Businessweek Extra - Stewart Butterfield (Podcast)

We're doing well, I would say overall. I mean, so there's a couple of things that threads to separate here. Um. Demand on the business is great, UM, and it's you know, it's very encouraging and energizing and kind of UM. Certainly in the first couple of weeks of March was like a big shot of adrenaline for the team. On the other hand, UM, we have a lot of customers, you know, more or less every country in the world, there's a hundred ten thousand of them. Some of them are are

really struggling. And I think also when you look at employees, it can be difficult to make this transition. Not so much the distributed work or working from home or remote work stuff. UM, but the uncertainty, you know that, the fear about the economic impact, the health impacts. UM. Also just the practical reality of being, um, suddenly the primary caretaker through the day and the teacher of your three year old and five year old if you have young kids at home. Right. So it's just it's kind of

all of the above. It's everything all about. Yeah, it's interesting, Stuart. I mean, so much of this and this is dealt within the story. And I know you've talked about this a little bit. I mean some of what we are doing now in many ways, you guys anticipated, like in terms of how we need to communicate, what's natural in terms of communication, and and yet still I feel like we're all being tested and you know, both as humans and the technology that we use to to their to

their very limits. What has surprised in terms of sort of synthesizing or maybe bringing those two threads to get

threads together about our human behavior and technology. UM, those are exactly that you treads that what's really been interesting is, UM, we wrote in our S one, the document you file on your path to becoming a public about the kind of the reason we thought we existed and our our role in the world, and that was really to help organization that achieve greater degree of agility, because in you we didn't have a global pandemic in mind when we wrote this, but we're talking about just the um ever

quickening pace of technological change and the changes that has consumer behavior, which can cause changes in competitive behavior, or which can cause macroeconomic changes. And the common challenge to all organizations is the ability to kind of maintain alignment in the face of changing conditions and to be responsive enough. So this is, you know, again not the example that we had in mind, but it's a great frustration of that.

And um, I kind of it's not funny, I guess, but it's it's really interesting to me to think back over the last twenty five years and how many large organizations had um set up with consultants or had their internal strategy teams come up with, you know, here's our plan for a talent community, here's what a world of work from home would look like, you know, maybe every eighteen months or every couple of years over the last

twenty five years. And if you looked at those plans, they would say we would be an eighteen month period of pre planning and a multiple year rollout. No one if they were asked three months ago what it said, Yeah, we can, we can transition our person company to be working from all right, but when something is absolutely required, what what had appeared to be impossible is suddenly possible.

And I think what's really interesting about that is I think it will cause some second order and third order and even fourth order effects of questioning UM, the assumptions that people had about what else was possible, what else was limiting their organization UM, and particularly for those UM companies or organizations that have been more resistant to digital transformation generally, including the demonstration that hey they can do it UM and you know, be uh there there's real benefits.

I mean, in this case, the benefit is survival, but but there's other opportunities that I bet we can discover if we are have a little bit more of an open minded approction stuff. Well, because Stewart and and it's interesting to hear you say that, because part of what I think we're adjusting to is this notion of you can sort of do anything for a week or two.

But you know, for me, I'm on week six at this point, and you can't sort of like fake it or kind of pull it all together with like chicken wire and duct tape once you're into week six, like you sort of got to figure it out because you've got to run an organization, which I guess leads me to my next question. We only got about a minute left and then we're gonna continue the conversation a few minut It's like, what sticks here, you know, in terms

of our our behavior and our expectation. Yeah, it's a great question. And um, in some respects too soon to say, I think. Um. In other respects though, UM, I think that, you know, an open mindedness and increased not reliance on,

but increased willingness to take advantage of software solutions. And of course, you know, one of a software company solve like expecting to say that, but you know, But what I mean is software and technology generally have automated away those things that are most amenable to automation, which tend to be those things which are most repetitive, kind of mind numbing um or areas where computers are just plainly better than people. Computers are better remembrance stuff, they're better

doing arithmetic very quickly. Um, and that frees up humans to do those things that humans are uniquely well qualified to, things that require intelligence and creativity, and so um, well, there's always some resistance to to change in the backdrop

of this kind of incredible, global, unprecedented change. Um. The CEO, as I've been talking to you, suddenly realize, well, geez, that reorder that I had been planning for the last six months but I was apprehensive about implementing, Maybe now was a good time, you know, maybe that was a good time to make some of the changes that would have seemed more difficult and normal ends and suddenly it's

been easy by comparison. Right. Well, we're here with the Stewart Butterfield co founder, chief executive officer Slack on the phone from San Francisco. Sister. One thing I was curious about, because you know, we heard from Netflix last night and we know they've had to jump into man with everybody streaming you guys, I'd love to get an idea of how how many more people are on your platform and

the kind of growth you've seen. And I know, from what I understand from reading, your attention rate tends to be well over I'm curious how much of that you expect to stay with you on the other side of the virus. Unfortunately, got to be a little bit careful because we're in our quiet period of leading up to earning. Oh no, no problem. We have made some public statements there UM and you know, one of the things we

saw was a huge increase in net new customers. So as of last report, we had UM a hundred and ten thousand customers around the world. Obviously there's you know, five hundred and fortune five hundreds, so at least a hundred nine thousand, five hundred. These are not fortunate five hunding companies, their small businesses UM and we saw surge in Japan and South Korea earlier, followed by Italy and then UM the rest of Western Europe UM and then

the US. So obviously kind of coincident with the spread of the virus and the spread of concerns around it. We also saw an enormous increase in utilization among our gust and users, so UM around increase and message ascenter user per day. We saw expansion among existing customers. But you know, looking a little bit more forward, we try to be really pragmatic. We had to do our earnings on March eleven. I think it was maybe March to

all it was. It was the day, you know, the kind of the morning after the Tom Hanks NBA Trump travel band kind that kind of moment that really that perfect storm where everybody realized, oh boy, this is happening. Yeah, yeah, exactly. I mean, and the numbers were so small then I feel like we were so naive, but it did shift the psychology pretty dramatically, and we're still we're still concerned long run about the macro impact here and what that's going to mean in it. So some are easy to tell.

The travel and hospitality obviously is very severely impacted. But if you know, if so many people being out of work for two weeks might not be that big of a challenge, um, being out of work for two months or longer can be a really significant challenge. And now we're talking about tens of millions of people. So we don't want to you know, certainly seems a little coolish to be excited about the business prospects in the overall environment.

We also want to temper the enthusiasm there um, just because of the uncertaintyment what we're going to see in the in the back of the year. Well that that certainly echoes what we heard from Netflix to Carol. You know, Jason and I talked with Meg Whitman m on the Lonch of Quimby, and you know, she said to us, here she is, she's worked at her worked at the office for like forty plus years, and and she's like,

I'm working at home and I'm getting stuff done. And she you know, made her maybe rethink about this whole idea of working from home. Has the notion of a workplace changed forever in your view? I think so it's a little too reallysed to tell again, um, but I don't know how it's changed. You know, there's definitely it's a conversation that we're having because we had something around five percent of our employees worked from the home before

they started. But that's a very different setup. You know. That means people had a home office set up, they had a good interact connection, they had childcare. When they felt like taking a break, they could you know, walk down to their local cafe and sit outside on the sidewalk and enjoy a coffee or something. This is very different. You can't get it haircut and childcare challenges being locked up and all the anxiety. So it's a little bit hard to know what happens when we're on the other

side of those things. But it is um, you know, for our customer success team, they work with customers after that the sails them to kind of ensure the implementation is mooved, work on change management. They're more effective than before. I mean the first office customers are really paying attention because this is you know, obviously important, um, but also because you cut out you know, sixteen hours of travel on either side of the engagement. But I think about

I put a couple of TVs. I'm actually on Family Show immediately after this, so stay tuned if you're in arranging of the TV. But um, you know a lot of those. If I'm in our New York office, it's forty five minutes left uptown and then moving around and it's like hours and hours of overhead. Now it's just like boom, um, you can knock them up and I get great, uh great meetings with executives at other companies

on short notice. So there's there's some real advantages here and that I think we'll we that flock of the company. But I think the people broadly will be off the ponistic about what you retain here UM and what we want to bring back about the old culture. Yeah. No, absolutely well, and I only got about a minute left here is Stewart, and we know you've got to get onto your next engagement, which is of course, as you said with our our colleague Emily Chang, so tune into

Blueberg technology as as you mentioned. But I do wonder, as you've sort of stress tested the product through all this, what have you learned that you may implement sooner than maybe you anticipated into in terms of new products or features, or what have you learned about maybe customers behavior. Only

got about a minute. Yeah, um, So we've been seeing a lot of demands for everything and that deeper integration is on the top of the side and something that we've been very engaged in the very successful in so far. You know one thing that I'm personally thinking about UM quite a bit. It's like easier UM and simpler forms of video communications and not video call just per se um, but more asynchronous video. And you're seen a lot of

interesting startups doing stuff in those spaces. Were excited about what we see there and making it easier for people to kind of record your clips. Um key, I want to be conscious of time, but I'll leave it there. And that was Stewart Butterfield, the chairman and CEO of Slack, and really interesting to catch up with him. Silicon Valley it's been a place we keep going back to, Carol to understand how they are assessing all of this and

how technology may help us. And interestingly, at a time or coming off of the time, I should say, where people were a little skeptical about tech, now we're all embracing it. Right. We've been talking a lot about how innovation often comes out of crisis, and we're seeing a lot of those tech companies, you know, formerly competitors, now coordinating and working together, collaborating to help figure out solutions for this crisis. All Right, you've been listening to Bloomberg

Business Week Extra. Be sure to tune into Bloomberg Buiness Week Radio Live Monday through Friday at two pm Wall Street Time on Bloomberg Radio. I'm Jason Kelly and I'm Carol Masser. This is Bloomberg