The slide deck that Slack CEO Stewart Butterfield shows to new hires reveals how he never expected the company to get so huge
Cindy Ord/Getty Images
- Stewart Butterfield didn't anticipate that Slack would become the $5 billion company it is today.
- An early investor presentation he shares with new employees illustrates this.
- Butterfield expected a "best-case scenario" far below what the company has achieved.
Almost everybody who works in tech, media or any other knowledge industry today has probably heard of Slack.
The chat app helped replace or supplement email inside companies, and in doing so, became the world's fastest startup to reach a $2 billion valuation. After a recent $250 million investment led by SoftBank, Slack has surpassed $5 billion in market value.
To demonstrate what a moonshot Slack started out as, the company's CEO and co-founder, Stewart Butterfield, shows his new hires an early slide deck he used when he first raised capital from early investors.
"When new employees start at Slack, I share with them the presentation that we gave to our investors before we started development," Butterfield told Business Insider Nordic during a recent interview in Stockholm.
Bessemer Venture Partners State of the Cloud 2017/Intercom"[Back then] we thought that one day, we could get to like 100 million dollars in revenue and that would be the end of it. Like 10 or 15 years down the line, when we would have every single person who would want something like Slack," he said.
If anything, early-stage pitches tend to be geared to overestimating market potential.
Less than five years after launch, Slack boasts over $200 million in annual recurring revenue, and is still growing quickly.
"So it's a lot bigger market than we thought at that time," Butterfield said.
Initially, Butterfield had used the last money of his failing game company, Tiny Speck, to design Slack, a "really jerry-rigged" iteration of a chat tool called IRC.
"We kind of discovered Slack, at least the core features, rather than designed it. I think it's one of the reasons it's been successful," Butterfield said.
However, Butterfield and his team only considered the needs of small teams "exactly like us."
In contrast, Slack's main revenue growth today comes from companies with tens of thousands of employees.
The main engine of growth has been the "bottom-up demand" from employees, that, with little interference from IT-sourcing departments, has helped Slack spread to more than 50,000 paying companies, including more than forty Fortune 100 companies.
Beyond corporates, there are additional growth areas that surprised Butterfield and helped grow the company's ARR further.
"Today, there are farms using Slack, there are federal governments in at least four countries. There's state municipal offices, dental offices, restaurants, police departments, healthcare, financial services, manufacturing and so on," Butterfield said.
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