, for this panel, means I’m very good at using alcohol to extract information. I’m hoping to do that today with you guys. In fact, I think in addition to your drinks there will be some shots coming out. I’m curious to see if anyone’s brave enough to actually undertake.1-johnstewart

We’re going to get started. I gave them one question that I told them I was going to ask. The rest of it we’re going to just wing it. I started off by asking, you guys are in three of the leading platforms in the industry. Amazing success. I said, “What’s the name, movie, or person that represents your platform and what you think about the world?”

I’d love to hear what you came up with out of that. Anybody want to start?

Neeracha Taychakhoonavudh:  Sure. I’ll get started. My name is Neeracha. Taychakhoonavudh is my last name. It is the longest name on the poster today I want you to know. I’m from Salesforce. I agonized over this question, Narinder, a ridiculous amount of time. I crowd sourced it, talked to my team.

In terms of what best represents our platform, I came up with John Stewart, which is very appropriate for the set. I didn’t realize this was going to be the set today.

The reason I say John Stewart is, fake news, very underrated in the beginning. As he developed an audience, it turns out that he was voted the most trusted newsman in a TIME Magazine poll. The way it links to the Salesforce platform is the AppExchange has been…We actually celebrated our 10-year birthday last month.

It did start out as a small offering just starting, “What is an AppExchange anyway?” No concept of the app store existed in a B2B world. It was much more than just a directory or a listing service. It really is an actual storefront for B2B apps. Today it is one of the most trusted platforms out there. John Stewart for me.

Narinder:  That’s great.

April Underwood:  I want to ask, are there any Star Wars fans in the audience? I want to apologize to you. I know Star Wars is really serious business. I don’t want to bastardize it in any way. I would say that I chose Star Wars because it’s a really interesting storyline in that you have this great team of humans that are working together. Actually the droids are some of the best personalities that are part of the team, that really help them get things done.2-starwars

As you mentioned, I’m April Underwood. I run Product over at Slack. A lot of what we’re doing at Slack is creating a communication platform that allows teams to work together better. The platform we built allows apps to join that conversation, and to bring personality to solving work tasks.

I’m going to go with BB 8 and R2 and that gang as a pretty good representation of what we hope some of the great apps on top of Slack might look like over the coming years.

Ilya Fushman:  Cool. I’m Ilya Fushman. I’m currently a general partner at Index Ventures. I spent the last four years at Dropbox where I did a bunch of things, including working on the platform. For us the vision around platform was always to build the dashboard or that surface that Tom Cruise has in Minority Report.

The idea was to get all of your most important data in front of your fingertips, have one central source of truth, and then have applications that live on top of that that provide utility on top of your data. I’m going to go with the Tom Cruise Minority Report dashboard.

April:  [laughs]

Narinder:  Great. I think one of the things is platforms, even amongst you guys, but it’s certainly broader, mean a lot of things. Platforms can be something you build on top of. Platforms can be something that extend your product in the functionality is there. Sometimes platform is the facilitator and it’s only about the content on top of it, like YouTube or iTunes.

Thinking about that I want to start, Neeracha, with you. The what and the why. Salesforce is both a platform you can build upon, but then also you guys have a platform that extends your functionality. Do you think of those things similarly, differently? How do you approach the strategy of why your platform is what it is and how you’re trying to move forward with it?3-tomcruise

Neeracha:  That’s a great question. We get asked that by customers all the time. The way I speak to customers about our platform, we call it the customer success platform, is it is a platform. On top of that, you can build your own apps. All the development tools are there. You can use our apps, CRM, service, etc. You can buy an app from the AppExchange from one of our many partners. It is kind of a mix and match for the Salesforce platform. It’s up to the client as to how they wish to deploy it.

Narinder:  April, I want to move to you for a second. You came to Slack a little less than a year ago. It was just, oh a humble million users. Now two plus million I think, right? You guys have been an amazing story of a platform getting adopted really quickly. On one hand, people love Slack the product.

You obviously got a lot of users. Then you went all in on platform. There’s some people who would say, “I love Slack because of everything that’s on top of it.” Do you think about those other two of the Slack being extending your functionality? Is there a future where Slack exists as a mechanism to bring all these other great things to you and that becomes the primary purpose?

