Stanford Seminar - Entrepreneurial Thought Leaders: Stewart Butterfield of Slack

0:13 was that clap for Ravi or is that for me my back look at every every 30 seconds another opportunity is my back God's not as interesting as Stuart but that's okay that's why we back really talented people like Stuart well thank you so much for giving us the opportunity to speak today I was telling the folks when I first arrived that whatever chance I ever had of getting into Stanford I was showcase that I had no no chance of game

0:42 the Stanford by the fact that I couldn't even find the directions to get here so that was not a good start for me in my Stanford career but I made my way to this beautiful building and in front of all of you to be able to spend time with was Stuart today and I thought maybe we would start off by asking Stuart to maybe just talk a little bit about your background because I think when you

1:05 think about the products that Stewart has put together with his team's over the years I think many of them are reflection of not just you know what he's done in his professional life but but it's sort of his journey as an individual and as a person you know through through life and it's an interesting background would love for you to share a little bit of that with the group here sure so even though there's all you know like the commune

1:33 and why should mention yes born in a log cabin and didn't have running water or electricity I think running water when I was three and electricity when I was for something like that but I'm gonna skip way ahead from there I'll show you starting college in 1992 so that was a really fortuitous time I think among the first things that happened when I got to school wise i got an account on the school's UNIX machine and discovered IRC

2:00 and use net and talk and email so a lot of early internet technologies and there was a a world wide web then but it wasn't very popular I I hadn't heard of it took me another year so before that was something was on my radar but immediately was blown away by the power the danger to had to connect people I was from a pretty small town in British Columbia Victoria British Columbia and I was at the University Victoria and my

2:27 friends who went away to different school I can communicate with them but also i could find people who shared interest in the same obscure philosophers and the same obscure music and saw even back then you know when there's maybe tens of thousands of people online in total including all of the academics there were communities for model train enthusiasts and there were communities for breast cancer survivors and that experience of I've seen technologies power to connect people was the theme

2:58 that if it goes through everything that I did since so I had because the web came up while I was in college my summer job every summer was making web pages for people HTML was simple enough that I could learn it back then and I sorry philosophy I went to grad school my plan was to be a philosophy professor and the 97 98 academic year I finished my masters and they had the option to continue and I had two good professors

3:26 both of whom said this is a terrible life don't do it but I also had a good friend of mine who finished his PhD or the year before me and got his first job and as the University of Louisville in Kentucky and it was like 32 grand a year with no job security had to renew every year and he didn't want to live in Kentucky and that was that was like a good outcome and i still had many hoops

3:52 left to jump through to get there but because it was 97 98 it was like the very beginning of the dot-com era there's a lot of excitement and make us that's a year after the Netscape my p.o right around the Yahoo IPO Yeah right around that time and friends who were doing web stuff we're making twice as much money as exciting and new so I think I made it my choice there and and began my career in internet stuff to

4:21 talk a little bit about what attracted you I mean even if you look back whether it be a grand finder which was sort of a if it's possible maybe a worse classmates com yep product if they want to remember is that product then to the game never ending and the flickr and obviously to slack and that theme of of whether you call it social networking or or communication or community has been you know consistent across all the

4:50 things that you've been passionate about on the internet and talk a little bit about why is that the case why have you focused so much of your time and your effort in that arena versus versus others I think because this is something that is probably clear now to more people than ever because of the rise of Facebook and we chat and whatsapp and you know a thousand other things that the fundamental application of computing technology and human beings lives is

5:21 communication and that's you know that wasn't true and say like the 1940s when the fundamental application of computing technology was calculating the trajectory of surface-to-air missiles and it wasn't true in the 50s when the fundamental application was tabulating the census or replacing double-entry accounting and there was huge productivity gains that we got through that and up to maybe the 1980s but the real potential and and this is like an experience that most of you will have

5:53 every once in a while you turn on your computer and there is no Wi-Fi here you can't tether there is no connection and a computer that's not connected to probably not now Stanford no hold on yeah we go on vacation yes I maybe and your computer is like this inert thing that doesn't really work unless it's connected to the Internet there's so many ways in which people can connect and the game stuff and we could talk

6:18 about the origins and all that but we'll talk about the game stuff yeah yeah okay so but games was never about games for me it was about creating a environment for people to interact using play as the kind of substrate so people like playing bridge with other human beings for example or playing golf or playing Settlers of Catan or whatever and that's just a thing that we do together just like other forms of play that are less

