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Slack’s free plan change is causing an exodus

blog.zulip.com

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Re: Slack’s free plan change is causing an exodus

#551

Post by bayindirh »

chrisseaton wrote: post #491
hnarn wrote: post #481

Earlier quoted context omitted.

Everybody understands this. Here’s what companies don’t understand: if you promote your product through a loss leader — which is arguably how Slack became popular in the first place — changing your pricing at a later date will piss people off. You’re trying to put the blame on the consumer here which never makes any sense from a business perspective. If your loss-leading pricing strategy was unsustainable from the st…

> will piss people off Well it pisses off the people who aren't paying you anything. It probably pleases the people who were paying you, because now they don't have to subsidise the people who aren't.

> Well it pisses off the people who aren't paying you anything.

These users will either move to on-premise systems or pay to a competitor now.

Re: Slack’s free plan change is causing an exodus

#552

Post by HelloNurse »

davnicwil wrote: post #543
jmull wrote: post #163

People should understand this: A free tier is a loss-leader, intended to support sales of the paid product. If too many “…have been happily using Slack’s free plan for years”, then Slack will have to change the terms. Generally, storage and access to storage cost money. If you aren’t paying for it, it is definitely temporary, whether anyone says it explicitly or not. I don’t just mean in a “nothing lasts forever” way…

The free tier usecases don't themselves need to convert for this to work out long term. They do need to convert the same customers for other usecases though - usually work. Keeping the free tier indefinite (in time, if not in storage) helps to keep the product used, therefore top of mind, therefore the default choice for the latter when those decisions come around. Or, even where the user is not the decision maker, t…

Long term, users learn not to trust cloud services that are based on taking the customer's data hostage: not only the loss leader free tiers that are too good to be true, but anything.

Re: Slack’s free plan change is causing an exodus

#553

Post by PedroBatista »

jylam wrote: post #501
chrisseaton wrote: post #491

Earlier quoted context omitted.

> will piss people off Well it pisses off the people who aren't paying you anything. It probably pleases the people who were paying you, because now they don't have to subsidise the people who aren't.

Not that the price will go down. Now they subsidize shareholders, which is quite worse in my book.

Same way my customers subsidize my dinner, I’m sure shareholders didn’t get in for free.

Re: Slack’s free plan change is causing an exodus

#554

Post by pid-1 »

echelon wrote: post #275
xmprt wrote: post #246

Earlier quoted context omitted.

Makes me wonder how long before Discord rolls out their enterprise tier. There are tons of Gen Z and Millenials using Discord who are likely in positions where they can make those kinds of decisions for the company. And it's a great and intuitive product too.

Discord is way better than Slack for B2C if you're reaching that demographic. I'm running my start-up via Discord and it's grown to a 60,000-member community. Incredible engagement. Fantastic way to find customers and business use cases, too. For "enterprise", we run a separate instance for staff with lots of useful Github, Clickup, and other integrations.

Discord lacks features like SSO, auditing and security controls, making it impossible to adopt in many business environments.

Re: Slack’s free plan change is causing an exodus

#555

Post by lhoff »

bootsmann wrote: post #518
xyzzy123 wrote: post #368

Earlier quoted context omitted.

I think it's complicated; the fact that I use a free slack instance for note taking / bots is one thing, but I'm on 2 company slacks right now (paid), 2 non-profits (1 paid 1 not) and a handful of open source communities. Am I a user who won't convert? Everyone on a free slack instance is NOT using a competitor's product. There's a tipping point where having to check multiple apps will push people towards consolidati…

> Everyone on a free slack instance is NOT using a competitor's product. Arguably this is even worse from slaks POV, no? Everyone on free slack is on free slack because they aren't willing/able to pay and slack would indirectly benefit if those customers were freeloading (and incuring costs) for their competitors.

Not the OP but I think if free slack becomse unattractive enough people might start to look around. There are enough alternatives (self-hosted like Mattermost, Rocket.Chat or free tiers from other vendors e.g. Zulip, Discord). That presumably has two effects: 1. People are used to them and if the decision at the workplace comes up to choose a solution the other product is on the table. Or worse if Slack messes something up with the paid tier people might be more willing to switch to something else that they know already.