April:  I would say the two aren’t mutually exclusive. We’re hard at work every day making Slack the best communication tool for teams that helps them be more productive. If we do that, that affords us the opportunity to be a place where teams want to get other tasks done.

When they want to go get other things done at work, there are a lot of other tools out there. There’s a proliferation of SaaS applications out there, and we want to help teams find the applications that will be best suited to their needs.

That’s why we launched the app directory last December. We’ve started making it easier for developers to build on our platform and get their application in front of our audience of two million daily active users and growing.

We’re not done. We’re still extending. We’ve got a lot of improvements that we’re going to be bringing to the core product that we offer within Slack. The more that we can solve that communication challenge for teams, the more that we can actually help third party developers plug into that critical communication layer.

The reason that I think that’s really important is that communication is just so foundational to getting anything done at work. There’s hardly anything you can get done at work without communicating within your team.

We’re going to try to do that really well and create a great opportunity for developers to build into us so they can solve all of their problems at work. There are an unlimited number of those and we’re really just getting started in bringing those developers to our platform.

Narinder:  A lot of times, people come to these things. They see Slack, Dropbox, and Salesforce. They’re either really excited because you guys are amazing or they’re like, “What the fuck does that have to do with me? I’ve got 10 people using my product. They love it, so how do I think about platforms?”

April, I want to follow up with you. You came aboard to run platform. Now you run all product there. What would have been too early for Slack in terms of pursuing a platform strategy? What impacted the timing of when you really poured gas on the fire and put the pedal to the metal around platform?

April:  My boss, Stewart Butterfield, one of our co-founders at Slack, he shared a deck with me recently that he put together before the team even built the first version of Slack. There’s been a vision for Slack to be this platform that serves as a command center that brings together all the applications you use at work really since the outset.

I wouldn’t say it was like we were doing one thing and then at some point it was, “Let’s pour some platform juice on top of this.” It really is such that Slack and platform are one and the same.

We have definitely made more investments in it. The team has grown from a handful of engineers who have built a lot of the early integrations with third party applications. Now we’ve got more than 60 folks, so probably 20 percent of the company roughly works on platform in some way at Slack.

We view it as such an important part of actually solving the fundamental problem we’re trying to solve for our users, which is to make their working lives better.

Narinder:  The vision was set up. It was a choice of when to execute based upon other aspects of the business.

April:  Yeah. We’ve only been around for two years, [laughs] but we’ve definitely been putting more gas on it for the last, I’d say, six to nine months.

Narinder:  Ilya, I want to shift to you because you were at Dropbox. You’re at Index now. You get to see a lot of different things. Platform’s this magic word and I think a lot of people think, “It means somebody else will help me make money for my business.”

Given the law of numbers, if everybody does that, that doesn’t work very well. Tell me a little bit about how you think about companies maturing into a platform when they’re early, before they’re a household name, so to speak.4-marketplaces

Ilya:  I think that’s a really important point. I’ve seen a lot of pitch decks where there’s a slide that says, “We’re going to be a platform.” My answer to that, intuitively is, actually, that’s probably not the right call for most companies.

A company like Slack, I think, has the ingredients for what it takes to be a platform. Just to give you a sense about how I think about platforms, platforms are really marketplaces. They connect customers, who are your users, with providers of applications and services, who are third-party developers.

The things you need to make that platform work are a way to make the two meet, whether it’s an app store, but really you want something inside the product that gives people access to core functionality of these applications, which I think Slack has.

It’s something that, when we were working on Dropbox in the early days, we frankly didn’t have. We built over time into the core UI of the application, the ability to act as third-party services. We actually did that with Microsoft Office as a first-party app there.

You have to have an interface that allows you to connect your users to applications. Then you need something that’s actually valuable to developers. You need either data, in the case of Slack, it could be things like the conversations, in the case of Dropbox, it’s the 35 billion office files that people have stored on Dropbox and other data that they’ve put there. Potentially some APIs that make the developers’ lives easier.

It could be quick ways to build UI/UX. It could be better ways to store data and synchronize it. It could be something like, in Salesforce’s case, sales data that they can’t get to otherwise, and integrations into the UI/UX of Salesforce.

