Hybrid work setups will require a new set of tools for employees: Slack co-founder Cal Henderson

Slack’s ability to integrate with a host of other applications makes it an efficient choice for customers, especially when it comes to the hybrid model of working.

The way we work is changing fast, with hybrid work models becoming the new norm, even as companies are increasingly trying to get everyone back to the office.

Slack co-founder, Cal Henderson, sees an opportunity in this shift, since he believes that these new models will require a whole new set of tools for people to collaborate and work together.

In an exclusive interview with Moneycontrol, Henderson says that the pandemic “took us forward five or 10 years” in terms of workplace habits. Hence, they are not witnessing any change in usage in the post-pandemic era even as people have started going back to offices.

Henderson also spoke about their journey after the acquisition by Salesforce, how generative artificial intelligence is changing their product strategy, and the significance of the India market for the company. Excerpts from the interview.

Can you talk to me about Slack's journey after the acquisition by Salesforce?

The last 2.5-3 years since the acquisition have been interesting, not because we were acquired, but also because the entire acquisition happened during the pandemic. The initial discussion, the announcement, and the closing - all that happened without ever really meeting in person.

In some ways, it is exactly as we imagined that Salesforce is. It's in the name - Sales, they are very good at the sales, marketing and enterprise side, they have all of these enterprise customers. Whereas, our strength is on product-led growth, creating, and iterating on products with our customers.

On the SMB side, we have hundreds of thousands of customers, many of them are tiny companies, maybe two, three, four person companies. We have many of the world's largest companies as well. But we have all of these self-service SMB companies, and it's just a very different outlook. So we're different in that way than I expected.

Over the last six to nine months, we've started hitting our stride in terms of building new products and getting them out there for our customers. It's taken some time, we're more than two years in, but it's really starting to pay off.

How has your product changed since the pandemic?

The beginning of the pandemic was a real kind of wartime footing for the company where, overnight, we had all of these customers who were banging down our door, because they just needed some way to be able to work when they're forced to suddenly be distributed.

We saw a big influx of customers, but we also saw a big rise in the average number of messages sent per day per user. So people were using Slack a lot more. That was not surprising, but I think what was surprising is, after the pandemic, when people have started to go back into offices, is that we don't see a change in usage, we are still at that elevated level of messages sent per person, whether people are in an office or not. And I don't think that's going to change now.

I think that pandemic, in many ways, just accelerated changes that were already happening, and took us forward five or 10 years in terms of workplace habits. So a lot more work, whether people are in the office or not, has now moved digitally.

While offices are open again, we have some companies who have gone to the far end of the spectrum and everybody is in the office five days a week. At the other end of the spectrum, we have some organisations who said we don't need an office, we're capable of being fully distributed and remote.

But the majority of companies that we talk to around the world, whether they're small, medium or large, sit somewhere in the middle, they are hybrid. And it needs a different set of tools to be able to work together like that, or at least a more robust set of tools.

I think we are hesitant to say we're lucky with anything to do with the pandemic, because it was an awful thing for the world to go through. But if it had happened five or 10 years before, I think the outcomes would have been extremely different in the workplace.

But we also know that there are a lot of activities that are best done at home. Whether that's because you want to give people the flexibility to work in different schedules than their work hours or because they need to focus and have individual heads downtime, and that's best done in a home office than it is in a big office building. I think that flexibility is the new default.

Read: India is a 'big opportunity market' for Slack: Co-founder Cal Henderson

A lot of companies like Zoom, which had received a massive usage bump during the pandemic, have subsequently seen a significant decline in usage as people start going back to office. Have you guys seen some moderation and how are you navigating that?

We've seen the same level of usage, even when people are back in the office. This is because it's the same to talk to the person sitting at the desk next to you as it is to talk to somebody who's sitting in a city 1,000 miles away. We see a lot of our customers work this way as hybrid becomes a more default work mode or they get larger in size.

Once you get in that mindset of using digital tools, it doesn't matter if somebody is present next to me or not for this particular activity, then you're going to be more likely to use them. So we see Slack usage just as much whether you're in the office, or whether you're working from home that day, whereas perhaps in meeting tools, if you're in person with somebody, you are going to have a meeting in person with them.

Has your value proposition changed now that people are increasingly going back to offices?When we look back at the beginning of the pandemic, a lot of the demand was just companies needing a way to be able to communicate. I think that's the very basic mechanics of what Slack is - channel-based communication for teams.

But as we've seen usage maturing, and companies using Slack for a longer period, the biggest amount of value that our customers get out of Slack is when it's integrated with all of the other tools that they use, increasingly hundreds or even thousands of pieces of software that they use to get the job done. I think that there's been more of an emphasis on the integration and automation through all of the other tools that they use, and doing that through Slack.

We've released a lot of new features in the last year but I think some of the most impactful have been around our Slack platform and workflows, which are heavily used by all of our largest customers, and increasingly by our smaller customers as well.

Slack workflows, which allow you to automate different kinds of tasks within Slack and with apps plugged into it, are increasingly used by non-technical people. More than 80 percent of our workflows are used by non-technical people and teams to be able to automate their work.

It leads into what's happening with AI, just this idea of being able to automate more kinds of work.

