♪ emily: this is what happened the last time we interviewed stewart butterfield. [laughter] emily: yes, jared leto, the actor, with our chat with stewart, the silicon valley entrepreneur, but butterfield's story is anything but. -- the seemingly quintessential serial entrepreneur. but butterfield's story is anything but. in fact, he founded the companies by accident. one of his companies sold to

twitter for $27 million in today, slack, the workplace 2004. collaboration app, is worth more than $7 billion and is now battling amazon, google and facebook. joining me is the slack ceo and cofounder, stewart butterfield. ♪ thank you so much for being here. stewart: my pleasure. emily: you had an unconventional childhood. your parents were hippies and chose to raise you off of the great in british columbia. what was that like? stewart: it was, in many ways, an idyllic childhood. no running water until i was three, no electricity until i was four. my father was from new york, and my mother was for montréal, and they really had no idea what to they were doing. it was pretty easy to grow a big zucchini but you cannot live off zucchini. [laughter] when i was five, we moved to the city so i could go to school.

a more normal experience. emily: your birth name is actually "dharma," which means "the way." stewart: yes, a complicated concept, but central to hinduism and buddhism. emily: how did that shape you? and what kind of a kid was dharma? stewart: i was very curious. my mother tells the story. there was another family who live near us and and they had a son who was maybe six months younger than me, and his name was noah. he was the only other kid i knew. it turned out that i understood "other child" and i have never been anywhere where there were so many people around. so i go on the train, and i was wide-eyed and went "noah, noah," realize there were other children, so that was a little weird. [laughter] emily: given that seeing other children was a rare occurrence,

when did you see a computer for the first time? stewart: by 1980, we had an apple 2e. i was super into it. with the first class in my school to have computers in the classroom. in apple basic, you could do pretty easily do some basic graphics. make this square, this color. so i made an interactive multimedia experience for the which was flags for the world, but on the super easy ones, like france and russia. basically any tricolor, with a big horizontal flags, not like brazil or mexico or any of the fancy flags. you studied philosophy. he wanted to be an academic? stewart: when i was an adolescent, i lost interest in computers. inwasn't until i arrived university and i discovered the

internet, this is a 1992, before the web started taking off. suddenly come i was back into computers, because of the networks. internet, as soon as the web became popular, i taught myself how to make a web pages and that was my summer job. by the time i finished my masters degree, i had no idea what i was going to do. except be an academic. five philosophy firms are always bigh by the way, the bi five philosophy firms aren't always hiring. it was 1998, and the dot com boom was in the upswing, and i had some very marketable skills. emily: so instead, you joined a startup. stewart: it was too long of a by the end of february 2000, a couple of weeks before the crash, i quit. it was driving me crazy, i was walking away from about $10 million in equity and it ended up getting bought out for $35 million, which was more than anybody else made if you stuck

around. the startup was funded by the person i sat next to my first day at this job, and i convinced him to quit. running the app was kind of a hobby, so we started it up as a business, so we did. emily: and it actually sold, and you made a lot of money. you made something. stewart: i made something, and that was pretty fast, but now, it is 2001, and that trough ended. worldcom and enron were happening, and not long after, 9/11. reallynomic outlook was dark, the nasdaq was down 80%, s&p 500 down 60%. not a lot of optimism about the internet, but self-expression, there was this burgeoning self-expression on line, which was blogging. from the late 1990's until the early 2000's, there was just such an active community who were innovative, but there were relationships. it hearkened back to what i had

been 10 years prior when i first got online, and it has been a theme for the whole career. started a company to build a web based multiplayer game. emily: a never-ending game, literally called a game that was never-ending. stewart: exactly. this was 2002, and people were investing in that at that time, can you guess? emily: unlikely. [laughter] stewart: definitely, there was an audience for that, a pretty small audience. we put our own money into it, and we got to the point where the only person who got paid was the one person on the team who had kids. and we just couldn't do it, so we ended up making flickr which was, obviously, like a big turn. emily: so, in the wreckage of the dot com bust, you started by accident. what made you see that it could be something? stewart: desperation. fundamentally, we had developed a bunch of technology for the

game that we thought was interesting in its own right, instead of the inventory in the game world, you had a shoebox of photographs. it was really cool from a tech perspective. we demoed really well and people were impressed. i did not know you could do that in a browser. it wasn't really a great product, you had to be online other person to share photos with them. emily: but the concept was very new. it sounds very familiar now. fathephoto sharing. stewart: 1992, game never-ending, flickr is really this idea of using technology to facilitate human interaction, in some sense, imf agnostic about what the purpose of that is. it could be for play or for creative expression, or for work. emily: are you enthusiastic about the results? it could be for good or for bad. stewart: technology gives us options, it could be good or bad things that people do with it. part of the reason to have a career is right now, -- when i

up, you and when i grew and me are the last generation of human beings who will know life before and after the internet. despite the fact that there are some negative consequences, but people now have better technology, so they can do the same bad things they did before consequences.r it is a huge plus, and i think that as a species we should be grateful that we got the internet. emily: flickr was so hot that the year after you launched, you sold it to yahoo! for 22 million to $25 million. is that the right number? stewart: around there, yes. emily: you move to yahoo!, and you became like a dot com star. stewart: it was the first thing that was like a phenomenon since the original dot com crash, and -- in 2004, we were on the cover ." "music the issue came out, i was in a new york city at jfk, i get