2. Every private group chat might involve people who never used something like it before. For these people the software they use first is the baseline. And they are more likly to recommend the solution they already know to a organistation that is willing/able to pay for a higher tier.

Re: Slack’s free plan change is causing an exodus

#556

Post by ajsnigrutin »

pid-1 wrote: post #547
hnarn wrote: post #481

Earlier quoted context omitted.

Everybody understands this. Here’s what companies don’t understand: if you promote your product through a loss leader — which is arguably how Slack became popular in the first place — changing your pricing at a later date will piss people off. You’re trying to put the blame on the consumer here which never makes any sense from a business perspective. If your loss-leading pricing strategy was unsustainable from the st…

Does Slack even care if folks not planning to pay are pissed? My understanding is this sort of strategy wants to archive some sort of network effect so business (which actually pay for services) start adopting a product. It's meant to kickstart recurring revenue, not to last forever.

I mean.. it kinda does.

If a small opensource dev group gets pissed at slack, and those people have a say in a chat solution at their workplace (paid plans there of course), pissed people won't recommend slack but other alternatives.

Re: Slack’s free plan change is causing an exodus

#558

Post by Kye »

pid-1 wrote: post #547
hnarn wrote: post #481

Earlier quoted context omitted.

Everybody understands this. Here’s what companies don’t understand: if you promote your product through a loss leader — which is arguably how Slack became popular in the first place — changing your pricing at a later date will piss people off. You’re trying to put the blame on the consumer here which never makes any sense from a business perspective. If your loss-leading pricing strategy was unsustainable from the st…

Does Slack even care if folks not planning to pay are pissed? My understanding is this sort of strategy wants to archive some sort of network effect so business (which actually pay for services) start adopting a product. It's meant to kickstart recurring revenue, not to last forever.

The people who use Slack for their weekend DnD group are the same people who bring it into the companies they work for during the week and ultimately suggest a paid plan. That's the entire idea behind freemium: just because someone doesn't get their own credit card out doesn't mean they don't influence the person who does.

Re: Slack’s free plan change is causing an exodus

#559

Post by iLoveOncall »

If you're upset with changes like this, you weren't using Slack as it is intended to be used. Nowhere is Slack advertising itself as a data archival platform, a file storage, or a project management software. It's a chat application.

Look at all the reactions in the article, they all are using Slack in ways it is not supposed to be used.

Also note that the article is written by a direct competitor of Slack...

Re: Slack’s free plan change is causing an exodus

#560

Post by TheGeminon »

pid-1 wrote: post #547
hnarn wrote: post #481

Earlier quoted context omitted.

Everybody understands this. Here’s what companies don’t understand: if you promote your product through a loss leader — which is arguably how Slack became popular in the first place — changing your pricing at a later date will piss people off. You’re trying to put the blame on the consumer here which never makes any sense from a business perspective. If your loss-leading pricing strategy was unsustainable from the st…

Does Slack even care if folks not planning to pay are pissed? My understanding is this sort of strategy wants to archive some sort of network effect so business (which actually pay for services) start adopting a product. It's meant to kickstart recurring revenue, not to last forever.

Don't know if it is their intention, but this is probably more of a cost-cutting measure than a revenue-increasing one (or maybe even a technical one, with their data strategy/partitioning it may be much easier to do everything time-based).

Many people expect free things to stay the same forever, which obviously isn't realistic, but this is still going to have a damaging effect on their brand. As well with the free tier, there are a ton of OSS projects, community groups, etc. that will no longer be using Slack, and the network effects will drop substantially. This has been seen a bit with Discord, so maybe they are going all-in on dropping these types of customers.

There can't be _that_ many people who are on the free plan that will now be migrating to paid with this change. If anything, it now incentivizes larger groups (which would generate more revenue) to use the free plan since data is gated by time, not by usage. A slack instance with a few thousand active users on the free plan was basically unusable, 10k messages can be eaten up rather quickly. Now if you only care about the last 90 days (which honestly, isn't a bad idea with Slack to not use it as permanent storage) you can have a much larger group on the free plan.

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