6:46 structured you know that might be wordplay or witticisms or just great dinner conversation or flirting or whatever flickr the games grad finder or slack is all about people talking to each other and trying to figure out ways to get make software do a better job of that let's talk a little bit about your gaming experiences haven't been the most successful games no in the world

7:17 terrible games yeah but you know and I think in both cases you know obviously some some greatness has come out of those experiences whether it be how many of you know the the flickr story raise your hand if you know the flickr story see it's been a while yeah i don't think people to talk to it talk a little bit about what in in both cases whether it be flickr or now with slack those those products and those applications were

7:48 essentially birth out of failures to create a great game a social and a community-oriented game and maybe talk a little bit about 22 similar outcomes in terms of korean something that's fantastic and now is the the belle of the ball but but two different time frames and two different experiences and what about you specifically has made you resilient through those experiences to be able to take the journey all the way through to create something really unique and special okay so here's the

8:20 the flickr story short version in the summer of two thousand two me and a few other friends started a company to build a web-based massively multiplayer game and the general average age were called she's in the sec this is when you were still in elementary school but 2002 was a terrible time to start any kind of internet focused business it was terrible time to start any kind of business because first of all there was a dot-com crash which still hadn't quite

8:48 shaken out but there was also the world calm and Enron accounting scandals there was 911 so the you know we think that the markets have a little bit of turmoil now in those days the S&P down sixty-five percent from its high Nasdaq was down eighty percent no one was interested in investing anything that had anything to do with the internet but especially not consumer face and stuff and within that especially not something as frivolous as a game so we had raised a little bit of

9:13 friends and family money we'd built a prototype people like the prototype there's a little community but it's gonna take us another year and a half to we had to produce something that we felt like was going to be commercially and commercially viable and no one would invest like really and there were there wasn't much investment in anything in the general sense then so flickr was a last-ditch attempt to take the technology that we had already developed

9:42 and apply it to something else so we were working on a web-based massively multiplayer game and we had this game client i connected to a server and at the bottom of the screen there was little slots for inventory you could go pick up things in the world in fact one of the items you could pick up in this game world was slack because it was a very absurd and it's a real kind of Monty Python dr. Seuss asked world and

10:04 you would get bonus points for picking up slack we replaced that with photos and the the experience so the idea for Flickr actually came over night I had food poisoning I was feverish dream but it all came to me once and that's actually literally true but it was a terrible product I mean it was technically super cool and it made a great demo at the time especially people are writing this thing in a web browser and you could chat and you could drop

10:30 photos and they pop up in someone else's screens and you could annotate the photos but you had to be connected at the same time as then and you can only see photos that they were showing you at the time they were connected the odds that someone you actually cared about being connected to this service that was you know that was a nascent service I didn't have any users was about zero so again great demo but terrible product so

10:52 that vision that came all at once and the food poison fever dream wasn't a very good one but it really quickly iterated from there by the middle part of 2004 it was growing like this there wasn't I don't know that there was a quite a reliable yet at that time in in the investment community in internet stuff but it was just starting to pick up the first web two point O conference was that fall of two thousand four and

11:23 by early two thousand five I had the choice between the term sheet actually from Excel and being acquired by yahoo and we made the right decision yes so after three and a half years of Yahoo myself and three of the original flickr team cal henderson sergei volkov and eric costello decided we're going to try this again so it's seven years later technologies advanced computers away fast you can't be wrong twice no like

11:54 wow what are the odds that you could be wrong about the same thing twice yeah and there's many more people online and we were better at what we did there's all this cool open source technology that had moved the the ball down the line a little bit or so we thought and people were used to paying for stuff online and there were other examples of massively multiplayer games which at the time were pretty successful and so we

12:16 decided we're gonna try it again and in contrast in 2009 even though this was right after the big financial crisis they don't think they really had much of an impact on vc investing in tech stuff it was easy for us to raise money now we were well known we raised i think a million and a half bucks the seed round and then five million dollar series a and then a year later a ten-million-dollar Series B and there

12:44 was all this initial traction and people liked it but there was many reasons why I didn't work the chief among them was people you know ninety eight percent of people who came in the front door left right away they just they didn't understand what it was it was too strange this is at a time when farmville was like on fire and that very very simple idea of social gaming was was one that was really problem and here's the

