How I Built This with Guy Raz - How I Built Resilience: Live with Stewart Butterfield and Steve Holmes

Episode Date: May 9, 2020

Slack's co-founder Stewart Butterfield wonders what the future of work will look like for his 12 million customers. Springfree Trampoline's co-founder Steve Holmes says the company has seen a 300 percent increase in demand for its products. These conversations are excerpts from our How I Built Resilience series, where Guy talks online with founders and entrepreneurs about how they're navigating these turbulent times.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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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.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 Springfree 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 Flickr. Before the pandemic, Slack was a pretty widely used office messaging platform. But in a single week, starting March 10th, Slack onboarded more than 2 million new users. Among those working remotely are Stewart's 2,100 employees who work in offices in 10 countries around the world. I spoke with Stewart 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'm doing okay. I mean, I'd feel grateful that we have a backyard given that we have two little dogs. That's something. On the other end, we have 2,100 employees around the world, kind of a distribution of how people are doing right now. Some people are okay. Many people are stressed and anxious, fears about the economic fallout, about the health of their friends and family and their communities. Some people going a little bonkers trying to work while being 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.

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 6th. How did you make that decision so early? Well, there's a other, I mean, there's a lot of people talking about it. And there was this really, you know, day by day, or even in some cases, kind of hour by hour accumulation of events. things getting canceled and we're debating whether to cancel our global sales off site at which we get about 800 people together. This year was going to be in Phoenix and we have guests flying in.

And that was the next week, I think. And we decided to cancel that with like four days. I was in frequent communication with a couple of my peers, other software companies in the Bay Area mostly. And we were starting to talk about it. And I think I realized that it was going to inevitably happen. And maybe we could defer by a week or something like that. but there was zero point deferring by a week.

And, you know, if one of the incentives here is not just the health and safety of our employees, but kind of being 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 CDC 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 actually, I mean, on March 5th 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 6th, and over the weekend, do a deep clean.

You know, people come in with, I think, UV lights and a bunch of other stuff. But by Friday afternoon, you know, there's the accumulating evidence made it clear that we were going to 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 last day in the office for most people.

Stuart, we've had a lot of business leaders on the show like restaurant owners and prominent founders. And for the most part, their businesses are in trouble, particularly the airlines and the restaurant industry. For Slack, it's been the reverse. I mean, after it, it kind of became clear that so many of us were going to work from home, demand for Slack just skyrocketed. Has the demand slowed down a little bit right now? We've now entered the quiet period leading up to 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,

the customers who are already paid, adding more users, 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 up. And I would expect 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. I'm mostly optimistic about human beings. And 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, it's not just productive and effective. It's also kind of spiritually calming. You're less anxious if you feel like you're being of health. So I think really grateful for that. Also,

we've just invested so much over the last, you know, five years in disciplined culture around communication, partly because of the use of our own product and partly just because you realize how important I was. This transition, I think, was relatively easy 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 child care. And when they felt like 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 child care. Grandparents can't come and help.

And, you know, there's one part of this that's a little bit nice, probably, people spending a lot more time with their families. So 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 is just been we cannot tell because we just don't, we honestly don't know. I'm still. We're getting lots of questions from Facebook and from YouTube and from Twitter. I'm going to start with Carly Batista. She asks, how are you going to ensure or how are you going to promote collaboration?

You know, how can you continue that when your team is sort of spread out across a 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. And as I was saying, I think it's going to be harder for some organizations and easier for others. We had 15 offices, 10 countries around the world 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 that happens in a Slack channel rather than in a verbal conversation that's kind of disappeared. So the first and second week after work from home order, we're 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 a painful muscle to develop, I think, if you didn't have to rely on it before, if you were really reliant on in-person meetings to kind of get worked on. or get decisions made. I overinvest in written communication and experiment with video tools

to find the ones that work. I want to ask 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 Omaha or in, you know, Lincoln, Nebraska,

or, you know, anywhere else 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 going to have to even imagine a world where they don't have a physical office.

I mean, some already don't, but big companies might start to think about that. Yeah, I'm hearing that more and more. So 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. I've always liked that phrase, never a waste a crisis. And I think, again, against this huge backdrop of change, people are much more accepting of other changes. I've heard all the things you said, plus employees, you feel like, wow, I don't know if this is ever going to happen again, but being 1,200 miles from my family and not being allowed to travel is really tough. 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, that boy, it would be great to live in the countryside and be able to go for a walk sometimes. So the downstream effects, I think you're going to be huge, and I think business leaders are going to need to be open to a wider set of possibilities. The good news, perhaps, is that when you're forced to do something that you previously thought was impossible, other things that you also thought were impossible, maybe become possible. So 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 to restructure how they work,

hopefully to get rid of some of the menial, repetitive, kind of mind-numbing parts of knowledge work. I'll also think, Stuart, that if people start to 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. It could also reshape how people kind of create incredible ideas, incredible businesses 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, L.A., etc. Yeah, and I totally agree. And that will definitely create all kinds of new opportunities.

