How I Built Resilience: Live with Stewart Butterfield and Steve Holmes

Hey, it's Guy here, and before we start the show, I wanted to let you know about a short anonymous survey that you can take to let us know what shows and podcasts you're listening to. If you want to help, you can go to npr.org slash podcast survey. It won't take up too much of your time, and this is a great way to support your favorite shows. That's NPR dot org slash podcast survey. And thanks. Hey, welcome to How I Built This Resilience Edition. I'm Guy Raz. So, as some of you know, we started a new series of online conversations where each week I'm talking to founders and entrepreneurs about how they're building resilience into their businesses right now. And in case you miss them when they happen live, we are posting excerpts right here in your podcast feed. And today we're going to bring you two conversations. Later in the show, you'll hear from Steve Holmes, the co-founder of Spring Free Trampoline, about the surge in demand for backyard trampolines and the long waiting list to get one. But first to Stuart Butterfield, the co-founder of Slack and Flicker.

Before the pandemic, Slack was a pretty widely used office messaging platform. But in a single week, starting March tenth, Slack onboarded more than two million new users. Among those working remotely are Stewart's 2100 employees who work in offices in ten countries around the world. I spoke with Stuart from his home in the Bay Area where he's been wondering what does a future of work and Slack look like? Thank you for being here. How are you doing, by the way?

I I'm doing okay. I mean I I um I'd feel grateful that we have a backyard given that we have um two little dogs. That's something. On the other hand, we have twenty one hundred employees around the world. kind of a distribution of Of how people are doing right now. You know, some people are are okay, many people are stressed and anxious, you know, fears about an economic fallout, about uh the health of their friends and family and their communities. Some people go into little bunkers trying to work while

mean the the school teacher to their six year old and the daycare to their three year old and the kids are obviously going crazy. And then you know, people who are cooped up in a small apartment but kind of by themselves. Uh and then of course there's the broader world, which is Much more mixed. You guys basically shut down your offices in San Francisco on March sixth. How did you make that decision so early? Um well there's an other I mean there's a a lot of people

talking about it. Um, and there was this really You know, day by day or even in some cases kind of hour by hour uh accumulation of events of things getting canceled, and you were debating whether to cancel our uh our global sales website, which we get about eight hundred people together. This year was gonna be in um in Phoenix and we have a guest wide in and That was The next week, I think, and we decided to cancel that with like four days. Um I was in frequent communication with a couple of my my peers, other software companies in in the Bay Area mostly, and we were starting to talk about it and

I think I realized that. It was gonna inevitably happen and maybe we could defer by a week or something like that, but there was zero point determined by a week. And you know, if if one of the incentives here is not just the health and safety of our employees, but um kind of being good good citizens and good stewards. Since we're able to do it, we should do it as quickly as possible. And then I think you had an employee who was contacted by the C D C that they might have come into contact with somebody who tested positive and I'm assuming that that also kind of Prompted the decision to just

Tell everyone to work at home. Yeah, yeah. So on actually I mean on March fifth was a Thursday, so that was our board meeting. Hadn't really contemplated it. Later that day, we got notified by this employee that the CDC had notified them that they had been potentially exposed. And since they had been back in the office since the exposure, we

Decided we'll close the office on Friday, March sixth. And over the weekend do a deep clean. You know, people come in with uh I think with UV lights and a bunch of other stuff. Uh, but by Friday afternoon, um You know, just the accumulating evidence made it clear that we were gonna have to decide to shut it down completely. So we never, you know, after Thursday we didn't go back in the office. And it turned out that was the the last day in the office for most people.

Um, Stuart, uh we've had a lot of uh business leaders on the show, like restaurant owners and prominent founders, and it for the most part their businesses are are in trouble, particularly the airlines um and the restaurant industry. Um for for Slack it's been the the reverse. I mean after it it kinda became clear that so many of us were gonna work from home demand H has the demand slowed down.