13:12 the part that I'm going to get asked after this for all the aspiring entrepreneurs what is the big lesson well there were four of us who started that company like I said two of us were in Vancouver British Columbia one was in San Francisco one was in New York and so the way that we like the natural mode for us to communicate was a product called IRC which actually predates the web by a couple years from 1989 and how

13:38 many of you actually know what IRC is how many people have heard of IRC all right so maybe a third eye or C stands for Internet Relay Chat and it's a messaging system where messages are directed to what are called channels rather than individuals or groups of individuals kind of hit the peak of its popularity in the mid to late 90s and still used by the open source community a lot of software developers but because this form 89 has all these deficiencies

14:01 so if Andrew and I were on the same IRC system and I wanted to change you a message and he wasn't connected to the time that I let the instant I wanted to send him the message and I just couldn't do it there's no concept of store and forward it's not like say I message on your phone where you can just send a message to someone anytime you feel like it so the first thing we did is built a

14:18 system to log these messages so we would have archives and once we had archives you wanted to be able to search them and then over the course of three and a half years working in the game we got to put about 45 people and every time one of our internal communication problems got to the point where we just couldn't stand it anymore we would spend the minimum number of minutes addressing that and then move on and slowly iterate

14:39 so we didn't know it at the time and it wasn't obvious and this wasn't even obvious like being told like a year ago in this very non self conscious non speculative way we were designing slack but based on the actual needs that we had as a team that was distributed needs that we had as a team that was deep in technological development that I don't agree of coordination is working on the game we had artists and animators the

15:06 sound designers level builders we had people making content pipeline tools to bring all that stuff together and just like any other business most of your daily effort is in communication and no matter what your job is like you're so your job might be doing stuff in Excel or might be doing stuff in an IDE or doing stuff in Salesforce or whatever your role specific function is but most of the time is someone telling you what you're supposed to be doing you

15:35 attending a meeting discussing what you're supposed to be doing you or writing email about what you are doing and just that that need to coordinate people is a really big part of how we work so this is you know kind of the good news and the bad news is over after a couple years we have some insight into why it was successful the bad news is that it's that's a hard thing to replicate to be able to

15:58 actually design something while not actively thinking about it but it's definitely the best way because I think one of the biggest problems that software designers product managers entrepreneur's have is the temptation to be really speculative with what some hypothetical person would want as opposed to something that you know you need so yeah what was that about the game I forget okay was awesome was a little bit was a it was a little bit about this idea of what you know

16:31 resiliency and people ask me a lot about Stewart and you know what what makes him tick what's why is he unique why has he been able to do what he's done multiple times at massive scale and you know there's he's obviously you can like turn away and not blush well I say this he's very handsome of course which is very helpful but he's very smart he has this I always talk about this combination of art and design plus engineering and sort

17:04 of technical competence and those two things or are incredible traits you know to have individually but when you combine them there the creative forces that come with that I think make make Stuart really unique because he's phenomenal up both sides of that equation but also I think and most importantly as an entrepreneur he's resilient and you know he's been knocked down multiple times and he's picked himself back up and and been able to rally you know a group of individuals

17:34 and people and investors and in markets around his new ideas and and that's something that you know you that's hard to train it's hard to imagine how you can get better at something like that some of that's just an eighth to the human and I think that is you know one of the things that we look for as investors in great entrepreneurs we look for that idea of resiliency because you know a lot of the things

17:58 that you hear about in the market these overnight successes they're not their journeys and they have ups and downs I mean Stewart started tiny speck which birthed glitch which was the game that then led to slack in 2009 that was six years ago slack is not an overnight success and it's not because his team stuck with it and Stewart stuck with it and so going back to the to the flicker days I think another really important

18:23 component of Flickr which will lead into slack is I don't think people and given you know sort of the fact that a lot of folks here didn't know the background of flicker I don't think people fully understand and recognize how innovative flickr was from a technical perspective and this idea of what we take for granted now in terms of a lot of the background infrastructure that's available to developers and software designers today a lot of the choices

18:52 allow the architecture of web to dada was really in some ways showcase by flickr so maybe talk a little bit about some of the decisions that you made early on and building flickr from an open API you know perspective from thinking about it as a community tool I mean how many of us in this room have tagged a photo recently on facebook on wherever we're Instagram right or Twitter and Flickr really was birthed Agee I mean delicious which was Joshua

