WEBVTT - Volatile Markets and The Future of E-Commerce 0:00:02.360 --> 0:00:05.680 From the heart of where innovation, money and power colli 0:00:06.480 --> 0:00:11.040 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:11.080 --> 0:00:27.280 Emily Jay. I'm Emily changing San Francisco and this is 0:00:27.280 --> 0:00:30.280 Bloomberg Technology coming up. In the next hour. US stocks 0:00:30.400 --> 0:00:34.199 oscillating as investors rushed to position after the latest comments 0:00:34.479 --> 0:00:38.239 from FED chair j Powell saying a recession could indeed 0:00:38.520 --> 0:00:42.200 lie ahead. We'll speak with Shopify president Harley Finkel signed 0:00:42.200 --> 0:00:44.680 about how it's all impacting consumers and where the company 0:00:44.760 --> 0:00:47.360 is placing its bets when it comes to the future 0:00:47.640 --> 0:00:51.559 of e commerce. Plus, Slack unveils a slew of new 0:00:51.600 --> 0:00:55.000 features for a hybrid work world. CEO Stewart Butterfield has 0:00:55.040 --> 0:00:58.200 been building companies since before the dot com boom and bust, 0:00:58.240 --> 0:01:00.960 will join us. We'll also get his view on the 0:01:01.000 --> 0:01:05.520 market meltdown, and Jeffrey Katzenberg joins to talk about the 0:01:05.560 --> 0:01:10.319 future of entertainment and disrupting a legacy industries. Plus we'll 0:01:10.360 --> 0:01:14.320 get his thoughts on what's happening at Netflix and Disney. 0:01:14.360 --> 0:01:15.840 All of that in a moment, But first I want 0:01:15.840 --> 0:01:17.680 to look at the markets with our very own ed 0:01:17.760 --> 0:01:20.120 ludlow Ed walk us through the day, and obviously everyone 0:01:20.200 --> 0:01:23.399 listening to those comments from FED charity plat power. Yeah, 0:01:23.440 --> 0:01:25.800 so like all eyes on the FED and exuty markets 0:01:25.800 --> 0:01:27.600 a little bit softer, were down by less than two 0:01:27.640 --> 0:01:29.840 tents of percent both on the SP five hundred and 0:01:29.880 --> 0:01:32.960 the NASDAT one hundred, and nothing really changed in terms 0:01:32.959 --> 0:01:36.119 of what Fed Powell said on the outlook for rates. 0:01:36.240 --> 0:01:38.560 The conversation is around whether they can deliver a so 0:01:38.600 --> 0:01:42.840 called soft landing, in other words, fight inflation without causing recession, 0:01:42.880 --> 0:01:45.399 the quote being it will be extremely challenging. You see 0:01:45.600 --> 0:01:48.200 tech Heavyn has that one index down by two tents 0:01:48.200 --> 0:01:51.360 of a percent ish snapping two day rally, a short 0:01:51.400 --> 0:01:54.560 lived rally, yields coming down by twelve basis points on 0:01:54.600 --> 0:01:58.000 the tenure, and Bitcoin below twenty thousand dollars kind of 0:01:58.000 --> 0:02:00.320 caught up in the move with equities in the risk 0:02:00.360 --> 0:02:02.640 of environment. But you know how I like to do it. 0:02:02.760 --> 0:02:05.240 Let's take a step back, Let's look at the last 0:02:05.280 --> 0:02:07.720 few days of trading and look at this in the 0:02:07.720 --> 0:02:10.480 context of what we've seen in markets recently, especially on 0:02:10.480 --> 0:02:12.920 the NAZAC one. When you think about all of the 0:02:12.919 --> 0:02:15.000 news of the last seven days, we started with that 0:02:15.040 --> 0:02:18.280 FED meeting a week ago where we got a clearer 0:02:18.320 --> 0:02:20.120 picture at the outlook for rates. We're going to be 0:02:20.200 --> 0:02:22.959 at three point two five three and a half percent 0:02:23.120 --> 0:02:24.880 on interest rates by the end of this year. We're 0:02:24.919 --> 0:02:27.560 kind of trading sideways, and then today the market not 0:02:27.639 --> 0:02:31.120 really making its mind up. Has anything materially changed, was 0:02:31.200 --> 0:02:35.240 anything actually that new in what fed pal said throughout 0:02:35.280 --> 0:02:38.440 the session, what I'm hearing the markets is that really know. 0:02:39.000 --> 0:02:41.079 But we swung between gains and losses. At one point 0:02:41.080 --> 0:02:43.200 in the session, you saw big tech up quite highly. 