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Why Slack’s CEO says he's not worried about Microsoft

"We should always be doing what a smart, well-informed customer would have us be doing."

​Slack CEO Stewart Butterfield

Stewart Butterfield says there is lots of room for a specific software product like Slack to exist, even in a world of enterprise giants: "Go find me a company that spends more than 10% of its software budget with a single vendor."

Photo: Drew Angere/Getty Images


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More than 10 years ago, Stewart Butterfield didn't set out to build what has become a key tool for an unprecedented era of remote work; he wanted to build a video game. The game never caught on, but the messaging technology built as part of that game turned into Slack, a $12 billion public company that is shaping the future of work.

Butterfield thinks his company has an opportunity to improve the modern state of workplace communication, which has always been one of the biggest challenges in running any kind of complex business. Around 12 million people use Slack every day, and those people spend an average of 90 minutes engaged with the product, rivaling email and (these days) Twitter as office-worker obsessions.

But Slack isn't the only company that wants to be at the center of your work life. Microsoft has thrown itself into this world by aggressively marketing its Microsoft Teams product, which is available along with a subscription to its widely used Office 365 software. Zoom has also emerged as the one of the primary beneficiaries of the global shutdown caused by the coronavirus outbreak, connecting dispersed teams over audio and videoconferencing.

Even before the pandemic, Slack was facing headwinds as investors feared Microsoft intended to blunt the word-of-mouth success Slack enjoyed inside Silicon Valley circles with its top-down approach to seeding Teams into workplaces that had yet to modernize their collaboration tools. All bets are off at the moment, given the business disruption that almost all companies will face over the next few months, but Butterfield thinks that customers who embrace its vision of channel-based messaging will never go back to the tools of the past.

Ahead of Slack's announcement of a redesign focused on helping new users and casual users get more out of the software, Butterfield spoke with Protocol by phone to discuss the new design, the competitive landscape and this singular moment in the history of remote work.

This interview has been condensed and edited for clarity.

Slack has evolved as kind of a product that a lot of technically savvy people have embraced, and that's kind of a specific kind of user. And it seems like as the company has grown, and as the user base has grown, you're branching off into different types of users who don't really have the patience for that kind of stuff. Do you feel like you've reached a tipping point there?

Yes, and then also, I think there's a point that's a little bit more subtle there.

If you are in a city that has a ride-sharing service, you will never — like for the rest of your life — call a cab company on the telephone and then verbally tell them your address and then wait an indeterminate number of minutes and then pay with cash at the end.

There's just a magical point where it's so much more convenient, it becomes really simple and obvious. People sometimes have the naive belief that software will improve their lives: technical enthusiasts, people who like to experiment with software, who like to configure it.

Even for people who are very experienced like this, like the administrator of a great instance for a 20,000-person team, you get beyond a certain point of complexity, and they just don't discover that the functionality is there. And because Slack is, in many ways, a fundamentally new category of software, people don't have a bunch of expectations.

In your life for sure you've done the same thing that I've done, which is like, "dammit, this app must have this feature." And you go to the File menu and you look through all the options, and then you go to the Edit menu and go through all the options, and then go to the View menu and go to all the actions, because you're sure that you must be able to do this, or you did this once before and you can go through a process of elimination.

But the feature, which is in our preferences, that allows you to hide all channels that don't have any unread activity — in other words, only show me ones where there are unreads (messages) — is not something that people already had an expectation that it exists, and therefore they don't go looking for it, so they'll never discover it, and it doesn't really matter if there's a keyboard shortcut or anything. So you need to teach them what it is.

I really like this line from Bezos in the last [Amazon] shareholder letter, which is "consumers are divinely discontent." So over time, the standard just gets raised. When Slack was first released in 2014, everyone's like, "Oh my god, the UI is amazing and so beautiful." And then, you know, everything just got better, year in, year out, and people's expectations were raised in a really kind of natural way.

And then on top of that, like you were saying, we [now] reach a different audience who … don't like to think of themselves as less technically sophisticated, they're just less interested in this stuff. And God bless them, they may have other hobbies and interests in their life, and they're not super excited about exploring software.

