5 Reasons Salesforce Was Smart to Buy Slack - The Entrepreneurial Way with A.I.


Sunday, January 3, 2021

5 Reasons Salesforce Was Smart to Buy Slack


Q:  Will Salesforce’s $28B acqusition of Slack be successful?

It should be successful.


  • Salesforce is good at mega-acquisitions. Salesforce paid $6B for Mulesoft, $15B for Tableau, $3B for ExactTarget … and these are Salesforce’s big M&A winners. They know how to take an established brand and grow it faster, and build or expand a new core offering around it.
  • Slack has already become very enterprise. The majority of Slack’s growth is from larger, enterprise accounts where Salesforce is strong. $100k+ deals are the majority of its growth engine. More here: 5 Interesting Learnings from Slack at $1B in ARR | SaaStr
  • Very high market share already. Yes, Slack competes with Microsoft. But it’s past $1B in annual revenues with a dominant brand. Salesforce may not be great at creating brand new things anymore. But it knows how to lean into a dominant market share.
  • Strong support from Salesforce President Bret Taylor and the top. Bret Taylor is President and COO of Salesforce — and Facebook’s ex-CTO. He has the DNA to make sure they don’t screw Slack up. And it’s his deal, and the heir apparent to Benioff.
  • Salesforce will drive up the deal size. Salesforce is very, very good at providing a bigger solution — and then charging more for it. Watch it over time drive up Slack ACVs, most likely.

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Jason Lemkin, Khareem Sudlow