| Slack Technologies is having a Zoom moment. The corporate chat platform signed on 90,000 new customers from February through April as the pandemic deepened. Yet only 16 percent of its accounts are paying for the platform, a slight reduction from the prior quarter. This isn't all that surprising or even damning. Slack operates a freemium model and at the moment it is growing at all costs—and arguably should be. Pandemic lockdowns have triggered a step-change in telecommuting and, as companies flailed like shipwreck survivors, Slack zipped around like a life-boat, hauling them aboard. Rescue fees can wait. The problem is that Slack is still a proxy for the labor market at large, at least the swath of it plugged into a computer all day. While the company may be powering an evolution in workflow, workflow, in general, is waning. One in four of Slack revenue bucks come from small- and medium-sized businesses, the most precarious in the pandemic economy. On a case-by-case basis, the company is delaying payments for clients in a cash crunch or crafting creative bill schedules. So what's Slack's long game for all the freeloaders? Unfortunately, there are no real network effects to speak of, the kind of value in volume enjoyed by other corporate tech giants like DropBox or LinkedIn. Barriers to entry aren't incredibly lofty either. There are a host of Slack-like startups, and the tech empires are very much in the game: Facebook has Workplace, Google has Hangouts and Microsoft has Teams. But the switching costs may be higher than they seem. Sure, there are plenty of chat services that do essentially the same thing, but Slack tends to get stuck in. There's a reason why its tagline is "Where work happens." It's the same reason why there's an entire sub-genre of Internet dedicated to Slack hate, specifically screeds about the platform's ubiquity and how deeply it worms into office workflow. On Friday, my wife was three hours deep into the Slack warren when I asked her about how ingrained it is in her company. "If Google Drive is the brain, Slack is like the circulatory system—or maybe the nervous system," she explained. As far as I know, both of those things are tricky to swap out. Slack functions as a formal org chart for her 100-person company. And then there are the chat channels: teams, teams within teams, "hidden teams" within teams and for each of those clusters of projects. It's a Babel of corporate babble and, for the record, my wife only hates Slack around 9 p.m. on a Friday. The Slack scaffolding clicks pretty seamlessly with thousands of apps, file-sharing services, calendars and project-management platforms. To switch to a different service would not only require a complete rebuild of the chat infrastructure, but the company would sacrifice its years-long repository of who said what. The Slack stickiness, in short, is largely cultural. And the company's strategy is simple: make it stickier. If Slack can train up its worst customers and turn the light users into addicts, they'll have to switch from free to "premium." This is why Slack expects its loss to narrow (and why Slack shares have roughly doubled since their March nadir). About 1,000 Slack outfits are now superusers, paying the company six figures a year. The Covid economy is still in the process of finding out which workers are essential. We'll soon find out to what extent Slack is as well. Ditto for Zoom. When we do, talk may no longer be cheap.  Bloomberg Businessweek, June 22, 2020. Photo illustration: 731; Photos: AP Photo; Bloomberg; Getty Images | 
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