So I'm taking it back to the very beginning, for people who are existing hard-core users of Slack, this new design, I think, will make a lot of important functionality more easily available because we're pushing certain things into the background.

It'll make it much easier for people to manage really active Slack instances, because they're able to create their own categorization for channels and then collapse a whole bunch of them at once. Which means that we can have a whole category of activity that I can reduce down to one simple unread or read state, or one simple spot for notifications to show up as opposed to, in some cases, hundreds.

Slack's new channel organization feature. Photo: Slack

I'll give you an example from my own experience. We have an accounts channel for every large customer. There's hundreds and hundreds of them. I'm in 100+, 200, something like that, I'm not really sure. But now they're all behind one section, and I can go find them really easily. But also, I can collapse them momentarily while I'm doing something else, and all the notifications, if there are any, will show up in a single slider. It's a little bit hard to explain, but it's a big step forward for existing hardcore users of Slack.

I try to put myself in the position of someone who is the 50,001st user of Slack inside of their company, and there's just this like whole world that they're not used to. — Stewart Butterfield

For new users, I think there's two benefits. One is when you first get to Slack, it's much less intimidating, it's much simpler. there're fewer things that don't work when they get there. But also in this process, we've created more of a system that's easier to manage, which will allow us to do what we call "progressive reveal of functionality."

So when you first arrive at Slack, anything that doesn't work yet, it's just hidden from you. And that's good because it's simpler. But it's also great because at the moment when you need it, the moment where it makes sense for you, we can reveal it. And that gives you much more of an opportunity to learn it, because it's just all there.

I started playing music again, recently, after a long time. I learned a lot of software over the course of my life, and I spent a long time as a designer and have like 25 years worth of accumulated muscle memory around Photoshop shortcuts and stuff like that. But I never really learned any linear editing software like video editing or audio editing. So I've been trying to learn [Apple's] Logic recently. And it's just, it's complicated.

I try to put myself in the position of someone who is the 50,001st user of Slack inside of their company, and there's just this like whole world that they're not used to and they're coming from an environment that's principally based around email. It can be intimidating and confusing, and the result isn't linear in the experience.

People hate, hate hate to be made to feel stupid. And if the software makes them feel stupid, then they'll just bail or they won't look there anymore, or they won't experiment or they won't try things. And I think we have a huge onus to not make people feel stupid so that they're able to get the most out of it, so that they're able to collaborate effectively, so that the other whole organization can perform at a higher level.

A lot of Slack's early product development came at a time where the market was a little less crowded — or was a little less defined, maybe is a better way to put it. Microsoft has made it very clear that it wants to steal your lunch. How has your product development strategy evolved in response to that?

I'm not sure that it has at all. And this is something that I try to make a big point about internally.

Before Microsoft, we had a set of priorities. And they're really driven by, think about it this way: We should always be doing what a smart, well-informed customer would have us be doing. Everything we're working on should be something that they'd be like, "Great, I'm so glad you're doing that."

So what would we sacrifice off of that list, what bit of user value would we say that we're not going to create in order to spite Microsoft? The answer is nothing.

I also think that there's … it's hard to know the actual truth, but we've seen very, very few uses of Teams that are at all like the way that people use Slack. People definitely use Teams, and I think the number one thing that we see is because it's the replacement for Skype for Business, they use it for the same things that they use Skype for, which is direct messaging, but principally voice and video calling.

What bit of user value would we say that we're not going to create in order to spite Microsoft? The answer is nothing. — Stewart Butterfield

The second place is as an amazing SharePoint browser, so that gets a huge step up. Until recently, Office didn't really have a homepage or start page, Outlook was too busy for that. So Teams as the kind of meta layer or wrapper around the Office file-type collaboration is super useful.

And only third do we see actual channel-based messaging. And Slack is just a channel-based messaging platform. We do have some voice and video functionality, but Slack the company is a customer of Zoom, because the set of features are pretty bare-bones inside of Slack.

Along those lines, you said that you weren't really thinking about the way that Microsoft is evolving its product. And you also said that Slack is a Zoom customer, simply because you have those kinds of tools in Slack, but they're not as much of a priority right now.

