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Three years ago, when Kara Swisher interviewed Slack CEO Stewart Butterfield on the first episode of her podcast Recode Decode, offices were already migrating toward remote, work-friendly software platforms like the one Butterfield created. That, of course, was long before the coronavirus turned the country’s working practices upside down in a matter of weeks. The national lockdown has dramatically intensified the trend: Though it took more than four years to grow from 1 million simultaneous users to the 10 million mark Slack hit on March 10, within the following three weeks, the service had over 12 million people online.
Butterfield said last week that the new, if temporary, realities of work feel “like the shift from inboxes to channels which we believed to be inevitable over five to seven years just got fast-forwarded by 18 months.” (Butterfield has also offered Slack’s paid plan upgrades for free to any team working on coronavirus research.) To discuss the “insane surge” over the past month and the responsibility of “our moment,” Swisher brought back Butterfield to discuss the coronavirus pandemic and the radically transformed landscape for remote work on Recode Decode’s 500th episode.
The exchanges below are pulled from this week’s interview, available in full on the podcast.
Recode Decode is produced by Eric Johnson. Erica Anderson is the executive producer.
Kara Swisher: To talk about right now, what is your response to the coronavirus and what has your company been doing to facilitate people?
Stewart Butterfield: The last two weeks, I’m sure you’ve had a very similar experience, have felt like months and months. So on March 6, we walked out of our board meeting with a plan for fiscal 2021, and our earnings guidance all teed up. But the next day, we made the decision to strongly encourage everyone to begin working from home on Monday.
And then Wednesday night, there was that two-hour period when the NBA got canceled, Tom Hanks tested positive, and Trump banned travel from Europe — obviously just a huge psychological shift. The next day, Thursday, we’re doing the earnings call and talking to the analysts. Meanwhile, back in San Francisco where headquarters is, there’s 1,200 employees and the schools just closed. So, suddenly, people who were already 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 or three kids running around, and they can’t ask the in-laws to come over and help anymore.
I would say that week, starting from whatever that would’ve been, March 12 or something like that, was the most productive week in the company’s history because it was just super-high adrenaline. We swept 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. One was starting to give comp plans to groups that were fighting the coronavirus, or mitigating the effects, and things like that. So we always had a free program for nonprofits. And what I think was really interesting about that week, and it continued into this week, is just a bunch of process got dropped. We just said, you know what? If you’re a nonprofit, we don’t need you to send us your 501(c)3 papers and establish that. And everything just started accelerating and kind of moving to a higher degree of autonomy.
And it’s funny, as a CEO, it’s like all this stuff that I’ve always wanted just magically started happening, and in circumstances that are supercharged.
People were getting more anxious, and yet at the same time, one of our big customer wins — it sounds weird to say that at this point — was Veterans Affairs, and they run the biggest integrated health-care system in the United States, and it’s disproportionately going to be people 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 onto Slack. So there’s that happening.
More or less every elite academic research institution is running on Slack. There’s virologists, and epidemiologists, and pathologists who are relying on it. And our customer-experience team spun up this program to do one-on-one consultations with people who are trying to figure out how to make the transition.
So I think Slack is a great tool for working from home, but I think probably the bigger contribution is giving the organization the kind of agility and responsiveness necessary to make the transition to working from home. Because for us, actually, it wasn’t that big of a deal. But if you’re a 40,000-person, more traditional company that relies on in-person meetings and email to get things done, it’s super painful.
Do you feel an extra responsibility as a company that links people remotely? Slack is in a lot of ways a company that other people are saying this is going to win during this. And I don’t suspect you want to win. Are you getting the influx of customers that are signing up? And what do you do about that?
Yeah, absolutely. I definitely don’t want to appear ghoulish but I also don’t want to be ghoulish. Hey, great. Global pandemic. Super for business. At the same time, I’m really conscious of our employees. There’s an increased nervousness I think among everyone. When you read about a 14 percent contraction to GDP in Q2, and you think about 20 percent of Americans who 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 affects Delta, or Marriott, or the all the retail stores down the street from me.
But, yes, we’ve seen an insane surge. Normally, if you look back at the previous quarter and the quarter before that, we add about 5,000 net new paid teams. So these are companies, some of them might be big, some of them might be small, but it’s about 5,000 of them per quarter. We’re halfway through this quarter, we’ve already added 7,000.
A lot of our graphs just have straight lines that go right up. For messages sent, the time people are spending, expansion among existing customers, new people signing up. I was in the middle of composing a message to the whole company just because we’ve said this a few times internally, just to remind people don’t let work be a source of stress right now because there’s a lot of people who are like, “I’m homeschooling suddenly. 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, because it’s not going to be two more weeks, right? The most optimistic —
Is eight weeks, right? So how do you do that? First of all, what are people doing? What are they starting to do more, messaging or 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 percent or something like that. More channels getting created, more messages sent, more teams created. It’s 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. Obviously, there’s Microsoft, there’s others. But how could you go back to email as the sole means of communication inside the company? That’s a shift that’s inevitable over the next decade. And I think it just accelerated by a couple of years because there were also people who thought Slack was great and really enjoyed it, but essentially just used it in the way that they might have used AIM or Yahoo messenger or something like that 20 years ago. It was essentially for DM. Who suddenly are beginning, depending on what they do, bringing in integrations with Sales Force, or marketing automation tools, or their HR system.
And at the same time, I’m really worried about our employees, about the community. I ordered some food from one of my favorite Mediterranean restaurants last night and the guy thanked me because they don’t normally do delivery, but they’re doing delivery now. The guy thanked me for the support, and it’s like every time I’ve ever driven past a mom-and-pop store or a restaurant that’s gone out of business, it’s always upsetting, because it’s someone’s life work and they’re probably bankrupt, it ruins them. And when you think about the cascade of that. Also people dying of a respiratory infection, that’s obviously a big deal. But the knock-on effect of this is going to be incredibly consequential and that’s definitely what’s top of the 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 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? And if you were starting another company, what would it be? Because you’ve started several.
I mean today it might be a different answer than they would have been a couple of months ago. But I’ve always liked the expression, never waste a crisis, and that’s not to belittle or not take the crisis seriously. But one of the things that I found really interesting is Louis Vuitton CEO Bernard Arnout saying to the LVMH companies that make perfumes, “All right everyone, you’re making alcohol-based sanitizer now.” 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 this like sudden surge of creativity and technological innovation that is aimed at the public good and people feel a real motivation. It’s a totally different thing than having like a hackathon when times are good.