Sales · Enterprise software

Is Slack refusing to hire a sales team a mistake?

Jessica Alter Entrepreneur & Advisor

March 18th, 2016

Slack CEO came out recently saying they do not have and do not plan to hire a salespeople.  Of course, it's worked so far but the same can be said of how dropbox and yammer started and they both realized  they then needed to hire in that arena. 
Curious to hear from both sides of the aisle whether or not they think this is a smart decision or doomed. Particularly interested if you've been at a company that's done this (successfully or unsuccessfully) or have lots of experience in sales.  People piling on to rag on sales or business isn't helpful or productive. 

Brent Bussell Retired High Tech Sales & Marketing Executive

March 18th, 2016

I've seen many businesses in my 30+ years in high tech attempt to minimize their investment in, and dependence on, a dedicated sales function for revenue production. And I've seen almost all of them come to regret it. But notice I used the term "sales function" because sales can take on different forms and doesn't necessarily mean a bunch of sales reps on the street carrying a bag, which is the vision many have when the role is mentioned. And not all businesses require that type of sales investment to be successful. But I would say that virtually all businesses require some person(s) with the proper experience and background in "sales" and the singular focus on producing revenue for the business to drive the actions of the business that will get customers to buy.

Rodrigo Vaca Product & Marketing

March 20th, 2016

Didier -

"Atlassian is one company that has thrived without having a sales team"

I did a quick LinkedIn search for Atlassian. I found the following people at Attlasian:
- Chris Short, Sales Operation Analyst: https://au.linkedin.com/in/shortchris
- Paul Vu, Deal Desk/Sales Ops: https://www.linkedin.com/in/paul-vu-35b5075

- Ghazwan Khair, Sales Engineer: https://www.linkedin.com/in/ghazwan-khairi-47400a3
- Tim Granshaw: Director Of Sales Optimization and Experimentation: https://www.linkedin.com/in/tim-granshaw-a1a650

Also, in Atlassian's Contact Us page, it clearly says:

Need to get in touch with someone from our product or sales team?

(emphasis mine)

So I'm not entirely sure what you mean when you say Atlassian doesn't have a sales team!

Maybe you outsource sales, maybe you only sell through channel, but at the end of the day, we all want to sell an extra one more widget. Think about some of the defining tech companies - Google, Microsoft, Facebook, Intel... you name it, there is a beefy sales department at each one of them!


Sam Khavari Co-Founder & CTO at Stride Labs

March 18th, 2016

> Is Slack refusing to hire a sales team a mistake?

The end of the article shows a tweet where he acknowledges they aren't refusing to hire a sales team. Dropbox / Slack seem like they're trying hard to learn from the challenges at Boxand aspire for financials like Atlassian. Andrew Hoag pointed to Tomas' great write-up which describes how Atlassian does it.

While Dropbox is known as a no-sales or bottoms up type of organization they have a considerable effort brewing around enteprise sales. We can see how much Dropbox is expanding its sales efforts here: dropbox.com/jobs/business/sales

Rodrigo Vaca Product & Marketing

March 19th, 2016

On the original question: "Is Slack refusing to hire a sales team a mistake?"

Well, it WOULD be a mistake, it it were true.

But it is simply just not true. Just some bravado posturing by a CEO to show how confident he is on his product. It is good for PR too. That's also what you'd want/expect them to do, so that's not a knock on them. We use Slack day in and day out and it is indeed a fantastic product.

Sales people profiles at Slack:
https://www.linkedin.com/in/neads
https://www.linkedin.com/in/brittjamison
https://www.linkedin.com/in/alexandertennant

Most importantly, you may not have people with "sales" in their title, and you may not be paying them a commission (BestBuy's non-commissions blue-shirt salespeople come to mind). But as some point, somebody is *selling* the product.

BTW, the BI article you referenced stated as much at the very end - probably an update after the initial publication? Maybe he just got a little carried away during the SXSW presentation.

Didier Moretti VP/GM Cloud Apps - JIRA Projects, Confluence, Service Desk at Atlassian

March 19th, 2016

Atlassian is one company that has thrived without having a sales team. Our business model is based on having great products, low prices, and high volume. We spread via word of mouth, have over 50,000 customers, ranging from startups to the F500. Atlassian went public late last year.

Atlassian is one of the first companies with significant revenues based on such a business model. There will be many others.

The model is not applicable to all markets - in case of Slack, one can debate whether or not they can deliver on high expectations without a sales team. Time will tell.

Glenn Donovan Vice President of Sales (fractional)

March 22nd, 2016

Funny, I never inherited a team of engineers, Rob... Today's engineering driven culture is a reversion to the pre '90s culture which prevailed in tech where engineering drove companies off cliffs. With startup failure rates higher than ever and falling business formation rates, I have to say this mentality is an abject failure. The average SaaS startup I encounter is a clowncar driven by naifs who have no business creating go to market strategies or executing them. But they are being driven by VCs who often even understand less about how this all works.

I think it's an absurdity that I have to even explain why enterprise sales teams are needed when it's simply a reality that is born out every day. But hey, I'm just a guy who's driven over 100 million in revenue personally, what do I know? I'm getting sick and tired of having to justify my existence to people who can't survive without me. In many ways this is a consequence of bubble economics and so much capital chasing so few opportunities.

But then again, it makes for clients who eventually are incredibly hungry for sound, realistic advice and approaches. Sadly, I have to wait until they've made a mess of things usually, "growth hacking" their fool heads off with no good results. Hey, it's a living though...

