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Hi, I'm Kara Swisher editor large free code you may know me as someone who loves pretending to work from home. But in my spare time, I'm just a reporter and you're listening to Rico decode a podcast about power change. The people you need to know. We're part of the VOX media podcast Network today on the 500th episode of Rico decode is Stewart Butterfield the CEO of slack. He was the guest on the very first episode this show did five years ago slack, of course is a messaging software mainly used by businesses including
Media the company went public last year and it's one of the companies that's really critical at this moment because a lot of people who used to work in the office or suddenly working remotely Stewart. Welcome back to Rico decode. Thank you so much for having me. It's a nice pretty big honor. I know. Well, you know you were not in that you were my first is that you know, when we talk we had really bad Lincolnshire on this thing called Squad cast because we're both at home because we're because of the coronavirus and one of the things we I went back and listened to that first step was I didn't sound so good.
We had bad sound but and that's things have improved gigantically since then but one of the things we talked about was this idea of working from anywhere and the eye and it was sort of a fresh idea and people had done email and texting and things like that. But you introduced a whole new genre. Let's start first off by talking about coronavirus and you know your company Zoom many others teams some others are doing really well or there's a lot of heavy usage on them much more so delivery services all kinds of things that have been put in place.
In the last five years really let's talk a little bit about what your company is doing. Obviously, you've had a work from home culture at slack. Although you have an office. I've been to
yeah, we have 15 offices in 10 countries around the world 2,000 people and it would say actually don't know the answer but I would say probably about a hundred people who regularly worked from home until two weeks ago when suddenly everyone works from home. So there was it was still a very big transition for
us. So talk about that. What did you do? What did you initially?
Really start to do now. Everybody works on slack at slack. Obviously.
Yeah, there's some you know, when you said work from anywhere, there's a company in Japan called Kikuchi and there I might have some of the details wrong here because I didn't look this up but it's like a hundred and twenty years old. They are a pipe and hose manufacturer and they only got an email a couple years ago, but they started using slack last year. We did this customer video with them and I have no idea what it was in Japanese, but the the translation in the subtitles
Video with the CEO he says slack allows you to transcend time and space. It sounds very profound. But the way he said it but even back at the time that we did the first one people would come to our offices San Francisco and say that it felt eerily quiet because people were doing most of their communication on slack even when they're in the same room and one of the reasons for that was not everyone's there at any given time, you know, so the people who are going to come back later in the afternoon, they were at a meeting or they were otherwise out or or they're just
Meaning that team or that conversation in the future to the extent that you have it in a channel. It's accessible in a way that it wouldn't otherwise have been
right and so to talk about right now, we'll go over what you've been doing the past couple of years. But what is your response to the coronavirus? And what is your company been doing it smartly to facilitate people.
Yeah. It's it's like everything. I mean the last two weeks. I'm sure you've had a very similar experience have been felt like like months and months. So two weeks and one day ago.
Thursday the 6th of March we walked out of our board meeting kind of with a plan for fiscal 2021 and our earnings guidance all kind of teed up but the next day we made the decision to at that point strongly encourage everyone to begin working on home from Monday spawn up all these channels we have like, you know HR and policy we have the facilities team and security and
The Cascade of internal Communications to the managers first. So Saturday that went out to the company Monday was the first day working at home and Tuesday. I flew out to New York. We are still traveling then with a couple members of the executive team to go do their earnings call and do all the presentations of yeah, the South Side analysts and investors and you know even just in that whatever the 72 hours from when we made the call Tuesday the world have felt like it was completely different.
We made some revisions to the guidance because he just couldn't tell what was going to happen. Just the degree of uncertainty was bigger and then Wednesday night. I'm sure you remember this pretty vividly. There was this like hour, maybe two hour period where it was the NBA got cancelled. Tommy asked this tested Cena and from travel ban, and obviously it is a huge psychological shift and we made one last call about you know, where we wanted to end up on the guidance the next day Thursday. We're doing the earnings call and talk.
Owing to the analysts. Meanwhile back in San Francisco where headquarters is 1200 employees and the school's just closed so suddenly, you know people who were already kind of in heavy negotiations with their spouse about who gets which part of the kitchen table for their next video conference now have a kid or two kids were three kids running around and they can't ask the in-laws to come over and help anymore, you know, maybe mom's 70 years old and and gotta stay home. They don't have
Any you none of the normal Services? They can rely on I would say that that week, you know starting from whatever that would have been the 12th or something. Like that was the most productive week in the company's history because it's just super high adrenaline. We still have this massive surge in interest, but I think we also just felt like this was our moment and we immediately started a bunch of things. So one was starting to give comp plans to groups that were
fighting coronavirus or mitigating the effects and things like that. So we always had a free program for nonprofits. It would think was really interesting about that that week and it continued into this week is just a bunch of process got dropped. We just said, you know what no one needs to log sick days in work day this week. We don't need to do the normal approval process. We don't if you're a non-profit, we don't need you to send us your 501 c 3 papers and established that everything just started you're taking accelerating and kind.
