Total Slack-er: work remotely here to stay thanks to a Canadian app. A potential spoiler – Microsoft

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Stewart Butterfield, CEO and co-founder of Slack, poses for a remote portrait of his home office using the video calling feature on the Slack app in San Francisco, California on June 2, 2020.

Laura Morton / The Globe and Mail

Thinking about the ripple effects of the Great Pandemic of 2020 is enough to make someone philosophical – and Stewart Butterfield more than most.

In the three months that have passed since companies around the world turned off the lights and sent their employees home, it has become more and more evident day by day that millions of workers are now permanently released from their cells. “There are second and third order effects,” said Butterfield via Zoom from his home in San Francisco, his tousled hair and trimmed face (although not necessarily more than it was before the pandemic. ). “What does it do to the commercial real estate market, the tax base and restaurants next to office buildings? What does it do to the distribution of high-income jobs across the country? The people of Toronto who earn $ 150,000, he wonders, do they continue to earn the same salary even if they decide to return to Manitoba to be close to their elderly parents? And what does that do for the economy of small towns, where homes cost $ 80,000 instead of $ 800,000? “There are so many things you can’t even really imagine the net effect,” he says.

Certainly, Mr. Butterfield is prone to thoughtful thinking, which is the case with his Masters in Philosophy from Oxford. But he is also the Canadian co-founder and CEO of Slack, the company that has, for the most part, dissolved decades of corporate culture – a generation change with massive cultural and societal implications.

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Slack’s workplace messaging app has become a lifeline for thousands of employers, large and small, frantically trying to keep their dispersed workforces connected during the pandemic. This includes the 2,000 employees of Mr. Butterfield, who began opting for remote working in late February – first in Japan, then in the 10 countries in which Slack operates. As of March 18, all of its offices were empty – and may remain so long after the foreclosure ends.

It could be difficult to see the straight line from all of these disruptive changes to an app that started life as a company called Tiny Speck. Basically, Slack – for those who haven’t used it or heard a colleague evangelize about it – allows colleagues from all departments to connect via an elegant but secure text chat service, while allowing them to organize these conversations in searchable thematic channels. (It can also be extremely addictive, as are social media.) Often described as an “email killer,” Slack has offered businesses facing an abrupt homework revolution a ready-made alternative to box overload. reception, tangled wires and responding to all the nightmares that awaited fractured teams trying to operate by email.

“Slack was not designed for a global pandemic, but we were well positioned when it happened,” said Cal Henderson, co-founder and CTO of Slack.

The result was an explosion in the use of Slack, unlike anything the company has seen before – and he was already the reigning champion of hyper-growth in Silicon Valley. At the end of 2019, five years after its launch, Slack was in use by 65 Fortune 100 companies. In the first quarter of 2020, it added 90,000 new net organizations, more than in the prior year as a whole; 12,000 of them signed up for Slack’s paid service, which starts at $ 6.67 per user per month. (Slack’s business model is based on converting more of these free users to the premium product, which includes unlimited searchable message archives, full access to third-party apps, and channels shared with outside organizations.) Among the major entities that have adopted Slack since March: Verizon Communications, Amazon and the US Department of Veterans Affairs. This helped boost revenues by 50% in the quarter over the previous year to US $ 202 million, although the company reported an operating loss of US $ 16.6 million, compared to US $ 33.8 million in 2019.

Slack hopes to keep the pandemic

dynamic, based on its

latest screenings

Organizations

using Slack

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to Slack per day

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use on Slack per day

JOHN SOPINSKI / THE GLOBE AND THE MAIL, SOURCE: soft

Slack hopes to keep the pandemic

dynamic, based on its

latest screenings

Organizations

using Slack

Avg. connected hours

to Slack per day

Avg. minutes of activity

use on Slack per day

JOHN SOPINSKI / THE GLOBE AND THE MAIL, SOURCE: soft

Slack hopes to maintain the pandemic momentum,

based on his latest projections

Organizations

using Slack

Avg. connected hours

to Slack per day

Avg. minutes of activity

use on Slack per day

JOHN SOPINSKI / THE GLOBE AND THE MAIL, SOURCE: soft

However, these results are far from meeting investors’ expectations. After climbing more than 50% since May 1, Slack shares (which trade under the symbol WORK) closed down 14% on Friday, when the company failed to convert as many free users in premium than investors thought. It’s the worst drop in a day since the stock started trading a year ago.