19:23 ich nur obviously had tagging as well but but flickr is really where that idea of being able to have a community an individual's tag an image came from so talk a little bit about some of the innovations there and have some of those things have fueled the web and what you think how it applies to slack moving forward all right so I mean one of the things was that we didn't have a whole lot to lose at the point we decided to

19:46 work on slacks we'd we'd run out of money the only person who got paid was the one person on the team who had kids liquor not black it's your absolutely right you didn't run out of money in on slack we did not almost so beaded position where you don't have anything to lose makes some decisions a lot easier one of those was having open API so people could do whatever they want but they're also that was and and

20:09 this might come to pass again at some point an area of really rapid innovation not just by us but by a whole bunch of people because the commercial focus was off of the internet because that wasn't you know like people graduating from great schools were going to investment banks and management consultancies instead of coming here and starting companies and that gave a little bit of breathing space I think for technologists engineers then like this is like a little bit of a creative

20:38 Renaissance I think it's also just because we had hit a point where enough people knew what they were doing at the time that we started working on flickr we had no idea what we're doing but most people did there was a handful of people in the world at ebay at yahoo at Google who had built things at internet scale and maybe a few thousand engineers who were good at that in fact Cal Henderson like co-founders CTO after like a couple

21:06 years after flickr was acquired literally wrote the book building scalable web sites because no there wasn't a book that said that there wasn't a book that laid out how well you know what the architecture would be like and that was very influential the time but I think it's also a really nice call and response with the people using the product so there was a very much a community focus at the time that flickr started the only web sites where you

21:30 could upload photos were ones that were designed to get you to print and the that was private closed off it wasn't a place where you could show it share and showcase and bob baxley who's now the head of design at interests was it yahoo at the time Apple Apple in between had a great line on that which was flickr was a great place to be a phono so if you were going to be a photo then you had a

21:56 happier life inside of that kind of ecosystem we actually want to go back to the resiliency thing because here's here's the part that you don't imagine when you start a company where you probably don't so one of the things you got to do is tell a story that people can believe in whether that's the investors whether that's co-founders whether that's employees you're trying to bring on board that's customers that's potential users that's like what the brand is well

22:22 as landlords everyone yeah you gotta tell a friend maybe your significant other or your parents or whoever and you really have to hope that that comes true and then often the way that you said it the first time doesn't happen and so you altered the story and then that also doesn't happen and then you alter the story again and that still doesn't happen and at some point you think am i stupid am I crazy am i lying about this

22:53 is there something here or am I just gonna have to keep on changing the story as reality punches me in the face over and over again so we had the experience I think it with this company that ended up being a huge success of it failing and the the feeling was not like well chin up old fellow we're going to try again it'll all be okay in the end it was like just personally speaking from the inside horrible sorry I'm a

23:25 chef from the last really you're Canadian yeah like so actually I mean I still remember this very very well we had tried all these things were working the new user experience we're looking at monetization were building this model we're saying like you know what you do this we do that we had five million bucks left in the bank there's always one thing that was coming up that was going to be the thing that would make this work and you know sometimes those

23:51 things where we we pegged all our hopes on would actually move the needle a little bit but not quite enough and that's the hardest position to be in not not quite failing not quite succeeding we actually had very very high average revenue per user we had you know deep commitment Annika's community that was really into it but just not enough and november 11 I was as I do and I still do I had trouble falling asleep that's just

24:19 like my mind was racing thinking about and I just knew this is not going to work because I don't believe it's going to work anymore and if I stop believing there's like no foundation for anyone else to believe and so I wrote you guys an edge was on the board of directors I wrote them an email saying that I talked to the founders two days later I'm standing in front of the company and telling them and it shut down so that

24:43 might sound bad but here's how it's really bad it gets worse oh yeah well there was this moment I'm we call a special all hands meeting we didn't normally have them on Wednesdays and we had two offices we had this video linkup between the two and everyone's wondering what's up I don't thing anyone had any idea that this was coming and I get up I said okay they don't have a deck or if like that I just have to tell everyone

25:14 that you don't have a job anymore and right when I start talking I just happened to be looking around the room I lock eyes with this one engineer who three months earlier I had convinced to move to a new city away from his in-laws who are helping take care of his 18 month old and buy a house and like it was a it took me so long to convince this guy to make the move and I told him

25:37 how great it was going to be and like it was a really fun and project you get to work with lice amazing people and look at these business metrics they're just about to go up and and I then should go to psychoanalysis or something like that I have a very strong desire to avoid disappointing people as many of you also have and this was like this is more than a disappointment this was like I

26:08 up his life like he had made the wrong choice moving to a new city not having the support of his family having the small child and not having a job so before I even actually said anything I'm crying and I'm like then people are like this is a weird everyone's a little bit uncomfortable so that took several like weeks of just

26:38 real emotional turmoil in pain and it's so that's horrible to have to tell people that they lost their job in a minute it's also very terrible from their perspective of course as well it's humiliating you know like so there is so much riding on this it was disappointing our investors it was disappointing like all of our friends who who's like time we had sacrificed to say that we're not going to do this thing I'm not gonna go

27:07 visit my parents I'm not going to hang out with my girlfriend and I'm going to be working and working and working and all of that was for nothing so in this case the story has a much happier ending for a couple reasons that we can get into but that's a that's the part that you don't think about and and I think that's good just like you know if you're jumping from one rock to another on a

27:34 beach sidewalk you don't think about the horrible ways you could slip and fall but it is not for everyone like I there are and this there's been a couple cases in the last year I think of founders even if companies that have done pretty well just ended up committing suicide because the pressure is so great I guess the last thing I'll say is that was a horrible period is very very stressful and since then many things have worked

28:00 out incredibly well and I'm here and we raised hundreds of millions of dollars and the business is growing a three percent a week still and it's incredible and we have no problem recruiting from any company that we want and the pressure is about the same it's about with the same emotional intensity because now the expectations are that much higher there's that much more riding on it it's like that much more visible on the cover of magazines and

28:24 like I also know just from past experience that there is a cycle and we are in this and it's very hard to convey this to employees I think that we're in this moment where it's not going to get any better like this is we have six months like this maybe we have 18 months probably a year where again we have no real competition the business growing like crazy it's easy for us to recruit and we also have

28:50 a special advantage I think that all of the media use of slack so just like Twitter in 2010 where approximately zero percent of the world used Twitter but a hundred percent of journalists did and so they thought it was very important approximately zero percent of the world uses lack one hundred percent of journalists do so they think it's very important but it's not going to get better than this right and the the mental preparation that you have to do

29:18 to prepare yourself for the first leg what's left doing and you see you can see that in all kinds of companies that there's that this enthusiasm there's this amazing support people think you're a genius and then it's like it you don't you stop growing quite as quickly and then a little bit skeptical and then there's medium posts about the death of this company that has hundreds of millions of dollars of you and you know that put is actually a great example

29:45 because you talk to any VC and a lot of people in the industry and the same Twitter piece of crap company they're dead and it's you know a 15 20 billion dollar company that didn't exist nine years ago so like that's that's that's the that's the death case so even you know they're the degree of cynicism hate criticism that you that you get is going to be high so still writing the nice way

30:15 but prepared for the bad one yeah but during that time too i think you know Stuart and the team I think this is indicative of the the culture and we'll get into slacks culture because I do you think that's really unique and puts them in a a very enviable position as relates to building the company and recruiting great people they did something extraordinary things they I remember Stewart calling me and saying that we're going to shut it down and have the

30:38 conversation today but we're going to spend the next month doing everything we can to help all the employees get jobs and we're going to give him really generous severance and are you okay with that and of course we were and I think maybe a week later they had law a website called hire a genius yep was that it right hire a genius which was a website of all the folks that have been laid off from slack and their resumes

31:05 and I think Stewart probably did I don't know how many references and reference letters reference calls and resume college and I mean I imagine most companies you know when whatever company lays off 500 people or a thousand people building a website and marketing the people as really talented folks to the rest of the you know the the employee employment base in a general area I think it just speaks to the type of person Stewart is the type of leader he

31:34 is so let's talk a little bit about as we move past some of these challenges and we move into this zone of slack and the unprecedented success and speed in which you all are operating talk a little bit about why what why is this happening what are the what preconditions are in place what what what is driving all of this momentum and this in this product and this category in this business so there's definitely

