Even big things have small beginnings. A small developer with a shuttered video game refined and released its internal chat system, at one point begging companies and friends to give it a try.
That application was Slack, and since its launch in 2014, the company has gathered a reported 1.5 million paid and 5 million daily active users, ranging from Fortune 500 companies to dentist's offices and NASA's Jet Propulsion Lab. The messaging start-up was valued at $3.8 billion in 2016 and has been in talks this month to raise another $500 million at a $5 billion valuation. It's also reported to have attracted the attention of some deep-pocketed potential acquirers, including Amazon.
But Slack's high-tech roots and rags-to-riches story defy a traditional business secret to its rapid success, one of the most basic tricks in the sales playbook: word-of-mouth marketing. An overwhelming 58 percent of small-business owners identify word-of-mouth marketing as the most effective way to communicate with customers and potential customers, according to the recent CNBC/SurveyMonkey Small Business Survey.
Bill Macaitis, Slack's first marketing hire and former chief marketing officer who now runs his own board advisory firm, has said the value of such referrals comes from a desire for quality purchases, and a lack of time among potential customers to research and assess the onslaught of information. A recommendation from a close friend or colleague cuts through the noise.
Macaitis told the Saas Revolution podcast, hosted by SaaScribe, that the "bar has never been simply, Did they buy from us and we're happy. It's not if they bought. It's not even if they renewed. It's would they recommend us. And if they recommend us, they're going to have a better experience, they're going to talk to our peers, and we're always going to have a very strong, healthy, organic order-based growth curve."
"Since we started, we've seen grassroots adoption at all levels drive growth," said Kelly Watkins, head of global marketing at Slack in an email to CNBC. "Slack has been recommended by millions of people around the world — something that remains instrumental to our momentum today."