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Slack CEO on Microsoft's Windows 11: 'I don't think it's a fair tactic'

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Stewart Butterfield, Slack Co-Founder & CEO, joins Yahoo Finance Live to discuss why companies are able to function without offices, Slack's new features and competition in the software industry.

Video Transcript

ZACK GUZMAN: In its battle with other [? worker ?] collaborative tools, like Microsoft Teams, Slack is out with a new slate of its own tools to supercharge productivity in the work from anywhere environment. And one of those tools catching a lot of attention today, Slack Huddles, the new audio tool that will let you collaborate in real time with co-workers using your voice rather than having to type out all those messages and go back and forth, typing away all the time. It's an interesting new tool.

And for more on that and the other tools in that slate, want to bring on the co-founder and CEO of Slack, Stuart Butterfield joins us on the program today alongside Yahoo Finance's Brian Sozzi. And Stewart, appreciate you coming on here to chat. I mean, obviously, this battle has grown more intense. People have kind of gotten accustomed to working from home now. So talk to me about what these tools enable in unlocking that productivity.

STEWART BUTTERFIELD: Well, thanks for having me. Yeah, one of the things I think has happened over the last 20 years without us really noticing is we've gone from a world where digital technologies supplement the in-person techniques we have for communication and for managing and reporting on a business to a world where the in-person supplements the digital. And I don't at all discount the value of getting together face to face. I think it has tremendous value.

But I think what we've proven over the last year, 18 months is that we are able to function without offices. I don't think we would be able to function without software. And it's probably time for people to take a little bit more of an experimental or creative attitude towards the ways that we work. You can't go through life questioning everything all the time unless you're a professional philosopher.

But this is such a big moment of disruption. I think it kind of behooves us all as workers and as leaders to reimagine the ways that we work and think more about the virtual HQ or the digital HQ that we have in addition to the physical offices.

BRIAN SOZZI: Stewart, because of Slack's existence, I know that I have sent far fewer emails the past year and a half of the pandemic. That's just the reality of it. Once I do go back to the office, because of something like Huddles, will I have less meetings in person? Will this new feature just end the meeting?

STEWART BUTTERFIELD: Well, they won't end them, but I think it'll expand the repertoire of tools we have available to serve the same purpose as meetings. And so we launched Huddles, which is audio-only communication, different than a call. So you don't start it and stop it. I don't have to interrupt you in order to talk.

This is not a perfect analogy, but you can imagine it like a taxicab dispatcher or a police radio or something where people are tuned in, and if I speak, you'll hear me. The advantage of that is you can kind of have an ad hoc two-minute conversation instead of something that's structured, instead of having to wait till next Tuesday, 11:30 till noon, where we all have to stop what we're doing and join that call. And because it's scheduled for 30 minutes, we'll take 30 minutes. You can have those quick one-offs.

So you can imagine a group of marketers launching a new website or recruiters organizing a university job fair or whatever it is, you kind of recreate the spontaneity and the serendipity of office space communications. But on top of that, we also launched a new set of video messaging capabilities.

And ideally, that replaces some meetings, the ones where it's just kind of people going around the room and giving their update. Because we don't need to be doing it at the same time. And I think, you know, we've talked a lot about Zoom fatigue, but I think it's also just a matter of being really overscheduled. So if I can record my update for you at 8:17 and you listen to it at 9:53, that's the same value as if we all had to stop at precisely 9:00 AM and have this daily stand-up meeting.

BRIAN SOZZI: I remember, and I should have paid more attention to this, I remember you and I talking about features like this last summer, and even before then, at the height of the pandemic. So I guess you gave me some guidance there on what's to come. But now that we're starting to go back to the office, and we will have a hybrid workforce, what other pain points are you seeing coming down the pike?

STEWART BUTTERFIELD: Well, it's funny. You know, we'll see how it turns out. But I feel like hybrid is a term that 10 or 20 years from now will sound kind of like paperless office does today. It obviously meant something at the time. But the question of how much paper there is in the office is not really an important one when you think about how the organization operates.

And I think, ultimately, the percentage of time that people are in the office will feel as irrelevant to how the organization operates given the set of technologies we have to transcend that. And again, I think it's great to get together in person. I don't think we need to do it all the time. And that's what we've proven.

There's two other things to take into account here. And one from the employer's perspective, being able to hire from anywhere, this is something that we really felt the advantage of, rather than only those locations where you have physical offices, is huge. You get a big range of talent, becomes more inclusive and more diverse.

And from the employee perspective, I think it'll be kind of a market-driven decision how much time people end up spending physically together. Because imagine you're a software engineer in a competitive environment and you have two job offers and one is you must come into the office five days a week and the other one is you have the option, who wouldn't take the option?

You know, given similar compensation, similar excitement about the opportunity, everyone would prefer to have that flexibility. And I think that's a message that everyone should be hearing loud and clear from employees.

BRIAN SOZZI: Well, who is not hearing it, I would argue, Stewart, are the investment banks. I've been a bit surprised by the hard line some of these investment banking CEOs have taken with their employees, that, hey, return to work or you just may not have a gig. Do you think there's a cultural issue inside of Wall Street and even many other big companies that they just don't know how to use these tools properly and, frankly, don't want to?