32:04 some external conditions which are really important and if we started slack three years earlier I don't think it would have taken off in any anything like the way it did part of that is another six to eight hundred million people coming online via Facebook and they're similar number of people coming on line outside of Facebook but with the with the idea of messaging and messaging for me I mean like I said 1992 I got my first UNIX account and messaging was all

32:34 the internet was and in the late 90s I had icq and that's what messaging was and in 2005 we talked about the strategic importance of yahoo messenger versus msn messenger bush said I don't even know if either that exist anymore and I had a blackberry 13 years ago or whenever that was so that it's always seemed like an obvious simple part of the internet and technology and computers and that's not true for most people so my mum's the first message she

33:03 sent me so she's gonna be many emails and other modes of communication but the first like text message she sent me was two years ago and the proliferation of iPhones and Android devices and the rise of SMS as a as a mode of communication is something that's going to be like it probably feels super weird to you if you're 20 years old and this was something that you did since you were a little kid but it's a new thing in the

33:28 world and it's also a new thing for most human beings so people are accepting of the idea of a messaging app being the way that they interact with people so they're ready for a messaging app for work I think it's also a bunch of critical technologies that were ready at the right time the proliferation of networks it's only been a couple years since we've had great internet pretty much wherever you go in your pocket like it used to be 10 years ago when I first

33:57 got to know Andrew the very coolest phone that anyone in the world could get and it was on backorder it was really hard to get ahold of was the Motorola RAZR and I don't even know if that you guys know what that is but like the little flip phone it was very thin and you could do things with it including make phone calls and place like I thought you were so cool because you had one of them and that was it like so that

34:21 wasn't the idea that you would use the internet on a mobile device was totally not a question so I think those things make a difference I think there's a lot of external factors some inside I know you don't like this answer very much but a part of it as lock part of his like having the right people use at the right time part of it i think was the goodwill that so when we shut down glitch we had

34:42 five million dollars left we could have kept going we could have like till we completely ran out of money but because we had money left in the bank we could say to our customers you have the option of getting taking your money back or letting us donated a charity or letting us keep it we got to spend enough time with our employees that every single person got another job and i think those things you know those kinds of Acts make

35:04 a difference and people are much more likely to support you I also think that we had that that interesting period of time held almost three three-and-a-half years where we tested this system you know on ourselves again totally unselfconscious not not looking for the results but just every time something didn't work we made it work in the minimum amount of time and then took the next step so those are hard conditions to replicate and it's also maybe not something that needs to

35:32 be replicated because I camera who told me this once but there was this it was a pretty well-known bias at Google towards hiring people from a pretty small subset of all the world's universities because a lot of the people who worked at Google in the very early days were from here or from MIT or from Harvard and so they thought hey we're super successful and we're hiring all these people from these great schools hiring people from great

35:59 schools will make us successful and it could have been that everyone at Google had red hair and then they would think like all we got to do is find more people in red hair and that's going to we're definitely gonna be successful or everyone who works here is you know under 5 foot 8 so we just got to hire a bunch of short people and then no problem we would fit in here yeah the the confluence of factors that have to

36:20 come into play in order for something to be successful are tremendous so it's like the quality of the design the technical infrastructure doesn't fall down your ability again to tell the story in a way that people are going to understand is is incredibly important the alignment that you have to get among a group of people and that's something that's still I think at 42 years old still learning as an integer is the degree to which alignment matters more

36:46 than the exact direction in which you're aligned so I don't know could I answer way yes well we good you did why don't we yeah kinda I think the lock part might be the most important piece talk a little bit about you know we'll talk about all we talk about culture at the company and then maybe we can talk a little bit about your vision for slack because I think people have not yet fully understood where what the

37:17 potential of slack is and how you think about it from a platform for versus maybe a pure application standpoint but before we do that let's talk a little bit about the culture of slack we're obviously in Silicon Valley there's a large emphasis you know diversity and an empathy and transparency and authenticity and all of those things which are all buzz words that are easy to say but but hard to practice so talk a little bit about your

37:43 your thoughts on that I would be happy to so actually here's another factor that I think helped in the success was that by the time we started to work on slack that was again too early 2013 all of the four co-founders had worked together for at least 10 years and at this point one of the co-founders I have now worked with for 18 years so there's a very very high degree of trust and understanding of people's capabilities