If you don’t have those components, and if you’re not thinking about them right away, then it’s not always necessary that you should build a platform. You kind of have to draw the distinction between platforms and services. I think in your analogy of names or characters in movies, Mr. Wolfe in Pulp Fiction is a service. He’s not really a platform. You need something dirty taken care of, he’s the guy you call.

He does that service really, really well. You can provide that as an API to lots of folks who can build off of you.5-investment

But an investment in a platform is a really big commitment. You’ve got to make sure that the core application supports the platform. You can’t just tack it on. You’ve got to make sure you build a really good team that will work with developers. You’ve got to figure out how you’re going to promote and how you’re going to monetize. You’ve got to make sure that if your platform evolves you take care of your developers. It’s a pretty big commitment.

The thing I’m excited about with Slack is that Slack itself has the Chrome and UI/UX to really be a platform. You can think of awesome things like bots and short commands and other UI/UX elements inside of the main Chrome of the app that will allow you to interact with applications, and will actually allow developers to build more quickly in that environment.

That’s my perspective. I think platforms are great and aspirational. I don’t think everybody should have a platform.

The other thing I would say is that when you think about your customers, selling a platform to somebody sounds pretty cool, but it’s a pretty nebulous thing to think about. When you’re a customer, and somebody says, “Hey, we’re a platform.” What does that really mean to you as a customer? You’ve got to think of what are the value, the services, the applications, the functionality that the platform is going to provide for those users and really go with that.

If there’s a way to extend your application and make it better and do things that you’re not going to do yourself, like Mr. Wolfe, then you should build a platform.

Narinder:  That’s a great transition actually to Neeracha. Salesforce has been a platform in the platform business for as long as anyone in the cloud business. Early days I explicitly remember your sales reps being very confused. They knew how to sell sales. The platform was this imaginary box. It was the pixie dust of the time.

How do you think about people now building on top of your platform, engaging in that conversation? For you, is the platform for Salesforce today just a matter of defining the sum of all the apps that are on top of it? Do you still see that conflict inside of your own business as how you think about the two aspects of the vagueness of a platform versus the precision of an application?

Neeracha:  I don’t know that there’s a clean answer to that. I’ve been at Salesforce six and a half years or so, not the start of the platform. When Marc Benioff tells the story, he basically says, “Well, you know, we figured out that our customers wanted to configure the app.” Instead of the tabs saying sales, forecast, and opportunity, they wanted to call it whatever their words were.

He realized, “Well, once you do that configuration then you can open it up and then let’s be a platform.” That pretty much was the Salesforce original thinking at the time. Not a whole lot of, “Let’s build an app exchange with 3,000 apps on it.” It wasn’t really quite that ambitious. The start of it was very simple. It was like, “Oh, well let’s just open it up and see what happens.”

What we do is we have a very smart CEO who makes these decisions. Today though, I think we’re much more established. We do see that if you go back to a sales rep having challenges expressing it, I think the concept of the platform being for our own apps, for your apps, for an ISV app has made it a little bit clearer in that we just treat our apps as one thing on our platform.

That’s how we kind of distinguish between the two. If you think about a platform and your three things on top of it, that gives it a very tangible representation.

Narinder:  I want to read a quote. It relates to somebody, Ilya, you and I were talking about yesterday. “People respect success. They respect big. They don’t even have to like your, blank, product. If you’re big enough, people are drawn to you.”

Basically saying, the reason all of you have been in successful companies, with successful platforms, is because your product was good. The rest is all bullshit. Until the product is good and has adoption, it doesn’t matter how good your platform strategy is.

You guys agree with that, disagree with that? How do you think about the notion of drawing gravity to you before a platform is even conceivable?

April:  Yeah. You’ve got to have users. I think…

Narinder:  That was Jay Z by the way.6-questions

April:  I think the question is what is the foundation you’re starting from? What problem are you solving? How large is the potential market for that? Very big market for CRM and all the things that Salesforce does. Communication is a huge market.

Every function in every industry needs communication. File storage, as well. Very very broad problem. The question is one of execution as how well we, Slack, can solve that problem.

If communication is something that every single worker in every single company needs, if we can solve that problem well and can actually get a lot of those folks using Slack, then that means that the developer that wants to solve expense reporting, or the developer that wants to build new dev tools, can actually come to Slack. Can use Slack as a distribution channel. Can reach and audience of customers at work.

We’ve got real examples of this. We’ve got teams of two to four engineers that are working on a new take on HR software. For example, a company called Growbot that has actually gotten thousands of customers to use their app.

The path to market for an enterprise application like that to just reach an audience through email through other marketing channels, it’s kind of a non starter for a lot of companies to really try these new applications.

When they discover them in Slack, they can actually experience the Slack experience through these apps. Then potentially become paying customers for these companies. It’s very compelling, but you do need that user base. You need that distribution.

Narinder:  Distribution is great. Ilya, I’m going to ask you. Since you’re not at a company, you can be our voice of truth here. If I choose to build on Dropbox, Slack, Salesforce am I giving up my own platform aspirations?

Ilya:  I don’t think so. If you think about it, take Dropbox as an example. It was built on the Microsoft and the Apple platform.

Narinder:  That’s as a technology. I’m saying from a distribution perspective now, I’m certainly giving some control away.

Ilya:  You basically want to target that set of users. You join a bigger platform. A good example of that were applications that ran on Facebook and used the Facebook graph to get distribution. You get on that train and you get on that big wave. The question is when you’re riding one of these big waves, how do you get off? Sometimes the wave crushes you. Sometimes you can have a good exit into parlaying that into your own platform.

I think the point that April made is really really important, which is if you think about a SaaS business that’s trying to get customers, you’re spending thousands of dollars to acquire a lead. I certainly see that in a lot of companies we see. If you can find platforms, like the Salesforce platform, like Slack, like anybody else who can give you access to an audience at a lower cost, that’s huge.

To do that you need scale. You need to reach the millions of knowledge workers, figure out which companies they’re in, figure out which services they might want to use. I think if you can build a platform that does that, you’ll really revolutionize how people actually go to market in SaaS and in enterprise.

The question then is, “How dependent are you on a Slack or a Salesforce for your long term success?” I think the answer there is it really depends on what you’re building. If you’re building a derivative thing that the platform itself will want to own, you’re probably at a bit of a risk.

That’s kind of what we look for. We look for companies that are doing something that’s very adjacent, that’s not going to get crushed by the main platform immediately. That’ll have time to grow.7-ecosystem

The biggest thing joining a platform like that is really knowing the social contract you have with them, and joining one that’s really really transparent. I think that’s the main thing.

Narinder:  I want to come back later to the ecosystem perspective. I want to move for a second to…I’ve got a company. I’ve got a bunch of users now. I want to start this notion of having a platform strategy. Neeracha, maybe you can start. What are the prerequisites of advice you would give me that I need to put in place beyond that to have a successful platform strategy, to create an ecosystem around me?

Neeracha:  I think a lot of what Ilya was saying makes perfect sense. What are you adjacent to? What makes sense? If you want to go your own way on a platform, do you start that or do you start with APIs and you start drawing a basin? I would probably ramp into it.

I do think it’s a little aspirational and grandiose to say, “OK. I have some users and now I’m a platform.” If your data is valuable to a certain set of users, and you start with API access, that’s a good way to just kind of get a sense of what your ecosystem would be. How could you work with them? What kind of partnerships they might form.

That seems to be a way to just test the market. I do think that if you do come out and you say, “Well, I’m a platform.” Can you say that legitimately?

[crosstalk]

Narinder:  I’ve got an API. I’ve got a bunch of users. What’s important, April, maybe from you, from a business alignment perspective? What do I need to get the pieces around that, to make sure that I’ve got the best chance at success around my platform?

April:  You need to be aiming to solve a big problem. If you’re aiming to solve a big problem, you do that in a way that leaves users really excited about your product, using it frequently. Then that affords you the opportunity to be able to expose access to that audience and actually allow other folks to plug into a platform.8-excited

I would just say that there are many big problems in the world and in the workplace. There are a distinct number of problems that I think are so foundational that they’re the type of products that customers are coming back to use every single day. I do think that is pretty much a requirement to be able to build a really meaningful platform.

Narinder:  You guys are either the best or worst example. Your timeline was so compressed. I don’t know if it’s like we can learn a lot from that, or let’s just put it to the side because it’s such an anomaly.