Moving to a higher degree of autonomy and it's funny, you know as a CEO it's like all the stuff that I would I've always wanted just magically started happening and you know in circumstances that are supercharged. You know, we're we had the first report of one of our employees whose partner tested positive. We had a couple people who are running fevers and hadn't been tested yet. Yeah. They're just the general level of concern started ramping up people are getting more anxious and yet at the
The same time we know one of our big customer wins sounds weird to say that at this point but was that was Veterans Affairs and they run the biggest integrated Healthcare System, the United States and is disproportionately going to be people who are who are elderly so just imagining The Strain that they're coming under and we had just started this rollout plan for them 20,000 people coming on this lock and it's a lot of people kind of all at once. So there's that happening. You know, there's Joe Teresa hit at the bio Hub and more or less every
Elite academic research institution writing down slack there's virologist and epidemiologist and Pathologists who are who are relying on it. There's obviously all the customers as well and what we call our customer experience team which includes support but the documentation and others spun up this program to do one-on-one consultations of people who are trying to figure out how to make the transition. So I think it's like is a great tool for working from home, but I think it's probably the bigger contribution is giving the organization the kind of agility and
it is necessary to make the transition to working from home because for us it actually wasn't that big of a deal but if you're a 40,000 person kind of more traditional company that relies on in-person meetings and an email to get things done. It's super painful
and try to know what to do first to do with the technology and then yeah and how
people relate to their managers and how people communicate and and all of that stuff. So yeah the question there was like, what was it like it was like everything because we're concerned for
Families for the community for what's going to happen to, you know, just to the world. I'm still a fiduciary and I'm running a public company and I have a responsibility there. We have all these customers but also everyone will see how hopefully this lasts a while not just it's locked but just you know, everyone generally is like wants to help wants to contribute wants to figure out what they can do how they can be of service.
Do you feel an extra responsibility as a company that does link people remotely because they one of the key Parts is work from home and you know today I think New York City's
Ali you have to stay at home Cal all of California yesterday Governor Newsom announced that I think that's going to happen in a lot of the major States I suspect it's gonna happen here in DC. So you've got responsibilities to help the companies you have and including what you're talking about a whole bunch of nonprofits which their critical that they have communications, you know, they communicate on Twitter they communicate and also things but slack is a really a what is is in a lot of ways some company that other people saying this is going to win during this and I don't suspect you want to win and you know
Are you getting the influx of customers of that are signing up and whatever. Absolutely. Yeah, and you're right.
I mean the the obviously but I said before all of the above it is everything I definitely don't want to appear ghoulish, but I also don't want to be ghoulish like, you know, hey, great Global pandemic super for business at the same time of really conscious of our employees. There's an increased nervousness. I think among everyone. It's like when you read about a 14 percent contraction to GDP
p in Q2 and you think about 20% of Americans might have already lost their jobs or had reduced hours people worry about whether they're going to get laid off whether the business is going to survive and all of that. So I think we feel very fortunate that this is not going to affect us in the way that it infects, you know, Delta or Mary it or the the all the retail stores down the street from me hotels. Yeah. That's it's a it's a very rough environment. But yes, we've seen an insane surge like the normally
If you look back at the previous quarter and the quarter before that we had about 5,000 net new paid team. So these are companies some of them might be big some of them might be small, but about 5,000 of them per quarter. We're halfway through this quarter. We've already added 7,000. Wow, that was one of the numbers that we already put out there. We ended up having to file an AK for it. But a lot of the graphs just have like straight lines that go the go right up for messages said the time people are spending.
An expansion among existing customers new people signing up and it's I don't know the I didn't get a chance to finish it before we started this call, but I was in the middle of composing a message to the whole company just because we said this a few times internally just to remind people don't let work be a source of stress right now because people you know, there's a lot of people who are like I'm home schooling suddenly, right? I can't get more than two hours of work done a day. And I think the last thing we want is people worrying about that because that's not going to be sustainable.
Don't think this is going to it's not going to be two more weeks, right? This is you know, the most optimistic State weeks. Yeah, exactly. And this could be six months or more. We are we sure you saw the University College London report where it's like maybe we'll get to a position where it's 10 weeks indoors two weeks outdoors in a rotating to Q of cities and we want to make sure people stay safe and at the same time we want to make sure that we're able to serve all these customers.
Hmm. So how do you do that by getting them? First of all, what are people doing?
Doing what are they? What are they starting to do more messaging or what? What is there any Trends you're
seeing? Yeah. So the number of minutes of active usage on average has gone up by about 35% or something like that more channels getting created more messages sent more teams created just a bit like an increase in the intensity of usage and I think that
This was something that was going to happen. No matter what I don't mean necessarily to us. There's obviously there's Microsoft there's others and in the future. I'm sure they'll be other startups but the transition, you know as much as I don't know if I've ever heard you complain about slacker, but I've definitely heard people complain about slack in the broad sense. Like I do my notifications
wasn't no I don't I turn off all the
notations. Yeah. That's that's the way I do it too. But I like how yeah, how could you go back to email as the answer?
Old means of communication inside the company and I think that that's a shift that's inevitable over the next decade. I think it just accelerated by a couple of years because there's also people who thought slack was great and really enjoyed it. But essentially just used it in the way that they might have used, you know aim or Yahoo messenger or something like that 20 years ago is essentially for GM who suddenly are beginning depending on what they do bringing in Integrations with Salesforce or marketing automation tools or their HR System and
Kind of
that's more like a dashboard rather than a
messaging service. Yeah, and people get you know, like the fundamental thing is channels and when I think about our transition, like I said, there's a lot going on all of a sudden were not in the office or not altogether and we can have we use zoom like many others. It's a great replacement for in-person meetings, and it's kind of obvious why you would need it, but there's many work streams happening and I wanted to check in on you know, there's an executive.
Of engineering we're trying to hire. I wanted to check in on the offer. So I go to the hiring channel for that we have for all of our large customers accounts channels that can go see what's going on there. But basically get into a position where people know where to ask the question or to give the update or or ketchup is essential.
