Nov 16, 2020 · 43m · 20vc
20VC: Slack Founder Stewart Butterfield on Leadership Styles, Decision-Making, The 3 Levels of Wealth, IPOs vs Direct Listings & Why Effective Entrepreneurship is Like Parkour
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings interviews Stewart Butterfield, founder and CEO of Slack, about his journey from founding Flickr to building a multi-billion dollar enterprise communication platform. Butterfield shares deep insights on product design philosophy, founder psychology, decision-making frameworks, direct listings, and the future of workplace collaboration.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 25.8% of the talking time here. How this is scored →
Harry as informed peer 1.9 Guest teaching 3.6 Guest disagreement 1.7 Harry pushing back 1.2
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 31:03 Direct premise rejection on executive authority
When Harry suggests that Stewart's successful track record means internal teams bypass data and take his word without question, Stewart immediately pushes back with 'it's very rare that anyone just takes my word for anything.'
Hardest push from Harry ▶ 30:37 Host pushes back on intuition relianceHarry challenges Stewart's stance on intuition by suggesting that elite founders like Stewart enjoy an authority pass where investors and internal teams don't require data to back up their opinions.
Biggest teaching moment ▶ 31:30 Lao Tzu's fish boiling and CEO impact lessonStewart reframes how CEO communication works, citing Lao Tzu to teach Harry that casual executive remarks create unintentional emotional ripples rather than straightforward team compliance.
Harry holds his own ▶ 16:09 Host demonstrates insider board knowledgeHarry brings specific intelligence from board member Josh Kushner to highlight Stewart's unique habit of opening board meetings exclusively with bad news.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Stewart Butterfield's Journey: From Early Web to Slack | 1 | 2 | 0 | 0 | Harry asks open-ended conversational questions about Stewart's path to founding Slack and his personal relationship with wealth. Stewart responds amicably with his 'three levels of wealth' framework, establishing an agreeable tone. | |
| Defining Company Vision and Making Adoption Inevitable | 1 | 3 | 1 | 1 | Harry asks whether vision can act as a constraint on upside. Stewart reframes vision as a broad statement of values rather than a fixed outcome prediction, highlighting how Slack reached $100M ARR far faster than projected. | |
| Market Timing, Product Positioning, and Founder Identity | 1 | 3 | 1 | 1 | Harry asks Stewart about separating personal identity from company success, admitting to feeling lost when taking breaks. Stewart offers reflective advice and a playful psychoanalysis of former founders buying sports teams to preserve global standing. | |
| Scaling Leadership, Moral Authority, and Advisory Networks | 2 | 4 | 1 | 1 | Harry asks about managing self-doubt as an organization scales. Stewart educates Harry on why product domain conviction differs from human leadership, noting that founder-CEOs hold an unfair moral authority advantage over professional CEOs. | |
| The Optimism of Leading with Bad News | 3 | 4 | 2 | 2 | Harry cites specific insider information from investor Josh Kushner regarding Stewart's habit of starting board meetings with bad news. Stewart explains his Munger-inspired mindset and challenges standard slide-deck culture with a cooking/editing analogy. | |
| Strategic Reversibility and Entrepreneurship as Parkour | 2 | 5 | 3 | 1 | Harry brings up reversible versus irreversible decisions. Stewart challenges Silicon Valley's obsession with data-driven decision-making and A/B testing, arguing that over-reliance on finite testing leads to local optima rather than breakthrough product vision. | |
| Post-Mortems, Intuition in Business, and CEO Impact | 4 | 6 | 4 | 4 | Harry challenges Stewart by suggesting his status means no one inside Slack questions his decisions without data. Stewart firmly rejects the premise, explaining that executive communications cause indirect organizational ripples analogous to Lao Tzu's 'boiling a small fish.' | |
| Navigating Direct Listings, IPOs, and Public Company Readiness | 2 | 3 | 3 | 1 | Harry shifts to public listings and quickfire questions. Stewart calls out Harry when he subtly changes a quickfire question from 'most valuable board member' to 'most memorable board moment,' teasing Harry about the shift before answering. | |
| The Next Five Years: Huddles, Slack Connect, and System Integration | 1 | 2 | 0 | 0 | Harry asks for the five-year outlook for Slack. Stewart collaboratively outlines product features including Huddles, asynchronous video stories, and enterprise integration fabric via Slack Connect. |
Statements from this episode (25)
Slack Raised Over $1.3 Billion Prior to Its Direct Listing
“Prior to their direct listing in June, 2019, Stewart raised over 1.3 billion dollars from the likes of Excel, Thrive, SoftBank, Kleiner, IVP, T-Road, GV, and Andreessen, to name a few incredible investors.”
Butterfield: Flickr Pivoted from Failed Multiplayer Game Game NeverEnding
“Started another company called Ludicorp to build a web-based, massively multiplayer game called Game NeverEnding. That didn't work, but we made Flickr instead.”
Butterfield: Slack Emerged from Failed Gaming Startup TinySpec
“Most of that original Flickr team got back together to start another company called TinySpec to build a web-based massively multiplayer game that didn't work, and then we ended up with Slack.”