Were there differences in terms of roles or people or things that you had to start doing to get those first couple partners? I’m sure you had people wanting to build on top of. What were the first couple stories that you really kind of said, “All right, this has taught us some nuance on how we want to pursue this.”

April:  I would say it goes back a little bit to the genesis of the Slack product, which is that this Slack product was born out of a communication tool built by the founders. It was used amongst a team to solve their own problem.

They couldn’t find a communication tool that they loved. They ended up building this great thing that now we know is Slack. I obviously wasn’t around in those days, but I think that approach to product development has certainly remained.

It actually guided the early days of the product, which were, “What are the tools we’re using everyday, and how could we integrate those more tightly with the Slack experience?” Integrating with GitHub and Jenkins on the developers’ side. Integrating with just a variety of other tools like Google Drive and Box and Dropbox, that were everyday applications that the team was using, and that our customers were using. That was a great foundation.9-firstexperiences

What we’re really transitioning towards is abstracting that and identifying those common patterns, which are that apps want to push notifications into Slack. That’s significantly better than sending an email out to a bunch of people, where they then have to reconstruct the audience that needs to discuss it to be able to hash through things and get to a resolution.

People want to be able to perform small tasks from within Slack. They don’t want to do everything in an application. You’re not going to actually write code from within Slack, but you might want to be able to give feedback on a code snippet from within Slack. Making it easy to do that with slash command.

Starting to abstract those patterns, and now make those available to third-party developers with some guidance, so that they can understand how to do this in a self service way. The demand from our customers, and the opportunity now exceeds our ability to ever be able to keep up by just doing these one by one, which is how we’ve really made that transition into now operating more like a true platform. It started with building a lot of the early integrations that a lot of teams use everyday, in large part ourselves.

Ilya:  I think that’s actually a super important point. I think Slack really nailed that. First of all, when you think about a platform you should think about really hand holding, or building, the first experiences yourself. Because you just can’t rely on a third-party developer ecosystem to build something awesome and magical.

Sometimes it happens, but really very infrequently. You’ve got to build some of those early integrations yourself with a partner in mind, and make them extremely high quality. That’s what’s going to really catalyze the whole ecosystem.

The other part of it is that these applications, most people basically say, “Hey. We’re going to have a platform, and the world will happen to us. We’ll get hundreds of thousands of developers. They’ll build everything.”11-communication

The reality is, you have to be very, very thoughtful about whether there are applications and services that actually make sense on your platform. Do they make sense to your customers and users? Are there things that you wish you had, that your customers are asking for, but you actually just don’t want to build?

They might not be interesting. They might not be high enough ROI. They might not be valuable enough for you. Those are the things you should go find a third party to go build, on your platform, and turn your experience into a platform.

If you think about Windows as a platform, if you think about the early days where people built spreadsheets and document editing software, which eventually Microsoft actually absorbed in a smart way. The reality is the initial experience your users have with your platform has to make sense for your product and it has to be highly curated.

Narinder:  I’ve been spending a bunch of time in health care recently. In health care, there was an app that made some claims, the FDA basically filed a lawsuit against them. They couldn’t justify their claims scientifically. If that happened in this room, we might have some problems. There’s a different bar.

Neeracha, this is a good place for you to talk about Salesforce. What’s the bar and responsibility for the provider of the platform to ensure quality for their customers? How do you go between buyer beware and an open marketplace? How do you navigate that spectrum? I know Salesforce has had lots of iterations of that over the past decade.

Neeracha:  Yeah. That bar is unbelievably high. I talked about trust and John Stewart earlier. That is a big value. Salesforce has been in cloud for a long time. The biggest thing that we focus on is trust. Once that’s eroded it kind of puts a lot of everything else in jeopardy. For us it is that trust, that security review. You’re putting it into the Salesforce environment. It really matters to us.10-trust

To be very very honest, we get a lot of ISVs saying, “You’ve got to get me through the process faster.” We say, “Well, we could, but that’s not really what we’re about.” I think the bar’s pretty high. When I speak to customers, customers look at me and they say, “Yeah. I know that’s an ISV, but it’s on Salesforce, so you are responsible. You are the platform, and we count on you.” With that comes that burden.

Narinder:  I’ll ask the other two. I know Salesforce monetizes people building on their platform directly. Dropbox, Slack?

Ilya:  Dropbox, at least to my knowledge, is not directly monetized.

