While Zoom Zooms, Slack Digs Moats

12.5M isn’t as impressive as 300M. But the beauty of Slack is that those 12.5M+ daily active users (DAUs) and 9,000+ new paid accounts are locked. They will keep paying for years.

Drinks and weddings… am I in the right place?

Slack, on the other hand, has Personal Utility (Direct) network effects inside of a company. People use PU(D) networks for essential communication with their personal or professional circles using their real identities.

Arguably, Zoom’s virality has caused negative network effects, at least for me. The more people who join Zoom, the more Zoom happy hour invites I get, the worse my life becomes.

Slack is “Come to our wedding!” It’s a real commitment, so it takes some real thought to say yes. Once you’re in, though, you’re in.

Zoom traded moats for speed. That trade works while they have the better product, but “superior product” is not one of the seven powers. Over time, product can be copied.

“Network effects” is an overused concept. The basic concept is that network effects occur when an experience gets better with each person who joins.

Slack made the opposite trade. They gave up some speed, but they’ve built in network effects and switching costs.

In a matter of weeks, Zoom zoomed from 10 million users to 300 million users participants.