About Freeterprise Business Model
In the Freeterprise (Free & Enterprise) business model the company tries to convert a large pool of accessible silos accounts into paid customers and allows them to collaborate. Collaboration is a critical ingredient in the recipe for success of a group and the organisation. The leaders in organisations constantly try to break the silos and bring the different functional groups together.
Under this model free professional accounts are driven into the funnel through the free product. As soon, the opportunity is identified the company assigns the free account to a salesperson within the organisation (inside sales or fields sales) that later is converted into a B2B/enterprise account. Successful freeterprise model requires the entire organisation which is structured / revolving around this approach, from utilising the free product as an entry point to building strong relationships with accounts through skilled salespeople.
Companies like Slack and Zoom have demonstrated how free freeterprise can lead to the creation of valuable businesses in the B2B and enterprise sectors.
About Slack
Slack (Searchable Log of All Conversation and Knowledge) is a workplace communication and collaboration platform, which features direct messaging, file sharing, notifications and alerts, group chat, and search. It offers integration with third-party services, including DropBox and Google Drive.
Along with letting you communicate effectively, it also lets you upload and share files and integrate other apps and tools in one place so that you can save time and work efficiently. You can granularly control pretty much every setting and can even create custom emotions to make work fun. A survey demonstrates that teams using Slack experienced some huge benefits, including:
About 51% decrease in email use
About 34% increase in team productivity
About 25% reduction in meetings
Slack uses the freemium business model. Freemium service is a component of the Freeterprise hybrid model. The basic features provided are 10,000 messages backup, 1-to-1 video call, provide 10 applications and integration. Slack is useful for teams starting up and low on budget. But the quota of 10,000 searchable messages would run out quickly.
It all began in 2013 when Stewart Butterfield went on to design an online game named Glitch. While working, he realised that his team needed an effective internal communication system. This incident led to the development of Slack, a tool meant to handle teams within organisations
Slack's Pricing
Slack promotes itself as completely free to use for as long and with as many people as you want. So how does it make money? Umm, this one is interesting. Let’s understand it
A percentage of organizations pay premiums for special features. Such features include access to an unlimited communication history that was earlier limited in case of free account, unlimited app integration, additional file storage, screen sharing, statistics, and more. With no apparent plans to run ads in the near future, Slack relies on a simple business model, charging monthly fees of $7.25 per user for the standard subscription and $12.50 per user for the plus subscription. It has also launched Enterprise Grid for larger organisations that have tens of thousands of users that save a lot of time and enhance productivity in internal management of an enterprise.
How do businesses use Slack?
Slack helps organisations bring their people and tools together in one place so that they can stay productive and aligned from anywhere. Many businesses use Slack every day for team messaging, file sharing, and video/voice calls. You can integrate thousands of tools, like Google Drive, Zoom, and Salesforce, or create custom bots or apps just for your organization.
Post COVID Financial Outlook
Slack is initiating guidance for the second quarter ending July 31, 2020 and providing updated guidance for the fiscal year ending January 31, 2021. With the ongoing uncertainties surrounding the COVID-19 pandemic, Slack is withdrawing guidance for the full fiscal year 2021 Calculated Billings.
For the full fiscal year 2021, Slack expected:
Total revenue of $868 million to $873 million, representing year-over-year growth of 38%.
Non-GAAP operating loss of $75 million to $70 million.
Non-GAAP net loss per share of $0.14 to $0.13, assuming weighted average shares outstanding of 567 million.
Free Cash Flow of break even.
There has also been the consistent increase i.e. increase trend in the company’s revenue and its paid customers
Conclusion
Slack is one of the best and most popular messaging apps available. It features private and public channels, critical integrations with third-party applications, and smooth file sharing. It managed to conquer the competition with its unique user interface. Apart from Slack’s user-friendliness, it’s compatible with mobile devices and desktops. The Slack team messaging application is feature-rich. It enables users to collaborate with their colleagues, share files, and automate repetitive tasks. Slack’s channels offer a dedicated space to accelerate communications with colleagues and third-party individuals. With its integrations, users can collaborate without switching platforms.
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