0:02:43.280 --> 0:02:45.360 There were some really interesting movers though that we can 0:02:45.400 --> 0:02:46.560 talk about in a minute. And the one thing I 0:02:46.560 --> 0:02:50.600 would say is that we're thinking clearly about recession risk, 0:02:50.760 --> 0:02:55.160 and the conversation is not necessarily if there's a recession, 0:02:55.240 --> 0:02:58.480 it's about when there's a recession. Indeed, and obviously there's 0:02:58.480 --> 0:03:00.600 a lot of big tech news that's having some of 0:03:00.639 --> 0:03:04.520 these moves. I'm thinking about Amazon, yeah, exactly. And you know, 0:03:04.760 --> 0:03:06.920 partly what we're looking at as well in the news 0:03:06.919 --> 0:03:08.880 flow is that all of these stocks are trying to 0:03:08.919 --> 0:03:11.080 take trading in lockstep. So you look at my board, 0:03:11.120 --> 0:03:13.080 Tesla down four tents of one percent at one point, 0:03:13.160 --> 0:03:16.000 it's been one of the biggest drivers pushing the index higher. 0:03:16.040 --> 0:03:19.000 Amazon up by a quarter of percentage point, Netflix up 0:03:19.000 --> 0:03:20.919 four point seven percent in the session, there was actual 0:03:20.960 --> 0:03:23.000 news with it when it came to Netflix, so the 0:03:23.000 --> 0:03:26.000 Wall Street Journal reporting that they are now considering a 0:03:26.040 --> 0:03:28.960 tier of subscription that is AD supportive. We know that 0:03:28.960 --> 0:03:31.200 that's something they discussed that their most recent earnings as 0:03:31.240 --> 0:03:34.000 an idea, But according to this report, they are talking 0:03:34.000 --> 0:03:36.920 to partners like Google and Comcast in partnerships on ADS. 0:03:37.000 --> 0:03:39.840 I'll Trier down nine percent very quick according to a 0:03:39.960 --> 0:03:44.520 Dow Jones report that regulators considering pulling the dual product 0:03:44.560 --> 0:03:47.160 in which our Trier has a stake completely from the 0:03:47.200 --> 0:03:49.080 US market. How long has it been since you and 0:03:49.080 --> 0:03:52.040 I discussed toll It went from the impact on children 0:03:52.360 --> 0:03:55.320 flavored products with jewels, now reports of it being pulled 0:03:55.360 --> 0:03:58.280 from the US market asgethering that having a really material 0:03:58.400 --> 0:04:01.960 impact on our Trier shares this Wednesday. All right, thank 0:04:02.000 --> 0:04:05.160 you for the round up. Well. Retail and e commerce 0:04:05.160 --> 0:04:07.400 companies have been under pressure in the midst of rising 0:04:07.440 --> 0:04:10.480 inflation and market turmoil, but Shopify shares took a leg 0:04:10.560 --> 0:04:12.920 up today after a slew of announcements targeted at the 0:04:13.000 --> 0:04:16.000 changing nature of consumers. I want to talk about all 0:04:16.080 --> 0:04:19.640 this and more with Harley Figglstein, President of Shopify. Harley, 0:04:19.640 --> 0:04:21.080 we've got a lot of news to get to, a 0:04:21.120 --> 0:04:23.080 lot of announcements that you made, and we'll talk about that, 0:04:23.120 --> 0:04:24.720 but first I want to get your your sense of 0:04:25.120 --> 0:04:28.960 what is happening with the economy. Shopify hasn't necessarily been 0:04:29.000 --> 0:04:32.640 spared here, but what's your feeling about just how bad 0:04:32.680 --> 0:04:36.479 this will get and if a recession is inevitable? Thanks 0:04:36.520 --> 0:04:38.560 for having Emily, always a great pleasure being your show. 0:04:38.600 --> 0:04:40.640 Two things. Let's first talk about the retail outlook and 0:04:40.640 --> 0:04:43.280 I think consumer sentiment. What we are seeing is that 0:04:43.680 --> 0:04:46.920 there's certainly some some retail rebounds happening in areas like 0:04:47.160 --> 0:04:49.719 in person retail UM and we are well positioned there. 