How do you hide how if you have this, you know, he's surging usage and surgeon everything. How do you then hire people because you're going to you're going to have to be a net higher and here in this.
As before
we had a staff meeting a couple of hours ago. And this was the big topic you'd upset on the one hand. It's still trying to project out for the year. We still have to have a plan. I think it's unlikely that we'll be able to hit our original hiring plan just because of all the disruption which is one of the things when we decided we're going to work from home or canceling all these events were closing our executive briefing centers. Our customers can't come in no sales people are traveling but also we had hundreds of in-person meetings with candidates already on the books, you know, like the authorities
Happened suddenly all those have to be rescheduled that candidates have to decide do I first of all I want to change jobs in the middle of this craziness. Do I want to accept an offer from a company when I haven't actually met him that people physically and person do we want to extend an offer to these people. So there's a whole bunch of factors. I think that will affect that board. Definitely. We're still hiring with the question is like are we going to be able to and certainly like any executive recruiting? I think it's impossible at this point just because every executive I know is
24/7 like just
focused. Yes exactly right for their business. All right, we're talking with Stewart Butterfield. He is the CEO of slack Stewart was the first person I ever had on Rico decode and will not be the last time he comes on but we're going to take a quick break and we're to talk about what it's like when you when you talk to me initially. I think the company was in public and sort of the Journey of slack since then and where it's going when we get back after this.
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We're back with Stewart Butterfield. The CEO was flag. We're talking about sort of the rise in usage of slack another at home work at home tools software tools that have been growing up. Let's talk about slack in general. You guys just did a redesign and now it's the redesign and when we first talked many years ago, it was pre public talk a little bit about how that's gone for you. I mean, it's been up and down the stocks have been up and down. It's been a hard journey for a lot of startups. So go
public. Yeah. I think I mean five years ago we had barely
Gotten started. So I've been see we first what we first publicly available six years and one month ago. So everything has happened over that period I think you probably want to talk to you or do you want we did record of the last one? Maybe we had 50 employees or a hundred or something
like that all but a phenomena you were a
phenomenon. Yeah. It was growing very quickly now we're over at over 2000 and most things that have happened happened since then, you know, we probably had
A thousand customers now there's a hundred and ten thousand. So even though that's relatively recent, you know in the grand scheme of History. It's a long time for technology. It's a long time for Tech debt to accumulate and for product changes to kind of layer in one after another and I think we got to a point I would say a few months ago where we sat down with a with a bunch of the product team and we very painfully over the course of a whole hour walk through what it was like to get started.
The slack for someone brand-new today and it's it was embarrassing in my description so much friction, but the one of the biggest things was you get to the end of the process. So let's say you sign up for slack. You haven't invited anyone yet. Now you're in the slack UI and over the years. We add features everyone who worked on whatever feature X once the button for their feature prominent and visible. So you end up in this UI where like the whole periphery of the window is like 53 inscrutable.
All different icons. Yes, and basically none of them work when you first get started like there are no threads to catch up on there are no pinned items this channel. There's no messages to search. There's no one in the team directory. But you know, the whole thing is like this Minefield of you you if you bring up the you get the courage to press a button that you don't understand what it does you essentially get an error message. So it was a miracle to some extent that people were getting started at all. And the redesign was a Mythic was barf.
Fourth or fifth aborted attempt to do it and one of those projects that this is a I love making software and this is kind of what I live for but one of those projects where you go down One path and then you change your mind and come back and you retread the same ground over and over again, and it's very frustrating and there's lots of arguments and then eventually you kind of push through to the other side and we ended up with something that was really good. So I think it'll be great for existing users. I think you'll hopefully enjoy it other people around
vocs and other customers broadly, but I think it'll be especially a big Improvement for people who are brand new
to select. So in what way what was the conceptual as they sort of onboarding or making it Point full to you
onboarding well, so a lot of things I use this these this example of the of the Uber app when thinking about it where they change it around all the time and sometimes ubereats is more prominent and stuff like that. But essentially the UI is
Where would you like to go? There's a button you can push the type in an address and then other like there's a menu that has everything else behind it and people hate to be made to feel stupid and software very often gives you these inscrutable choices and you have no idea what you're doing and now you're hesitant and that's a pretty clear choice like tell me where you want to go or anything else and anything else includes change your payment method or get help or lost items. And so the challenge was like
that's obviously not going to work for slack. Let's just a little bit more complicated than that. But what if we just had the message and put the messages you're looking at the channel list and then other and start from that and build it up so that the end result is a lot of the complexity kind of recedes back behind menus. There's a kind of a rethink of which things belong together and how you group them the information hierarchy, so it's much cleaner and simpler. There's just literally fewer buttons to push.
Makes it easier for you to make any given choice for new users. That's obviously better but there's a double benefit. So first of all, it's simpler, but the other benefit is we can progressively reveal parts of the UI. We can hold things back until you actually need them. And then if we introduce you to you just in time then suddenly There's an opportunity for you to actually figure out what that thing is for.
