7 Quick Lessons on Startup Growth From the CEO of Slack

By: Brianna Valleskey 

There’s no question that Slack’s growth has been tremendous. The cloud-based collaboration software and message app now boasts more than nine million weekly users, six million daily users, two million paid users and 50,000 paid teams. Though the product officially launch in February of 2014, Slack generated an incredible amount of momentum throughout 2013 with clever marketing tactics like letting friends use it for free to provide feedback and inviting people to a “limited preview release.” (You can read more about it here). I learned a lot more about Slack when its CEO, Stewart Butterfield, spoke at this year’s INBOUND conference. Stewart is also the co-founder of Flickr, which sold to Yahoo in 2005 for (reportedly) around $20 million. So clearly, he knows a thing or two about scaling a business.

My favorite piece of advice had to do with coming up with Slack’s name. He cited “The 22 Immutable Laws of Branding,” which advises choosing a name that you can say aloud and not have to spell for people. Fun fact: Slack was very nearly called “Honeycomb.” But, Stewart and his team wanted a name they wouldn’t feel embarrassed to tell others, was easy to say and spell (ideally, and English word), and had some emotional resonance. He explained that “Slack,” is a technical term in project management, describes how much excess capacity a system has to take on work. The Slack platform was designed to make people more productive and successful. And when that happens, you get some slack ― more room for creativity and innovation.

Thus, the Slack brand was born. But Stewart knows there’s so much more to branding than a catchy name and stylish logo. He shared a lot of other important leadership tips that contributed to Slack’s success. Below are some of my favorites.

Stewart Butterfield’s Seven Steps for Startup Success

Step One: Create a collective knowledge base of your company.

Not surprisingly, Slack’s own software has contributed quite a bit to the company’s growth. One of the major benefits of Slack is that it maintains a record of every conversation. If you’re an employee at a new company with 10,000 people, for example, you start off with an empty inbox. Billions of messages have been shared between people before you started, but you don’t get access to any of that information. Slack automatically accrues a massive archive of what’s happening at the company over time, Stewart explained. That enables new people to easily understand social protocols, norms, who answers questions, who makes decisions, etc. just by scrolling through various channel histories. There’s also a real value to those records in terms of more accurately communicating messages to other team members who might need to coordinate with your team.

Step Two: Foster alignment with lateral transparency.

The more a company grows, the more difficult it becomes to maintain alignment across an organization. Transparency helps. Slack provides that transparency in the sense that it removes opacity from an organization. People have the ability to understand what’s going on in various departments, instead of feeling left out on decisions and updates. Technical operations can see what the support team is dealing with. Designers are in tune with what engineers are working on. Stewart said that most of management’s effort in any company is coordinating people so that everyone understands what’s going on throughout the company. Slack helps with that.

Step Three: Don’t immediately search for an exit.

Stewart admitted he somewhat regrets not trying to make the Flickr platform even better for users before selling it to Yahoo. He can’t definitively say that Slack will never be acquired, but it’s not in the plan right now. Slack’s current valuation is in the billions of dollars. The company now has $200 million in annual recurring revenue, and Stewart said it would be a “banonkers” (his combination of bananas and bonkers) decision to not see how far they can take it. Instead, he said Slack should be the giant company that goes around acquiring other companies.

Step Four: Encourage risky projects.

When people are at a big, fast-growing organization, they tend to gravitate toward safe projects because they don’t want to put their job performance in jeopardy. Yes, those projects could have high rewards; but they also have high risks of failure. In order to keep innovating, however, Stewart said you need people to keep going after those risky projects.

Step Five: Branding is what happens when people interact with your company.

Slack has responded to almost every single message people have tweeted at the company, thousands of which Stewart, himself, replied to from the company account. He believes that a brand is the sum of all the interactions people have with your company. That’s why Slack focuses on small details like fast-loading pages and clearly written copy. But more importantly, the company responded to every single one of the thousands of customer support tickets they’ve received over the years. He thinks of if as investment in marketing. And it works. Slack has a 98 percent customer satisfaction rating.

Step Six: Put customers first. Always.

Internally, Slack’s measure of success in the long term is the amount of value it creates for our customers. Create so much value for your customers that they’re happy to pay you, Stewart advised.

Step Seven: Exercise and meditate first thing in the morning.

Oh, that’s not Stewart’s routine. He joked that he starts most days by grabbing his smartphone and looking through all his emails and slack messages until he’s so anxious that he just has to get out of bed. He does not recommend this. “Those people that exercise and meditate in the morning ― follow what they do,” he said, laughing.  

What’s ahead for Slack?

Of course, Stewart’s session had to touch on what the future holds for Slack. Part of the current roadmap is to make the software smarter, perhaps even creating a feature that acts as a “virtual chief staff.” The software would read all your messages for you and proactively suggest the most important tasks for you to complete that day. Stewart confessed that he probably has more than 50,000 unread messages at any given time (which that makes sense given his CEO status). He manages to get through 50-70 percent of the messages that are important to him. It would be great if he could get through all of them, he said, and with a sense of priority.

“Decision fatigue is a real thing,” Stewart said. “The more decisions you have to make about priority depletes your ability to make those decisions.”

I definitely see where he’s coming from here. And with the pace that artificial intelligence is advancing, this feature might be something we could see in the near future. But for now, I’m quite satisfied with the amount of connectivity and productivity I get from the current platform.

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