0:04:49.880 --> 0:04:52.600 I mentioned on the earnings called last quarter that we 0:04:52.640 --> 0:04:55.800 saw physical retail gym V up by nearly eighty percent 0:04:55.960 --> 0:04:58.359 year on year UM and then when we add things 0:04:58.400 --> 0:05:00.120 like you know we one of the announcements today was 0:05:00.200 --> 0:05:03.360 local inventory sync on Google and tapped to pay, we 0:05:03.400 --> 0:05:06.239 really are well positioned to ensure that if physical retail 0:05:06.400 --> 0:05:09.240 is rebalancing and reopens that shopbly merchants can also use 0:05:09.240 --> 0:05:11.320 that as well. But one of the things we're seeing 0:05:11.360 --> 0:05:13.799 from a sort of a macro perspective is that consumers 0:05:13.839 --> 0:05:16.480 are very much still voting with their dollars to support 0:05:16.520 --> 0:05:19.919 independent brands. This is something we saw happen very quickly 0:05:20.000 --> 0:05:23.000 and and and intensely during the pandemic. They are looking 0:05:23.000 --> 0:05:25.240 for quality products and certainly a lot of the shop 0:05:25.240 --> 0:05:27.440 by merchants are doing well there. In terms of the 0:05:27.440 --> 0:05:30.720 economy in general, it's clear that obviously inflation is at 0:05:30.720 --> 0:05:33.279 a record level, but to the degree in which merchants 0:05:33.279 --> 0:05:36.480 wallets are stretched from higher prices. What they're beginning to 0:05:36.480 --> 0:05:38.320 do is they're looking to get more value out of 0:05:38.360 --> 0:05:40.839 every single dollar. And what we're seeing is that more 0:05:40.880 --> 0:05:43.360 merchants are coming out to shopify and they're taking more 0:05:43.400 --> 0:05:45.920 of our products, whether it's capital or payments or fulfillment. 0:05:46.080 --> 0:05:49.159 They're leveraging our mass economies of scale while still keeping 0:05:49.360 --> 0:05:52.240 an independent business. So um we we we think both 0:05:52.240 --> 0:05:54.960 those things lead to a lot of optimism on our side. 0:05:55.200 --> 0:05:59.080 And of course Shopify Editions was launched today. Right you 0:05:59.120 --> 0:06:01.960 are making this big shift from DTC to C to see, 0:06:02.000 --> 0:06:05.280 as you call it, direct to consumer to connect to consumer, 0:06:05.320 --> 0:06:06.760 What does that mean and why do you think that's 0:06:06.760 --> 0:06:09.440 the future. So this idea of shopla editions, which we 0:06:09.480 --> 0:06:13.440 announced this morning, UH burned night nine am, it introduces 0:06:13.760 --> 0:06:16.640 what we're calling the connect to consumer error of commerce, 0:06:16.760 --> 0:06:18.760 and part of it is that you know the speed 0:06:18.800 --> 0:06:21.280 of innovation and the depths and breadth of what Shopify 0:06:21.360 --> 0:06:24.000 is building. I celebrated my my twelfth year anniversary last 0:06:24.040 --> 0:06:26.440 week at Shopify, so I've been around for a third 0:06:26.480 --> 0:06:28.960 of my life. Thank you. Uh. The amount of products 0:06:28.960 --> 0:06:31.000 that we're shipping right now is is stronger than than 0:06:31.040 --> 0:06:33.440 ever before. We unveiled more than a hundred new product 0:06:33.560 --> 0:06:35.840 updates and launches today and I think we are moving 0:06:35.920 --> 0:06:38.919 faster than ever and shoplay additions is our way of 0:06:38.960 --> 0:06:42.240 sharing that momentum with the world now. I think you 0:06:42.279 --> 0:06:43.520 know if you've I've been on the show a lot 0:06:43.520 --> 0:06:46.040 of talking about direct to consumer, which really was about 0:06:46.080 --> 0:06:48.920 this one to one connection with the brand to the consumer, 0:06:48.960 --> 0:06:51.520 but it was very transactional. What we are noticing is 0:06:51.560 --> 0:06:54.120 that more and more consumers want to connect with these 0:06:54.160 --> 0:06:56.760 brands online on social media. They want to attend an 0:06:56.760 --> 0:06:58.440 a vent or their store, they want to have more 0:06:58.440 --> 0:07:01.440 of an emotional connection, whereby they can connect with brands 0:07:01.480 --> 0:07:04.160 across a whole bunch of different surface areas. And so 0:07:04.400 --> 0:07:07.279 commerce is really just not about the transaction. It's much deeper. 