I mean, any period of change will dislodge a lot of incumbent businesses. And unfortunately, you know, this kind of change, I think, is going to destroy a lot of businesses. There's no nice way to say that. The downstream effect of that is, again, a lot more opportunities for things that just wouldn't have been businesses before or new things that people are open to that they wouldn't have been open to. that's definitely one of them. Stuart, before we let you go, one last question for you. How's this going to change the way you think about your role as the leader of a company

that employs 2,200 people? It's a great question. I don't know that I've internalized 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 almost like it's an evolutionary instinct. And you go back thousands of years, why didn't it rain this year? It can't just be random.

You know, that our crops were destroyed, it must have been because we didn't sacrifice enough goats or something like that. We always need a reason for things. And then in this environment, I think people need more than ever to be reminded what's important, to be reminded why we do this and to feel like they understand what the plan is. So hopefully, my goal is to do that more But that's going to 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 see you in person at some point soon. Yeah, that would be great.

Always a pleasure, guy. Thank you. That's an excerpt for my conversation with Stuart Butterfield, the co-founder of Slack and Flickr. 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 Springfree 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. Stay with us. 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 Spring Free, 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 and trying to meet demand, which he says is 300% higher than normal. Tell me about demand. Compare demand right now to demand at this time last year. 300%. Wow. And your explanation is... You know, the explanation is that families are experiencing a new type of pain.

You know, we've had so many stories that trampolines weren't part of their family plan or their journey. But staying at home wasn't either. Or stopping organized sports wasn't either. And so we became part of that solution. And families were looking to relieve the pain. And we were trying to create an opportunity for real family unity. And so 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 COVID thing started. And when that shutdown started, we saw that ramp up in demand. Steve, I understand there's high demand. How has Spring Free altered its distribution network during this moment of significant disruption in the operation of your distributors. Sure. Let me just share. So we, you know, we sell product around the world. We didn't know when the first, when this shutdown started to take place, we gathered as a senior management group when 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 kind of said, oh, man, and I walked into the meeting and I said, look, we're going to do three things. We're going to turn product into cash. We are going to create cash as best we can. So if we have partners who have extended receivables terms, they're out. We're going to 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 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're 90-day terms with them. And they sent us a note and said, we're going to 180-day terms. And we said, have a nice day. You're not seeing any more. Because you need the cash now for a rainy day and

be to ramp up more production, right? There's lots of things you need the cash for. One of the things is, if you remember, I came up with that strategy, worried that we might get. get products 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 U.S. 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 not going to pay you for 90 days. now 180 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. 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 love it. You cried in our interview. I love it.

Look, 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. 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 were running, you know, 7, 800 calls a day, not missing one of them. And, you know, I mean, you don't lay those people off. Those are the men and women you go to war with. I remember I'm going to call her out because 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 going to 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 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. 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. This is a question you get a lot, Steve. This is from Colette Wu.

And this is something we talked about in the podcast, but a really good question. How did you get your first 10 paying customers in the beginning? How did you convince the first 10 buyers to buy it? Well, I think, you know, if people do listen to the podcast, it's kind of funny. We really tried to go out to some various shows. We went to what was called the Super Show, the SGMA, Sporting Goods Manufacturers Association. And we started in Vegas and came away with no sales. we went back a year later because we'd, 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 Costco. So before we had actually ever sold a trampoline to a single person, we had sold our first 400 to Costco. In the episode, eventually Costco kicked you out, which could have devastated your business, but it didn't because you pivoted. And it sounds like you are making some really important changes in pivots now, which I think is really important. And also, this idea that, This moment will actually lead people to think creatively about what they will do, about their futures. And a lot of companies are really getting hit. A lot of companies that have been on how I built this.

And the thing that I think that I come back to, this idea I come back to is even if your business collapsed, right? God forbid it does. 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 can't be fired, right? That's still there. I've rarely shared this story, but in 1995, I had that collapse. You know, my business was there. And I remember phoning my dad 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 and your kids are going to love you. Get back into work. And my dad was a minister. So business wasn't his thing. But that wisdom was 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. A guy, one of our businesses is really struggling. We're in a footwear and 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. 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 for 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 going to 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 NPR.