Good morning.
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.
Other news below.
Alan Murray
alan.murray@fortune.com
@alansmurray
TOP NEWS
Fiat Chrysler PSA
No, not a public service announcement: Fiat Chrysler is in merger talks with Peugeot maker PSA Group of France. The combined entity, if it appears, would be worth around $46 billion and be the world's fourth-largest car maker by volume. Fiat Chrysler recently tried to merge with Peugeot rival Renault, but that deal was sunk by the French government and Renault alliance partner Nissan. Wall Street Journal
Brelection
It's happening: the U.K. is going to have another general election, and it will take place on December 12. The purpose of the election is to resolve the Brexit crisis; this is by no means certain to be the outcome. But, with Liberal Democrats surging on an anti-Brexit stance that will tempt left-wing voters from Labour, and the Brexit Party threatening to steal votes from Boris Johnson's Conservatives, what is likely is that the election will radically shake up the country's political landscape. Guardian
Juul Suit
Former Juul global finance chief Siddharth Breja is suing the company for allegedly retaliating against him when he raised concerns about a contaminated shipment of e-cigarette pods. Breja claims a million contaminated pods were shipped to customers and never recalled. He also says former Juul CEO Kevin Burns' reaction to Breja's concerns about shipping almost year-old pods ran thusly: "Half our customers are drunk and vaping like mo-fos, who the f--- is going to notice the quality of our pods?" Buzzfeed News
Boeing Grilling
Boeing CEO Dennis Muilenburg got grilled by senators yesterday over the company's safety failings relating to the 737 Max aircraft, two of which have crashed, killing hundreds. Muilenburg: "On behalf of myself and the Boeing company, we are sorry, we are deeply and truly sorry…We’ve made mistakes and we got some things wrong.” CNBC
AROUND THE WATER COOLER
Deutsche Bank
Deutsche Bank reported a $924 million Q3 loss this morning, as a result of restructuring costs and a 13% drop in income from its bond-trading unit. The previous quarter saw a $3.5 billion loss. Analysts had held back from providing estimates ahead of today's results. Reuters
Chinese Blockchain
Li Wei, the tech chief at China's central bank, says Chinese commercial banks should step up their use of blockchain technology—the shared-ledger technology that underpins cryptocurrencies such as Bitcoin. The call comes as the People's Bank of China develops its own digital currency plans. Fortune
Bottle Recycling
Coca-Cola, PepsiCo and Keurig Dr Pepper have announced a big recycling drive called Every Bottle Back, involving $100 million in infrastructure and $400 million heading in the direction of environmental nonprofit The Recycling Partnership and circular-economy investment firm Closed Loop Partners. The beverage firms' packaging will by late next year bear messages highlighting their recyclability. BevNet
EU Competition
The EU's Competition Commissioner, Margrethe Vestager, is considering changing antitrust rules so that market-dominating companies (read: Big Tech) have to prove their behavior does not harm competition—as opposed to the European Commission having to prove harm. Financial Times
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