A little bit right now? We're we've now entered the quiet period leading up to our our earnings call and the Early stages of this, yes, we saw a huge increase in the number of new teams being created, which is kind of people signing up for Slack in the first place, converting to paid status, uh, the customers who are already paid, adding more users, um the people who are already using it, increasing their usage, like you know, the number of messages they sent per day, kind of like every single metric. Um Up and I would expect the the the good part I think of having that surge early on is it was great for employees. You know, it was great for morale to feel like you could help. And I'm uh I'm mostly optimistic about human beings and um

In times of crisis like this, I think people have a really strong instinct to help. And if there's a place for you to put that energy, um, it's not just productive and effective, it's also kind of spiritually calming. You're you're less anxious if you're if you feel like you're you're being of help. So I think I'm really grateful for that. Also, we we've just invested so much over the last you know, five years in uh disciplined culture around communication. Partly because of the use of our own product and partly just because we realized how important that was. This transition, I think, was

relatively easy um because we had already invested so much in a style of working and you know ways of reporting progress and keeping people updated and coordinated. But people had an office and they had childcare and when they felt like it they can go to the cafe and sit outside and watch the people go by and stuff like that. This is different, you know, there's no childcare. Grandparents can't come and help. Yeah, there's a there's one part of this that's a that's a little bit nice probably people spending a lot more time with their families. So it's it's really it's an interesting position because we just I don't have a crystal ball. None of us do. I think our position has just been we we cannot tell because we just don't.

Uh we honestly don't know. Stuart we're getting lots of questions from Facebook and from YouTube and from Twitter. I'm going to start with Carly Bautista. She asks, how are you gonna Ensure Or how are you gonna promote collaboration? You know, how how can you continue that when your team is sort of spread out across the world at home. I mean obviously Slack is a collaboration tool, but

Having that face to face interaction, you know, I think for most of us, we think of it as a crucial part of collaborating. How do you maintain that collaborative Momentum. Yeah, so it's a great question. Um

And as I say, I think it's it's gonna be harder for some organizations and and easier for others. We had uh Fifteen offices. Ten countries around the world.

Um, at our San Francisco headquarters, even years ago, people would come and it's an open space office plan and People definitely go have meetings and talk one on one. But The normal course of work was largely performed in Slack. And the advantage of that was if you and I are having a conversation and then the third person or the fourth person, they're out today and they want to be able to catch up on the conversation, it's much easier if it happens in a in a Slack channel rather than in a verbal conversation that's kind of disappeared.

Um So the first and and second week after uh work from home order, were probably the two most productive weeks in the history of the company. I'd say we're probably still slightly above average. But it is really starting to wear on people. So it's It's a

painful muscle to develop, I think, if you if you didn't have to rely on it before, if you were really reliant on in-person meetings to to kind of get work done or get decisions made. Um may I over invest in in written communication and experiment with video tools to find the ones that work. So I want to ask you about the future of work. I mean a lot of people actually they're asking themselves, why do I have to live in San Francisco where it's so expensive. You know, why can't I live in in Omaha or in you know Lincoln, Nebraska or you know, or anywhere else and and still work for Slack or whatever wherever company I don't know. I mean what do you think? I mean do you think that It seems to me that this is going to have an impact on the way we work in the future and how we think about the workplace. I mean, some companies are gonna have to even imagine a world where they don't have a physical office. I mean some some already don't, but but big companies might might start to think about that. Yeah, I um I'm hearing that more and more. So uh

One of the big topics is Do you expect to have a significant portion of your workforce remote when this resumes? And universal, yes. So I definitely expect that for us. I expect that for many companies. Um I've always liked that phrase, never waste a crisis. And I think again, against this huge backdrop of of change, people are much more accepting of other changes. I've heard all the things you said, plus employees who feel like Wow, I don't know if this is ever gonna happen again, but being twelve hundred miles from my family and not

being allowed to travel is really tough. I'd I'd rather move back to my hometown. There's economic considerations, there's lifestyle, and I think a lot of people who are cooped up right now think Oh, it'd be great to live in the countryside and be able to go for a a walk sometimes. So the downstream effects I think are going to be huge. And uh I think business leaders are going to need to be open um to a a wider set of possibilities. The Good news perhaps is that um

you're forced to do something that you previously thought was impossible, other things that you also thought were impossible maybe become possible. Yeah, I think generally not just Slack, not just Zoom, not just kind of tools that help you work from home, but just generally there'll be more acceptance of technology in the workplace in a positive way, and people will be able to take more advantage of that. um to restructure how they work, hopefully to get rid of some of the menial, repetitive, kind of mind numbing parts of Of knowledge work. I also think, Stuart, that if people start to think rethink how they work, right? And if they decide, look, I want to live in the middle parts of the country. I don't need to live in San Francisco or New York. Um it could also reshape how

People kind of Create incredible ideas, incredible businesses in in other parts of the country that have really kind of in some way suffered from the brain drain that's come into places like San Francisco, New York, Washington, LA, et cetera. Yeah, and and I totally agree. And that will definitely create all kinds of new opportunities. I mean in any Any period of change will dislodge a lot of incumbent businesses. And unfortunately, you know, this kind of change I think is gonna destroy a lot of businesses. Just you know there's no no nice way to say that.

