 Cal awesome to see you my friend and Always thrilled to continue our ongoing going conversation about how to build software that people love And I don't know if there's any better authority on that subject than you and so I really appreciate you taking the time to do this today Yeah, no, I'm super excited to be here so You've done it again first flicker the world's Most wildly successful photo sharing service at the time which was acquired by Yahoo And now in five short years you've managed to build a seven point one billion dollar business Which is quite extraordinary Take us back to 2012 or 2013 The world had aim instant messaging clients. I guess what's app was around back then yeah, and of course Skype and We at Skype felt like we had already solved the world's communication problems What did you and Stewart see in terms of the business opportunity that no one else saw? Yeah, so we'd we'd come off kind of four years of trying to make video games And that hadn't worked out but over the the course of working on the game We'd kind of fell into this way of working together as a team that when we when we started the company We adopted IRC internet relay chat great finish export and it's something that that we had been familiar with since the mid 90s But was a super nerdy tool which had never kind of got any kind of mass market adoption Partially because it was just really difficult to use and explain and partially because there are a whole bunch of product gaps that meant it didn't work Well in in the workplace But over the four years of working with IRC we built a whole bunch of things around it to kind of ameliorate those gaps So remembering history adding search adding a mobile interface When when we wound up the game and we're trying to figure out what we wanted to do next We realized that the way we were working together could be a competitive advantage if we turned that into a product. So really it was Solving a need that we had immediately which wasn't the focus of the company We realized was much more applicable than just to our team and we thought Maybe it would work for other teams just like us and One of the things that I find fascinating about Slack is that it's one of the only examples that I can think of of an enterprise small business Service product that's actually designed as a consumer product. It looks very colloquial and familial And I love your quirky loading messages How did you arrive at that ethos or aesthetic and how has that had to evolve over time as you've onboarded more and more enterprise clients Or not. Yeah, you know, I think that's it's been kind of really key I think has been one of the the things that's helped make us successful has been that we didn't set out to build Enterprise business software in the usual way that you do which is that you build it to sell to the CIO to the IT department And you kind of ignore the end user, you know, we not not necessarily super consciously We came from a consumer background. So we're all about how can we build something which is great for a human to use? You know, we want people to use the tool every day and to find it super useful So we spent the you know kind of the first six months really the first year trying to find that product market fit trying to find Get the product to experience to to a point where Somebody found it so individually useful themselves that they would tell their friends that isn't how enterprise software works in general You don't say oh my god Carter. Have you used this expense software? It is changing my life You know, that's not how enterprise software grew, you know grows in general but we just took the consumer approach which is make a product that people really like and will tell other people about and I think there's That was definitely super helpful in building like a small business freemium product as we did at the beginning But has also really helped us grow our kind of enterprise side as well, you know Today we're used by 65% of the fortune 100 the fit see 100 You know a larger customers like 21st century fox or or target or you know a Spotify and Really that approach has worked well for our enterprise customers as well on the enterprise side There's all those kind of extra kind of security and compliance things you have to do just to be able to be used by a large company But you know the the people who work at large companies are still human beings They still want software that solves problems for them. Nobody Wakes up in the morning and thinks what new piece of software can I add to my tool set today? You know, they want to be able to get their work done better They want to be able to be more efficient or feel more connected to their co-workers or you know like have a better life I Guess following up on that One of the most critical aspects of building software that people love is actually listening to people and Another unique aspect of slack is that you have on one hand users and on the other hand small business and enterprise customers and So I'm wondering I'm curious about how you manage those two masters who may not actually want the same things And so how does that affect how you prioritize what you fix build and kill? Yeah, I think you know as as we've grown as a company and as we've had more and more users I think it's been Very important to you know to stay focused on the few things that we want to do I think it's a Trap that's very easy to fall into is there's so many things we could do so much customer feedback that we get You know customer feedback listening to our customers has been really built into the the way we you know The way we think about product for a long time that it's it's really tempting to just like half-ass a lot of things Instead of whole-ass a few things and so as we've grown setting that priority and focus and deciding exactly what we want to go After I think has been really key and Customer feedback has always been really important to the you know the cycle of what we're building early on We spent a huge amount of time talking to and listening to our customers for the first couple of years of the company Everybody on the slack team did some kind of customer support every week So whether that was Responding to email to our customers going out and doing customer meetings Responding on Twitter making sure that there isn't that huge distance between the people who are building the product and the people Who are using it which I think is a very easy trap to fall into I think a super important tool Which hasn't talked about enough in like building modern software is Twitter as well You know if you if you can imagine a time before Twitter, which is you know now tricky, but we didn't used to use Twitter all the time People would have to really hate something about your software to like it would have to really anger somebody enough for them to open Up their email client and write out a message about how much you sucked and how much you've ruined their lives Twitter has really lowered the bar for people to complain about stuff Which on the one hand has been can be a big negative But on the other hand you get such a rich vein of information about things that people find Frustrating or difficult or the reason they're not adopting