through the security and i see the magazine. i grabbed a stack of them and put them on the counter and the the first one,ed she scanned. then she scanned the second one and she said, honey, these are all the same. and i said, no, that is ok. and she looks up at me and it looks up at the magazine and she realizes comanche is so excited. i do not remember exactly what it said, but to have flickr and -- web 2.0, how flickr and myspace are changing life. [laughter] emily: you talked about how one of the strengths of flickr was the culture and how caterina would welcome every single user. today, that doesn't happen on facebook and instagram and in fact, online hate is a huge problem. the worry about that on social media? stewart: i do. one of the things we say in my company is that your culture is the worst behavior you are willing to tolerate. not everyone tolerates the worst behavior on twitter, but collectively as a society, as a

business, as a culture, we tolerate it in a sense that it hasn't been eradicated. it shifts the boundaries to what is acceptable in a way that kind of encourages more bad behavior, and i think it probably has a negative impact. on the other hand, i think the net impact is hugely positive. i think it people in a way that they wouldn't have been connected before. i think twitter, in particular, gets a lot of criticism and has been outstanding in amplifying the voices of people who would otherwise not be heard. but it is also amplifying and negative voices, should they be doing more to stop that? stewart: they probably should. it is not like an obvious, terrible thing that as a society, we would be better rid of, but people used to say terrible, nasty things on the radio and used to that to insight not only mobs, but also

political movements that were super damaging later on. it takes a while to figure out how to use technology, and sometimes it takes generations. right? we have to figure out how to move technology towards its consequences, we want it away from the consequences we don't want. ♪ stewart: 10 years ago, 20 years ago, we would have been public before we got to this stage. ♪

emily: you left yahoo! broke up, a lot of things changed. stewart: yes. but history actually repeated itself. and itrted another game, failed, and he started another company by accident. stewart: yes, it was me and three other original members of the flickr team who all worked at yahoo!. we left and we said, this time, we can't fail.

there are 10 times more people online. hardware is 90% cheaper than it used to be, and the internet is faster, and we are all more experienced. but we definitely failed again. so a more ambitious project, and we were able to raise more money. emily: this was glitch. stewart: this was glitch. we were working on the game, we , instantg irc, messaging for those who aren't familiar, and it is aced on what they call "channels"." it is like a chat room. it is a name, you use a hash symbol, which is where twitter got the hashtag from. evidence to us, we are developing this in the background. it was so irritating to have a problem, and then we would address it in a number of minutes and then get back to what we were doing. and we let that kind of talk. emily: so when did you realize that slack was a thing, and was most certainly not? stewart: it happened the other

way around. there was a moment, late at night, i hadn't been able to sleep well for a while. i was always worried. the result is something we could try, and it was always like one more thing that would make a difference. it was a little too weird, little bit too esoteric, and i didn't believe it could work anymore, so the next morning, i told the board and the cofounders that we had to shut it down. wele that was happening, three were like, what do we want to do next? we all wanted to work together and we realized we had never worked with a system like this which we had developed inside the company. maybe that was something that other people would want. emily: slack now has 3 million paid users, 65% of fortune 100 companies. stewart: yes. it is not what i expected. and the potential seems like, unlimited. emily: so, what are the goals out tasty ownfar

expectations? stewart: i think we are unbounded in terms of opportunity and resources. the market is just way bigger than we thought. ex-china, maybe 200 million people in the world who would inevitably be on slack or something like slack. the advantages are just so big. everyone will eventually switch, and there are 100,000 plus day,e using slack every instead of ibm, but there also firms and dental offices and small tax preparers. departmentslice using it, the norwegian department of welfare uses it, san francisco, berkeley, stanford, they use it. the federal government, the range of utility was way greater than we thought when we first got started. emily: so you raised hundreds of millions of dollars, and in the

said, it was easy money, you didn't need it. now, orat easy to raise how have economic conditions changed? stewart: certainly for us, what has happened is there has been a n increasing separation between the most successful companies, and everyone else. it is like in its own category. the market still seems hot in the broad sense. i worked through the dot com crash, and i personally held shares in lehman brothers the weekend they went bankrupt. i didn't think that stocks could go to zero, but they literally went to zero. so i am conscious of the cycle. emily: you're holding it for a rainy day. stewart: it is a great hedge against significant market conditions. team, microphones has a facebook has one, they are built as a slack killer. is that cutting into your share at all? stewart: no. it hasn't shown up in actual usage of customers yet.