Narinder:  April, Slack?

April:  Not yet.

Narinder:  Do you feel like that changes the bar? I think on Slack I signed up. It says, “We’re not endorsing any of the products.” It also says, “To the product manufacturer, don’t spell stuff wrong because it confuses the users.”

You care about your user experience obviously. How do you guys draw the line of how high the bar should be for the apps that are wanting to be part of your ecosystem?

April:  It’s sort of a two-pronged approach. We have an open API. Anybody can build on top of the API. Thousands and thousands of developers have, as well as some customers have actually. Many of our customers integrate with the API to build their own custom integrations and really tailor fit Slack to their own workflows, use Slack as the interface to their own internal reporting tools.

There’s a lot of really great things that are benefits to the fact that we have an open API. You don’t have to call us to get permission to use our API. Our app directory is a point at which we review every app. We try it out. We make sure it does what it says it will on the label.

We give feedback in terms of the experience, how the app is described, how the developer’s using the API. We actually take a very, very hands on approach to giving feedback.

We want that to be a collaborative process. We want the developers to be able to put their best foot forward. We certainly want to make sure the customers have an awesome experience using Slack. We want to avoid anything that could degrade that. We take a very hands-on approach to approving the apps that show up in the app directory, while maintaining that open API.

Narinder:  All of you have also this, “Hey, we can change the terms of service any time we want,” or something to that extent.

Ilya:  Right.

Narinder:  If you’re a platform provider, you’re going to make those changes. That’s just reality. How do you make those changes? How do you change the rules for people who are building their businesses on top of you in a considered meaningful way without breaking that trust?

Ilya:  Gently.

[laughter]

Ilya:  I think you have to be very transparent with the developer base. I think the more transparent you are the better up front. Dropbox has always said, “Hey, you know. We’re not going to shut down derivative apps that are sort of Dropbox-like. But it’s probably not a good idea for you to build one.”

Dropbox has recently phased out a bunch of APIs, which I think they did very well in giving developers heads up, giving them a lot of time to transition their applications.

It’s really mostly about communication at the end of the day. Frankly it’s about picking the things that you really want to do in the first place. Do you really need a particular API for the success of your platform? You have to be very thoughtful about that, because once people start using these APIs it’s really kind of hard to get them off.

It’s somebody’s livelihood. It’s somebody’s application that they’re using to support their users. Phasing things out is painful. That’s why I think you have to be very very thoughtful about what you build in the first place.

Narinder:  There’s other companies that have not been up here, so I’ll pick on them, that have got a bad reputation or a problem with that. Twitter, LinkedIn are two that have been thought of as changing the rules on the developer ecosystems.

You don’t have to comment on them specifically. What do you think creates clarity in that relationship in terms of, is it your own strategy in understanding it? Is it being able to expect what’s around the corner? You were at one of those companies. How do you think about creating the right environment?

April:  We strive to be really transparent and clear about our overall strategy. What is Slack? What is it for? What is our business strategy? We build a communication tool for teams and we sell it for seats in a SaaS model. That’s pretty straightforward.

Having worked at a consumer company, I was at Twitter for five years, I think that there are just a different set of challenges that come with operating a platform while also being a consumer company that monetizes through advertising, that are just not relevant to everything we’re talking about today.

Everyone here, we’re solving problems for teams at work. I’d say the incentives are very well aligned.

There’s the technical aspects of, “What if you change this API endpoint,” and that sort of stuff. I think communication is certainly the answer, which is why I’m stepping up a develop relations and partnerships folks, so that we actually have people that are really really focused on providing that guidance.

The guidance I give to developers who ask me this question of, “How do I know you’re not going to build this feature,” is that if the end goal for what you’re building is to make using Slack better. That would be true for any other platform.

If the end goal of what you’re building is to make the platform you’re working on better, then my recommendation is to think more broadly, and to try to solve a broader problem than just trying to make the experience of working on that platform itself a little bit better.

I’m also an investor, as well. That’s the guidance I would give any company I would invest in. I think that sets us all up to solve many of the myriad problems that exist for teams at work. For Slack to be able to provide that distribution channel for those teams in a way that is going to be very symbiotic and provide a lot of value to them over the long run.