So SHOT show them every bit of the menu right away exactly as it's the user experience Journey that you're trying to to come on exactly. Yeah, so and the mobile experience
Audience has
changed. Yeah by the time I use
slack mostly on mobile. It's really interesting. A lot of people use desktop more but I own
I'm actually with you I'd say I'm probably like 70% Bobo 30% desktop or something like that that that change is coming. It's a couple weeks behind it will roll out to people a couple of weeks after but yes, that's a pretty profound difference to and definitely one of the things that's happened in the last five years between 2015 and 2020 is the shift not just in
Discretionary time to mobile devices, but just work time in general now. I I still have to sit at a desk or sit in meeting rooms for a large part of the day. So it's not like I'm constantly running from one place to another but mobiles are just an increasingly important part of people's Computing experiences and I think because we started back in 2014 really we've had to rethink the shift in emphasis and how we get there. What about
the shit happens towards what productivity is because one of the
Things you're trying to do is replace things people are already using you know, as we went from you don't remember this but mimeographs to copy machines to you know, how we got things together. I'm turning 47 tomorrow. We have a history your own your old. I forgot you're the old entrepreneur. You're one of the few. We'll talk about that in a second. But what do you imagine is happen in this because there's been tons of companies created, you know, either they're like you or they are in areas that are perfect, you know peripherally involved in some of them do plug into Slack.
You're sort of the I would say you're the dashboard that other people tend to operate like workday and others what has changed in the productivity space in terms of innovation from your perspective. That's business productivity software. I'm talking.
Yeah, so I'll an enormous amount and then also not very much and it kind of depends, you know, the book high output management of ever heard of that
now, you know,
it's well, I don't know if you insist it's kind of a it's written by Andy Grove.
So CEO of Intel back in the
day. Yes. I read the paranoid one. But yeah, and this one is more of a kind of
a Bible of product managers and and some management people in Silicon Valley. So I don't know if that's not you. Maybe it's not a
good picture made. I'm going to have to read it now,
but the interesting thing is that the beginning he wrote it originally, I guess in the mid 80s or so and then there's this this preface that he wrote for a second edition that essentially says like hey everything.
but to tell you in this book is totally true except let me tell you about this crazy new thing called email and at that point he makes so until probably most people know that brief story but originally made computer memory not not CPUs and they competed against all the Japanese memory manufacturers and got to the point where they're just getting their butt kicked and they would get yeah, they were you know on the verge of going out of business, but he makes this point which I thought was really fascinating that the Japanese
teams tended to sit at one long table with the manager and the middle. So everyone overheard every conversation. Everyone was kind of in the loop and knew what was going on. Meanwhile, I didn't tell HQ everyone had their own office with the door closed and if they wanted to communicate with one another it was they called a meeting or they sent a memo and the memo was xeroxed or you know, maybe earlier on mimeographed and and like taking a paper and put it into a little tube and stuffing it in the cubby hole or interoffice Mail envelopes and stuff. Yeah. So an email came out
For the Americans was like holy smokes. This is a billion times better than what we were using and it got instant adoption for the Japanese teams at that time. They saw email. They're like, yeah, you know, we don't that doesn't strike us as valuable. And this is you know, now very old memory for me of what does that in the books? I might be characterized in this in accurately, but that was a huge step forward for Intel like suddenly they ramped up the way that they communicate and communication is the most fundamental thing that people do inside of organizations you look at
at how people spend their time if you're a knowledge worker and this may or may not be timid I think is probably more true for you at the time of being an independent business operator. Yeah, and maybe less true now, I don't know but people spend more than 50% of the time just on basic acts of internal communication and coordination.
Yeah. So yeah, I know I do a lot. I can minimize them. I wrote a column the time recently hasn't published yet that says, you know, I'd rather not meet I'm set as the original social distance, sir, especially at work because I don't like going into the office and like I'd rather not have
Meeting I'd rather send you an email. In fact, I'd rather send you a text. In fact, I want the no, I'd rather have a call and then I'd say no, I'd rather send you an e-mail. Actually. I'd like to text actually I'd have to one more text like I'd like to get down to yes. No or just upload the photo, right? Exactly. Yeah, but gift so whether it's
text email in person phone call slack, whatever. There's this extraordinary effort that people put into communication across companies and and you got to look like all across all the different roles people do the
Turley business reviews and the the roadmap planning sessions and the daily stand-up meetings and the status reports people spend an incredible amount of time making slide presentations and then they're going to show the slides in a meeting and the whole point of the medians is get people up to date on what's going on. So I don't have evidence for this. My contention is that that's more than 50% for for knowledge workers if you average it out and it's not that stuff is unimportant. I think it's critically important because keeping people together and aligned and coordinated is you know,
Hardest challenge for a large organization if you can get any leverage on that, I think it's disproportionately impactful relative to anything else you could do like there's no no one's going to type stuff faster in a way that's going to have a real impact on their actual productivity. I think the tools do continue to get better and software gets better. Our computers get faster. The screens are nicer. The phones are obviously much easier to use and there's improvements all over the place but fundamentally,
The bottleneck for humans working together is going to be how well they communicate how well aligned they are and so I think the biggest step forward in productivity typically comes from a change in in how you communicate that obviously slack is a big part of that or can be a big part of that for organizations, but there's other stuff too. Like when we started the work from home transition, it was like, all right. This is going to be disruptive. Let's use it as an opportunity to kind of rethink our somewhat.
Of control meeting culture and just are their meetings that were you know, the whole point of them is to get a decision. Let's just escalate and get the decision without having to have them sure. Let's see if we can make them half the time and actually the first All Hands meeting we had after that normally they're an hour-long. They're a little bit of a heavier lift people have slides is kind of being formal presentations people do rehearsals and stuff. This one was 23 minutes long. It was a bunch of exact speaking for 30 to 90 seconds about what's most important for them and their teams, right?
Right. Now what's going on? There's a lot of expression of gratitude and appreciation for people stepping up and it was obviously much more informal. So Julie legal our head of marketing is didn't skip a beat. She's doing her update and she has one daughter suddenly crawl into her lap and another daughter pop up behind her on the on the camera and the audience went wild like people were screenshotting that inside the company and saying yeah, thank you Julie for normalizing this because people are always worried about their kids.