Rob G

March 18th, 2016

Bill Gates was fond of saying "our software sells itself",... but he had a sales team... and a monopoly.  Even Google has a sales team and few have Google's reach.  I've managed sales at small, medium and large software companies (b2b). Assuming they want to grow in the F1000 market, eventually Slack's organic growth will slow and competition will increase and investors will pressure them to grow revenues faster and they will acquiesce to deploying a sales team. Having a great product helps, but pushing into the F1000 without a sales team against competitors who have sales feet on the street puts them at a competitive disadvantage. 

Andrew Hoag Builder of products, teams and companies

March 18th, 2016

I can't think of a company that's done this successfully over the long-term. If Stewart thinks he can change the way enterprises buy software, I'm all for it (and am doing everything I can to help that revolution), but until every F500 company is using holacracy I just don't see it happening at terminal scale.  

And if he's going to hire a bunch of inside salespeople and call them "Customer Success" then I call bullsh!t. It's not outbound sales but it's still persuading someone to spend more money with you. http://tomtunguz.com/saas-innovators-solution/

Jessica Alter Entrepreneur & Advisor

March 18th, 2016

Actually my point was that Dropbox does have a sales team - 100%. Even though they started bottom up. And more importantly they've struggled with enterprise deals vs box because they waited so long. Sent from my iPhone

Glenn Donovan Vice President of Sales (fractional)

March 22nd, 2016

@Rodrigo - I made the same observation in the blog post I linked above - Atlassian has an enterprise and channel sales team.

Guess I have to post the whole piece here. It's on LinkedIn too.
I love Slack. It's the best IM product I've used to date -- and I've used many of them. I'm also a career enterprise tech sales exec who helps enterprise tech startups go to market. So when I read this piece by Stewart Butterfieldhttp://www.businessinsider.com/slack-ceo-stewart-butterfield-no-salespeople-2016-3I felt like I had to respond as I see this kind of thing being said over and over and over again in the startup world. I believe it reveals a naivete about how large organizations buy technology, and how technology is sold to them.

The claim is that Slack is special because it appeals to all users in an enterprise, hence they don't need B2B sales people. This is just goofy is not an argument, it's an aspiration based on zero facts. I guess Microsoft can fire it's sales force now, right? I mean, in a company where all the employees use Outlook, it will just sell itself by this reasoning. Ditto for laptops/desktop PCs etc. This is just errant nonsense.

Then the article goes on to claim there is a precedent, citingAtlassianas a case in point. Hmmm. Go to LinkedIn, pull up Atlassian, use advanced search and put the keyword "sales" in -- you get 422 results. They have titles like "Enterprise Advocates" (these folks all have enterprise sales backgrounds) and "Channel Sales" etc. In fact, their team looks a lot like every other enterprise tech company.

What Stewart is right about is that in the past, a lot of enterprise technology was sold "top down", meaning it played mostly to the preferences and priorities of management/leadership. This is how we end up with CRM systems likeSalesforce.comwhich every sales person on earth will tell you sucks to use and does not help them sell. Management was sold on the cloud model, the integration, the compliance and the benefit of the platform.

This is both a bad business decision and a bad people management decision in that it tells end users of technology that their concerns aren't important enough to drive decisions. It's demoralizing to have a hostile piece of software shoved at you to use which doesn't help you do your job better. Stewart is right to deplore this kind of decision making and how users of technology are ill-served by it.

Slack is the anti-thesis of this thinking. Stewart and his team were and are obsessed with user concerns and user experience. And when decisions are being driven by these criteria, technology can be sold this way, as long as it's inexpensive enough to not invoke enterprise criteria or formal procurement processes. To me, the amazing thing Stewart did is taking on a segment that was already filled with products -- IM/Collaboration and do it better by obsessing about users.I think the entire enterprise tech business needs to take this lesson to heart: Software that isn't great for users is vulnerable to competitive displacement even in a mature product category.

However, this is to see only half the playing field. In fact, organizations have what I think of as "emergent concerns" that arise from the size, scope of operations and externalities such as regulations and ecosystems. It's not unimportant that a given technology cooperate with what an enteprise already owns. Likewise, it should have features to support the compliance issues you face (and Slack has had to add all of this kind of capability to be sellable to the enterprise).

What Stewart and many others miss is how to influence these top down decisions. You see, these concerns are not addressed by product use. They are complex, group decisions that ultimately have political and organizational aspects to them which you can't address by a free download of software. This is where enterprise sales teams come in -- they work with the top down concerns of large organizations by understanding a company's strategy, it's technology landscape and compliance issues and organization. Enterprise sales teams advocate for a given solution to the stakeholders who own those very important and legitimate areas of concern.

Another aspect of large enterprises is that they often formalize procurement processes to ensure all of the stakeholders involved in any decision get to have their say, and that the process is undertaken in an ethical way. Enterprise sales teams spend a lot of time working through these processes, which expect a human from the vendor to participate. Not understanding this signals not understanding how large enterprises work and why they do so. In a way, it's typical Silicon Valley arrogance to ignore these crucial criteria. And of course, this is why even companies likeGithubare hiring an enterprise sales team.

I'll close with an observation that seems to bother many denizens of StartupLand today. Customer experience surveys of B2B buying show time and time again that human interactions drives 50-60% of the "buying experience" while actual product features/use drives about 20% of it. This is because of the facts of life in a complex, large organization that has many other concerns than simple features and functionality. That's why enterprise sales people are trained the "Complex Sale" in the first place.