Neeracha:  The one thing that I would add to what April said is that symbiosis is key to the relationship. If you look at Salesforce, AppExchange has been around for 10 years. We have, over the years, changed the terms gently, as Ilya said. Realizing that it is a symbiotic relationship.

Part of the success of Salesforce has been the enthusiasm of the developer base, the enthusiasm of the customer base, and just that shared sense of purpose. That’s an essence to the relationship that we can’t lose.

Narinder:  Neeracha, you guys have a unique situation in that you’re directly charging people for the platform. Semi-transparently. I think you’ve talked about it publicly. It’s not sitting on the website. How does that change?

Neeracha:  It’s actually sitting on the website somewhere.

Narinder:  The percentages now are sitting on the website?

Neeracha:  Yeah.

Narinder:  How does that process of charging partners change the dynamics? Think about this in terms of not just Salesforce, but the advice you would give somebody else who wants to charge somebody basically access to their customers, particularly in second order, potentially their technology.

How does that change the dynamic of the relationship? What are the things that you think are additionally needed because of that direct financial relationship with a partner?

Neeracha:  To your earlier point, the bar is higher. If you’re trying to monetize, then obligation becomes much, much more. I think that’s the nature of the relationship. There are expectations set when revenue is involved that we have to deliver to. It’s not a the platform can’t go down. We can’t just arbitrarily change things when people’s livelihood and our shared interest with revenue sharing comes together.

That’s basically it. That’s why the bar is higher for security review. That’s why the bar is higher in general. It is still symbiotic, a deeply, deeply symbiotic relationship. But that obligation to each other is ratcheted up.

Narinder:  Ilya, if you were talking about Dropbox or Slack, what guidance would you give them on if and when they should think about directly monetizing their platform?

April:  Yeah. Tell me, Ilya. What do you think?

Ilya:  Tomorrow.

April:  [laughs]

Ilya:  I would figure out a model for distribution and really understand the dynamics of how application providers connect with their customers. Charging for a platform is tricky. It’s worth doing it when you’re really giving people a lot of access to a lot of customers.

It does allow you to filter out apps that are not really serious. That’s the other piece of it. You have to have some skin in the game. People usually do a better job.

I’d really make sure you could get somebody a guaranteed number of users within a certain amount of time by doing certain things, whether it’s promoting in-product, whether it’s promoting via email and other channels. I think once you can create this ecosystem that connects users and applications, then in my view it’s pretty fair to charge a tax.

The only other perspective on this would be, are you giving people access to some data that they really need to run their business and can’t have access to otherwise? I don’t think in either case that’s really so true.

It’s really mostly about can you truthfully tell a developer, “Hey. By joining our platform, we’re going to get you in front of the kinds of users that you want to get to. Really the simple math is you could go spend $1,000 a customer on AdWords or you could join our platform and pay a little tax.” That would be my advice.

April:  Thank you.

Narinder:  You buy that, April?

April:  For the input. [laughs] Yeah. I think that’s all totally reasonable. I also think that at Slack, we’re still at a stage of just making sure that people can find the apps that will help make Slack a better experience for them, that they can understand how to use them. We’re really focused on that discovery piece and just getting the user experience right.

I think the more that we do that, that affords us the opportunity to really think about what we want to do to help developers to be able to build a business on top of Slack.

We’re already hearing demand from it. Since we’ve launched the app directory, we’ve had developers directly ask us like, “You’ve already got the credit card info. Can you just charge people for us?” I have no doubt that opportunity is there. It will be something that we think about over time.

We’re going to keep the bar really high on making sure that we check the box, is this the right experience for our customers first, before we really delve further into that. There’s a lot of complexity that does come along with that, even though it’s an exciting opportunity.12-buildit

Narinder:  We have a few minutes left. I want to basically get from each of you. Particularly 2016-relevant or in general, what’s one misconception you see people talking about when they think about their own platform strategy? Not your platforms, but their own aspirations around platform, that you want to call out.

What’s one misconception that you’re like, “Don’t follow that advice. That’s just wrong. It will take you into a dead end.”

Ilya:  If you build it, they’re not going to come.

[laughter]

Ilya:  That’s the biggest one.

Neeracha:  That’s sad.