Despite this, as state, provincial and local governments lift restrictions that have forced so many people to flee their cabins and open workplaces, Butterfield positions Slack for the future. The tectonic change that happened this spring has set the clock on a transition that would otherwise have taken years to happen. “If you asked 99% of CEOs in January if they could run their business 100% remotely in a week, they would say, ‘No, it’s not possible.’ But suddenly the impossible became the possible, “said Mr. Butterfield. “There are all of these benefits and costs. Now they’re thinking about the type of hybrid we might want after. ”

This is already evident in the wave of companies announcing that home work plans will continue even after the end of the pandemic. Last month, Shopify founder and CEO Tobias Lutke said the Ottawa-based e-commerce company was “digital by default” and said that the majority of its 5,000+ employees would no longer work from their offices . Several other tech giants have made similar statements, including Facebook, Google, and Waterloo-based OpenText. The Bank of Montreal has said that up to 80% of its staff could adopt a mix of office and home work in the future.

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In many cases, Slack is at the heart of these plans. “Whether it was to connect socially with our colleagues on a quiz or to check the goals and deliverables for the week, we used Slack to stay connected,” said the director of technical infrastructure at Shopify, Garth Pyper, in a statement, adding that Slack will play an even more “fundamental” role now that the company has decided to perpetuate telework. “Working from home across the enterprise means less time, so staying connected is even more vital.

Slack is far from the only game in town, however. Microsoft has launched its own collaboration hub, Microsoft Teams, which is part of its ubiquitous Office 365 software. And the move to remote working will certainly inspire a new generation of challengers. But as the rise of homework increases decades of thinking about how the job should be done, Butterfield says Slack will play a leading role in the transformation.

“Slack is about aligning people and staying aligned, because organizations change and reality changes,” he says. “Obviously, it is the grandmother of all the changes happening at the same time. “


In these times of pandemic isolation, even billionaire tech titans need a virtual shoulder to lean on.

Every Thursday afternoon in the past three months, Mr. Butterfield has connected to a Zoom video conference call with the CEOs of 15 other publicly traded software companies to exchange stories from the COVID-19 trenches. “It’s like a group therapy call,” he says. Mr. Lutke is a member, as are executives from Twilio, Splunk, Atlassian and others.

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The idea behind Zoom meetings, with an inter-company messaging channel on Slack (of course), was born out of the questions each boss had about how others were handling the crisis: Are you going to close your buildings? Do you offer employees an allowance to improve their home offices? What do you say to employees worried about layoffs? How do you plan for the next fiscal year? Should all new employees be remote workers?

But while Mr. Butterfield says that the CEOs each have their own answers, “there is 100% agreement on one thing: at this point, we never go back to normal. “

This is an assessment shared by Wayne Wachell, CEO and chief investment officer of Genus Capital, an investment management firm in Vancouver. Like other business owners, he acted quickly to send his 32 employees home when the lockout hit British Columbia. But he had to take on the added challenge of coordinating a distant team while the stock market collapsed around them. Using a combination of Slack and the Google Hangouts video conferencing service, Genus revised its portfolios “without missing a beat,” he says. “At a very intense time, we were side by side in this virtual space, and it worked perhaps even better than if we were in the office.”

The Genus team was just a tiny fraction of a wave of new users who swept through Slack as the crisis deepened. The company reached 10 million “simultaneously connected users” for the first time on March 10, four years after crossing the million mark. In two weeks, this figure reached 12.5 million.

