Skip to main content

Stewart Butterfield, the chief executive of Slack, at the company’s office in San Francisco, March 10, 2015.JASON HENRY/The New York Times

Stewart Butterfield is feeling good.

In the past year, a number of so-called "unicorn" startup companies in the billion-dollar valuation club have seen writedowns – including Canada's Hootsuite Media Inc. (U.S. asset manager Fidelity wrote down the value of its stake in the Vancouver startup by 18 per cent earlier this year). Not Slack, though.

Founded and led by Mr. Butterfield, the British Columbia native who also co-founded photo-sharing site Flickr, Slack Technologies Inc. on Friday boosted its valuation to $3.8-billion (U.S.), with an additional $200-million injection of venture capital. The San Francisco and Vancouver-based company has raised $530-million in four funding rounds since its launch in January, 2014.

The chat-like business communication service, whose customers include Samsung, NASA, Salesforce, Airbnb and Time Magazine, has 2.7 million daily active users and 800,000 paid accounts. The company has plans to triple its work force, currently about 430 employees, this year. That includes a plan to double the 65-person Vancouver office (the second largest of the company's five outposts, after San Francisco). Mr. Butterfield recently spoke to The Globe and Mail before heading to Australia, where the company is opening a new office.

Are your Vancouver hiring plans a move to take advantage of the low Canadian dollar?

We don't make investment decisions based on [the dollar]. Since this company has existed, the Canadian dollar went from near the peak of $1.12 [U.S.] to 68 cents, a giant swing. Vancouver's an incredibly expensive place to hire; it's an incredibly expensive place for everything at this point, so it is nicer that it's cheaper here. Vancouver is where I live. It's one of our first two offices, and it's certainly somewhere we want to grow quite a bit.

Why hasn't Slack, which pulled in several rounds of venture capital over the past two years, been viewed as a company with a frothy valuation?

The story of Slack is kind of unique and very much separate and unaffected by what's going on in the broader markets. There was a kind of stutter in the public markets in January, although it seems like things have recovered again. This [valuation bubble] conversation has been going on for years, though, since 2011, it's been the same story. There just is a business cycle. Things that make sense in an up part of the cycle may not make sense in a down cycle.

We're in a very fortunate position where we're continuing to grow very strongly. We are a company that has had a high degree of gross profit from the beginning, we've been investing wisely. We haven't really invested much of the capital we've raised so far. Part of the reason we raised [more funds] was a hedge against changing market conditions.

Last week, Microsoft was the latest big tech company to go all in on interactive bots as a way to help consumers find and use technology solutions outside the traditional app-store model. Slack has a history and an investment in bots, but are they the future?

I personally believe that some of the most important software product categories that will evolve in the next couple decades are going to be driven by conversational interfaces – powered by AI [artificial intelligence] and machine learning back-ends – to try and further enhance people's productivity. Whether that's filing your expense reports, booking business travel, ordering office supplies or scheduling meetings through a conversational interface by talking to a bot.

I'm the CEO; I have an assistant now for the first time in my life ever for the last six months. It's been completely revolutionary. I no longer file expense reports, so I no longer experience the pain of it. What if everyone had a virtual assistant to do that kind of effort … like approving time off or submitting time-off requests? We want to really encourage developers to create cool things for Slack.

Why wouldn't you just build your own in-house competitor to every popular bot?

It would be hopeless for us to try and disintermediate Dropbox, Concur, GitHub, ZenDesk or Twitter. Twenty years ago, when I first got started in this industry, we got most of our software from Microsoft. Now we buy software from 80 different vendors because there's just more software product categories.

No one could ever possibly, no matter how big the company, provide all of those different services; there's no point in even trying. Software is easier to make and easier to distribute than ever. The role we want to play is something that enhances.

A lot of people speculating on the troubles Twitter is having look at Slack's interface and think: Couldn't this just replace Twitter with some tweaks? Would you ever add more features for public-facing consumer-Internet uses?

I don't want to promise that we would never, ever do anything. … I can't rule it out completely. I'm not trying to be cagey about it, but we can barely keep up with the growth in the core product.

It's not that we try to discourage people from using Slack for their families or community groups, or for whatever. The social use of Slack does drive awareness – it's a good thing for us. But it's not anything we can support and [still] do a good job for our existing customers. We're adding thousands and thousands of new paid users every day. It will be a while before we have the ability to take on more things.

This interview has been edited and condensed.