Slack CEO Stewart Butterfield is on a roller coaster ride. His company went public in June with its stock price soaring to $42 a share. Earlier this week, it dipped briefly below $20. In part, the company has suffered from investor fears that Microsoft could take its business away. But it is also riding the ups and downs of a wild tech wave.
During a visit to Fortune’s (new) offices yesterday, Butterfield was confident the company could ride the wave and prevail in the long run. He believes Slack is a powerful tool for productivity within companies. When I asked why that productivity gain isn’t showing up in the government’s statistics, he gave this thoughtful answer:
It’s been more than thirty years since Robert Solow said, “You can see the computer age everywhere but in the productivity statistics.”—and won the Nobel Prize for his work on the productivity paradox. It has been notoriously hard to measure and most attempts give counter-intuitive results.
Maybe all the productivity increase is ‘competed away’ and becomes a benefit to consumers instead, or maybe it’s some other explanation. What we do know is that at every stage of the computer revolution, companies that didn’t transform went out of business.
There are no longer any large retailers that don’t have inventory management systems. There are no banks that don’t do electronic record keeping. There are no insurers who calculate actuarial tables by hand. There are very few jobs for file clerks, compared to the 1980s or before. But in every case, companies in those industries employ the same number of people—they are just doing less ‘menial’ mental work and more of the kind that is more demanding of human intelligence and creativity. The parts that are automate-able are automated away.
In an interview at Fortune Brainstorm Tech this summer, Butterfield talked about why he believes Slack can beat Microsoft. You can watch those comments here.
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