Kids. Well, nobody wants what happened to that guy. Although everybody wants what happened to that guy remember? That kid
is amazing. Yeah. I think if you had that that daughter probably want to show her off but some just that didn't mean he was 22 minutes long. It's like great. You know, what maybe why don't we done and done? Yeah, let's do all of our all hands like that the radical sit still for an hour and everyone change their their locations in order to do it. So enough of those kinds of changes can be absolutely transformative and you think about the most
Kind of stuck organizations that the places that are at the or the hardest to get things done. And I remember your let's say I don't know participation in Yahoo's Evolution fact in 2000 2004 2005 2006. That's peanut butter now. Yeah, all that era man. That was like it was very difficult to get anything done. And I don't know it wasn't the worst of it either and there's no companies that there's people come he's going to business all the time because it becomes more or less impossible for them to coordinate.
People effectively in foil that you know, I don't like this term very much but deploy all that human capital towards the ends that are going to be most productive for
the yeah. Yeah. It's interesting because I was just talking to someone today. I'm thinking of doing something and I've changed my mind about doing something and I they said what change your mind I said, I think you can make things now, I think before you spent a lot of time talking about making things like yeah, I think you actually can actually get things done and I did believe that two years ago, which is interesting. So I want to finish up this section. So what is it?
Been in terms of what you've done where you're looking towards. Are you looking towards things like AR and VR? What's the what's the thing if you could say what slack is sort of the most fast forward thing you're working on what would that be?
So let much an AR and VR for us and maybe they'll be
application videos. You have some video. It's got
some video but I think the thing
but not heavy. It's not pity its text Heavy. Yeah, I mean no. No, it's not
what we do the the kind of voice and video calling these people who do like I said, we're at
To resume. So there's people who just do it better than us, but there's a class of things that I don't think anyone does better than us. But the fact if we're asking about is a kind of like future interesting technology things. I think a lot of the opportunities are around. What can you learn about your own organization and and how well you communicate or don't based on an analysis of what people are actually doing and we get this incredible signal so you when I finish this call I might pick up my phone.
And I'll have little things little red notification bubbles for because a bunch of people send me direct messages and they'll be five of them and I'll just tautologically I choose one of them first and then later on they'll be three and I choose one and it'll be 11 and I choose one over time. It's pretty easy for slack to tell who's the most important person to you. Like who if you have an unread message from person X who's the person that you're always going to look at first? Hmm. We get a good idea of the overlap and channel membership who has Authority in different areas, and we've already released in features along these
Like a people search which helps you find people who are experts and given topics. So sometimes you're looking for a document. I know this document exists. I just want to find it again other times you're looking to learn about a topic and inside of companies the bigger they get the more time people spend trying to find the expert or who's allowed to make decisions about or who do I go to ask about you know, whatever and that think that is increasingly valuable the bigger we get
the further stages of that for me are part about you know, visualizations you can make about the internal networks. But really the highest warm is these organizational insights that can I'll give you one
example, your data will show where that your
data. Yeah. I'll give you one example imagine, you know, you put in a search term you get search results. Sometimes that's just what you want you at the list of things that match it. Imagine if you put in a search term and what you get back is a heat map of sentiment differentials.
Among different populations of the companies. I put in the name of for our new product and the marketers are love it super happy and the sales people are very pessimistic very very negative on this thing. You know that I don't know exactly what that means. But it's definitely something that I would want to dig into and selected a position to be the custodian on behalf of our customers for a huge amount of data. And what can we do with that to help them improve the way that they communicate improve the way that they operate kind of uncover and
Correct
dysfunction syndrome or more of this you're taking temperature and saying more this less this more this this works. This doesn't exactly. Yeah, so it's kind of polling by walk like a sort of paths are made by walking. It's an old poem the idea of that people walk a certain way. And now we're going to tell you how they're walking in a software sense. Alright, we're here it was Stewart Butterfield. He's the CEO of slack. We're talking about his product and the company and its variants are having right now providing a product. That's very helpful to people working.
At home and during the coronavirus crisis when we get back when you talk about tech in general and how he looks at the industry now and where he thinks it's go Silicon Valley is going in Innovation is going in the future. We'll be back after this. We're living through historic times. It's hard to understand what's going on in Washington across the country and a whirlwind news cycle often leaves us with more questions than answers stay tuned with preet is a podcast that makes sense of what's happening is about issues of Justice power law and democracy. The host is preet bharara.
Rahul of the southern district of New York the most storied Federal prosecutor's office in the country with a signature common with Crete answers questions and speaks to people shaping the industry previous guests include Pete Buddha. Judge Sally Yates and Bryan Stevenson listen now to stay tuned with preet wherever you get your podcasts.
We're here with Stewart Butterfield the CEO of slag. We talked about a range of things including where slack is going and how they're responding to The Chronic virus crisis, but it was talking about brought her Silicon Valley and Innovation. You've started a number of companies liquor and a lot of them out of problems. Like, you know, both Flicker and slack is many people know we're started out of mistakes that then you turned into advantages essentially one of the things that that talks about is the ability to innovate quickly and to shift quickly talk a little bit.
About how you look at the broad Silicon Valley Market right now and and where Innovation is a lot of people are worried about the large companies. You did not sell your company. I'm sure I know you've had millions of offers to do so much bigger companies. One of the things the FTC is looking in is purchases of companies like yours when they were at a small thing talk a little bit about this how you view it because many think it's one of the most serious issues happening is the lack of ability to innovate constantly.
Yeah. It's it's very interesting.