Ilya:  It goes back to the earlier point. I think you really have to have something unique that’s a distribution channel or a proprietary data that’s really valuable for creating novel experiences. Just building a platform and saying, “Hey, world. We have a platform,” isn’t going to get you a whole lot of really value.

Neeracha:  It’s harder than you think it is to make it work.

Narinder:  Neeracha, you think people diminish the difficulty of actually pursuing a platform?

Neeracha:  Yes. Not just from the marketplace dynamics, like what data or users can you offer, but just technologically. Building that thing and getting it evolved, and making sure that it satisfies so many constituencies. It’s a tremendous amount of work.

Ilya:  It’s really, in some ways, the equivalent of having another sales and go to market team. If you think about developers, you have the long tail. That’s kind of your inbound. You have the mid-tail developers. That’s your inside sales. Then you have large partners.

That’s going to be an enterprise team. All of that has to have customer support. It has to have high touch at the enterprise, low touch at the long tail. You’ve got to have marketing behind it. Really supporting a platform is like duplicating a serious part of your company.

April:  The one that I would call out is that I think there can be a misconception that it’s a zero sum game. That if your company has platform aspirations that there is not a role for you to also participate on another platform. I think if we look at the mobile platforms, for example, for a long time…Google didn’t invest heavily in apps on the iOS platform because they had their own aspirations.

Now they’ve built great apps on top of the Apple platform. I use them everyday. I think that’s been a really smart decision for them. We spent a lot of time talking to companies that are also pursuing platform aspirations. I believe that there are customers in Slack for like 10 hours a day. More than two hours active time, but connected to Slack 10 hours per day.

I would imagine almost any company building for teams at work, no matter how large they are, actually is a meaningful opportunity by having a great experience on Slack, even while they pursue their own opportunities as a platform.

Narinder:  I said that’s the last question, but now I’m lying. You brought up something else. I’ve got a great idea for an app that’s going to help sales people build really complex proposals better. It needs collaboration. I need data from Salesforce. We have a lot of really big files.

Neeracha’s going to charge me. April said she might charge me. Ilya said Dropbox might charge. What the fuck do I do? How should I be thinking about that when these multiple platforms come together, versus is there direct connections that platforms will start to make between amongst yourselves that will make that easier from the person who wants to build on the shoulders of giants?

April:  Potentially it sounds like a good idea.

Neeracha:  Yeah. [laughs]

April:  It’s already the case that I think there are developers out there that are tying together these different applications.

Neeracha:  I would agree. Yeah.

April:  Then it’s just a competition among the distribution channels. Although that’s not really what we’re focused on right now at Slack. I’d imagine over time, if there are multiple marketplaces where teams are discovering apps for work, then there will be some competition there in terms of we’ll all want to be able to give developers the most access to great customers.

I think for now it’s pretty green field. I think that there’s a lot of opportunities before people really have to worry about that being a real point of friction for them.

Narinder:  Strike while you can, because it might get harder.

April:  What’s that?

Narinder:  I said strike while you can because it might get harder.

April:  Yeah.

Ilya:  The reality is if you look at the big mobile platforms, if you’re a serious application that’s targeting a big global audience you’ve got to build on a core platform. Some of them offer different things.

Android is very different than iOS in many ways because of the amount of access you get to the actual underlying OS. The same way that I imagine you can build the sales app for the sales guy that’s going to send nice notifications to Slack, where they get to see them in real time. Then they’ll pull data from Salesforce and maybe attach some of the records from Dropbox.

I think you can really tailor the experience to the platform that you get engagement on.

Narinder:  Neeracha, any last words on that?

Neeracha:  I would say look for more platform integration in the future.

Narinder:  I’m going to end with a quote from Jay Z again. He’s like, “I’m not a business man. I’m a business, man.” I think that applies to platforms. I want to thank our panel very much. April, Ilya, and Neeracha, thank you so much for your participation.

Before you guys get up and go, there’s a happy hour following this. Go outside and surprise surprise, there’s free drinks, and then the epic I promised, it’s going to be an imperial level after party at 1015 Folsom. Starts after the happy hour at 6:00. I think you got some emails suggesting Ubering down public transportation to get there. It’ll be an awesome awesome event. I will definitely be there. I know many of our panelists will, as well. Thanks everybody.

April:  Could this be…

 

Published on July 7, 2016
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