The downstream effect of that is that again, a lot more opportunities for things that just wouldn't have been businesses before or new things that that people are open to that they wouldn't have been open to. Uh that's definitely one of them. Um Stuart, before we let you go, one last question for you. How's this gonna change the way you think about your role as the leader of a company that employs twenty two hundred people? It's a great question. I I don't know that I've internalized or or or acted on this to the extent that I should.

People need to be reminded what's important more often. People need to be reassured. People need to be clear that they understand the plan because human beings. Hate. uncertainty. I mean just historically it's a it's almost like it's an evolutionary instinct and You go back thousands of years. Why didn't it rain this year? Um, it can't just be random, you know, that our crops are just right. It must have been because we didn't sacrifice enough goats or something like that.

We always need a reason for things, and then and in this environment, I think people need more than ever to be reminded what's important, to be reminded why we do this, um, and to feel like they understand what the plan is. So um hopefully I mean my goal is to do That more but that's gonna be no less important when things go back to normal to the extent that they do. Stuart.

Thank you so much for doing this. I hope to I hope to see you in person at some point soon. Yeah, that'd be great. Always a pleasure, guy. Thank you. That's an excerpt from my conversation with Stuart Butterfield, the co-founder of Slack and Flicker. To see or hear our full interview, you can go to facebook.com slash how I built this or to NPR's YouTube page. When we come back in just a moment, we're going to hear from Steve Holmes, the co-founder of Spring Free Trampoline. Since the pandemic began, his company's phone lines have not stopped ringing. But Steve is hoping that he can bring a little backyard joy to kids and to their parents who are stuck in quarantine.

I'm Guy Raz and you're listening to How I Built This. From NPR. Hey, welcome back to How I Built This Resilience Edition. So, for parents with kids stuck at home, the past few weeks have been particularly challenging. But for those lucky enough to have a trampoline, it's a little bit easier, except

Trying to get one now? That's a different story. Steve Holmes is the co-founder of Springfree Trampoline. When Steve and his business partner Keith Alexander started Springfree, they set out to make a safer trampoline by essentially removing the springs and replacing them with fiberglass. I spoke to Steve from his office in Toronto, where he's going into headquarters every day. Every day and trying to meet demand, which he says. is three hundred percent higher. Th normal.

W talk tell me about demand. Compare demand right now to demand at this time last year. Three hundred percent. Wow. And your explanation is

The the explanation is that families are experiencing a new type of pain. You know, we've had so many stories that that that trampolines weren't part of their family plan or their journey, but but staying at home wasn't either. And or stopping organized sports wasn't either. And so we became part of that solution. Families were looking to relieve a pain, and we were trying to create an opportunity for real family unity. And so You know, we're working with families to try and say, Hey, this is a solution, and we're here to try and make it as accessible and as good as possible. So That whole covet thing started and and when that shut down started, we saw that.

Ramp up in demand. I understand there's high demand. How has Spring Free altered its distribution network? Um during during this moment of significant disruption in the operation of your distributors. Sure. Let me let me just share. So we you know we we sell product around the world.

Um We didn't know when the fur when this shutdown started to take place, we we gathered as a senior management group and we were actually worried about the opposite happening. that things would go and we wouldn't be able to ship trampolines, that lockdowns would take place and we wouldn't be able to ship anything. And so we we kind of said, Oh man. And I

I walked into the meeting and I said, Look, we're gonna do three things. We're gonna turn product into cash. We are gonna create cash as best we can. So if we have partners. who have extended receivables terms they're out. We're gonna change our distribution strategy. We're not doing this on credit. We need to create cash.

We need to preserve cash, and we absolutely cannot cut staff. And number three is the reason we're doing this is not because we're trying to save ourselves. We're trying to preserve that cash that we might leverage going forward to to be able to take advantage of opportunities wisely. So we cut out almost all of our big retailers. We had a big retailer right at the start who sent us a notice and say We we're ninety day terms with them. And they sent us a note and said we're going to a hundred and eighty day terms. And we said, Have a nice day. You're not seeing any more people.

For a rainy day and before. T Ramp up more pro production, right? Yeah, we there's lots of things you need to cash for. One of the things is if you remember I came up with that strategy worry that we might get product shipped out there and turn it into a receivable and then the receivable goes bad.