0:07:07.520 --> 0:07:10.600 And we think SEE two SEE really places more authenticity 0:07:10.720 --> 0:07:13.040 and loyalty and trust at the heart of every single 0:07:13.080 --> 0:07:15.200 merchant interaction. And uh, and so a lot of the 0:07:15.200 --> 0:07:17.840 products you saw today is really about us ushering in 0:07:17.840 --> 0:07:20.440 this new model for commerce. You're also striking a big 0:07:20.480 --> 0:07:23.240 partnership with Twitter to help businesses reach buyers there. And 0:07:23.280 --> 0:07:25.720 I just wonder why now on Twitter is facing all 0:07:25.760 --> 0:07:29.440 of this uncertainty about whether Elon Musks buys the company 0:07:29.560 --> 0:07:32.360 or not, and if this partnership will hold up in 0:07:32.400 --> 0:07:35.720 a new regime. We think the future of retail is 0:07:35.760 --> 0:07:37.880 going to be retail everywhere. It's going to be online 0:07:37.920 --> 0:07:40.240 and offline, on social media, it's going to be in 0:07:40.360 --> 0:07:44.080 person at at farmers markets, at events and concerts. We 0:07:44.200 --> 0:07:46.240 really are you know, I think we started as being 0:07:46.240 --> 0:07:48.679 an e commerce company, and you know, about ten percent 0:07:48.680 --> 0:07:51.280 of all e commerce in the US now flow through Shopify. 0:07:51.320 --> 0:07:53.800 If we were one single aggregated story would be the 0:07:53.880 --> 0:07:56.720 second largest online store in America. But the key here 0:07:56.840 --> 0:07:59.320 is that commerce in the future will happen everywhere, and 0:07:59.360 --> 0:08:01.480 so we we've announced I'd come on the show and 0:08:01.520 --> 0:08:04.640 talked about our integrations with Google and Facebook and Instagram 0:08:04.640 --> 0:08:07.720 and TikTok to embed commerce there. And then the newest 0:08:07.800 --> 0:08:10.160 one that we're embedding, the newest partner we're betting commerce 0:08:10.240 --> 0:08:12.240 with is Twitter. Now. Twitter is an interesting one. Of 0:08:12.240 --> 0:08:14.240 course they're in the news a lot lately. But you know, 0:08:14.280 --> 0:08:16.200 if you think about where commerce used to happen, it 0:08:16.280 --> 0:08:18.520 was always sort of around the town square where the 0:08:18.520 --> 0:08:21.480 baker sold bread and cobber so old shoes. Twitter in 0:08:21.520 --> 0:08:24.440 some ways is the modern day digital town square, and 0:08:24.520 --> 0:08:27.600 so embedding commerce right into Twitter so you can turn 0:08:27.680 --> 0:08:30.960 conversation into commerce, all powered by Shopify. We think it's 0:08:31.000 --> 0:08:33.120 a really great thing. And whether or not, you know, 0:08:33.160 --> 0:08:34.880 they have a new owner in the future or not, 0:08:34.960 --> 0:08:37.880 I think commerce will play a role in Twitter future. Okay, 0:08:38.000 --> 0:08:41.480 I recently interviewed Amazon CEO Andy Jase Harley, and I'm 0:08:41.480 --> 0:08:43.120 not sure if you caught this, but what I asked 0:08:43.120 --> 0:08:46.880 about Amazon's relationship with third party sellers and the tension 0:08:47.200 --> 0:08:51.080 that has existed there between Amazon and some third party sellers, 0:08:51.440 --> 0:08:54.040 he took kind of a dig at Shopify. Take a 0:08:54.080 --> 0:08:58.280 listen to what he had to say. Sellers don't really 0:08:58.720 --> 0:09:03.280 wrong for commerce software that exists in lots of places, 0:09:03.760 --> 0:09:06.720 and uh, and it's not very expensive. What they love 0:09:06.760 --> 0:09:09.920 about selling on Amazon is that they get access to 0:09:09.960 --> 0:09:13.360 our hundreds of millions of customers and that completely changes 0:09:13.480 --> 0:09:15.480 what their prospects can be in terms of the business 0:09:15.480 --> 0:09:21.800 as they're building. What's your response to that, I think that, uh, 0:09:22.000 --> 0:09:24.520 it is quite clear that the future of retail is 0:09:24.520 --> 0:09:28.840 going to have direct connection between brands and the consumers. Look, 0:09:28.880 --> 0:09:32.280 I mean, obviously, a place like Amazon allows third party 0:09:32.280 --> 0:09:35.400 sellers to access a very large network of consumers. But 0:09:35.440 --> 0:09:37.640 if you look at any of these marketplaces, you, as 0:09:37.640 --> 0:09:39.720 a merchant, you're not building your own business. You are 0:09:39.720 --> 0:09:42.400 effectively renting customers from the marketplace. And I think for 0:09:42.480 --> 0:09:45.000 some merchants that matters. But for a lot of merchants, 0:09:45.040 --> 0:09:47.559 you think about your favorite brands or Mine, James Purse 0:09:47.679 --> 0:09:50.720 or the Albert Shooes, I'm wearing bombas socks and wearing 0:09:50.880 --> 0:09:53.280 they want to have a direct relationship with the people 0:09:53.320 --> 0:09:55.600 that are buying their their products. And I think that 0:09:55.640 --> 0:09:58.600 more and more you see consumers again choosing to go 0:09:58.679 --> 0:10:02.079 direct whenever possible. So I think there's a place for marketplaces, 0:10:02.120 --> 0:10:04.839 and obviously Amazon has done a great, great, great thing 0:10:04.840 --> 0:10:07.000 there and and it's very valuable in that way. But 0:10:07.080 --> 0:10:09.719 I think consumers also want to have a direct relationship 0:10:09.840 --> 0:10:11.880 with the brands they're buying from. And that's the reason 0:10:11.920 --> 0:10:14.840 why you see companies like Mattel and Craola and Herman 0:10:14.920 --> 0:10:18.320 Miller and Proctor and Gamble you Shopify to go direct 0:10:18.360 --> 0:10:20.839 to consumer. These are brands that traditionally never did so, 0:10:20.960 --> 0:10:24.559 and now they're doing that now, Harley, you know, Shopify 0:10:24.600 --> 0:10:28.920 shares have taken a pretty big dive since November where 0:10:28.960 --> 0:10:31.120 they hit a hit a high point, and obviously we're 0:10:31.160 --> 0:10:33.280 in the middle of a broader market turmoil. But how 0:10:33.320 --> 0:10:37.080 concerned are you about this and going forward? You know, 0:10:37.280 --> 0:10:39.520 how are you thinking about this? What are investors missing? 0:10:40.960 --> 0:10:45.120 I think Shopify was certainly a pandemic story, and I think, 0:10:45.360 --> 0:10:47.959 obviously you know this, the stock reflected them. I think, 0:10:47.960 --> 0:10:49.840 what what a lot of people are missing? But the 0:10:49.840 --> 0:10:52.920 Shopify stories that on one hand, we're ten percent of 0:10:52.920 --> 0:10:55.080 all e commerce the ums, we have massive scale. At 0:10:55.120 --> 0:10:57.040 the same time, those economy scille that come with it. 0:10:57.160 --> 0:10:59.439 At the same time, the two million stores on Shopify 0:10:59.640 --> 0:11:02.120 have an independent business at the same time. That happens 0:11:02.400 --> 0:11:05.280 every thirty seconds or so a brand new entrepreneur gets 0:11:05.320 --> 0:11:07.280 their first sale on Shopify. That means we are not 0:11:07.320 --> 0:11:09.360 only getting a larger piece of the pie, we're growing 0:11:09.400 --> 0:11:11.760 the pie itself. And all those stores that end up 0:11:11.760 --> 0:11:14.120 in businesses that are being really successful will stay on 0:11:14.160 --> 0:11:17.000 Shopify indefinitely. And that's why you see companies like Figs 0:11:17.000 --> 0:11:19.400 and All Birds go public and and Jim Shark and 0:11:19.520 --> 0:11:21.520 all these amazing brands that were built at their mom's 0:11:21.600 --> 0:11:25.199 kitchen table that are our category leaders built on Shopify. 0:11:27.200 --> 0:11:29.200 I also want to ask about you'll go go ahead 0:11:29.240 --> 0:11:31.120 finish your I was gonna say in terms of so, 0:11:31.200 --> 0:11:33.080 I think we were a pandemic story. I think what 0:11:33.200 --> 0:11:36.360 what often people misses? Were also this reopening story again, 0:11:36.440 --> 0:11:39.800 eighty percent of our eight we had eighty percent growth 0:11:39.800 --> 0:11:41.719 in point of sale gym V. We have thousands of 0:11:41.760 --> 0:11:43.240 stores all over the world that you shop lay a 0:11:43.280 --> 0:11:46.560 power their physical store. You know, we saw social embedded 0:11:46.559 --> 0:11:49.880 commerce on services like Instagram and TikTok and now Twitter 0:11:50.040 --> 0:11:52.960 grow almost four percent year on year last quarter. So 0:11:53.040 --> 0:11:56.120 Shopify is really more than just spinnay commerce provider or 0:11:56.280 --> 0:11:59.040 or a pandemic story. We really are the world's retail 0:11:59.040 --> 0:12:01.440 operating system. And again, look at every one of your 0:12:01.440 --> 0:12:03.920 favorite brands or anyone listening look at your favorite brands. 