I think on the consumer side, so if you look at Google Facebook Amazon as well, my in fact, this is not Insider information. My impression from the outside is it's gonna be tough for them to buy anything of any significance, you know, maybe like a little eight-person startup or the have some technology that they like or they want to buy the team but it's impossible for me to imagine a significant acquisition of another consumer service by Google or Facebook at this time being a part of it is maybe the political environment and
I mean, you know Democrats and Republicans are just made of the impression that people have of the industry but also their they are big. I mean they are I don't take their monopolistic in the sense that standard oil was but they have incredible Market power and it is difficult for from new companies to come up but on the other hand, you know, you look back 2004 like when I'm trying to remember what year everything was but let's say what I joined Yahoo.
After you who acquired Flickr which I believe was the end of 2004 early 2005 over that Christmas break. Yeah, it was bigger than Google in terms of Revenue. They were like double or triple or something like
that by the time you would talk to Google you would talk
to. Oh, yeah inside information there. But by the time I left Google was, you know, four times bigger something like that and growing so much more quickly and I think yeah who was one of the survivors?
Hours of the first crash eBay and Amazon and Yahoo, and a couple of other companies and it seemed like your 2004 maybe even in 2005 kind of Unstoppable Behemoth. Terry Semel the best paid CEO in America and a couple years later that just wasn't the case anyone there's definitely companies have remained strong over a longer period but that's tough life comes at you pretty fast and the companies that seem Unstoppable juggernauts one year can a couple years later that you know, the world can completely change.
JH but it hasn't for them. I mean they've only gotten stronger and a lot of ways and I think they've sort of sand especially in a crisis like this. I think there's a real culling of the herd here and the strong ones that have the Deep Pockets to stay in business or really going to do a lot better. They can wait it out, you know, and some will benefit like Amazon with the delivery right now no matter what challenges they faced with coronavirus delivery and this net though will come out stronger people get more used to delivery. Yeah, there's upside for them. Unfortunately in this as it is with your company and when zoom and others because people get used to trying
Nothing, but in general these big companies sort of have never been more powerful and it seems like there's nothing that will not keep them
powerful. Yeah going forward. Is it so
mm. You're a smaller player and they're all now in your space. They're all up in your grill right. Now. You have Microsoft you got covid like everybody's now up in your girl of what you're doing all the big companies. How do you deal with that as a smaller company?
Effectively, I
mean you're like Spotify, you know, but yeah, he's still worried about being a hose. And please don't worry about
competition. You know, the one of the things that I think may be a harder but not difficult but like it might take a little bit more time for people to wrap their heads around internally is we say we should always do whatever is the best interest of the customer so blah blah blah. Everyone says customer Centric but I mean like we should never be in a position where we would be embarrassed if a customer saw
How we were spending our time you should always do what a rational perfectly well informed customer would want us to be doing and that's never going to be spitting competitors. Right? So there's it doesn't really matter what Microsoft does if what was important to customers was this Improvement to Performance and this new feature and this compliance regulatory feature security or something like that. Then that's what we should do. And it doesn't matter what a Microsoft does and that can be tougher for people to wrap their head around as opposed to
The reacting they did X we better do y and talked about that? This is now kind of maybe to quaint of a phrase but you would never want to cut off your customers nose to spite your competitors face like you just right. It'll be really foolish thing to do. And the tough thing is you are the picture of Microsoft in 1977 in Albuquerque. I'm sure you've seen it, you know, there's like 12 of them and they're all happy and stuff. Yeah.
And like five years later, IBM didn't know it yet. But the biggest and most valuable company in the world was about to get kind of suckered by Microsoft but fast forward to 2008 girl starts gaining popularity search looks like it's a real business that Overture blossomed patents are settled and AdSense is going and you know at that time Microsoft had 90, whatever percent market share for Windows, ninety, whatever percent market share for Internet Explorer they had
Ready bought Hotmail. They had MSN. They had, you know hundreds of times more Engineers. They had hundreds of times where capital and they said hey, we should get into that. I mean like they literally controlled everyone's access to the internet. Look a Stranglehold and yet Google just got away and you might say that Google was the special case because they're you know, really really smart. They're special kinds of geniuses, but then fast forward another seven years and Google+ first first time they've ever promote anything on the home page if you are YouTube user you got to have
Google+ account to comment promoted in Gmail just like all-out war on Facebook and Facebook was like didn't matter because nothing happened, right? They had a rough patches here and there but it wasn't because of Google so much so that can happen. You know, like if you're the smaller startup that has a real focus and real traction with customers. I think you have some advantages against the large incumbent that has multiple lines of business because it's just it's harder for them to focus. It doesn't mean they shouldn't take him competition seriously, right?
But we had so there's a little bit of nuance there and
morally it would you like would you oh go ahead and say
like, you know at one point when I kind of made those comparisons I would go on and this is like three or four years ago. I go on to say and then look at Facebook going after Snapchat, but then they'd kind of effectively did go after Snapchat although Snapchat still exist. And by the way
still oh, there's my
receptionist and IBM still exist. There's there's new kind of layers that come up but more recently. I guess it would be Tech
talk right Tick-Tock or or in the case, you know, there's
There's lots of different there's Spotify which continues to hold on but you know, it's harder to be IU and Spotify sort of remind me of each other in that regard is that you're winning through some sort of innovative Innovation or something else that you have what you're close to the ground with customers, but would you like some help from the government on this to you feel that? These companies are have too much power. Would you have you been talking to legislators about
don't know I've been I've been I'd like to have every unfair advantage in the world. I don't this one is tougher because I think it'd be tough.