or the reason they're not paying for something and Like paying attention and aggregating that information is hugely You know a huge channel of customer feedback that you just wouldn't otherwise get so we spent a long time early on Really digging into that signal and understanding what it was that people were saying and people do say positive things as well but I think the you know the Negative feedback you that you get from people in the moment when they're frustrated is super powerful Absolutely, so you guys are at 8 million daily active users right now and you said At a less cooler conference in the past that you want to get to 500 million daily active users So how the hell are you gonna get there in such a short amount of time and then The how do you manage the transition from product market fit which you guys clearly have Established that kind of mindset to a growth mindset if you will yeah Well, that was a bit of a misquote I think what I said was that we see the kind of possible future audience for slack as all knowledge workers across all kinds of industries all kind of size of Size of company and all countries and depending on the stat you believe today There's something like 600 million knowledge workers in the world growing and growing massively every year and I Would love it if all 600 million of those people were slack customers But I would settle for a mere 500 million of them being our customers. So it's totally reasonable goal And I think that you know like we've we continue to see see growth and uptake of the product and that's driven a lot Not like by our own innate genius or how great the product is the product is great But by a lot of tailwinds a lot of kind of macro trends that are happening in general in the world One of those has been the rise of consumer messaging So, you know, you don't email your friends to organize going out with them in the evening anymore You use WhatsApp use Facebook Messenger use iMessage and the quality of those experiences has grown so incredibly over the last ten years That has really raised the bar for software experience in general You know if you if you go back a decade a decade and a half the kind of cutting edge of technology in general was in the workplace Because that's where the the money and the investment was but with the the rise of the smartphone and to some extent social networks The best kind of technology investment and experience is now happening in the consumer space and that's really kind of Raised the expectation around the quality of software and software adoption I think the other really big macro trend over the last last few years has been an explosion of Categories of software, you know, this is driven by the rise of sass as a delivery platform, especially in business That the average enterprise now is using more than a thousand different software tools to get work done Whereas a couple of decades ago that might have been one big vendor, you know Like an Oracle and IBM and SAP people are now buying from hundreds of different vendors And that's making people Individually way more productive, you know if you think about being say a recruiter in an age You know like a few decades ago You would go into a building's lobby and look through the directory and write down all the phone numbers and then go cold-core people And today you have you have linked in and you have applicant tracking systems And you have machine learning to be able to understand people's resumes and the tool set is so rich But it's all being focused around making people individually more productive making people More efficient or faster at the individual tasks that they have to do I think the real gap there has been around making teams of people more efficient together And I think that that is both a real a real gap and a real opportunity There was a earlier this year Google released a study Couple of year-long study around trying to predict what would make their teams more effective What would make them deliver high-quality results on a better timeline and they you know looked into a whole bunch of factors like superstars of particular, you know different skill sets management structure Kind of tenure at the company how clear the goals were and the only predictor on how effective a team would be was how well the members of that team communicated with each other and so That that kind of team communication I think can be at the core of all of those Different products that team uses to get work done. I want to pick up on one thing you said earlier Where we are today in terms of the spectrum of communication channels and modes and tools people What's that people slack people zoom people email texts call each other How do you think where does slack live within that spectrum and how do you think about? Which communication channels you're going to compete with or not? Yeah, I think from the beginning with being very focused on just the work use case I think the the personal use case is So well served already And it's also such a different experience that we're just Team communication in the workplace and I think that you know the the the whole set of tools that somebody You know that a business uses is only going to continue to expand You know when we when we look at customers today who are adopting slack You know they probably already have a videoconferencing solution and it's built into all the hardware in their meeting rooms And that's tough to move and they probably already have a desk phone solution And you know they definitely already have email But I think that that team team messaging piece team communication and collaboration is you know Is definitely our sweet spot and and in the workplace and when generally when you're developing a product How much do you pay attention to competitors and when do you kind of find it to be a distraction? Yeah, I think that you know what what we found we're in an interesting position as a kind of product category in that most of the people You know who are adopting slack for the first time aren't using another tool just like it So this isn't like a replace product a with product b because it's five percent better and ten percent cheaper It's a this is a different way of communicating and working together. So on the one hand It's difficult because you're selling you know But you're you're selling behavioral change and human behavioral change is really difficult and slow and excruciating even when it's like in a Even if it was in a super obviously clearly positive direction, it's difficult to get people's behavior to change and We definitely found this kind of early on when we first built the product We realized that not only do we have to convince convince you to give it a go Like there is this thing you should use it work in a different way. It'll be great I promise, but the you have we have to convince you to convince your co-workers to give it a try So it's a real kind of kind of uphill battle. So our competition that we that we think about you know kind of early on was More less a competing product and more kind of like inertia to change It was you're using email today You're using a mix of email and Skype and a well-instead messenger and g-chat and WhatsApp and texting people and