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a16z Podcast | Nobody Discusses Work Software Outside of Work -- and Then There’s Slack
21 segments available
For as long as there has been software we have had this collective hope -- maybe more of a desire -- that software will make all kinds of work easier, more productive, and more creative. Spreadsheets, computer-aided design tools, digital publishing platforms, though never perfect, are examples of software that have definitely changed how we work and what is possible. Still, you find very few people enthusing about Excel over cocktails. So what is going on with Slack? The messaging app crops up in conversation at dinner parties. It’s become a kind of cultural signifier of a tech savvy workforce that is always looking for better ways to connect -- inside and outside of work. In this segment of the podcast we discuss Slack with its founder Stewart Butterfield. Why Slack has resonated so well across all types of people, from engineers at NASA’s Jet Propulsion Lab to dentists, and what that says about how we work today and about our ongoing quest for the perfect tools and services to get the job done. The conversation happened as part of a16z’s Capital Summit.
Segments Timeline
The Promise of Software
In this opening segment, Michael Copeland discusses the collective hope that software will enhance productivity and creativity in the workplace. He contrasts traditional software tools like spreadsheets and CAD with Slack, which has become a cultural phenomenon, sparking conversations outside of work. This sets the stage for exploring why Slack resonates with diverse users, from engineers to dentists.
"welcome to the a 16z podcast I'm Michael Copeland for as long as there has been software we've had this collective hope maybe more of a desire that software will make all kinds of work easier more pro..."
From Gaming to Slack
Stewart Butterfield shares insights into his journey from creating a massively multiplayer online game to developing Slack. He reflects on the challenges of building engaging software and the lessons learned from the gaming industry that informed the creation of Slack. This segment highlights the importance of user experience and the iterative process of developing a product that meets real needs.
"to get the job done the conversation happened as part of a 16 ZZZ capital summit Stuart welcome i guess mark told your origin story how you're off to build a massively multiplayer online game so my on..."
Empirical Development of Slack
Butterfield discusses the lack of a singular 'a-ha' moment in Slack's development, emphasizing a long process of addressing internal communication challenges. He explains how the team focused on solving their immediate problems without grandiose visions, leading to a product that was empirically tested and proven effective. This segment underscores the value of practical solutions in software development.
"I think there's a long process of argument and it's funny because I just found the pitch deck that I took down to John O'Farrell and Frank Chen Frank's here which is exactly what we ended up building ..."
Transparency and Communication
In this segment, Butterfield elaborates on the concept of transparency within organizations, distinguishing it from political connotations. He emphasizes the importance of lateral transparency, where team members can see each other's work, fostering collaboration and understanding across departments. This approach contrasts with traditional email systems, enhancing new employees' onboarding experiences.
"time but in retrospect though right so when you were building this product for yourselves what were the things that you just unselfconsciously wanted to solve for one of them was transparency across t..."
The Challenge of Collaboration
Butterfield addresses the historical challenges of workplace collaboration, referencing past software like Lotus Notes. He poses a three-part question about the current landscape of technology and behavior that enables effective collaboration today. This segment sets the stage for discussing the unique insights that led to Slack's success in a crowded market.
"company might have exchanged depending on its size hundreds of thousands or millions or tens of millions or hundreds of millions and messages before you got there and you have access to none of those ..."
Why Now? The Timing of Slack
Butterfield reflects on the timing of Slack's launch, contrasting it with earlier technological landscapes. He discusses how advancements in mobile technology and changes in user behavior, such as increased internet connectivity, created a fertile ground for Slack's success. This segment highlights the significance of context and timing in the development of innovative software solutions.
"think back to that now like what a oh I had one yeah I love that funny and the little look the blue glow and the LED yeah think of what a different kind of device that was then what you carry around t..."
Slack's Unique Positioning
Butterfield explains the strategic positioning of Slack as a business software company that values both small and large customers. He discusses the importance of user adoption across teams, noting that Slack's success hinges on collective usage rather than individual adoption, which differentiates it from other software solutions.
"think if we had started slack three years earlier and we just it wouldn't have taken off the way I did it might have been a moderate success right and have taken off the way it did so technology mobil..."
From Startups to Cultural Phenomenon
The conversation shifts to Slack's early customer base, which began with startups in San Francisco. Butterfield shares how Slack's popularity grew through word-of-mouth and cultural relevance, becoming a symbol of modern workplace communication that transcended traditional software usage.
"dentist to be using it right well so let's suddenly you brought it up so let's talk about customers at the beginning one of the things that you noticed was there were advocates or you know profits for..."
Media Influence on Slack's Growth
Butterfield highlights the role of media in Slack's expansion, noting that tech and business press coverage significantly contributed to its visibility. He explains how positive mentions and user experiences shared on social media helped Slack gain traction among diverse industries and users.
"different ways so one was people like mrs. entrepreneurial dream people liked it enough that they would tell their friends about it and most people don't tell their friends about the software that the..."
Challenging Email's Dominance
In this segment, Butterfield addresses the perception that Slack aims to replace email. He discusses the limitations of email for internal communication and argues that Slack offers a more transparent and efficient alternative, while acknowledging that email will likely persist in some form for years to come.