To have an antitrust case against Microsoft teams at this point because there are many people using it but they're all of the hundred million users of Skype for business are being forced migrated to teams. So people are using it for voice and video calling which just isn't what slack does so I don't think it's gonna show up that they have a monopoly there. I think they do have some unfair advantages and the fact that they have hundreds of millions of users of Office 365 and they give this away for free and and all that.
But especially in the u.s. It's there's no effective mechanism for remediating that kind of stuff. Anyway, like what would happen is you go to the regulators and and then if they think you have a case, they'll go and put it before Congress and then Congress will deliberate and if they say yes, there's a problem here. We need to rectify it. Then they make some kind of judgment immediately goes into appeal and now you have several more years and like, you know, yeah now you're talking song. It's gonna be 2026 or something like that by the time everything happened and the
By that point who
cares? What kind of Regulation should there be on Tech and I've talked to this to justice department. People said it's just moving so slowly and they're moving so quickly. We don't know if we can get the mean these are top justice department people. They're like these cases are not like the old days and even the Microsoft case didn't got appealed several parts of it and it you know, everyone thinks they lost but I'm like did they did they actually lose and so one of the things is what should happen. What do you think the key parts? That should be regulated as it privacy. Is it anti-hacking?
Is it stuff around you know teens and depression addictiveness device use wouldn't let you know if I have to choose
if the only choice in the world is at T regulation or Pro regulation. I would say I'm Pro regulation just because it's great but there's not as much lead paint that there used to be and yeah kind of environmental controls and a bunch of other stuff for the areas that are moving the fastest. I think they're the toughest to regulate because you just don't know what the impact is going to
to be and often by the time things are enacted. It's too late. So I have some some sympathy for the people who inside the doj and not elsewhere didn't All The Regulators who are genuinely good hard-working people who are concerned about the country and the citizens and they're trying to do the best job that they can so they have to be really thoughtful about it.
Some of the regulations that we've seen in the last couple years have been less effective than others. You know, I think GDP are well-intentioned but kind of ended up being a little a Preposterous and you know, like there's a lot of media organizations in the u.s. That were just like we can't do this. So our website is just not accessible for Europeans anymore. We were able to do it but it was a giant pain. There's a huge amount of energy and effort that went into GDP our compliance for us and I think it's completely irrelevant for slack like it wasn't it didn't really matter.
There wasn't we got kind of caught up in the
Dragnet. Oh, you're not using data that yes, you know, that's not how your advantage in your
know. But but for Google and Facebook, I think it actually kind of entrenched them further because smaller competitors are just not going to be able to implement into to Hew to those those regulations so I don't mean to pick on on that because I you know, I understand the intention behind it, but it's a good example of a well-intentioned approach to regulation that has unintended consequences. I think me and probably backfires and some of it is
is there's some subtle ones right? Like the right to be forgotten is one that I've always found really interesting. I don't have a clear opinion to be totally candid either way because there are unfair things that can get published online and you should be able to get rid of them on the other hand should cereal con men or swindlers be able to wipe all their misdeeds off the internet and then go on to Swindle other people and that's just
Trump's. Oh, yeah. Sorry,
why wide open?
Wide open? Yeah, so there's there's some there's some really tough
ones. I remember trying to be hand-wavy about it. I genuine
to you. Is there anything you think needs to be regular because there are no regulations on the internet really there aren't there nothing's been regulated. I mean if you could pick one that was here comes the cat. Is there anything you think needs to be regulated or that should be if you had to pick one or using these fines just find them when they violate data practices because every issue is different whether it's Facebook / using
R data or apple not giving Advantage. So perhaps the correct apps for Google, you know having a monopoly on the search business there hasn't been a search business created in a hundred fifty years, since it started same thing with social media snap was the last social media company, you know, they own it speaking of you. They own photo now, there's nobody but Google and apple and photo right? That's it. Yeah essentially
so it's yeah, I mean, I don't I can't say that. I agree that there's no regulation because there's a
There's a lot of different regulations and and they're continually coming to the fact that you just earlier this year. The California privacy regulations came into effect. And because California is such an important Market, they're effectively National or even International regulations. And I think generally the Privacy protection ones the data breach notification ones. Those are actually important and probably have close to the intended effect. I think there's also ones that I actually am not expert on.
Enough to know whether we'd class. These is just laws versus regulations and some of it is voluntary compliance, but the screening of image and video uploads for child exploitation and the cooperation that a lot of organizations have with the national Center for missing and exploited children. I think you know, that's that's an important area for antitrust. I just don't know. I mean when the political conversation was very different four months ago when there was still the Democratic primaries going on and
And people were like, oh, oh my gosh. What's Elizabeth Warren going to do if she gets right gets elected.
There was a freak fit in Silicon Valley
was yeah, but some of the like I can imagine splitting Apart YouTube and Google it's impossible for me to imagine how you split apart Google just like web search in a way.
That's what I can't have products and you could do Amazon very easily. You're like, you can't make stuff at be the marketplace and sell it on the market.
Yeah, there's definitely there's definitely examples where you could break it up. I don't know if those would be met good.