screaming at them across the office and sending memos or just not talking to your co-workers And so that was the the kind of early on what we thought of as a competition. I think that's changed more recently As a you know as a founder you always have to have an irrational Perhaps a rational belief that whatever you're gonna do is gonna succeed that like it is inevitable that what we're doing will be Successful everybody will want to use it and it will be beneficial for them And you have to believe that whether it's true or not And that's all very well for you to believe that but when you actually start to get competition in market It's a validation that it's not just you that believes that but other people do and I think a Microsoft entry in same space as us Has been good market validation that a product like slack, you know channel-based communication You know communication instead of being being one-to-one as the default is an email being organized around Topics or teams or projects this kind of channel-based concept is going to is inevitable and is gonna happen You know, we hope that slack is the core of that But I think whether whether slack continues to be successful or not that channels are going to be the dominant form of communication in the workplace over the next five years and so I think having that competition has been you know like Affirming in like a market category kind of way, but it's also just healthy, you know Like not having direct competition. I think is you know detrimental in the long term, you know It's very very focusing that we are now super focused on just providing that really great experience to our to our users So there's been a lot of debate and news recently about the attention economy and Kind of the morality Within or around it How does slack think about managing its users attention and specifically within the the product How do you manifest and surface the notion of urgency or urgent messages versus non-urgent? No, I think that especially with the rise of smartphones in the workplace It's become very easy to be in a constant state of Kind of working, you know of never fully disconnecting of being always somewhat available online, and I think that's not a very healthy way of you know, not a very healthy way of achieving work life balance So from the beginning You know while the kind of general technology can enable that I think from the beginning We've been cognizant of that and built some features into the product to help people manage that from both sides So, you know one is that we set do not disturb hours by default that you know I don't need to receive notifications overnight Or custom status so that I can tell people I'm traveling or I'm in a meeting or I'm on vacation So, you know don't don't contact me at this time But I think putting some of those controls on the other side as well has been helpful the idea that if I message you at Night and you have do not disturb turned on it'll let me know that like you're not going to receive this for a while So set expectations appropriately or if we have a feature where you can send a notification to everybody in a channel by typing At channel if you do that in channel with a lot of people in we'll put up a little pop-up saying There are 120 people in this channel across five time zones. Are you really sure you want to do that? But I think that you know we can we can add these features to help people manage their preferences But there's there's a wider issue of Expectations around disconnecting from work and being able to I think that at all like slack can be a magnifier on your cult on your work culture whether it's positive or negative and You know no no tool that you adopt in the workplace is suddenly going to change You know your your company's culture and outlook towards when people should be working and that work life balance But to me personally and to us as a company has been very important that we you know set expectations Appropriately around that so I'm careful not to message people in the middle of the night Just because I'm awake and sending a message doesn't mean there's an expectation that people should respond to me immediately And I think that that's a a work cultural issue as much as it is a tools issue And what is this about raccoons at slack raccoons? So we have We have a lot of kind of custom emoji in our slack and a lot of workflow built into using custom emoji And one of them is a polite raccoon It's like a raccoon with his hands together and that means please move this discussion to a channel more appropriate So if somebody tags you with the raccoon, it's saying please move this discussion to a different place. I like it. So, you know Something that occurred to me and in a sense all this conversation about attention economy is In part a good discussion about what are the right KPIs and I think that Because your business model isn't necessarily tethered to attention You slack potentially. There's a there's a leadership opportunity for slack to define a new set of KPIs Have you given much thought to that? Yeah, I think you can if you pick the wrong set of KPIs you can really like have some perverse incentives and drive the wrong kind of behavior So I think it would be easy to make a naive choice and say that you know We want messages per day or number of hours in the day in which people interact with slack as our like primary metric We're measuring and that would that could You know create incentives to not help people communicate better But just use the tool in a really annoying way It's like we could drive that up by sending you a push notification every hour regardless of what's happening And that would like make that metric look great in the short term and in the long term would you know Like not be effective in driving our business So I think you know we picked daily active users as our kind of main driving metric and that is it doesn't matter How much you're using it within the day But if you're using it to get work done and communicate you'll use it at some point each day I think so I think picking DA use as our kind of core metric has been really important there Cool. I think we're running low on time here But just any general advice for any of these hungry entrepreneurs out here in the crowd Sure, I think some some useful advice that I found from both kind of the early days of growing and now as we're kind of a Larger company today with more than a thousand employees spread around the world is It's very easy to fall into a trap of being very busy of finding There's you know so many things that you could be doing at any given time as a company grows And you can be very reactive. There's always enough things to fill your time I think when you find yourself really busy, it's important to take a step back and Think what are the things that I could be working on? I could be spending my time on to get the company to the next phase whether that's the next week Three months six months a year What are the things that are actually going to drive my business my product forward and concentrating on those? I think getting out of the busy trap is really important Cal. Thank you very much. It's always a treat to talk to you and Thank you. Thank you so much. Yeah