And so I didn't want to do that. So we worked with our US dealers and said, guys, how do we help you? Some of them don't have banks. And so that's how we changed our distribution strategy. We focused on direct to consumer. Where we thought we could get the highest value. And reduce our risk of having any losses. Right, because in normal times you're selling to retailers and you're basically floating them alone because they're gonna they're not gonna pay you for ninety days now a hundred and eighty days. and now you don't want to take the risk of not getting paid. You need the money to

Also, I'm assuming preserve your workforce. H have you had any layoffs or furloughs? No. You know, we have an amazing team of people. I remember Pardon me if I get emotional, but You get emotional every time I interview you. I I love it.

You cried in our interview. I love it. Look, it when when it comes to people, you know the best part of business is people. It's interesting. We never really used to get a lot of telephone calls. People came online. Well, when you have people who have a need like this and they have a sense of urgency, sure they're happy to do business online. But they actually increase their desire to talk to people. So when our retail stores shut down.

Those people stepped up, they got on the phone. We We were running s you know, seven, eight hundred calls a day. Not missing one of them. And uh

You know, I mean I uh you don't lay those people off. Th those are the men and women you go to war with. I remember I'm gonna call her out'cause I said I wasn't she's Ready. Austin, Texas got shut down real quick, and Phyllis, who runs that store, was kind of thinking, Okay, what am I gonna do? And here's what we know about our three staff. If I can teach any entrepreneurs about their people, there's three things they want to know. They want to know.

What's my job? How does it impact the company? And and minor, how do I get paid? Interestingly, if you go back to Dan Pink, you know, on what motivates people, autonomy, mastery, and purpose. We think there's three pillars to that. You're motivated. You've got competency, and all you need is clarity.

I have so many people who have that motivation and that competency. And we're just giving them clarity and we're asking them to rethink their jobs. In new ways and they're doing it. We're doing stuff online. We didn't even dream we knew how to do. Um this is a question you get a lot, Steve. Um this is from Collette Wu. Um Th and this is some something we talked about in the podcast, but a really good question. Um how did you get your first ten paying customers in the beginning? How did you convince the first ten buyers to to buy it?

Well, I think you know, if people do listen to the podcast, it's kinda funny. We we we really tried to go out to some various shows. We went to what was the called the super show, the SGMA Sporting Goods Manufacturers Association. And we started in Vegas and came away with no sales. And then we went back a year later because we you know put on an enclosure. And what our focus at the time was, as you know, Guy, was to try and build a relationship with Gosco. So before we'd actually ever sold a trampoline to a single person, we had sold our first four hundred to Costco. In the episode, eventually Costco kicked you out, which could have devastated your business, but you but it didn't because you pivoted

And you sound like you are making some really important changes and pivots now, which I think is really important. And also This idea that this moment will actually lead people to what they will do about their futures. And a lot of companies um are really getting hit. A lot of companies that have been on how I built this.

And I think that I think that I come back to this idea I come back to is Even if your business collapsed, right? But even if it does Your talent? Your ability.

That enabled the creation of that business. Your drive, your resilience, your hustle, that doesn't go away. That that can't be fired. Right? That's still there. Nineteen ninety five, I had that collapse.

You know, my business Was there. And I remember phoning my dad. I was Passed away.

And trying to tell him I was failing. And I was in this crisis. And he said What are you talking about? Your mother and I love you.

Your wife loves you, your kids are gonna love you. Get back into work. And uh my dad was a minister, so business wasn't his thing and uh but but that wisdom was You you can be resilient, you can see its way through it. And I've been passionate about so many people the last few weeks who are in business. Who are struggling guy one of our businesses

is really struggling. We're in the foot we're an apparel business. Retail's closed. And I've been talking to lots of those guys and I keep encouraging them the same time every time. Get up every morning, set a focus, learn something new. Apply it.

And keep going, because people will Be with you in this journey. I love it. Um Steve Holmes Thank you so much.

We'll stay in touch. It's so great to see you. Thanks, Steve. Great to see you. That's an excerpt from my conversation with Steve Holmes, the co-founder of Springfree Trampoline. To see our full interview, you can go to facebook.com/slash how I built this. And if you want to see all of our past live conversations, you can find them at youtube.com/slash NPR. We're gonna be putting these conversations in your feed every week and hosting the conversations in real time. at Noon Eastern 9 Pacific on Twitter, YouTube, and Facebook every Wednesday and Friday. If you want to find out more about these conversations or other virtual NPR events, you can go to nprpresents.org. This episode was produced by Candace Lim with help from John Isabella, Julia Carney, Neva Grant, and Jeff Rogers. Thanks for listening, stay safe, and we'll see you next week.

I'm Guy Raz and you've been listening to how I built this. From N PR.

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