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It’s unsurprising for Google, Facebook, and Uber to be household names, but when enterprise software makes it into the mainstream, you know that change is afloat. Yet, go to any office, and you’ll hear people talking about “Slacking” over information or “Zooming” into meetings. Similarly, just a few years ago it would have been hard to imagine an enterprise software company being well known enough to make a direct listing viable. Yet, Slack direct listed onto the NYSE successfully, and other high-growth enterprise companies are considering following suit.
A new breed of enterprise SaaS companies has achieved mainstream recognition due to their rapid mainstream adoption. Zoom has 50,000 corporate customers, and Slack has 10 million daily active users. Microsoft responded to Slack’s growth with a competitor called Teams, which quickly became the fastest growing application in Microsoft’s history. In only two years, it garnered 13 million daily active users and 19 million weekly active users. Notably, it’s not just startups, the typical early adopters for B2B technology, who are using these tools. As of their filings, 50 percent of the Fortune 500 were using Zoom, and 65 of the Fortune 100 were using Slack. Even more--91 of the Fortune 100--are using Teams.
Slack, Zoom and now Microsoft’s customers recognize an increasingly clear business truth: The future of work requires agility--not just for startups but for every company. As Slack stated in its S1, “In an increasingly dynamic world, the fundamental business advantage is organizational agility.” Business agility comes in many forms, but at their core, products like Slack, Zoom and Teams are enabling companies of all sizes to gain agility in three critical competitive arenas: collaboration and communications, talent acquisition and talent management.
AGILE COLLABORATION AND COMMUNICATIONS POWER AN ALWAYS-ON BUT NOT ALWAYS IN-PERSON WORKFORCE
Zoom and Slack both increase the speed at which teams collaborate, whether team members sit in the cubicle next door or in a country across an ocean. Leveraging the fast broadband connections and ubiquitous mobile access that are now easily accessible to remote workers, as well as collaboration tools like Zoom and Slack, professionals can work anywhere, anytime, adopting a flipped workplace model in which physical in-person meetings take place only rarely and as needed. In fact, by 2025, around 70 percent of the workforce will work remotely five or more days per month. As usage has spread, communication tools like Zoom and Slack have ignited an expectation of immediacy that changes not just how teams communicate in the narrow sense, but more broadly and fundamentally how they work.
Digitally-enabled instantaneous collaboration has gone so mainstream as to become an expectation in the modern workplace. In astonishingly little time, collaboration tools like Zoom, Slack and Teams have become integrated into the business workflow. It has become hard to imagine co-workers collaborating without them or similar tools.
AGILE RECRUITING ENABLES COMPANIES TO HIRE THE BEST TALENT, NOT THE CLOSEST TALENT
Today, top talent commands a premium. Even amidst concerns about the economy, employers still have far less leverage than they’ve had in decades. Employees have choices and can demand flexibility from their workplaces. That’s of course the appeal of WeWork and other co-working spaces for the physical workplace, but whether it’s at home, a co-working space or a Starbucks, distributed work is only now becoming more common because powerful tools like Slack, Teams and Zoom make working remotely as effective as working in person . That’s why there’s been such a surge both in the number of people working remotely--and in their incomes: Remote workers now make on average more than workers who commute. And it’s not just the actual work that can be remote: Even candidate interviews can be conducted remotely with Zoom. Ben Thompson from Stratechery famously compared WeWork’s potential to that of Amazon Web Services, but I think that analogy belongs to products like Slack, Zoom and Teams.
In the same way that Amazon Web Services so dramatically reduced the cost of software development that it made software startups easier to launch than ever before, tools like Zoom and Slack are dramatically reducing the barriers to distributed working while ushering in new and exciting opportunities for startups to address net new challenges and opportunities like culture building, coaching and development and collaborative product design.
In the old days (like a decade ago), startups would often launch with distributed teams in order to run lean. As they grew and took on venture funding, they were expected to settle in tech hubs. Those long-standing norms are being challenged because employees want to live where they want to live, not where their employers want them to live. In order to access top talent across the globe -- not just confined to tech hubs -- companies are increasing staying distributed longer, even as they scale. Auth0*, valued at more than $1 billion, and the high-growth company Zapier have both managed to reach scale with completely distributed workforces. Companies that initially set out to become distributed due to costs or the search for talent have discovered what other non-natively distributed companies are beginning to learn: that employee distribution, when well-implemented, yields organizational agility. If you want to have the most productive, agile and efficient team, you’ll need multiple offices--or otherwise no office at all. The basic requirements for making distributed work viable include communications and collaborations tools like Slack, Teams and Zoom, as well as emerging collaboration tools that are building out additional layers of lean management and organization agility.
AGILE CORPORATE CULTURES ARE NOW TALENT MANAGEMENT BEST PRACTICES
At the end of the day, we all long for emotional connections. That desire exists whether you work in an office or in your pajamas at home. That’s why it’s so powerful that Slack, Teams and Zoom facilitate the building of cohesive team cultures. Zoom rooms and Zoom meetings make it easy to run or join video meetings, which isn’t just great for customer conversations; it’s also great for team building. Virtual standups across offices are far more powerful through video conferencing than they are through voice alone. Some companies even facilitate buddy chats, essentially virtual coffee dates to help employees build camaraderie and alliances without ever having to meet in person. Through video conferencing, we can all feel connected even when we’re physically distributed. The more we become physically disconnected, the more we rely on technology to stay culturally connected.
LOOKING AHEAD
As more future of work startups set their gears on the enterprise market, leaders will only push harder to bring agility and flexibility into the traditional workplace. It’ll extend beyond teams to entire organizations seeking lean management principles. While organizational agility was once an accidental byproduct, over time it’ll become the goal, not just the outcome. That’s because at its core, organizational effectiveness requires doing the same or even more with less--which is increasingly impossible to execute without agility. Whether the economy is strong or weak, businesses always want to reduce costs while boosting productivity.
These emerging products are a symbol of the future of work to come—or, quite simply, the future. Maybe the workplace of the future won’t be fully distributed for a while. Maybe more small and midsize employers will have a few offices instead of just one or two, but over time, much of the future of work will be largely distributed. It’s a secular trend not going away. Business leaders who recognize the future of work by integrating collaboration and communications tools into their business workflows; by leveraging these tools to recruit the best talent, regardless of where they live; and by integrating an agile corporate culture into their talent management practices will not only enjoy successful IPOs (or direct listings!) if they haven’t already; more importantly, they’ll comprise the S&P 500 of the future.
Thank you to my colleague Allison Baum at Trinity for her research assistance with this piece.