By that time, Slack’s own work force was gone. To help with the transition, the company gave each employee up to $ 500 to equip their home office and told them not to disturb sick days. It was a time of intense energy and focus all around, recalls Mr. Butterfield. “A CEO takes to the stage at a show of hands to excite people and create a sense of urgency,” he said. “In this environment, you get a lot of this for free. “

Everything happened faster, including important decisions. In the second half of 2019, Slack worked on the very first redesign of its website, desktop app, and mobile app, to make it easier for new users to get started. Over the years, new buttons and features have blurred the simple design that helped propel Slack’s initial popularity in the tech and media industries. “The software had become too heavy for a new user who was unhappy to understand,” said Johnny Rodgers, senior user experience developer at Slack, who led the redesign.

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The initial plan was to deploy the changes over almost two months, testing them along the way. But with the influx of new users, Slack wanted to make the best possible first impression. So the team decided to do it all at once. “We took a six-week deployment and reduced it to one day,” said Rodgers.

No one in Slack has lost sight of the fact that as their business flourished, many of their customers were in dire straits. “There is this heightened sense of importance in what we do,” said Mr. Butterfield. Slack provided free premium accounts to COVID-19 researchers around the world and was approached by massive organizations, including Veterans Affairs, who needed to get 20,000 of its employees to the platform quickly to reduce disruption to its services . While it had already taken 15 months to add all 100,000 employees to Oracle Corp. In Slack, customers at the height of the pandemic added 5,000 users in a few days.

As the rush escalated, Slack offered 20-minute individual phone calls to all of its customers, whether they have free or paid accounts, to make sure they were getting the most out of the platform. Three hundred employees mobilized to manage the deluge of calls. Ali Rayl, vice president of customer experience for Slack and one of its first eight employees, has answered many calls herself. The same was true for other executives. “You were just as likely to get our CFO as someone from our support team,” she said.

This experience also opened a window on the difficulties that companies endured. Time and time again, she heard people stress that they should stay connected to their teams. For some, it was just a matter of being able to direct their work. “At the other end of the spectrum, there were people who said,” I have to make sure my people are not alone, “she said.

Slack has always been proud of its ability to make collaboration at work fun. “When you compare the way people communicate in Slack versus email, people’s humanity is more evident in Slack,” says Rayl. And it only became important when the workers were cut off from each other. “We took the personal connection for granted until it was deleted, and now it has become a much more precious commodity,” said Matthew Quinn, chief operating officer of Tibco, a software company based at Palo Alto, California, with offices in 22 countries. , including Canada.

Tibco recruited all of its employees to Slack last year, and Quinn says it has helped ease the transition to homework. But beyond the professional conversations that take place on the platform, Tibco’s social channels – including # Social-Yelling, # Social-TV, # Social-Pets and # Social-Games – were essential to the link to distance. “He created subcultures within the company, where people who have hobbies without work can come together,” he said.

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In fact, Quinn believes COVID-19 has brought parts of the business together. “It’s almost like after a traumatic brain injury, where the brain rewires for different pathways,” he says. “The social organizations that we are as people have found new ways through technology to maintain connections and create new ways.”


In the world of startups, the story of the rise of Slack is propelled by tradition. Mr. Butterfield – the son of an American dodger who spent his early years in a log cabin in northern British Columbia without running water or electricity – was working with a team of Tiny Speck developers on a video game called Glitch since 2009. (A previous gaming effort had spawned the photo-sharing site Flickr, which had been sold to Yahoo for $ 25 million in the mid-2000s).

