The Changing Nature of Productivity Tools
Last month we shared our thesis on the Decentralised Workplace. This month, we delve further into this subject with some insights that we have gathered on the changing nature of productivity tools - that have been essential enablers of efficient remote working.
Last month we shared our thesis on the Decentralised Workplace. This month, we delve further into this subject with some insights that we have gathered on the changing nature of productivity tools - that have been essential enablers of efficient remote working. We hope you enjoy it!
The Decentralised Workplace
Last month, we discussed why we believe the “Decentralised Workplace” is here to stay and why it forms one of the cornerstones of our vision for the future of work. This month, we’ll explore how the decentralised workplace will flourish, specifically how ‘productivity tools’ are enabling teams to achieve new levels of success and efficiency remotely. This vision steers our investment outlook for the Work & Knowledge sector.
Where was the industry before?
It started with the ‘Microsoft era’. Historically, Microsoft desktop-based software owned the market for productivity tools with the Microsoft suite of Excel, Word, Outlook, etc. We then saw the rise of Google that brought all productivity tools online with G-Suite (Sheets, Slides, Docs, etc). This move broadened access to these tools across an organisation and added sharing functionality. These changes democratised access and collaboration, making workplaces more productive and collaborative.
Where is the industry headed?
We are now entering into an era of productivity tools such as Notion, Airtable, Monday and Trello, which are more consumer-oriented in look and feel, but have deeper flexibility addressing a broad set of needs.
Many of these tools transcend work and personal life. Companies like Notion (which just raised $275m from Sequoia and Coatue at a $10B valuation) and Evernote offer text and note-taking solutions that enhance and drive flexibility in a networked era. Products like Airtable and Smartsheet are making spreadsheets on databases far more dynamic. Trello, Asana and Jira are enhancing individual and team efficiency by making it easier to coordinate and execute tasks, while team-based work management companies like Asana and Monday facilitate seamless team project planning.
What makes a productivity tool successful?
- Point-solution: Being known for helping solve a specific problem and driving user efficiency allows these services to be distinguished in this crowded market.
- Consumer-feel: It has a simple consumer feel that comes across as innovative and non-corporate.
- Flexible: It can be used in different environments and started easily, irrespective of the system used.
- Easy to learn: The initial interactions with the product are fairly intuitive and not too daunting.
- Cross-platform: No matter the platform (mobile, desktop, OS agnostic) the user has a solution that should accommodate it.
- Simple pricing models: Usually freemium subscription-based models or SaaS-based models. The pricing tends to increase with added functionality.
Additionally, these tools have several potential moats that they use to maintain market dominance:
- Network effects are probably the most powerful moat of productivity tools. Most productivity tools become more powerful as the number of active users of the tool increases.
- Switching costs: Once a user spends many hours building their systems and knowledge around a software it becomes expensive and time-consuming to change their procedures to move to another system.
- Branding: The reputation and brand of a service have a great impact on adoption and engagement. Slack’s reputation helped make it an obvious solution for even reluctant users because it was regarded as the industry standard.
What future opportunities will define this space?
- Multitude of point-solutions: With so many options available, it’s hard for users to determine what solutions best fit their needs. Will customers get accustomed to using multiple different tools or will they keep experimenting until they find one that exactly fits their needs?
- Transferability: Individual users want the ability to switch between providers seamlessly. The security that their information can move with them to new platforms will become an important feature.
- Integrations & APIs: Users want to be able to integrate their preferred set of tools so they can work across these different tools and apps without unnecessary friction. Integrations that make a user’s collective toolkit more powerful than the sum of the individual tools will be a force multiplier.
- Security: If we are working on many different solutions there is more cause for potential security issues and a broader potential exposure.
- Simplicity: Users will demand increasingly more simple to use tools that work on top of whatever infrastructure they have.
Mattias’ Bloomberg Appearance + Web Summit 2021
Earlier in October, I joined Francine Lacqua, editor-at-large of Bloomberg TV, to discuss the investment trends of tomorrow, the future of work and the next frontiers in gaming. Check out our conversation here.
I’m also heading to Lisbon to discuss what founders should look for in a seed-stage investor at Web Summit 2021, November 1-4. Hope to catch you there!
Thanks for reading and keep an eye out for next month's edition.