38:11 and knowing how to work with these people that that was the the core of the team and in addition we had been through this traumatic experience so there's eight people who made the transition from glitch to working and slack and going through trauma what the group of people is the best bonding experience you could have and we had worked with them for several years so like that that makes a really big difference it also instructed the kind of culture that we

38:38 wanted to have we made some really great early hires and in a lot of those decisions of the early days that you could you don't have enough information to make the decision properly it could be this and it could be this and so after some consideration and by the way John do are once gave me some I think is really good advice if a decision is really really hard to make then it the probably doesn't matter because if it's

39:00 that close it doesn't matter and and sometimes you write sometimes you're wrong we were right many times we've got a couple of great hires our chief of staff or engineering is a guided Nolan Caudill who wrote this great piece that when we were about 30 employees about building the kind of workplace that we would want to have and identifying at that time three traits that we would look for in people and one of them was empathy and that was something that was

39:23 at the core of the company in the beginning just from my perspective it's very difficult to design something well if you don't have any empathy for the people who are using it in fact I bet these probably the most important skill that a designer can have because you can't step back from your own emotions and your own ego about how the things should your idea versus somebody else on the team's idea and really put yourself in

39:48 the shoes of human being who's going to be using this software then it's I don't know your your chances of success are coin flips another one was curiosity and another one was diligence and those have morphed over the years and we actually on our day two of onboarding for new employees is the CEO welcome and I start by telling them we had a management off-site to discuss corporate values and then wait for them wait for the grown

40:19 and what came out of that was empathy as expressed by courtesy expressed through courtesy and you can be courteous without being empathic a lot of psychopaths are super skilled and being great with people and not having any empathy craftsmanship tempered by playfulness and playfulness in the sense doesn't just mean silliness or whimsy oh I think we got away with just enough of that in the bridge so to be accessible to people and authentic but playfulness

40:50 in that sense means willingness to improvise and be creative and to try to anticipate where other people are doing if any of you have ever played team sports or playing improvisational music you'll know that attempts that you make to both act in a way that's going to be helpful to your teammates or your fellow musicians while simultaneously anticipating what they're going to do and paying attention to what they're doing now and that's a kind of playfulness that we mean and then the

41:22 last one was and this this comes straight from the philosophy degree is thriving which is really because when we said flourishing everyone thought we meant like this Aristotle's eudaimonia ethics discussed this kind of happiness that one gets from fulfilling their purpose irrespective of what the purpose is so doing the thing that you're meant to do in the sense that like a knife is meant to cut dings and so a good knife is a sharp knife at he does get into a

41:51 little bit when he Aristotle thinks that people should do but that's irrelevant there is a feeling that you get what you're really engaged in something you know sometimes people talk about the flow state and when you're doing the thing that you're you're meant to be doing that's incredibly valuable so the last set of values thriving both in ourselves and in others so the last one is solidarity and that's very strange for for like as a list of values for a

42:17 high tech company because most lists of values are like excellence integrity I don't know what else would be on that list but they're completely generic and people forget them the day after they have their new employee welcome and those have been kind of guiding principles and also good checks against business decisions that were making like does this actually make sense bill mastitis our CMO who came over from zendesk is I think unusual for a CMO in

42:50 that his chief focus is are we making customers happy because if we're making customers happy then they're going to stay with the service and that's you know a critical factor in our business success and they're going to recommend us and one hundred percent of our growth so far has been on the basis of people recommending or ninety seven percent of our growth has been on the basis of people recommending us and that's unusual and it's very much in alignment

43:13 with our values and one of the things we do to check whether our decision is good or not is to see like the extent to which it's in accordance with those values and what was the other thing besides values that you ask diversity I was going to do it in one minute oh god yeah don't even see there's a time yeah I saw it I've been watching it okay that was a little you took that I had an

43:33 extra minute there but you took about my name ok but just speak really quickly about you launched a diversity report one of the youngest companies Denver do a diversity study and publish it I think this is important maybe just in 30 seconds talk about why you did it one of the reasons we did it was to hold ourselves accountable they had a number of conversations with a whole bunch of people who had a lot of respect for

43:56 including a woman named Joelle Emerson who runs a consultancy called paradigm who've been working with on unconscious bias training a bunch of other things also Eileen Lee former client partner it now at cowboy ventures who actually coined the word unicorn data was a diversity event with her that actually the White House sponsored Megan Smith and we one of those we talked about was like a pledge

