Stewart ButterfieldVerified account

Quick introductory note: I’m a human. I worry about my family and am deeply concerned about the millions whose jobs and health are at risk. But I’m also a CEO and these tweets are about work: the company, money, markets, customers, earnings, guidance, etc. With that in mind …

Week of March 2nd-6th Monday: Fewer than 100 COVID cases reported in US, but uncertainty increasing. Over the weekend we shut down the Tokyo & Osaka offices, put travel restrictions in place and cancelled our annual Global Sales Offsite, a long-planned 800-person event.

I get an email from the CTO of one of the world's biggest asset managers telling me (a) they’re signing the contract to go wall-to-wall on Slack and (b) this was one of the last big purchases before tightening up due to coronavirus concerns. First time I'd seen that in the wild.

Tuesday: Announced “optional WFH” at all other offices globally. A few other companies had also started or were considering starting WFH programs amid growing uncertainty. We noticed upticks in new teams signing up for Slack, especially in Japan, Korea and Italy.

Wednesday: Things speed up. We launch a set of resources for teams that are faced with the prospect of a sudden shift to remote work, began offering free 1:1 live consultations and created new webinar programs in response to growing demand. (See: https://twitter.com/stewart/status/1235613239322374144 …)

Thursday: Board meeting. Debated and approved plan for this fiscal year— hiring, budgets, targets, forecasts, etc. Got feedback on our prepared remarks and guidance for next week’s earnings call; felt confident! Didn't know it, but for most, our last meeting in the office.

Thursday (cont.): An SF-based employee informs us that they’d been contacted by the CDC about a potential SARS-CoV-2 exposure. Decided to close HQ the next day and do a deep clean over the weekend. (The employee had no symptoms and was self-quarantining. Now okay, thankfully.)

That evening policy discussions intensified. Reported cases in the US up to 200. News was getting worse. The exec team debated what global office closures would look like, backchanneled to other leaders, and began preliminary planning. All this seems a different universe now.

Friday: Made the call. “Strongly encouraged” all employees to work from home. Planning intensified. There was a LOT of work to do. By the time we communicated to employees on Sat afternoon, there were 400 cases in the US. (I wrote about this time here: https://twitter.com/stewart/status/1237815458386055178 …)

March 9th-13th. Earnings week Monday: Trading halts six minutes after markets open on a 7% drop in the S&P 500. Everyone learns that the markets have circuit breakers built in. VIX spikes to highest since Oct '08. Suddenly the macro environment seems dizzyingly uncertain.

We regroup, revise the script and adjust guidance as the CEO/CFO/IR/Comms crew heads to NYC. Driver from the airport tells me business is down by half, he’s behind on rent and his brother just got laid off from his hotel job, along with 50% of the staff. Darkening clouds.

Markets bounce back that morning, but there’s a lot of noise. In Italy, new “returning teams” (important internal metric) were up more than 120%. Japan & Korea, already way up, increased another 34% & 33% W-o-W respectively. At the same time, more layoffs and businesses closing.

Wednesday: Prep sessions for media interviews & earnings call. WHO officially announces it’s a pandemic (?) and, with another 5% drop in the major indices, we’re also officially in a bear market. Practice questions get weirder and more off the wall. (We have a great team!)

Quick drink/snack with friends on the way home ends up being my last time in a restaurant. Then, all at once, it got *real* in America: Tom Hanks & Rita Wilson diagnosed, NBA suspends season, Trump announces travel ban. Futures trading halted on limit downhttps://twitter.com/tomhanks/status/1237909897020207104 …

Just after 10pm, the CFO, GC & VP IR and I are discussing. Inside of an hour we go from “the last 24 hours of activity does not warrant any further conservatism” to “we need to adjust guidance one more time.” In the next 24 hours we would be asked about this dozens of times.

Thursday. Earnings day. Major indices plunge again. Prices fly all over the map as 10%+ intraday volatility becomes the new normal. Back in San Francisco, total school closures are announced (which is both the right thing and a very, very big deal for parents working from home).

That afternoon, waiting for the earnings to print and the call to start, felt completely surreal. This was our third earnings as a public company. The first was a point, the second made a line, and this one made it a curve. But that’s all normal world stuff. Here was crazy.

When the possibility of millions of deaths is slowly starting to sink in, it’s hard to say an otherwise normal CEO thing like “the macro environment is creating significant tailwinds for the business” and it felt completely impossible to extrapolate out from this present moment.

It felt like the shift from inboxes to channels which we believed to be inevitable over 5-7 years just got fast-forwarded by 18 months. Good for our business. But what about everyone else? Many sectors were already hit hard and the fallout for small business could be devastating.

Looking back, things looked good. Full year revenue up 57%; Q4 revenue up 49% and billings 47%. We believed we were finally through some organizational growing pains and were better positioned than ever. The competitive narrative was clearing up as we kept winning in enterprise.

So, on one hand: Large enterprises were sure to clamp down on spending, our EBCs were closed, salespeople couldn’t travel, no in-person meetings for training programs, and more we couldn’t yet imagine. And on the other: Those same customers needed Slack more than ever.

At the other end of the spectrum it was: Early signs of a surge in teams created and new paid customers unlike anything we had ever seen. Weighed against: We had 110,000 customers. In the worst case scenarios many thousands of those would go out of business.

When I think about the future, I imagine a “cone of possibilities.” The further out you get, the harder it is to predict and the wider the cone gets. Increased risk, volatility, uncertainty push it wider still. Our job in this moment is to help others predict our future. Hmm.

We want to be “reasonable” and “prudent” and earn the trust of analysts and investors over time by being honest and straightforward. But we literally have no idea what is going to happen and neither does anyone else, really. The error bars on any prediction will be miles wide.

One thing we can say is that averaging out the best and the worst case to draw a line down the middle doesn’t make any sense. We want to guide to something we know we can achieve, and that means factoring in the downside scenarios more heavily. And that’s what we did.

Eventually the numbers went out, the call started, and we stayed in the office doing callbacks with sell-side analysts till bedtime. The next morning I was up early to do CNBC’s Squawkbox, but this time from a separate studio 7 blocks away. Visitors were no longer allowed.