emily: this is what happened the last time we interviewed stewart butterfield. [laughter] emily: yes, jared leto, the actor, who is also a tech investor with our chat with , stewart, the seemingly quintessential serial entrepreneur. but butterfield's story is anything but. in fact, he founded both of his companies by accident. flickr sold to twitter for $27

million and 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 grid in british columbia. what was that like? stewart: i am not 100% clear on it. 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 from montreal, and they really had no idea what they were doing when they tried to live off the land. 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. it was 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 lived 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 "noah" to mean "other child" and she took me on a train to go see the family and i had 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"" -- i did not realize there were other children, so that was a little weird. 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. it happened in second grade. it was 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 other children, which was flags easye world but only be flags like france and russia. , basically any tricolor, with a big horizontal flags, not like brazil or mexico or any of the fancy flags. emily: you studied philosophy. you wanted to be an academic? stewart: big interesting computers when i was a kid. in computersst when i was a kid. when i was an adolescent, i lost

interest. it wasn't until i arrived in university and i discovered the internet, this is in 1992, before the web started taking off. suddenly come i was back into computers because of networks because of the internet, as soon , as the web became popular, i taught myself how to make 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. the big 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 story, but by the end of february 2000, a couple of weeks before the crash, i quit. i could not stand working there. it was driving me crazy, i was walking away from about $10 million in equity and it ended up cutting bought out for $35,000 -- up getting bought out

for $35,000 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. the economic outlook is pretty dark, the nasdaq was down 80%, s&p 500 down 60%. not a lot of optimism about the internet but there is this burgeoning movement in 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 seen 10 years prior when i first

got online and that 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 game 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 who were enthusiastic but 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 flickr 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 an inventory in the

game world, you had a shoebox of photographs. it was really cool from a tech perspective. it 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 because you had to be online with the other person to share photos with them. emily: but the concept was very new. it sounds obvious today. photo sharing. stewart: 1992, game never-ending, flickr is really this idea of the use of toputing technology facilitate human interaction. in some sense, i'm agnostic about what the purpose of that is. it could be for play or for creative expression, or for work. emily: are you agnostic 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 i have the career i had is when i was born

and when i grew up, you and me are in 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 but with bigger consequences. 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 a real number? i do not remember but around there, yes. you moved 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 of "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 woman scans the first one and the second one and she says honey, these are all the same. and i said, no, that is ok. and she looks up at me and it -- and she looks up at the magazine and she reads the thing. i do not remember exactly what it said 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. do worry about hate -- do you worry about hate 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 connects people in a way that they wouldn't have been connected before. i think twitter, in particular, who gets a lot of criticism has , really been outstanding in amplifying the voices of people who would otherwise not be heard. emily: but they are also amplifying negative voices as well. 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. there were people who said terrible things on radio and use that to insight mobs and 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. we have to figure out how to move technology towards its consequences, we want it away from the consequences we don't want. 10 years ago, 20 years ago, we would have been public before we got to this stage.

emily: you left yahoo. you and caterina broke up, a lot of things changed. history repeated itself. andstarted another game that failed and you 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. and 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 were using instant messaging for those who aren't familiar, and it is based around what they call "channels"." it is like a chat room. you can give it a name. you use a hash symbol, which is where twitter got the hashtag from. unbeknownst to us, we are developing this in the background. it was not explicit. 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 supposed to be doing. emily: so when did you realize that slack was a thing, and glitch 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. there is always one more thing 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 do not believe it can work anymore. so the next morning, i told the board and the cofounders that we have to shut it down. while that was happening, we three were like, what do we want to do next? we all wanted to work together and we realized we would never 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 now, that you outpaced your own

expectations? stewart: i think we are unbounded in terms of opportunity and resources. the market is just way bigger than we thought. there are, ex-china, maybe 200 million people in the world who will be using slack or something like slack. the advantages are just so big. everyone will eventually switch, and there are 100,000 plus people using slack every day, of ibm but there are also farms and dental offices and small tax preparers. there are police departments using it, the norwegian department of welfare uses it, almost every academic research lab in 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 past, you said, it was easy money, you didn't need it.

is it that easy to raise now, or how have economic conditions changed? stewart: not for us. an increasing separation between the most successful companies, and everyone else. the market it -- the market still seem hot. 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 a great change in significant market conditions. microsoft has free teams. 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 will be interesting is people talk about new microsoft versus old microsoft. where that will make a difference is what the policies are for customers. first of all, it is a good foundation and second of all, we are ahead on the product side. emily: you are not worried about it. stewart: no. emily: ok. you said you are running the company to get ready to go public but you're not necessarily going. stewart: it is difficult to contemplate. there are not 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've chase speculation if there is a buyer out there for slack at this insane valuation. stewart: there are some people who would buy it. it doesn't work that way. circumspect more 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", there is no offer. nobody says, here is a check, do you want me to sign it? we are so optimistic. i would like to do this for another 10 or 20 years if i can. it does not make sense to sell it. also, when i say unbounded potential, we should end up as big as microsoft if we are able to execute the way i hope we can. 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 this in terms of policies at this point and there are all kinds of policies which i think are worth vigorous opposition, for different reasons, right? immigration policy for example on both moral grounds and a understanding of what has made this country great historically. other end of the spectrum, trade policy is something that could have a really significant damaging effect on both the american and the world economy. i still think we're going to

have some repair to do, but 10, 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 stances, how do you decide to do that? is it personal? stewart: 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 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 that realization? stewart: first of all, it wasn't just me, it was a company decision. we were around 30 people and we

looked around and this was looking like any other tech company. it is just a conversation that what we can do to make a difference. the real impact is more to come from building an inclusive culture where different types of people can thrive where people are less likely to fall out of the industry. because the longer someone from an underrepresented group or a woman in technology stays in 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 the way we are going to get 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 we are willing to try to increase 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 move 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 think you will see a bigger and more profound change than anyone realizes. 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 -- work all the time. do you think about the irony of that? stewart: oh, yes. if your company has cultural really serious cultural problems, slack can make it worse.

if your company has healthy patterns and a high level of trust and respect, high-level communications slack can make it even better. when you look at people and their individual functional roles today versus decades ago, they are massively more powerful in their ability to get things done. where we have not seen as dramatic and improvement and what ends up being a limiting factor in performance, is communication. 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. we have concentrated our effort on 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 is like the degree of transparency, clarity around goals, trust, respect, alignment. the output there can be an order

of magnitude or several orders of magnitude greater. emily: how do you see your role changing in the next 5, 10, 20 years? you want 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 for 4.5 years, and by the time i figure something out, suddenly, we are 50% bigger and that doesn't work anymore. i'm sure i would not have said this out loud what my job was as ceo but what i would have thought in my head i would have said that my job is to be the smartest person in the room and make the important decisions. that is definitely not the job. the fundamental responsibility is to increase the performance of the organization as a whole. in an environment where you have no limit on the 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.

continual learning and improvement for the whole organization will 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.

manus: you are watching the "best of bloomberg daybreak: middle east." i'm manus crowley. aramco's ipo is a no go for the time being. the giant is preparing to hit the debt market with its first international bond offer. moody's downgrades 20 turkish banks and warns the worst is yet to come for the economy. the -- the president rouhani suffered another setback, this time losing his finance minister. total's exit from iran may have given china opportunity to swoop in on some of the most coveted energy assets in the world.