where it does show up is in the sales process. i think what is interesting is people talk about new microsoft versus old microsoft. where i think it would make a difference is what the policies are for customers. first of all, there is a good foundation and second of all, we are ahead on the product side. emily: emily: you are not worried about it. stewart: no. emily: ok. you said you're getting the company ready to go public but you're not necessarily going. stewart: it is difficult to contemplate. we are kind of in the same position. there aren't many outcomes where we don't end up going public. i don't have any timeline, we are not in a rush to achieve that. it is an unusual circumstance because i think 10 or 20 years ago, we would have been public long before we got to this stage. we are a big company with hundreds and millions in revenue and we are still private. emily: would you consider selling? we have chased speculation if

of there is a buyer out there for slack at this insane by a valuation. stewart: there are some people who want to buy it. but it doesn't work that way. companies. it is a much kind of circumstance conversation. interested in talking about how companies can work more closely together, we would be interested in having that conversation, something like that. if we don't respond positively to that, like if we don't say, "yes, it sounds great, let us talk about it, go errors no offer. nobody says, here is a check, do you want me to sign it? we are so optimistic. it does that make sense to sell it. also, when i say unbounded potential, we were able to execute in the way i hope we can. we should end up as big as microsoft if we are able to execute the way that they want to. by the time i figure something

out, suddenly we are 50% bigger and that doesn't work anymore. ♪

emily: you have not shied away from speaking out against president trump or candidate trump. when i interviewed you for my book, i remember you talking about how you thought the world was getting better, and then the day after the election, you realized it wasn't getting better. what do you think about the world today? stewart: that is pretty dramatic. i like to think about it in terms of policies at this point to read there are all kinds of policies which i think are worth vigorous opposition, for different reasons, right? immigration policies for example. just understanding of what has made this country great historically. the other end of the spectrum, veteran policy is something that could have a really significant damaging effect on both the american and the world economies. i still think we're going to but 10,e repair to do, 20, 50, 100 years from now, i

think we will be in better shape than we were. emily: you have come out in support of planned parenthood. you spoke out against the travel ban. when you make and take these political stance, how do you decide to do that? is it a personal thing? you have a company -- >> i think we have to take the battle as a company. i think as individuals, we are absolutely free to make our choices. i try to separate my activities as an individual person from those of the company. emily: i know you're nervous about being held up as a model for diversity, but the truth is your numbers are far above the industry average when it comes to diversity, and you personally decided very early on in the slack life to make it a priority. what was the spark that brought you the realization? wasn't: first of all, it

just me, it was a company decision. wewere looking around and saw that there were 30 on people and it was looking like any other tech company. it is just a conversation that what we can do to make a difference. there is more to building an inclusive culture, one where all different type so people can thrive, where critically, people are less likely to fall out of the industry. because the longer someone from an underrepresented group or technology stays income of the more success she has in her career, the greater the odds that she will bring someone from her network, that she will be a mentor or role model. that is how we hoped to make a lasting change. what we have seen happen is we have made some positive moves and we have taken a very open, experimental approach to things were willing to try to increase both diversity and inclusion. as a result of that, we have attracted a lot of people, and success begets success. emily: 43.5 percent of your workforce is female, versus 30% industry average.

your numbers are better across the board, whether it is women, african-americans, others. facebook and google, meantime, just released their diversity reports, and the numbers have barely moved. how can the rest of the industry do this in a substantial way, and what is your advice to young entrepreneurs who are starting at the beginning? stewart: the second question, i would say, start as early as possible. which i guess answers the first part of the question, how do you get big? it is hard to move things on a percentage basis. people have unrealistically high expectations of what kind of change we can see in the short term, but in the long term, i see the bigger change. emily: slack is dramatically changing the future of work. in many ways, it increases flexibility but also means that we are connected to work on the time. do you think about the irony of that? stewart: oh, yes. when your company has cultural really serious cultural problems, slack can make it worse.

if there is a high level of trust and respect, high-level communications slack can make it , even better. future work is, when you look at people in other individual functional roles today versus decades ago, they are massively more powerful in their ability to get things done. thatwe haven't seen is dramatic improvement in what ends up being a limiting factor in performance, is communication. how difficult it is to gain the alignment you need. because the difference between the best and worst performing teams is far greater than the best and worst performing individuals. concentrated our work on the individual worker productivity and time management skills and to-do lists, getting things done, things like that. and far less on what is probably the more important thing to change, which is the degree of transparency, clarity around goals, trust, respect, alignment. the output there can be in order

of magnitude or several orders of magnitude greater. emily: how do you see your role changing of a next 5, 10, 20 years? would you like to keep doing this? stewart: i feel i am behind where we should be because we are growing so fast. we have only been in the market the time irs, and by figure something out, suddenly, we are 50% bigger and it doesn't work anymore. maybe i shouldn't have said this out loud, if you had asked me to years ago what my job was as ceo, inside my own head, i would have said that my job is to be the smartest person either in the company or in the room, or whatever, and make all the important decisions. that is definitely not the job, . the fundamental responsibility is to increase the performance of the organization as a whole. thehave no limit on opportunity or resources available, it is really just a matter of figuring out how to amp it up, how to work more quickly come how to grow more quickly, how to make customers happier, how to do all of that better.

learning and improvement for the whole organization will continue to be the driver of our success. emily: we will see how ramped up you are in five years. thank you so much for joining us, stewart butterfield. great to have you. ♪ retail.

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