Every 11 days, Stewart Butterfield's business collaboration software company adds $1 million in annual recurring revenue.
Stewart Butterfield has been everywhere lately — a Wired feature story, a PandoMonthly appearance, and a turn in Fortune’s latest cover story “The Age of Unicorns” about companies with valuations of $1 billion or more. The attention is deserved—Butterfield’s business collaboration software company, Slack, is one of the more fascinating startups in the unicorn club.
For one, Slack scored a $1 billion valuation in less than a year. Second, it’s growing like gangbusters. And third, Butterfield is not your typical behoodied Silicon Valley startup founder—at least if the stereotype is to be believed. He’s 41 years old. He spends half of his time in Vancouver. He’s the kind of guy who will tell a reporter, after an awkward industry awards show, that everyone in the crowd “is making too much money.” (Or the kind of guy who responds “I have no fucking idea” when asked why his new company was growing so quickly.)
Today marks the San Francisco company’s one-year anniversary, and Slack released a bundle of envy-inducing growth figures to mark the occasion. More than 60,000 teams and 135,000 paid accounts use Slack’s software. The company claims it has 500,000 daily active users, a number that it says doubled twice in the last two quarters. The service sees 10,000 new daily active users each week.
For Slack, this translates to $12 million in annual recurring revenue, which is a typical form of measurement for companies that sell access to software by subscription. It means that if Slack added no new customers after today, it would end the year with $12 million in revenue. That’s not the case, of course: Slack says it’s adding another $1 million in ARR every 11 days.
The success of Butterfield’s company reinforces the well-worn Silicon Valley refrain that first isn’t always best. Facebook’s social network came after MySpace and Friendster. Google’s search engine followed Excite, Lycos, AltaVista, and others. Slack’s collaboration apps, available on mobile and desktop, follow services such as Yammer, a startup which sold to Microsoft MSFT in 2012 for $1.2 billion, and HipChat, a similar product made by Atlassian.
Butterfield insists that Slack improves on the basic messaging functionality offered by its predecessors. The company plans to expand from 100 employees to 250 this year, open an office in Dublin, and launch a version that supports large companies with multiple teams.
Butterfield believes the move away from email to internal messaging systems is inevitable. “Within 10 years every company will use some kind of system for internal messaging,” he says. The hope, of course, is that most of them will choose Slack.