October 31, 2024

How Slack hired its way to a $27.7B exit

John Kim

Co-founder @ Paraform

In this blog

Be willing to hire from unconventional backgroundsAsk weird questionsDo layoffs with graceWrapping up: The talent strategy that helped Slack build a $27.7B juggernaut

You’ve probably heard Slack’s origin as a failed video game company that then productized an obscure tool they’d hacked together. Their “Searchable Log of All Conversation and Knowledge” was abbreviated to Slack and launched as a team communication product. 6 years later, Salesforce acquired them for $27.7B.

But focusing on this ignores an important part of the story: The people who built Slack into what it is—and how Slack found them.

I researched how Slack found and kept the high-quality talent that helped it build its massive success. Here are the top 3 strategies I found:

But those stories are only symptoms of an incredibly talented team. Great strategies come from great people. Fast execution only happens in functioning teams of high-performers. And it’s not just me saying this: CEO Stewart Butterfield considers recruiting one of his superpowers.

Be willing to hire from unconventional backgrounds

There’s a tendency to look for perfect resumes: The Ivy League degrees, the high-profile internships, and the FAANG logos on the resume.

Those can certainly be signs of a good candidate. But they have two weaknesses. First, somebody who operates perfectly in academic and corporate settings might not succeed at a startup. Second, everybody wants to hire these people, which means you’re competing with many other employers.

Slack’s founder Stewart Butterfield didn't study computer science but spent his early 20s obsessed with Wittgenstein while getting a philosophy degree. As a successful founder (before Slack, he sold Flickr to Yahoo for $35 million), he saw that perfect credentials don’t always map to great performance.

Slack hired important people who didn’t check all the boxes Big Tech would look for. Slack’s former Head of Brand Communications Anna Pickard told Forbes that she got her degree in theater and struggled as an actress before making her way into tech via blogging.

“Struggling actress who blogs on the side” is a candidate profile that’s easy to overlook for a communications role where you’re most likely scanning resumes for experience at agencies or PR teams. Yet hiring Anna was instrumental in making Slack the go-to for internal communication and its initial positioning:

Looking back, it all makes sense: Someone with theater experience would obviously be great at creating characters (Anna Pickard shaped Slackbot’s personality) and someone with enough initiative to blog on the side clearly has intrinsic motivation.

But these people are hard to find if you discard resumes because they’re not perfect on the face of it.

What you can implement:

• Realize that not all useful experience and qualifications show up on resumes.
• Be open to interview people with unconventional degrees or career histories

Ask weird questions

There are 3 downright weird interview questions Stewart Butterfield asked every candidate:

1. What’s 3 times 17?
2. Name 3 countries in Africa.
3. In which century was the French Revolution?

None of these answers were instrumental to job success at Slack—answering them incorrectly didn’t disqualify anyone. But they were designed to evaluate an important value at Slack: curiosity.

A candidate's reactions to oddball questions like this reveal something about their character and personality because the right answer isn’t the point. That’s because they catch most candidates off guard.

Many interview processes fail to surface the right hires because they’re too easy to prepare for.

What you can implement

• Don’t copy your interview questions/hiring process from Big Tech
• Develop interview questions that are hard to prepare for
• Develop interview questions that surface whether or not a candidate

Do layoffs with grace

Everybody loves talking about strategies to find, hire, and retain the best people. But nobody ever talks about how to do layoffs and separation well. But the truth is that if you don’t manage this part well, word will get around. The Glassdoor reviews will come in. And eventually, people will be more hesitant to work with you.

This is especially important when the business isn’t doing well. When Glitch (the gaming company that spawned Slack) wasn’t working out, Butterfield had to lay 37 people off.

Instead of letting them fend for themselves in a tough job market, the company created the “Hire a Genius” website, where all of the employees were highlighted with their portfolios, skills, endorsements etc.

The company kept paying everyone until they had found a new job, which they often found by leveraging their experience into an even better role.

This helped them maintain a great relationship with their (former) employees and put their name on the map as a company that could be trusted to care about its people.

What you can implement

• Care as much about providing a good experience of leaving the company as you care about providing a good experience joining the company.
• Help team members find new opportunities if you have to do layoffs.

Wrapping up: The talent strategy that helped Slack build a $27.7B juggernaut

The biggest insight I would share about Slack would be their focus on hiring for alignment with values. They were open to hiring people with unconventional backgrounds and designed oddball interview questions that helped tease out curiosity, one of their most important values.

It’s usually this alignment on what matters that leads to a great working relationship—not the logos on the resume. At Paraform, we believe this determines the success of a startup more than anything else.

How you work and who you work with is more important than any AI tool you can buy. This is why we’re building a startup to revolutionize how startups hire: So everyone can end up with top-tier talent that perfectly matches their culture.