Slack’s $3 Billion Growth Loop

This ONE mechanic was pivotal in helping Slack achieve $3.32 billion ARR and 42 million users.

Hi, it’s Andreas, and I’m back with Growth, my newsletter that dives deep into today's top startups' funnels and growth tactics. Today, we’re covering Slack—and while I found a trillion articles that shed some light on its story but only touched on its strategies at a high level, I had to dive into its mechanics myself to figure out what made it grow so rapidly.

So, buckle up.

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Believe it or not, Slack started out as part of an online gaming project.

Back in the days Stewart Butterfield, Slack’s CEO, was working on an browser-based MMO game called Glitch - the gamplay was centered around collaborative crafting and gathering activities.

Like shown in this (super weird looking) screenshot.

While developing Glitch, Stewart built a tool to communicate and share messages internally. With the goal to improve the development process and help his team work better together.

When Glitch shut down in 2012 due to low player interest and financial issues, the team were left with $5 million from investors but no product.

Instead of starting over, they decided to turn their internal communication tool into a product.

That’s how Slack was born.

By 2024, Slack had grown into a major company, earning $3.32 billion in yearly revenue and gaining 42 million active users.

Its success came not just from having a great product, but also from using some smart strategies. One of them is a pretty well-functional growth loop.

How Slacks Growth Loop Looks Like

When looking at Slack's strategy, one thing stands out: