Note: My comments and thoughts are geared specifically to Slack or a very similar entity (tech start up, which sells a service).
I strongly disagree with this idea:
"Now that Slack has captured the low-hanging-fruit of the market, it needs to pick the high-hanging-fruit. The most profitable clients for slack will be the largest, conservative, enterprise clients who will join the Slack platform and then never leave. The long term survivability prospects of Slack depend on capturing these large enterprise customers."
I think this is a large misconception held by people. Often times, and I say this from experience, enterprise customers will demand a large amount of support/coddling because of the gross amount they're paying.
That "$1 million" a year contract sounds less and less good when you realize it requires constant attention of two, now dedicated, engineers, two support reps, sales person, and on occasion an executive... Compare that to 1,000 individual customers/subscribers who require next to no special attention, or dedicated engineers. Large, conservative, enterprise customers distort profit margins, and should be avoided.
Think about this: some enterprise customers are so large they may hire a person (or persons) to _only_ deal with your product. Now you've got a team of cogs (people) at your enterprise client, working, to take up your time and cost you money.
What's worse is that in most corporate cultures, partners/suppliers/providers are not looked at as "family" but as disposable. There's no vested interest in your success or failure. So there is little to no concern over how your smaller company may be abused by a larger one.
This is why humans invented contracts. No two businesses enter into a $1 million deal together without a contract to describe the expectations of the partnership. For this reason, no service provider should be "surprised" by the level of commitment required to fulfill its end of an enterprise deal, because all the expectations should be in the original contract (literally, the service level agreement). There are no surprises.
Also, (pedantic) in your example, $1m a year is beyond sufficient to cover the costs of two engineers and some support staff. Besides, realisically the biggest support issues will be problems with availability, which presumably will be network wide and not limited to one client. I highly doubt slack needs to hire dedicated engineers for each new enterprise client. Instead they can reallocate existing engineers when needed, and grow their total labor capacity as it becomes constrained.
I strongly disagree with this idea:
"Now that Slack has captured the low-hanging-fruit of the market, it needs to pick the high-hanging-fruit. The most profitable clients for slack will be the largest, conservative, enterprise clients who will join the Slack platform and then never leave. The long term survivability prospects of Slack depend on capturing these large enterprise customers."
I think this is a large misconception held by people. Often times, and I say this from experience, enterprise customers will demand a large amount of support/coddling because of the gross amount they're paying.
That "$1 million" a year contract sounds less and less good when you realize it requires constant attention of two, now dedicated, engineers, two support reps, sales person, and on occasion an executive... Compare that to 1,000 individual customers/subscribers who require next to no special attention, or dedicated engineers. Large, conservative, enterprise customers distort profit margins, and should be avoided.
Think about this: some enterprise customers are so large they may hire a person (or persons) to _only_ deal with your product. Now you've got a team of cogs (people) at your enterprise client, working, to take up your time and cost you money.
What's worse is that in most corporate cultures, partners/suppliers/providers are not looked at as "family" but as disposable. There's no vested interest in your success or failure. So there is little to no concern over how your smaller company may be abused by a larger one.