Will that change? Will Slack need to get better at some of these other parts of the enterprise software stack, for lack of a better word, in order to win business down the road?

I don't know how old you are, I'm 47 [ Editor's note: Butterfield and the interviewer are both Gen Xers]. And I have a pretty vivid memory of the first time I walked into an office where suddenly everyone had a computer. This is like 1996, whereas '93-'94, maybe just the accountant had a computer.

My dad was a real estate developer. And at one point, like all the business people had computers, all the draftsmen, all the architects had computers. The receptionist had a computer. And a few years before that just wasn't true. Part of the driver for that was there were suddenly many more applications that people needed in order to get work done.

Now, there's 7,000 — or something like that — different cloud tools that are competing just in marketing analytics. And thousands and thousands more that are competing in market automation. The average large enterprise has 1,000 different cloud services in use: We're tech-forward but we're still only a 2,000-person company that buys software from 450 different vendors. That's not different products, that's different vendors.

So I think there's still this narrative of best of breed versus suite. That was over like 15 years ago, because there is no suite that offers everything.

Go find me a company that spends more than 10% of its software budget with a single vendor.

There might be exceptions. There can be manufacturers who are just like super all-in on SAP, there can be financial institutions that completely run on Oracle. There can be people who just don't need much software except for standard office tools who have more than 10% of their budget with Microsoft. But I think going over 10% is extremely rare, which means that 90% of the budget is split among hundreds and hundreds and hundreds of different vendors.

Obviously, this is a surreal time to be talking about enterprise software. Have you noticed a significant uptick in usage since, call it over the last week? Also, we're working on a story about the rise in working-from-home software, and then the tools that administrators can use to monitor their workforces. I was wondering if you could tell me a little bit about that: what Slack offers and then sort of also what you think personally is an acceptable level of workforce monitoring.

Let's go through that backwards. The area to expend the effort is not in tools to monitor employee behavior, but in culture and basic management so that you don't need to do that.

I think it's really what we found, and maybe we're a special case because we're a much younger company and growing quickly. But the reaction internally has been, take care of yourselves, take care your families, when you're working, bring your full attention to it and if you take additional time off during the day, that's understandable because if you suddenly have three kids at home and you're trying to share the kitchen table with your spouse to do videoconferencing. It's a tough situation to be in.

If you try to manage a group of knowledge workers the way that, like, a shift supervisor manages fast-food employees, you're not going to get the best out of people.

I think Slack is a great tool for remote work, but it's not especially designed for remote work. It's designed to allow people to achieve a greater degree of alignment and give some leverage to the enormous investment we all make in internal communication. — Stewart Butterfield

We've seen unprecedented, explosive growth in everything. So, increased usage among existing customers inside of enterprise but [also] in every segment, in smaller enterprises, midmarket, commercial SMB. And we've seen a massive uptick for us at the top of the funnel, which is like we hit the website, you create a team and you're inviting people, you get to the point of sustained usage. So a huge spike in new users.

We're not releasing any numbers yet. [ Note: On Thursday, Slack announced that it had added 7,000 paying customers since Feb. 1, after adding 5,000 paying customers in its last quarter.] But I think it feels like this has been going on forever, frankly, and it's now Tuesday of the second week. Last week was our first week of global work from home, and I would say probably the most productive week in the history of the company.

I think Slack is a great tool for remote work, but it's not especially designed for remote work. It's designed to allow people to achieve a greater degree of alignment and give some leverage to the enormous investment we all make in internal communication. Like 50% of knowledge workers' time is spent on basic acts of communication coordination. So I mean, like all project management, quarterly business reviews, roadmapping sessions, daily standup meetings, status reports, all the time that goes into preparing slide decks that are presented in meetings and the purpose of the meeting is to update everyone on what's going on. If you can get any leverage on that, it's really transformational.

So it's not so much that, yes, it is a great tool for working from home. But it's that this sudden transition, the kind of agility that you need, the degree of alignment you need to carry through, if you're a company that has really been reliant on email and in-person meetings to run things, you're in a very tough position.

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