Andrew Braccia of Accel Partners doesn’t tweet or write blog posts. He rarely talks with the media. But that doesn’t mean the 39-year-old isn’t working it. In fact, Braccia may have landed as big a deal for Accel as Facebook, whose $12.7 million Series A investment produced billions of dollars for its investors.
That company? Slack.
I had coffee with Braccia last week to ask about his early bet on the company, which Accel led with help from Andreessen Horowitz. It could become the defining deal of Braccia’s career, despite his other prescient bets, including on the high-profile Hadoop software company Cloudera (expected to go public sooner than later); Vox Media (owner of The Verge, SB Nation, Vox and Recode); and the 30-year-old, fast-growing online learning company Lynda.com, which had raised nearly $300 million from investors in recent years and announced in April that it was being acquired by LinkedIn for $1.5 billion.
Our chat has been edited for length.
TC: Before joining Accel in 2007, you’d spent nine years at Yahoo, where you met Stewart Butterfield.
AB: Yes. In 2005, as part of the web search business at Yahoo, we bought Flickr, which was Stewart and Caterina [Fake]’s company, so I became really close with Stewart. And after Yahoo, he took a year off and was deciding to do something new with three other folks from Flickr, and they were debating whether or not to create a bank. The other thing was a game [called “Glitch”] , which they’d tried build before Flickr, which was itself a pivot. They thought: Now there are a lot more preconditions in place to build a great game, and we have the ability to make it a reality. But the reality was that it was a really interesting game but it wasn’t a hit.
He could have continued, but he thought: Given our ambitions and the time and place where we are today, let’s end it now and move on.
AB: We had a discussion about: Should I return the money. But the company we’d invested in was Tiny Speck, which produced the game. And the reason we invested in Tiny Speck was because we were investing in that team. I told Stewart, “If you want to continue to be an entrepreneur and build something, then I’m with you.”
TC: So they started to converge on this idea of Slack based on some software they’d created internally to communicate. Were they trying to cut down on email? What was their motivation?
AB: Email is a medium that contains a bunch of different parts of your life — newsletters, emails from friends, notices from Amazon Prime and about your kids’ soccer club. It’s just not the most effective way to communicate as a team.
Also, in this world where all these new services and technologies are alerting you to what’s happening within your business, it becomes really hard to manage. So Slack built this internal messaging service so they’d have a purpose-driven application around team communication and business communication and could integrate all the services that are integral to them. They also wanted to be able to make all of their conversations transparent to the rest of the organization, so that when people started, they would have this history [that could be referenced] from day one.
TC: Did you realize right away what Slack was on to?
AB: I don’t think we understood how valuable, important, or fast it would grow. We just knew the use case was really strong at Tiny Speck and that if it was strong there, perhaps it could be strong other places, too.
TC: How did the company start getting its tools in other users’ hands?
AB: By August of 2013, they starting to approach people they knew. They have a strong network within Silicon Valley and started to get feedback on the product. From there it started to grow virally via word of mouth. [Editor’s note: As of June 24, the company reported having 1.1 million users.]
TC: Where does it go from here?
AB: If you think of Slack simply as team messaging, it’s incredibly powerful. If you think about the many disparate things you do on your computer as you work to get your job done — if you think about consolidating that into workflow, into a single view of the world — then all of a sudden you’re talking about almost the business operating system, where you’re using Twitter, but you’re actually using Twitter in Slack because you’ve set up a Twitter feed and you’re seeing all the things that relate to your job that are being posted on Twitter and you’re able to reply to those posts on Twitter in Slack.
[Similarly], you’re getting all of your customer response tickets in Slack and you’re able to respond to them in Slack. You can add to your CRM database in Slack, and you can push out your email marketing newsletters in Slack. If you think about it that way, the vision for it around workflow becomes really compelling.
TC: Do you see a day when it’s adopted widely by consumers?
AB: Sure, you see people adopting in a bunch of different ways. You see families adopting it, communities adopting it, groups adopting it. It’s not what the product was built for and thus the use case isn’t as delightful and compelling as the business use case, and those use cases won’t be solved for any time soon. But I can definitely see it.
TC: What might users be surprised to see coming from Slack a year from now? Is there anything on its roadmap that you can hint at?
AB: I think you can expect a lot of the expected — and you can expect the unexpected, as well.
They’ve talked about things they are going to do. They’ve talked about threaded comments, for example; that’s something they’re working on and will release at some point when it’s ready. They’re perfectionists, and to build product really well takes a combination of art and science and it takes a level of perfection — thinking about every edge and use case and thinking how it works on mobile and the desktop and how it works offline and online. And they’ll take their time to do it right.
TC: I admired Stewart’s candor in talking publicly this year about Slack’s early, billion-dollar valuation and why it was important for him to secure. How did you feel about that interview?
AB: I don’t think he was revealing a secret. What gets lost in a lot of the fundraising fervor around Slack is that it’s a free market. People will pay for companies and entrepreneurs and teams that they believe in, at a price that they believe is reasonable and fair. If you think about the idea of a company being on the desktops of tens of millions, if not hundreds of millions, of people around the world — about it becoming the essential work-communication product for workforces globally, how much would that be worth?
People get too caught up in the today of valuations rather than saying, “Maybe we’ll be looking back 10 years from now and thinking –
TC: “That was the deal of the century,” like Facebook.
AB: Like many companies. That’s not to say people won’t overpay for private companies and some won’t end up fulfilling their vision and won’t be worth as much as [their investors] would have hoped. That’s life. But there are a lot of companies that get bucketed by these discussions around high valuations [that shouldn’t].
TC: Do you think Slack will be as big as Facebook someday?
AB: I don’t know how to put a finger on what it will inevitably be valued at some day. I can tell you I think it has the potential to be a really defining company in a space that’s valuable. How valuable? I don’t know.
Update: The original version of this story did not note that Lynda was recently acquired by LinkedIn.