Slack's Expansion in India: A Case Study in Strategic Research Decisions

A lot of people I talk to argue that good research is about learning.

And while there's some truth to this, it's not the complete picture.

Because the essence of good research lies not just in learning but, more importantly, in using that learning to make informed decisions.

The real purpose of research is to facilitate action. It's about applying what you've learned to do something concrete.

The pitfall many fall into is focusing solely on the learning aspect, overlooking the ultimate goal of why they're learning in the first place.

This might seem like a subtle distinction, but it's crucial. Throughout my career, I've seen this misstep time and again, leading to significant consequences:

• Poorly developed products

• Wasted customer time

• Inefficient research teams.

Understanding the true goal of research - learning to make decisions - is key to avoiding these pitfalls.

Let's picture ourselves as a small startup grappling with customer churn. Our goal is to unravel the reasons behind this. A common approach might be to engage with dissatisfied users to understand their concerns.

Initiating these customer interviews could provide us with insights, potentially aiding in decision-making regarding churn.

However, this is where many go off course.

They default to familiar research methods, gathering data in the hope that it will somehow guide them toward a decision.

But this approach is often ineffective, if not outright wasteful.

It is a 'decision-last research' – a process where the decision, arguably the most critical aspect, is the last thing considered. 

The key mistake here is not aligning the research strategy with the decision-making process from the outset.

Research should be a means to an end – the end being informed, strategic decisions, not an afterthought.

When adopting a research approach, there are typically three major pitfalls everyone should consider.

Firstly, the selection of research methods is often misguided.

Many choose methods based on convenience rather than effectiveness. For instance, someone might opt for customer interviews or surveys without considering their specific situation, like the target population, statistical significance, or sampling strategy.

Even if the method is theoretically sound, there's a risk of gathering irrelevant data by engaging with the wrong people or asking the wrong questions.

This leads to wasteful spending of time and resources for you and your customers, culminating in poor-quality input that inevitably results in poor-quality output.

Secondly, there's often a disconnect in involving the right stakeholders.

Any decision or action in a company usually requires buy-in or approval from key stakeholders, often managers or a group of decision-makers.

Without a clear understanding of their decision-making criteria, you're essentially flying blind, not knowing what evidence is necessary to propel the decision forward.

This disconnect can lead to excessive time spent on communication, attempting to validate insights that may not align with the decision-makers criteria.

Lastly, a common issue is the lack of strategic alignment in the research process.

When research is not directly linked to the decision-making process, it becomes inefficient. It's crucial to ensure that your research is not just an academic exercise but a tool to drive strategic decisions aligned with your organization's goals and decision-making processes.

If the typical approach in research is to work from evidence to decision, a more effective strategy would be to reverse this process and adopt a decision-first mindset.

Starting with the decision at the forefront demands clarity on the boundaries and possibilities of what you're willing to undertake. This conversation should happen before using any customer time. Knowing the decision you aim to make allows you to hone in on the specific evidence needed to support that decision.

When you're clear about the decision, it aligns your team on what needs to be done and the confidence level required to move forward. This clarity enables you to specify exactly what you need to hear or see from different groups to feel assured in your decision-making.

With this approach, research becomes more targeted, efficiently gathering the necessary evidence while avoiding irrelevant data, inappropriate methods, or neglecting key stakeholders.

Taking our churn example, instead of vaguely asking why customers are churning, a decision-first approach reframes the question:

What should we prioritize to improve retention among our target audience?

This question is more focused, considering what actions are feasible, impactful for the business, and relevant to the audience we care about. It guides who we focus on and how we engage with them, ensuring that our research is directly tied to making a meaningful decision.

Adopting a decision-first approach in research offers three significant advantages:

First, it helps in prioritizing what truly matters.

Often, there's a temptation to learn everything possible about customers, markets, and industries.

While these areas seem valuable, they may not always align with your company's critical decisions.

A more focused question can be:

What are the two to three key areas where increased confidence or reduced risk would significantly impact your roadmap for the next quarter, half-year, or year?

This question encourages a strategic evaluation of each initiative, recognizing each as an investment or bet. High-risk, high-value items naturally rise to the top of the priority list.

Second, this approach simplifies the evaluation of research by asking three essential questions:

• Is it feasible?

• Is it reasonable?

• Is it worthwhile?

For example, a startup CEO wanting to survey CTOs of Fortune 500 companies faces a feasibility issue, as these individuals are unlikely to respond to surveys. This leads to discussions about more viable approaches. Similarly, proposing a 100-question survey might not be reasonable unless there's significant compensation for participants' time.

The third and perhaps most crucial aspect is assessing the research's return on investment (ROI). Every research project has a cost - planning, execution, team engagement, and customer involvement. Focusing on the decisions and actions that research intends to inform makes it easier to evaluate the potential ROI.

This is a more strategic approach than embarking on research with the vague hope of it being beneficial. It's about ensuring that every research effort is directly tied to a decision that moves the business forward.

Let’s see how Slack used a decision-first approach with its user research when considering its expansion in India.

Slack's Market Expansion in India

When Slack considered expanding its customer base in India in 2018, it recognized this as a strategic opportunity. Despite having some product users in India, it lacked a substantial business presence and an understanding of local preferences and drivers for retention with their product.

To address this, Behzod Sirjani, who led Research Operations at Slack at that time, approached his product partners with a crucial inquiry:

What were the feasible options within the decision-making scope?