STEWART BUTTERFIELD: Well, I don't want to speak for any of them. And I think some of it ends up exaggerated. There are interesting cases. So, you know, David Solomon of Goldman Sachs kind of famously proclaimed everyone's coming back to the office. I had breakfast with him a couple weeks after that came out.

And the thing he was principally concerned about is, like, 5,000 fresh out of college associates starting at the same time. And I think from the perspective of younger people, where the office is a greater percentage of their social life, it is important to get them together face to face. But at the same time, Goldman had their best quarter on record just the last quarter. So obviously the business is able to continue to perform with everyone working from home.

And rather than think about this as, like, everything's the same as February 2020 except we're only going to come into the office two days a week, you don't, like, hop to the future from some moment in the past. You kind of evolve from where we are. So if you think about where we are right now, it's net positive.

Like, we're going to-- as the pandemic kind of fades, we're going to have a lot of the amenities of regular life back, people going to the theater and live music and all that. So life is better. And then we'll also have in-person collaboration back as one of the tools in our toolkit to operate the business. But so many people went from 200, 250 days a year of business travel to zero.

People went from, you know, 90 minutes each way commutes every day to zero minute commutes. I think it's going to be pretty tough for people to give that up now.

AKIKO FUJITA: Yeah, Stewart, it feels like we're kind of beyond that conversation of going back to normal, especially when we consider how much has changed in 18 months. You've been talking a lot about the changes in the way we work. I wonder if the measure of productivity has changed as a result of what we've gone through. How do you think we should be looking at that?

STEWART BUTTERFIELD: You know, it's famously difficult to measure the productivity of software engineers. Because people have tried these things, like we'll count the number of lines of codes that they write. And so people change their coding style to be much more verbose. Or we'll count the number of bugs that they fix, and then people would, anytime they make a change, go file a bug and then fix it so it looked like their count was higher.

As more and more work shifts from the equivalent of clerical work and more and more of that stuff is offloaded to computers, the work that remains is more demanding of people's intelligence and creativity. It also means it's harder to manage, and it's harder to measure the impact. So for software engineers, one of things to look at, I think, is how happy are the employees?

Because if they're happy, it doesn't necessarily mean they're working their hardest, but if they're unhappy, it probably means that they're not productive, because it's incredibly frustrating to come in to work every day and feel like you're not making a difference, like if your work doesn't matter, like it's not adding up to anything. I think the way that we measure productivity will have to change.

And ultimately, businesses at a high level will judge their own results given how good those results were for businesses whose poor [INAUDIBLE] hammered by the pandemic, so financial services, technology, media companies, retailers, or online retailers, at least, all did very well over this period. And I think they have to take as a lesson from that, their productivity was high.

ZACK GUZMAN: Yeah, and I mean, we've seen some of the tools come out. I think one of the most overlooked tools in Slack has been Slack calls. I've been Slack calling everybody to the point where probably people are mad at me. But I am curious, as you see kind of competition here heat up, we had Windows 11 coming out and Microsoft bundling their Team software in with that, I'm curious, when you look at that competition, what you make of it and how big of a risk that might be to Slack's future growth if they are going that route.

STEWART BUTTERFIELD: Yeah, look, I mean, obviously, it's a familiar tactic, I guess, when you think about Microsoft. And I think-- uses a lot of leverage they have to try to drive their way into business. I'm not particularly concerned about it in the long term. Because you think about-- Instagram didn't need to be preinstalled on iPhones to get a couple billion people using it. It's where the value is.

So if you're an organization that, today, uses Zoom for video calling and you buy a new laptop and it has Teams installed on it, you're just going to install Zoom and start using that for video calling. And likewise, if your organization uses Slack channel-based communication, you're going to install Slack. So we'll see.

I mean, I don't think it's a fair tactic. And I'll leave it to the regulators to investigate the ramifications of it. But ultimately, I don't think-- you can't kind of force people to use software in the same way that back 20 years ago, when they preinstalled Internet Explorer, people just didn't know the internet. They didn't know browsers. They didn't know that there was an alternative. Now people know that there are alternatives.

BRIAN SOZZI: Hey, Stewart, since we last spoke, I hear you have a new edition in the family. Congratulations, baby Oliver is now a member of the family.

STEWART BUTTERFIELD: Yes, thank you, 6 and 1/2 weeks ago. And another fascinating thing about this, the pandemic is, so I've been on paternity leave, and that means I haven't been working very much. But the time I'm spending working at home as I've started to come back, it's a very different experience than if I had to get on the train every morning and had an hour-long commute and then was in the office all day and came home after the baby was asleep.

That kind of experience of being able to be closer to family I think is another thing on the list that it will be difficult for people to give up. I'm eager to get together with more of my work colleagues again in person, but I definitely-- from my personal perspective, it's not something that I need to do five days a week.

ZACK GUZMAN: Well, congrats on the figurative baby, and congrats on the literal baby here. Stewart Butterfield, Slack co-founder and CEO, introducing some new tools out there. Thanks again for the time, and thanks to Brian Sozzi as well.