Slack boss Stewart Butterfield on scaling the $4bn tech unicorn, taking on Microsoft and why Yahoo is a "disaster"

Shruti Tripathi Chopra
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The New York Times New Work Summit - Day 2
Slack CEO Stewart Butterfield opened the messaging platform's London office this week (Source: Getty)

From ordering office furniture to making a balance sheet, there’s a business app for everything.

But making a business app go viral? That’s a whole different ball game altogether.

Enter Slack, the fastest-growing business messaging app in history that lets co-workers chat, host video calls and share files. “It's where work happens,” the app claims.

Slack was launched in 2014 by Stewart Butterfield. He is on a mission to scale Slack through international expansion and his first stop is London, which he calls “the messaging app’s most active market in Europe”.

He claims over 40 per cent of FTSE 100 firms use Slack with clients including Marks & Spencer, Sky and Lush.

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This month, Slack’s first London office was set up on Great Portland Street.

“London is among our top five cities in the world and the UK is our number two country. We needed to be here to scale our business,” he says.

He’s pulled it off before. Slack went viral within days of its launch after tech billionaire Marc Andreessen, a seed investor in Facebook, publicly gave it his nod of approval. It boasts 5m daily active users.

The messaging app has raised over $540m (£420m) since launch and was valued at a whopping $3.8bn in a funding round in April 2016.

Slack’s meteoric rise also probably lies with Butterfield’s know-how and contacts. He co-founded photo-sharing website Flickr in 2004 which was sold to Yahoo for $25m in 2005.

Slack’s brand proposition isn’t unique. It’s essentially a chat service that employees can use instead of emailing each other.

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Quiz Butterfield about why a simple concept like Slack gained clout and he has no straight answer.
“I wish I was clever enough to know how we scaled so quickly,” he tells City A.M. “If it’s one thing we’d put it down to is listening to customers.

“Slack’s growth has been purely word-of-mouth. At first, we went around begging our friends to try it. We then gave sales presentations to big corporates and managed to convince them to introduce Slack in their organisations,” he adds.

Slack's biggest competitor - Microsoft

Slack’s biggest competitor is Microsoft. Butterfield published a tongue-in-cheek open letter in the New York Times last year challenging the tech goliath’s business messaging platform Microsoft Teams.

“It’s validating to see you’ve come around to the same way of thinking,” the letter read.

The Slack boss says: “It [Microsoft Teams] is a copycat product and it is not very good. But they are not stupid and it’ll become a better product later this year and the year after. If we’re too slow then we’ll lose out.

“But as far as I know, we’ve never lost a customer to them,” Butterfield beams.

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Much like many fast-growing tech unicorns, Slack was rumoured to be eyeing a stock market float this year but Butterfield says the app doesn't need the money right now.

“A float is the most likely outcome for us but it is a couple of years away. We don’t need the money as private markets have a lot of capital for us,” he says.

Butterfield claims he wouldn't be open to a takeover either. It seems Flickr’s fate following the sale to Yahoo is partly behind this decision.

Why Yahoo is a "disaster"

“Yahoo is a disaster and it is disappointing that Flickr wasn’t able to take advantage of opportunities that were taken by Facebook and later by Instagram because it could have easily done either of those things,” he says.

“I've learnt that it is much more attractive to scale a business ourselves than go be part of some other company."

Butterfield says he's conscious Slack is a "once in a lifetime" opportunity and that he may never get a shot at a tech venture of this scale again.

"I’m 44 and if I ever wanted to see how far I can take a business then now is the time,” he says.

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