0:12:03.960 --> 0:12:06.360 You will start seeing shop pay as the payment game. 0:12:06.360 --> 0:12:09.160 But you will start seeing Shopify power those brands. That's 0:12:09.200 --> 0:12:10.800 really important to us, and that's the reason why I 0:12:10.800 --> 0:12:13.760 think our future is very brave. I also want to 0:12:13.760 --> 0:12:17.400 ask about your evolving governance story. Shopify recently made some 0:12:17.480 --> 0:12:21.880 changes to enhance Toby lucka of the CEOs power. Some 0:12:22.000 --> 0:12:25.800 shareholders did oppose these changes. What are you hearing from 0:12:25.840 --> 0:12:29.040 from shareholders now, you know, in terms of concerns about 0:12:29.120 --> 0:12:32.480 this change, and what has been Shopify as response. I've 0:12:32.520 --> 0:12:34.640 spent the last few weeks with uh some of our 0:12:34.679 --> 0:12:36.880 our largest investors, and and and frankly a lot of 0:12:36.920 --> 0:12:39.839 investors generally, and I think um one, you know, we're 0:12:39.840 --> 0:12:41.720 grateful for their trust and coetin to run the business. 0:12:41.720 --> 0:12:45.120 But the goal here really was modernizing our government structure. 0:12:45.160 --> 0:12:46.840 We want to be a hundred your company. We're about 0:12:46.880 --> 0:12:49.199 sixteen years sixteen years into it, so we've got a 0:12:49.280 --> 0:12:51.280 lot more time. Eighty four years left to go, and 0:12:51.320 --> 0:12:53.120 we want to ensure that we can run our business 0:12:53.160 --> 0:12:56.480 and make really good long term decisions for investors, for merchants, 0:12:56.640 --> 0:12:59.800 for for every stakeholder that's involved with Shopify, and we 0:12:59.800 --> 0:13:03.360 think this monetization, particularly around the government structure, allows us 0:13:03.360 --> 0:13:05.160 to do that. I'll also tell you, having spent so 0:13:05.240 --> 0:13:07.400 much time with investors lately, that some of these investors 0:13:07.440 --> 0:13:09.440 that have been with us for the last seven years 0:13:09.480 --> 0:13:12.839 since the I p O, and they believe more in 0:13:12.840 --> 0:13:15.160 shop Plain now than ever before. And we're grateful for that. 0:13:15.200 --> 0:13:17.439 But we got a lot of room to grow and 0:13:17.600 --> 0:13:19.679 and we have a lot of new opportunities in front 0:13:19.720 --> 0:13:23.360 of us. All right, Harley Finkelston. Always appreciate you joining us, 0:13:23.360 --> 0:13:26.480 Thanks for taking a wide range of questions today. Appreciate 0:13:26.520 --> 0:13:37.679 it happening in New York right now. Slack Frontiers the 0:13:37.679 --> 0:13:40.800 company's annual conference where they've unveiled the latest innovations to 0:13:40.880 --> 0:13:44.400 a product that's become integral to the hybrid workplace. Joining 0:13:44.480 --> 0:13:47.640 us now. Stuart Butterfield, Slack co founder and CEO, joining 0:13:47.760 --> 0:13:51.720 us from our studios in New York, Stewart. Great to 0:13:51.760 --> 0:13:53.480 have you back with us, and thanks for coming in 0:13:53.960 --> 0:13:57.520 among the many announcements today, you're building out Slack huddles, 0:13:57.679 --> 0:14:00.760 adding this new video feature, and I'm curious, with video 0:14:00.800 --> 0:14:04.000 conferencing a very crowded market, what's the unique niche that 0:14:04.040 --> 0:14:08.040 you hope Slacks offering will fill. Yeah, thank you, Emily. 0:14:08.120 --> 0:14:10.880 It's um it's a little bit different than than a 0:14:10.960 --> 0:14:13.160 video call. So huddles, for those of you who are 0:14:13.200 --> 0:14:15.959 not familiar, used by tens of millions of people a 0:14:16.000 --> 0:14:19.800 week on Slack, and up till now, they've been audio only, 0:14:19.960 --> 0:14:21.800 and the intention is a little bit different than like 0:14:21.800 --> 0:14:24.640 a call that has a scheduled start time and end time. 0:14:24.880 --> 0:14:29.520 They're more for serendipitous, spontaneous conversations and they've been really 0:14:29.560 --> 0:14:32.480 valuable in that respect, fastest growing feature and Slacks history. 