Butterfield: The three levels of wealth are debt, restaurants, and vacations
“So I said in some interview, I don't even remember where now it was, but there's kind of three levels of wealth, and one is I don't have to worry about my debts, and the second one is I don't care what anything costs in a restaurant, because I very clearly rem…”
Butterfield: The ultra-wealthy pursue more money simply to keep score
“And people who have a lot of money want more money, not because they're going to do something with it. Generally, they're going to give it away, but because it's how you keep score.”
Tiny Speck had $5M–$6M remaining when pivoting to Slack
“We had five or six million dollars left when we decided to shut it down and work on Slack”
Slack reached $100M ARR in less than two years
“Certainly less than two years to get to a hundred million dollars in ARR.”
Butterfield: Channel-based messaging will eventually replace all internal corporate email
“At some point, everyone in the world will be using a channel-based messaging platform for internal communication rather than email.”
Butterfield: Product Adoption Speed Depends on Clear Positioning
“The cleaner and more powerful of an answer we have for that or those questions, the faster it'll get adopted.”
Butterfield: Slack Has Passed 2,500 Employees and a $1B Billing Run Rate
“For the scale that we're at now, it's a little over 2500 employees and a billion dollar run rate for billing, so it's, you know, it's a pretty big company”
Butterfield: Retired tech executives buy sports teams to retain lost prestige
“It is funny that there's like a class of occupation that is professional football team owner, because it's people who have retired from companies where they had a lot of prestige, and they had a lot of power and wealth, and they're not ready to just be that wh…”
Butterfield: Deductive reasoning works for functional domains, not leadership
“Because I think you can, to a certain extent, deductively reason yourself to the right answer when it comes to product or marketing, or other functional areas of the business, I guess, finance and sales. You can't do it for leadership.”
Butterfield: Founder-CEOs need less leadership skill than hired professional CEOs
“And founders like me, who remain the CEO, I think have a huge advantage. We don't have to be as good as leaders as like a professional CEO would be because we're the founder, because there's like something of the soul of the company that's tied up with us. So …”
Butterfield: Listing Operational Problems Is an Expression of Optimism
“For me, listing all the challenges or the problems or things that aren't going well is Is an expression of optimism, because I believe that we can do something about them, and for certain personality types, I think it's, it feels like the opposite.”
Butterfield: Over half of successful software effort goes to technical debt
“Anyone who has been successful with any kind of software project, either in, like, the software industry, meaning enterprise, or consumer apps, or any kind of technology, knows that at some point, more than half of the effort just goes into paying off old tech…”
Butterfield: Slide decks and static mock-ups are product teams' biggest waste
“The biggest waste of time in product organizations is the preparation of slide decks, of static mock-ups of user interfaces, and then people go to the meeting and they all look at the slides and they give their opinion about whether it'll work or not. And to m…”
Butterfield: Entrepreneurship is like parkour because stalling causes severe damage
“Being an entrepreneur can be a lot like doing parkour, and obviously not physically, because I'm, I would not be a good parkour participant. But what I mean is, you have to keep moving. You have to keep the momentum, and any kind of stalling or hesitating can …”
Butterfield: Silicon Valley's obsession with A/B testing causes counterproductive incrementalism
“There's a thing that I think has infected Silicon Valley, the kind of corruption of data-driven decision-making. People just haven't really looked at the kind of history and philosophy of science to see how rigorous you have to be to have kind of the scientifi…”
Butterfield: Direct listings beat IPOs if companies don't need capital
“Pre-SPAC, the real decision, I think, came down to, do you want to raise more money right now? And if you don't, then a direct listing is better than an IPO.”
Slack prepared public company readiness 3 to 4 years before listing
“We started three years or so before, maybe four years before we went public, for what we called public company readiness. In fact, PCR was like an acronym inside the company to refer to that”
Butterfield: SaaS adoption fails due to poor comprehension, not price or friction
“The answer is almost never going to be it's too expensive or is lacking some feature I want. The answer is almost always going to be I have no idea what that does, and so the problem is almost always comprehension, but we treat it as if the problem is friction…”
Butterfield: Chamath Palihapitiya was right 90% of the time on Slack's board
“We didn't have Chamath Palihapitiya on the board for that long, but he was always great in that there would be just one or two things that he thought were more important than anything else, and we should be focusing our time on then, and everything else we wer…”
Slack Has 700,000 Actively Used Custom Integrations
“There's 700,000 custom integrations that are actively used on Slack today. So 700,000 integrations that customers have set up.”
100% of Slack's $1M+ enterprise customers use custom integrations
“The million dollar plus customers, a hundred percent of them use custom integrations, and the average is in the hundreds that they use.”
Butterfield: Slack Will Become External Collaboration Fabric in Five Years
“So the Slack from five years from now, I think we'll Continue to iterate and improve on the core user experience and the way that we deliver the service and the excellence in support and all that, but I think it will function much more like the lightweight fab…”