But Glitch didn’t really work. “It was a complete failure,” said Andrew Braccia, partner of Accel, a venture capital company that invested $ 5 million. Mr. Butterfield wanted to return the money to the investors, but Mr. Braccia encouraged him to keep it and come up with another idea. “The job of a venture capitalist is to stay in touch with people who we think are really talented and who are going to start a business,” said Braccia. “I didn’t really care what he was doing – I wanted to be part of it. “

The result: Mr. Butterfield transformed Tiny Speck’s own internal messaging tool into a powerful collaboration center for businesses, and Slack was born. When the company went public last year, Accel’s investment in Slack – a total of US $ 200 million – was worth US $ 4.6 billion. Mr. Butterfield’s stake today represents US $ 3.2 billion.

Braccia, who sits on Slack’s board of directors, remains optimistic about the future of the business. “My general belief as a technology investor is that something like Slack, in any business in the world, is inevitable,” he says.

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The key words are “something like Slack”. In 2017, Microsoft announced Microsoft Teams as its “cat-based workspace” response to Mr. Butterfield’s company. Companies adopting Slack are drastically reducing their use of e-mail for intra-group communications, reducing the value proposition of Microsoft’s Office 365 suite, which includes Word, Excel and Outlook. As such, the software giant has invested its immense development resources and marketing dollars in targeting Slack, to the point that Mr. Butterfield recently told an American tech news site that Microsoft was “unhealthy concerned.” to kill us. “

Slack has a lot to gain in its battle with Microsoft Teams, a new image of Skype for Business more focused on voice and video calls. Slack integrates seamlessly with 2,200 applications (including Word and Excel files) – four times more than Teams. This is a draw for companies that are now using a dizzying array of specialized software applications. Slack is also enhancing the ability of several separate companies and organizations to share files and messages with each other, which could further reduce their reliance on email.

Meanwhile, users who have tried both systems quickly find that Teams lacks the elegance and design ethos that characterizes Slack – for example, the way users view and interact with photos shared on Slack. is very similar to that of a Mac compared to, well, a PC.

However, Microsoft’s war chest is almost 100 times larger than that of Slack. And while Slack offers a free version, companies that want all of its features have to pay for it. Every 200 million Office 365 users can get teams for free.

Are teams a real threat, or will they prove to be the Bing of communication tools in the workplace?

For what it’s worth, when Mr. Wachell and his team at Genus Capital shuffled their portfolios to identify the companies they thought were winning in the new digital world, Slack didn’t make the cut. “Slack is great, but there is a lot of competition,” he said, adding that Genus is evaluating the teams for change.

Rishi Jaluria, senior research analyst at D.A. Davidson & Co., however, sees an opening for Slack linked directly to Microsoft’s weight. Since companies in more traditional industries such as financial services, consumer products and healthcare are adopting real-time messaging and collaboration tools for the first time, they will likely be defaulted for Teams as they are already Microsoft customers. “But once companies make this change, it creates even more prospecting opportunities for Slack,” he says – once companies get a taste of real-time messaging, Slack can entice them by promising them a best experience. “I used both,” says Jaluria, “and Slack is a much better product.”

It is clear that Mr. Butterfield is increasingly frustrated by the story that the disappearance of Slack from Microsoft is imminent. “Almost all of our activity came at a time when Teams was distributed free of charge,” he explains. “If they were truly competitive, when does the empirical evidence of our continued success erase people’s belief that Microsoft will inevitably kill us?” “

One thing is certain: the market for helping distant colleagues stay connected has grown considerably. In May, Statistics Canada estimated that 40% of jobs in Canada “are likely to be at home” (roughly the share of the workforce that teleworked in the last week of March). In some industries, including financial services, educational services, and professional and scientific services, the potential for distance work affects more than 80% of jobs.

telework capacity in canada

Prof., scientific and technical. services

Information, cultural industries

Real estate, rental and leasing

Arts, entertainment, recreation

Admin. and support, waste management.

Other services (except pub. Admin.)