0:14:32.720 --> 0:14:35.840 People love it. UM. So we're adding a little bit 0:14:35.840 --> 0:14:37.480 more of a coworking space, and I think there's a 0:14:37.480 --> 0:14:40.480 difference between on the one hand meetings and the other hand, 0:14:40.560 --> 0:14:43.320 people working together and helping to use computers at the 0:14:43.360 --> 0:14:45.960 same time. We're definitely on the far left edge of 0:14:45.960 --> 0:14:49.000 that spectrum. And I think that I, like all of 0:14:49.040 --> 0:14:52.120 the people in the audience, will be on many many 0:14:52.240 --> 0:14:54.920 more video calls years. Show now but I think there's 0:14:54.960 --> 0:14:58.200 also like a whole set of tools that kind of 0:14:58.240 --> 0:15:02.080 became obvious that they're desirable during the pandemic. But we're 0:15:02.080 --> 0:15:03.920 just starting to see some of them now. Some of 0:15:03.960 --> 0:15:05.520 them will come from Slack, some of them will come 0:15:05.520 --> 0:15:08.480 from others. It's actually a pretty exciting time and enterprise software, 0:15:08.520 --> 0:15:12.120 insofar as enterprise software can be exciting at all. Indeed, 0:15:12.160 --> 0:15:14.600 of course, you know there's competition here from Zoom and 0:15:14.680 --> 0:15:17.400 Google Meet and Microsoft Teams and just go WebEx And 0:15:17.400 --> 0:15:18.920 in the same way that you're kind of moving on 0:15:18.960 --> 0:15:21.120 to let's say, zooms turf a little bit, you've got 0:15:21.240 --> 0:15:25.200 Zoom announcing some chat features. Are you at all concerned 0:15:25.240 --> 0:15:28.840 about them taking Slack market share? No, not at all. 0:15:28.880 --> 0:15:31.640 And to be clear, we at Black are a happy 0:15:31.720 --> 0:15:35.280 Zoom customer, and I don't expect that to go anywhere. 0:15:35.640 --> 0:15:40.160 There just is a lot of use cases that that 0:15:40.200 --> 0:15:44.000 aren't covered by the thirty minute video call. There's also 0:15:44.040 --> 0:15:45.680 a huge amount of stuff that Zoom does that I 0:15:45.680 --> 0:15:48.760 don't think Slack will ever do, and also vice versa. 0:15:49.120 --> 0:15:52.800 But um, we're at this moment where it really feels 0:15:52.840 --> 0:15:55.640 like I'm personally as optimistic as I ever have been 0:15:55.760 --> 0:15:57.720 in the last twenty years. It really feels like there's 0:15:57.680 --> 0:16:00.000 an opportunity to create a couple of brand new categories. 0:16:00.000 --> 0:16:02.640 In the same way that everyone has the standard set 0:16:02.680 --> 0:16:05.960 of email and calendar and word processor and spreadsheet, there's 0:16:05.960 --> 0:16:10.120 a couple more slots there that the pandemic made clear. 0:16:10.560 --> 0:16:12.760 We're really important, and so we're excited to spend a 0:16:12.800 --> 0:16:15.920 lot of time experimenting there and uh and releasing new stuff. 0:16:16.720 --> 0:16:18.360 Now you don't have to worry about this as much 0:16:18.400 --> 0:16:21.080 now that slack is part of salesforce. And I wonder, 0:16:21.120 --> 0:16:23.280 actually if there's some relief that you actually don't have 0:16:23.360 --> 0:16:26.240 to worry about the market meltdown. But you've been building 0:16:26.280 --> 0:16:28.800 companies for more than twenty years, you live through the 0:16:28.840 --> 0:16:31.400 dot com boom and bust. What's your take on what's 0:16:31.400 --> 0:16:34.360 happening with the economy right now? If Elon Musk has 0:16:34.360 --> 0:16:40.520 a super bad feeling about it, how does Stupent Butterfield feel? Well? Uh, So, 0:16:40.560 --> 0:16:42.360 I'm from pretty old at this point. I graduated from 0:16:42.360 --> 0:16:46.880 post school in ninety one, so I worked through the recession, 0:16:47.600 --> 0:16:50.160 right through the dot com crash, that whole roller coaster 0:16:50.800 --> 0:16:52.960 two thousand and eight of course as well, and a 0:16:52.960 --> 0:16:57.080 couple of other littler ones. UM. I don't want to 0:16:57.120 --> 0:16:59.880 suggest that there's no dislocation and there's no like immediate 0:17:00.040 --> 0:17:02.480 negative impact for a lot of people, um in the 0:17:02.520 --> 0:17:05.320 short term. But at the market level, I see this 0:17:05.560 --> 0:17:08.560 um kind of working itself out over. Maybe it's six 0:17:08.600 --> 0:17:12.240 months if we're super super lucky, maybe if it's eighteen months. Um, 0:17:12.280 --> 0:17:15.080 