"here's what example Nordstrom bought two companies one company called outlook another one called Trump Club and both of them were slack users so slack got into Nordstrom and through that a Trojan hors..."
Valuation Insights and Market Dynamics
Butterfield provides insights into Slack's valuation, discussing the unique market position of the company and the supply-demand dynamics that influence its worth. He reflects on the factors that contribute to investor interest and the challenges of maintaining a high valuation in a competitive landscape.
"perpetuate within a within a an enterprise I had hippie parents and grew up in a log cabin so I'm not trying to kill anyone man but that's it's a very easy headline and it's people want to click on it..."
Productivity Gains: The Slack Effect
This segment reveals findings from a survey of Slack users, highlighting significant reductions in email and meetings, alongside a reported 32% increase in productivity. Butterfield discusses the subjective nature of these metrics and the broader implications for workplace efficiency. The conversation underscores Slack's value proposition in enhancing organizational productivity.
"possibilities there are for acquisition because only a smaller number of companies can afford it and them but they might even going to go to the rest when the the dangerous one for us is we don't hit ..."
The Future of Work Software
Butterfield reflects on the evolution of work software, contrasting the past suite approach with the current landscape of specialized tools. He argues that the proliferation of software solutions has made it impossible for any single vendor to dominate. This segment explores how Slack fits into this new paradigm and the challenges of integrating diverse tools in modern workplaces.
"at 15% a month so it 15 yeah and so if you if you think about that in comparison to a public company the multiples gonna be very different but there aren't public companies that are growing revenue fi..."
The Rise of Specialized Software
In this segment, Butterfield discusses the shift from monolithic software suites to a diverse ecosystem of specialized applications. He emphasizes the need for companies to adopt multiple tools to meet their operational needs, illustrating how Slack serves as a central hub for communication amidst this complexity. This insight highlights the changing dynamics of software procurement in organizations.
"them a bunch of questions so to what degree has slack and reduced your internal email or reduced medians or increased productivity and so this is entirely subjective this is the weighted average of th..."
Slack's Role in a Fragmented Software Landscape
Butterfield elaborates on Slack's success in a fragmented software environment where teams utilize various tools. He explains how Slack integrates messaging from both humans and machines, making it a vital component of modern workflows. This segment underscores the importance of adaptability and connectivity in today's software solutions.
"and it's obviously much cheaper to buy some software for 5 grand or 10 grand or a hundred grand depending on the size your organization than it is to hire 5% more head count or 8% more head count righ..."
The Evolution of Software Procurement
This segment highlights the dramatic changes in how companies procure software, moving away from reliance on a few major vendors like Microsoft. Butterfield discusses the necessity for organizations to source tools from multiple providers to meet diverse needs, reflecting on the implications for software strategy and integration in the workplace.
"pander to our hosts for a moment software is eating the world and one of the side effects of that I think is the application of software to problems that didn't have software applied to them before so..."
The Importance of Integration in Modern Work
Butterfield discusses the challenges of integrating various software tools in contemporary work environments. He emphasizes that no single vendor can provide all necessary solutions, leading to a reliance on multiple applications. This segment explores how Slack addresses these integration challenges and its role in facilitating seamless communication across different platforms.
"you're talking to Microsoft but anyway well you just you you need to do more things than Microsoft empowers you to do no matter how broad the suite is I look around our company we buy software from ab..."
Machine Communication: The New Frontier
In this closing segment, Butterfield highlights the growing importance of machine-generated communication in the workplace. He notes that a significant portion of messages in Slack comes from automated systems, illustrating the shift towards integrating technology into everyday communication. This insight points to the future of work where human and machine interactions are increasingly intertwined.
"something that that one of the reasons I think slack has been successful now is because there is no place where it all comes together twenty years ago when everything almost everything we bought was f..."
Enhancing Productivity with Slack
Butterfield elaborates on how Slack enhances the use of other tools like Dropbox and Google Drive by improving file sharing and indexing. He argues that even small improvements in productivity justify Slack's cost, making it an essential tool for modern teams.
"so how does then slack sit within all that stuff like just how do you describe it are you the the the what for the enterprise then sometimes we say the bottom layer of the business technology stack so..."
Microsoft's Competitive Threat
Stewart Butterfield reacts to Microsoft's announcement of a 'Slack killer' within Office 365. He discusses the implications of this competition, acknowledging Microsoft's strengths while asserting Slack's unique position in the market and its commitment to customer satisfaction.
"certainly the cost of slack which is 22 cents per user per day on the base plan so it's not really is less than what most companies spend on soda pop but at this point but just the enhancement to prod..."
Customer-Centric Growth Strategy
In this final segment, Butterfield shares Slack's growth strategy focused on customer happiness and retention. He highlights the importance of recommendations in driving growth and emphasizes that maintaining high customer satisfaction is key to Slack's ongoing success.
"Microsoft is yet I have a huge amount of respect for Sasha and she Lou was one of the 3s ups I worked with for a long time Yahoo and he's an incredible hard worker and a genius I don't know if this is..."