Health care, social assistance

Mining, quarrying, oil / gas extraction

Accommodation, catering

Agriculture, forestry, fishing, hunting

JOHN SOPINSKI / THE GLOBE AND THE MAIL

SOURCE: canada statistics

telework capacity in canada

Prof., scientific and technical. services

Information, cultural industries

Real estate, rental and leasing

Arts, entertainment, recreation

Admin. and support, waste management.

Other services (except pub. Admin.)

Health care, social assistance

Mining, quarrying, oil / gas extraction

Accommodation, catering

Agriculture, forestry, fishing, hunting

JOHN SOPINSKI / THE GLOBE AND THE MAIL

SOURCE: canada statistics

telework capacity in canada

Prof., scientific and technical. services

Information, cultural industries

Real estate, rental and leasing

Arts, entertainment, recreation

Admin. and support, waste management.

Other services (except pub. Admin.)

Health care, social assistance

Mining, quarrying, oil / gas extraction

Accommodation, catering

Agriculture, forestry, fishing, hunting

JOHN SOPINSKI / THE GLOBE AND THE MAIL, SOURCE: canada statistics

However, before the start of the pandemic, the share of employees working at home had remained unchanged for almost two decades, between 11% and 13%.

Murtaza Haider, associate professor at Ted Rogers School of Management at Ryerson University, attributes this to a “lack of managerial imagination”. The bosses could not stop equating the physical presence of an employee with productivity. “An employee who shows up at 6 am or who is late is considered a more difficult worker than an employee who could do the same job in three hours at home,” he said.

The pandemic, however, is what Professor Haider calls a “time-limited disruptor” – a short-term shock that will lead to long-term behavioral changes, similar to what happened following the embargo. oil on the 1970s. This means that we will have to make adjustments, including converting large volumes of redundant office buildings for residential purposes and rearranging homes to incorporate work spaces. “We’re going to have to reconsider our thinking and make the most of the technology,” he says.

Butterfield plans to be in the middle of the action. And even if he reaffirms that “remote work is here to stay”, he has a few reassuring words for all those who might not be delighted with their first taste of working full time at home.

“The good news for many people is that what we are doing right now is not remote working,” he said. “If you could go out and have a beer at 6 pm. or have your hair cut, or if people could take care of your kids, that would be really good. If we can combine the best of what we are going through with the best of normal life, that would be great. ”


M. Butterfield on …

Inequality: “I don’t think most people really understand how disproportionate the benefits of government are depending on your financial situation. For someone to be truly wealthy in the 15th century, it meant that he had his own army and built his own castles; otherwise, someone would come and take your money. Don’t worry about that now – let someone just kill your family and take your money, because we have the police, the laws, and the contracts. On the other hand, if you are very poor, the government is a net detractor. It makes your life worse. If you are a poor black child in South Side Chicago, the police don’t make your life better. “

Tax the rich: “I really think the wealthy should pay more taxes, no doubt. I am also sure that this will not solve many of our problems. Someone had said that if Dwayne (The Rock) Johnson had paid $ 50 million more in taxes, that would have been enough to solve the Flint water crisis. Here’s the problem: the US federal budget in a normal year was US $ 2.7 trillion. It is not money that makes these things difficult to solve. We do not have the political will. We don’t have passion. And we don’t have the right incentives in place. But there are some really easy reforms that would make a huge difference, and the most important one is that we tax capital at half the labor rate. I could work my ass by planting trees and earn $ 40,000 a year. Or I could have a few hundred thousand dollars producing $ 40,000 over a year. Why is this person paying half the price of someone who breaks their back? ”

Basic income: “You are disproportionately vulnerable if you are poor and you are very safe if you are rich. You are therefore removing some of this vulnerability so that people have enough to survive. People worry that if you give people money, they’ll just get high and play Xbox all day. But first of all, most people would not do it because they want to accomplish something in their life. But I’m not talking about giving them $ 100,000 a year either. I say, make sure they don’t have to choose between diapers and food, and then they won’t be able to enjoy it. ”

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