if it's a little bit more realistic. But we do 0:17:15.119 --> 0:17:17.680 come up the other side, and so many great companies, 0:17:17.720 --> 0:17:20.440 including it slock. We're started. You know, there's company that 0:17:20.480 --> 0:17:22.679 became slock started at two thousand and nine, kind of 0:17:22.800 --> 0:17:25.960 right in the in the absolute bottom part of the trough. UM. 0:17:26.000 --> 0:17:30.119 So I think there's also a lot more opportunity now. Interesting. UM, 0:17:30.320 --> 0:17:33.120 So how do you think Silicon valid looks different after this? 0:17:33.160 --> 0:17:36.440 I mean, if it's not a major dislocation, is it 0:17:36.600 --> 0:17:40.320 just a sort of evolution. Yeah, I mean, so if 0:17:40.320 --> 0:17:43.040 we're talking about like just stock prices and big multiples 0:17:43.080 --> 0:17:44.919 have come down to a pretty realistic level now, and 0:17:44.960 --> 0:17:47.280 so now we'll see if people can deliver the earnings 0:17:47.280 --> 0:17:49.360 that are expected, will kind of stay in the same 0:17:49.400 --> 0:17:53.639 box for a while. UM. The bigger question is whether 0:17:53.760 --> 0:17:56.280 that whether you imagine a recession that would really impact this. 0:17:56.720 --> 0:17:58.600 But I think something else is going on at the 0:17:58.640 --> 0:18:03.280 same time, which is we've really realized, uh, the importance 0:18:03.320 --> 0:18:06.440 of all the digital infrastructure that supports productivity and collaboration, 0:18:06.520 --> 0:18:08.600 and just to make that like a little bit more 0:18:08.600 --> 0:18:12.239 tangible for people. If you go back to March and 0:18:12.640 --> 0:18:15.520 imagine that a parallel universe where you could keep traveling 0:18:15.520 --> 0:18:17.560 for work and use conference rooms and commune, go to 0:18:17.600 --> 0:18:19.720 the office, all of that stuff, but you took away 0:18:19.760 --> 0:18:22.760 the software, all of these companies would have just disintegrated 0:18:22.760 --> 0:18:25.199 in like twenty four hours. So at some point in 0:18:25.240 --> 0:18:28.160 the last twenty years, we switched from a world where 0:18:28.200 --> 0:18:30.760 the physical HQ is more important than the digital to 0:18:30.840 --> 0:18:32.600 the other way around. And yes, we use digital h 0:18:32.720 --> 0:18:35.080 Q as a marketing term, but I just mean obviously 0:18:35.160 --> 0:18:38.520 all of these companies continue to exist, and when that happens, 0:18:38.560 --> 0:18:41.199 I think there's a lot more interest in investment. You know. 0:18:41.680 --> 0:18:44.160 The worst case scenario is a is a chief information 0:18:44.200 --> 0:18:47.440 officer who've used technology as like HVACT for the building, 0:18:47.480 --> 0:18:48.800 like you're just trying to get it as cheap as 0:18:48.800 --> 0:18:52.200 possible as opposed to an investment in the organization's overall 0:18:52.240 --> 0:18:55.440 effectiveness and the ladder case is really what we're seeing 0:18:55.440 --> 0:18:59.200 with customers now. Flat is becoming more and more integral 0:18:59.280 --> 0:19:02.119 to all kinds of workforces and has been in the 0:19:02.160 --> 0:19:06.520 news recently because the January six Committee has asked Twitter 0:19:06.800 --> 0:19:12.160 for Slack messages tied to their decision to ban former 0:19:12.200 --> 0:19:15.760 President Trump, etcetera. I'm so curious for your thoughts on this. 0:19:15.960 --> 0:19:18.600 If Slack has been subpoena and I know Twitter has 0:19:18.640 --> 0:19:22.040 refused to hand this misinformation over, and if you were subpoena, 0:19:22.080 --> 0:19:26.440 if Slack would comply, UM, I gotta be honest now 0:19:26.640 --> 0:19:28.680 at this point, I have no idea if we've been subpoena. 0:19:28.880 --> 0:19:31.560 I don't think so. UM. You know, obviously we have 0:19:31.760 --> 0:19:34.480 a range of customers. In fact that when I'm a 0:19:34.640 --> 0:19:38.600 softball opportunity to mention. We also announced gov Slack today, 0:19:38.680 --> 0:19:40.679 the fed ramp high version of Slack used by like 0:19:40.800 --> 0:19:45.199 Lockheed Martin and the U. S. Army software factory. Um. 0:19:45.240 --> 0:19:47.320