Philosophy major takes road less travelled to tech fame
Stewart Butterfield’s messaging platform Slack is one of tech’s hottest properties
Stewart Buttefield of Slack speaking at the Web Summit in Dublin. Photograph: Niall Carson/PA Wire
Stewart Butterfield is enthusiastic about Irish food. Particularly apples, which he says are better than most in North America, but brown bread and butter also get a special mention. Although he doesn’t claim to have any expertise, it’s worth noting that Butterfield has a bit of farming in his background; in fact, he doesn’t come from the typical tech background at all.
The Canadian-born entrepreneur founded Slack, which is considered one of the hottest tech companies around at the moment and a fast-growing business app. It’s a messaging platform for teams that integrates a number of services including Twitter, MailChimp Asana, Dropbox and Zendesk, into a searchable archive that teams can follow and search.
Butterfield also has a master’s in philosophy and spent his early years living in a log cabin in a fishing village in British Columbia. Although he says he barely remembers the cabin, there were perhaps a few early lessons to be learned from his parents, who moved there with friends to live off the land.
“They each had their own independent property and they were all bad at farming in their own way,” he says. “They grew a lot of vegetables, things like squash that want to grow, but they also tried to grow wheat in the rainforest. They thought they would be able to do all the stuff that a whole village could do. There’s a reason that Miller is a last name; it’s an actual occupation, because milling wheat is its own speciality.”
His parents met when his father went to Canada to avoid being sent to fight in the Vietnam war. Two years into college, he decided to drop out in the wake of the Martin Luther King and Robert Kennedy assassinations, and the shooting of students in Kent State university in 1970.
“He thought society was about to collapse, so he dropped out of college, and as soon as he dropped out of college he got drafted,” Butterfield explains. “Because he had done two years of college, he was made a sergeant right away. There was 32 men in the platoon, and the sergeant is head of the platoon; four of them could read and write out of the 32, two were white and 30 were black. They were all 17- and 18-year-old poor kids from Alabama, Mississippi and Georgia, and he was supposed to lead them to go to fight Vietnamese people, who we had no quarrel with. It’s such a f**ked up thing.”
Staring down the prospect of being shipped off to bootcamp, Butterfield’s father jumped a fence and headed for Canada.
Although he admits that he’s not quite sure what lessons he would draw from his father’s experience – apart from the fact that he would do the same in his situation – he says there was definitely a willingness to explore, in the context of a time when a lot of people were willing to explore a lot of things.
“Society didn’t collapse, but the tracks that people would typically be on kind of shattered and people spread out. People started doing all sorts of other things,” he says. “Like going to try to live off the land.”
Fast forward a few years and the family had given up on the log cabin, moved to the city and Butterfield got into university to study philosophy. It was the mid-1990s, a time when the internet was in its early days for most people, but being affiliated to a college meant that Butterfield got an internet account.
That was where the obsession was born.
“It was amazing for me to find you could reach all these people all around the world. There was probably only a couple of hundred thousand people online at the time,” he says. “Whatever you were interested in, you could find other people who were interested. And so it became kind of an obsession.”
That led to a job designing web pages, and a move to San Francisco, now the heart of the tech scene on the west coast of the US, and the rest, as they say, is history.
Well, sort of. While Butterfield is currently well known for his communications platform Slack, he was also involved in a number of other startups.
The best-known of those was Flickr, the photo and video hosting site that Yahoo bought in 2005, a year after it was set up by Butterfield’s company Ludicorp. The original intention wasn’t to set up a photo service; Flickr came about from tools Butterfield and his company Ludicorp had created for a massive multiplayer online game Never Ending. The game wasn’t a success, but Flickr was built as a standalone project. “I think Flickr missed an opportunity to be something more like Wikipedia for images. It has amazing image search. If you want to find a photo of a particular type of bird, then Flickr is probably your best bet. I think it’s an important and valuable thing,” he says.
“There was a point well before I left that it was clear that in terms of social photo-sharing, Facebook had completely taken over. When we started Facebook was maybe a 10th the size of Flickr; when I left, Flickr was a 10th the size of Facebook.”
But bigger things were waiting. Butterfield tried the game route again, this time with Glitch. Again, the game didn’t take off. But as before, there was something that turned out to be valuable: the internal communication system the developers used for the project.
“It wasn’t technically Slack, it was a proto-Slack, a system that was very much like Slack. Then we realised when we decided to shut down the game, this was something we would never be without again, and perhaps other people would also like it,” he explains. “So it made it an actual thing.”
Slack, by any measure, has been a success. Only 21 months after it first opened officially, the company has 1.7 million daily active users, with 480,000 as paid subscribers. It recently hit a milestone of one million users online at simultaneously.
“We only count people who are active every day, because if you’re not active every day, you’re not really using it,” says Butterfield. “Facebook has maintained a ratio of about half of the monthly users use it has daily, which is pretty amazing for a service you don’t have to use.
“When a team is switched to Slack, they do it because they want to, obviously, but once you’re using it in the workplace you have to use it whenever you’re working, so there’s definitely a “come back every day” rhythm to it.”
It has certainly taken off. The number of paid users signing up is increasing all the time, even if it takes some time for them to do so after initially establishing their Slack team.
“At some point it dawns on them that we’re asking for 22 cents per person per day. It’s usually less than you’re spending on soda for the office, or coffee. And what’s more important to you – the communication software people spend hours a day using becomes your team’s collective archive of intelligence, or coffee?”
The company was recently valued at $2.8 billion, putting it among the higher valuations out there. But that doesn’t mean that it’s any further evidence of a tech bubble, Butterfield says. It’s a business cycle.
“We’re definitely at the high end of it right now,” he says. “It’s foolhardy to say that this is the top if you’re going to try to make a business decision based on that. We’re definitely very far from the bottom, and that’s very clear. Whether the valuations for late-stage companies are sustainable is really a function of how well this graduating class of companies does over the next couple of years.
“We have a lot of cash right now and we don’t burn very much of it , so if there was a correction, we’ll be sitting on a giant pile of cash, which is a great place to be. Rent gets cheaper, competition for employees is reduced, advertising rates are less and it’s cheaper for us to buy other companies.”
The company has been expanding, and now has offices in San Francisco, Vancouver and Dublin.
Slack set up its Dublin office earlier this year, with plans to employ more than 100 people in two years. It’s currently at 25, but not because of any unwillingness by the company to expand further; rather, it’s the commercial property situation in Dublin that has held up hiring at the fast-growing firm. The company is still seeking a permanent home for its European headquarters, but it’s unlikely that it will joining the Silicon Valley alumni in Dublin’s Silicon Docks area, by design rather than circumstances.
Next on the agenda is refining the Slack platform and creating its Enterprise Slack offering for larger organisations that will allow companies to federate multiple teams together. That’s due to come next year.
Improvements are made partly because the company uses its own platform on a daily basis, so anything that irritates users can be quickly identified and fixed.
“If you worked at a company that makes payroll processing software, you could work there for your whole career and never once process any payroll. But if you work at Slack, making Slack, then you use Slack all day every day. So if there’s something that’s an irritant, some stupid thing that we’re doing, we notice, and we have a motivation to fix it beyond just the fact that it’s good for business and it would make customers happy,” Butterfield says.
“It’s inherently hard when the people who make [the product] are different to the people who consume it.” Suddenly we’re back to food again.
“The people who make this nice butter definitely use the butter themselves. If it tasted terrible, they would notice.”