Or bad there's some you know, I don't think wouldn't be some kind of tragedy for the world if Instagram and the main Facebook site where were separated like this and really it's not going to hurt anyone and I don't
think actually shareholders would do better with two companies. Yeah in a weird way, you know, it's all right. So in terms of where it's going you don't do you feel like there's going to be that when people did have that sort of Silicon Valley freak out over Elizabeth Warren and I think Mark called it the existential crisis threat to I was like now you're going to say a different
Probably do you think that Silicon Valley is very nervous about it now or there hasn't been any Democrats or Republicans coming together on this
yet. I mean that current situation is just completely overwhelmed every other bit of conversation and and that that's as it should be but I think right now I might mean try not to be overtly political in this but I voted for word in the primary. I don't have a problem with it and I think that a little bit of that I put down into posturing in the in the
primary but also there's just practical ramifications that are really difficult but I don't know at this point. No one cares. I feel like even the conversation about who's going to be the Democratic nominee is almost yeah fine. Whoever it is great. Let's not let's not concern ourselves with that because you just don't have no idea how this is going to roll out, you know, like every day. I do have the responsibility of being a public company CEO and I have a fiduciary and they take all that very seriously and at the same time I'm really worried about our employees the
The community I ordered some food from one of my favorite Mediterranean restaurants last night and and the guy thank you because if they don't normally do delivery, but they're doing delivery now the guy fact me for the support and it's like every time I've ever driven past like a mom and pop store or restaurant that's gone out of business. It's always upsetting because you thinking is because like as someone's life work the probably bankrupt just it ruins them and when you think about the Cascade of that never
I mean also people dying of a respiratory infection mean that's that's obviously a big deal, but the knock-on effect of this is going to be incredibly consequential and that's definitely the what's top of mind right now.
So I want to finish up then our last question about how do we keep being Innovative as a country? I mean one of the things many people have felt there was an innovation deficit to start with recently. How do we stay Innovative? How do we keep investing in sort of the next thing?
If you were starting another company, what would it be? Because you've started got you've started
several. Yeah. So then today it might be a different answer than it would have been a couple months ago. But I've always liked the expression never waste a crisis, you know, and that's not not to belittle or not. Take the crisis seriously, but one of things I found really interesting is Bernard arnault saying to the lvmh companies that make perfumes. All right, everyone you're making alcohol-based sanitizer now.
The I was I was in a conversation with Twitter with a group in Germany that's doing this hackathon, but also another group in Ireland that's an open-source ventilator project and people try to get ventilators out and there's just like sudden surge of creativity and technological innovation that is you know, aimed at the public good and people feel a real motivation and it's a totally different thing just have like a hackathon when times are good. Yeah people everyone's fat and happy and the
yeah what dating absolutely
exactly and suddenly it's like
Wow, this this matters, you know, having up-to-date data matters, the fabrication of new testing Technologies The Rush that people have got into you know, like startups that were in biotech and Pharma already getting their their kids into market. So
there's dealing with disinformation misinformation. This is you know is interesting Zuckerberg had a quote. He's like, well this matter is I'm like it all matters actually and I don't know there's always matter, you know, it does and of course, it's very clear here why it does because people actually die.
But they died another way, you know, I mean they died before you just didn't see it in such a stark really so it's whatever it is. Take it take what you're doing.
Seriously. Yeah, I think it's your and that people feel like they have a purpose and that matters and so they're motivated and they're inspired and that you know, a lot of technical skills that have accumulated over the last couple decades the interesting advances in technology are suddenly like what can we do if this for the good of humanity and that's that's really nice to see people have a mission. You know, how can they help each other
right? So the last question I asked you on the last
When we did was what would you do if you weren't running slack? And you said this one? I'm going to stay at I'm going to ask you that question again and final question. If you weren't running slack, what would be the startup Stewart Butterfield with you?
It's so hard to imagine because I do like I'd like to do this for the next 25 years of I get to stay on doing it. I don't know if I would do another tech startup right now or not. I'm getting a little older much if I have the juice to start another one.
A restaurant maybe you know, but at the same time, I'm sure that there's real Innovations. I think there's a lot of stuff that's still to be done in the application of all this great technology. We have to financial services, but particularly to services for the front unbanked, you know, you hear about fast food employees getting paid in ATM cards that have a 75 cent charge for any usage and suddenly you you getting paid.
Five dollars and thirty cents an hour and now you're dinged every time you want to buy food. I think that's a big area. But as I've gotten older and I think you know, obviously in a better position financially, I must motivated to do startups and more motivated around some of the philanthropic causes and more recently. I think Criminal Justice Reform and obviously this is a going to be a critical time for a country that's but five percent of its population in jail or whatever. The number is at this point because it started
A little that's a little high. I just realized sub 1 percent but so millions and millions of people in prison who are going to be susceptible to this disease and many of them have to pay for their own soap. So yeah, the the I feel like there's a set of priorities in areas where I would be investing my time and energy that aren't started a new business.
All right Stuart. I really appreciate you coming on and thank you so much for coming on my first one and now this one good luck with getting everything that you're doing there with the
Your company is I think it's one of the you know, one of the critical companies to working well going forward in the next couple of months when we get through this we certainly will that people will be able to do. So. Anyway, thank you for coming on the show you so much and hey congratulations on 500 episodes. That's 500 Maura Stewart 500 more. You can follow me on Twitter at Kara Swisher. My executive producer is Erica America. My producer is Eric Johnson had hey esj Stewart. Where can people find you online?
I am
just Stewart Ste. Warta on Twitter and the same thing on Instagram.
Yeah, you're actually very funny tweet her not as funny as the Aaron levie, but your guys I got to stay behind. Yeah, if you liked this episode, we really appreciate if you share it with a friend and make sure to check out our other podcasts pivot reset recode media and Land of the Giants and search for them in your podcasting app of choice or tap on the link in the show notes. Thanks also to our editor Joel Robbie. Thanks for listening to this episode of Rico decode. I'll be back here on Friday tune in them.