44:27 from CEOs that this would actually be something that was awarding and I you know part of it is internal you can't manage what you don't measure so you know just knowing what the numbers were and to hold our feet to the fire I guess you have to put it out there and then be accountable to the press because the press is shifted to the point where like you know shifted from it would be nice if there's more diversity in Silicon

44:56 Valley to in the minds of I think a lot of journalists at least this is something that we are going to grill people on forever so like having having that kind of you know almost vociferous pneus hold you to account i think is really valuable it's great questions you you choose collections yeah sure she'll write shirk in the fifth row that

45:27 got six okay justification for years oh well so it's like we were using the red whatever working on glitch it was IRC plus a whole bunch of stuff that we had done oh I'm sorry yes okay so what I mean not if I have the question right what kinds of communication tools were you using but while you were even before you had built slack and the previous companies here's the interesting thing we ask our customers what did you use

45:59 before slack and eighty percent of them say nothing because they don't think about internal communication as a product category in the way that if you were going to start a sales force today you would choose a CRM at the moment that you got started playing that and if you were going to start an engineering team you would choose a system for source control you just wouldn't start writing code you had chosen some system for managing that code but you say the I'm going to

46:23 start a new team and they start a new company i'm going to start a new project you don't make a decision about internal communication so it was haphazard and scattered and it was like Kabul people are on hangouts acabo people are in skype chat we see customers who have used private facebook groups there's Yammer and chatter and convo and social facts and all that stuff there's obviously things that are very much like slack there's hipchat and photo a

46:47 condition IRC itself but most of all there's email and the thing that I would say that we found and this is probably in retrospect is if you can't contain the whole spectrum of communication from this is an important memo that everyone at the company must read too I'm going to be 10 minutes late for this meeting so why don't you just get started without me if you can't like get that whole range then it's going to be

47:14 another thing that you have to check so you still have to do both of these I think that was the problem that we tried Yammer in 2010 and there's a tweet for me in 2010 or maybe 2011 saying WOW Yammer is amazing and we had this initial burst of enthusiasm that lasted about six weeks before he realized now we had another thing that we had to check so we didn't like those customers who say they use nothing we used nothing

47:39 next question oh boy there's a bunch questions white trade the second row then ventured in the first grow itch like to raise my flag app I me right out of meh successful venture well so I guess this is I guess we kind of skipped over this yeah yes what was the pitch to raise money for slack after a less successful venture all right yeah so this one's kind of interesting so we had we had raised 17 f nine dollars to work

48:09 on glitch and we had five million left and they very prudently didn't want their money back and so we still had five million dollars to work on slack and there was only eight of us and kind of buckled down now we started working and we did this preview release which is kind of like a private beta and once we felt like it was good enough we did the full official launch people could just sign up when we started

48:32 charging money and by that point it was clear that this was going to be much much more successful than we had anticipated like the once teams start using slap they essentially don't stop people were happy to pay money for so by the time that we had to go back to raise more money because we had spent a million and a half out of that five million it was a quarter billion dollar valuation and rising fast and the pitch

48:57 was look at these numbers essentially there wasn't you know if there's enough growth you don't really need any other kind of story okay sorry Larry said red shirt first robot can we do one more after that one yeah really for 526 all right okay so you mentioned that was like this printer on period and can usually make two or three the factors that that works key to that turnaround Crean that helps you create slack that

49:31 inflection point so talking about the transition from which just left two or three factors that helped us through that so I think one of them would be the depth of the relationship of the team so that would have been and I think that I don't know what the studies say but I bet the studies say that most startups fall apart not because they couldn't raise money because investors were jerks to them or something like that or even

49:56 because the product failed but because the founders eventually had a falling out and even in very successful cup base that's you know that's often the case so yeah one of the things would be the the the depth of that relationship I guess the second thing very quickly is that we had come to a product design that was just really good and we actually had that before we started and it's incredible as I just like a month ago

50:22 dugout this pitch deck now before we had committed to the idea of doing slack we had this pitch back it said codename slack and I went down to present to the accel partners and I presented in Driessen Horowitz and everyone said yeah but I guess you could try that you know we'd rather you try something then give us your my back so go ahead but we did exactly this is three years ago we did like we're

50:45 still executed against that same deck in exactly the same way that's incredibly rare because usually it's like improvisational so Roddy Robbie take it away Thanks thank you very much you