Their primary objective was clear: to boost acquisition and retention in India. However, this left ample room for exploration.

1. Which customer segments mattered most?

2. Were they targeting specific industries or business types?

3. What were the limits in terms of actions to take?

The feedback was diverse and insightful.

• The finance team debated over price discounts.

• The infrastructure team considered the necessity of an offline experience akin to WhatsApp to stay competitive.

• The core product team focused on identifying and eliminating friction points in the onboarding process.

• The platform team explored the need for unique apps and integrations specific to the Indian market.

• The marketing team pondered over strategies to effectively communicate Slack's value and story in this new market.

• Lastly, the sales team was keen on developing an effective go-to-market and sales strategy for multinational companies with significant employee bases in India.

Each team's perspective offered a different facet of the overarching strategy, highlighting the multifaceted approach needed to penetrate and grow in the Indian market successfully.

In a traditional decision-last approach, you might just conduct a survey and a few interviews. But with a decision-first mindset, Slack recognized the need for a more nuanced approach.

They identified three key business types to engage with:

1. Small businesses already using Slack

2. Large organizations using Slack

3. Potential customers to understand their existing tools and workflows.

Adopting a Decision-First Approach

They arranged interviews with nine different businesses, three from each category.

Additionally, they organized focus groups with four critical customer segments: software decision-makers, Slack admins, developers using Slack, and end-users.

This comprehensive approach might seem overwhelming, but they accomplished it during a five-day trip to Bangalore.

Their days were meticulously planned. Each morning, they traveled to a customer located farthest from their hotel, followed by a visit to another customer on their way back. Every evening, they conducted one of their focus groups.

To maximize their efforts, the team was split. Behzod, along with a colleague, would typically interview a software decision-maker or a leader to understand the organizational usage of Slack.

Simultaneously, the rest of the team engaged directly with users, observing their Slack workspaces to grasp what was working, how they named their channels and the overall user experience.

Though demanding, this immersive, hands-on approach provided them with a rich, multifaceted understanding of Slack's usage and potential in the Indian market.

They held a pre-brief session at the start of each day to align their expectations and review their interview plans. After every meeting, they conducted debriefing sessions to reflect on their learning. These discussions were pivotal in ensuring that their findings were not just informative but actionable, guiding their colleagues in their decision-making processes.

They also made it a point to relay insights back to their headquarters after each debrief. This communication was essential in validating whether the evidence they were gathering aligned with the decisions their colleagues were aiming to make or if they needed to adjust our research approach.

Critical Insights from the Field

Their research trip gave them invaluable insights that directly influenced strategic decisions. A key concept they encountered was 'Jugaad,' a widespread ethos of resourcefulness within organizations. One striking example was a company that archived essential Slack conversations in Google Drive, driven by the prohibitive cost of Slack, leading to a loss of message history. This practice diminished Slack's role to a basic chat tool, putting it in direct competition with WhatsApp – a challenging opponent on many fronts.

Financially, they found that Slack ranked as the second-highest expense for numerous companies, just after their cloud infrastructure costs, such as AWS or Azure. This was a surprising revelation, considering the typical expense distribution in most companies.

Additionally, they identified practical usage issues related to bandwidth and intermittent connectivity. These factors made using Slack, especially challenging during commutes, a prime time for mobile app usage.

These insights were not just academic but critical in shaping how they viewed Slack's role and value in the Indian market. This understanding was vital for tailoring their strategies to address this region's unique challenges and opportunities.

Strategic Decisions

Informed by their findings, they implemented several strategic decisions to optimize Slack's presence in the market. Recognizing the cost barrier, they decided to discount Slack by 40 to 60%, aiming to enhance acquisition, retention, and monetization.

Acknowledging that competing with WhatsApp was not viable, they shifted their focus away from developing an offline experience. Instead, they concentrated on improving caching and message-loading mechanisms. This approach was designed to provide users with more consistent and efficient access to Slack, adapting to the unique usage patterns observed.

Furthermore, their research provided clearer insights into the types of businesses they could realistically target, considering local regulations regarding data protection, privacy, and other relevant factors. This strategic clarity was crucial for navigating the market more effectively and making informed decisions about their regional business development efforts.

Putting It All Together

In many organizations, there is an excessive focus on learning for its own sake. The crucial shift is from working forward (focusing on what can be learned) to working backward (focusing on what needs to be decided).

Instead of asking what could be learned, ask which items on your roadmap would benefit most from increased confidence or reduced risk.

Too often, teams realize too late in their project timelines that they haven't allocated enough time to research crucial decisions. Being part of the planning process and identifying high-leverage items early helps focus on the right research.

For those overly focused on learning or those dealing with colleagues who are, a helpful tactic is asking why they want to learn something. More specifically, ask what actions they would take based on what they learn.

Consider the shift from asking why users are churning to determining what should be prioritized to improve retention.

Often, people initially want to understand churn reasons, but the deeper goal is to address the root causes of dissatisfaction and drive retention. This subtle change in questioning shifts the focus of the research and the target audience, leading to more impactful insights.

Lastly, integrate this approach into your project plans. Ensure that each project plan clearly states the goals, decisions to be made, and the necessary evidence.

This structured approach streamlines the research process and ensures that every piece of research is directly aligned with driving meaningful decisions and actions.

Have a great week!

- Dimitris

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