You've initially started with text and you added voice through Huddles. Are you guys looking at adding more formats?

Huddles are audio by default, but you can turn on video when you want to huddle as well. And we see the usage is pretty evenly split between with and without video.

I use video huddles with my team pretty much every day, but especially for those quick catch-ups. And we increasingly see a lot of that being used as well. On the other side of that is Clips, which is like Huddles, but asynchronous. So if you want to record a voice note, or short video, and send it to somebody or send it to your team; we see that being used a lot as well.

People use Clips to avoid having a stand-up meeting in the morning. And instead, everybody just sends like a 30 sec clip of what they're working on and you can consume it when you're ready. You don't all have to be there at exactly the same time, but you're getting the same ability to get things across on video. I love seeing designers showing off their designs by recording a small clip and walking somebody through it.

Read: Slack's generative AI push: Message summaries, writing assistance and more

How is generative AI changing your product strategy?

A lot of the features that we recently announced and are launching soon for our customers, are around search and summarisation.

The ability to use generative AI to be able to summarise messages in a channel. Say, there are thousands of messages (in the channel) but here are the four most important things you need to know that happened in the last six months. Or, you have a huddle with your team, and maybe it lasts half an hour, but being able to take the transcript of that call and run it through an LLM (large language model) and say what are the action items, or what do people need to do out of this call? Getting that automatically extracted and summarised is huge.

It's all the things that a human could do but it just takes time and with large language models, we are able to automate these things.

The other one is search. Some customers have been using Slack for a decade now and they have so many messages and so much information stored in their Slack. We want to make that information a lot more valuable.

I think generative AI expands the category of tasks that we can automate into new categories and will take particular actions and activities that knowledge workers did, and be able to automate those that ultimately leaves knowledge workers to be able to spend more time doing things that humans are uniquely good at. Those tend to be highly collaborative and highly creative things, often done in groups.

So what is the potential and opportunity you see in generative AI in terms of improving productivity and efficiency in the workplace?

Apart from search and summarisation and being able to harness large amounts of knowledge, I think there's a lot of interesting opportunities that are helping people write software better.

It's still very early days, we are not quite a year into ChatGPT being released, which changed how the world was thinking about AI. And we're really just starting to see the first actual large-scale products get into the market. So I think almost every kind of information worker role is going to be augmented by AI in some way over the next couple of years. And we're really just starting to scratch the surface.

Of course, because these tools are being built by software engineers, software engineering is the first area that's augmented by it. But I think we're going to continue to see it across a wide variety of disciplines of taking some portion of that work, and being able to automate it, make it faster or accurate, and leave time for the higher leverage work.

Read: Slack's new redesign brings in unified view, dedicated DM tab and more

A lot of companies are now looking at building smaller domain specific LLMs. Is Slack looking at a similar strategy?

There are some cases in which making bespoke LLM makes sense. We're starting to see smaller commercial and open source LLMs being made, that makes a ton of sense, because we can drive down the cost, while keeping the efficiency high.

However, we're not building our own LLM, we're rather using enterprise foundational LLMs from our partners to be able to power these Slack features.

How significant is India for Slack in terms of product or in terms of market?

It's an important market for us. I think it is one of the biggest markets for free users, which is really the start of the freemium cycle for Slack. And it's increasingly in our top countries for paid customers as well. We've long had a big presence in India that started with US multinationals that had teams in India. But I think it's been expanding over time.

Slack has had an engineering team in Pune for maybe five to six years and we have other teams around India as well as part of Slack and Salesforce. So it is a big opportunity market for us and we're starting to see more adoption there as well.

What is the broader AI vision you have for Slack?

Apart from the AI features that we're building natively into Slack, there's also the platform integration side of it. Slack is messaging for teams in the workplace, it's channel based, but the other really important aspect of it is that it's also a place to integrate all of the other pieces of software that you use, be it hundreds, or, maybe even thousands of pieces of software that the modern enterprise uses, we can make each of them more valuable by integrating it with Slack.

That's true of all kinds of AI tools as well. For instance, companies who are using ChatGPT enterprise or using Anthropic, or Cohere bots, you can use those in Slack today. So you can bring those into Slack if you're already a customer of those companies. We want to continue to allow AI companies or people building services around AI to integrate with the Slack platform and bring those services into Slack.

You have a lot of local rivals such as Zoho who can potentially give more localised experiences to customers. What is your strategy to maintain an edge over them?

Ultimately we just want to try and build the best product that we can. Part of that is the experience of the product right from the design, making it fun and user friendly, but also performance in all of our different regions around the world and with local data storage.

If you're a customer in India, we can store your data in India as well, to meet local compliance laws. It's also integrating with every other piece of software that you use. Slack out-of-the-box integrates with 2,700-2,800 other bits of software right now. The more of the other tools that you use that work with Slack, the more valuable Slack becomes.

What are the main focus areas going forward in the next year?

AI features is a really important one and continuing to build on top of Canvas, which is our flexible document containers built into Slack.

We recently announced Lists, which is a way of having lightly structured data inside Slack and then tying all three of those together with our Workflow platform with our automation for being able to take all of those building blocks and automate simple, lightweight business processes.