Shhh: Slack’s Quiet Messaging

There’s a lot riding on Slack’s IPO later this month, which is why its normally loquacious CEO is carefully watching what he says. 

Though financial regulations require a quiet period — where corporate insiders are not allowed to talk publicly about the company’s business — Slack’s leader, Stewart Butterfield, is curbing his own communications on social media and elsewhere, where his strong opinions are known to go viral. 

“An IPO in today’s market is very different than it was a few years ago,” says Richard Marshall, global managing director of Korn Ferry’s corporate affairs and investor relations practice. “Investors scrutinize a wider range of things like culture, diversity and inclusion, and environmental and social sustainability. Numbers are only part of the story now.”

To be sure, one of the biggest challenges organizations and leaders, particularly hot tech startups like Slack and its CEO, face during an IPO is striking the right balance between preserving the culture that brought it success and tweaking it to meet the new demands of being a public company. Lyft, the ride-sharing app that recently went public, for instance, feels that its culture is so integral to its success that it explicitly listed the potential of losing it as a risk factor in becoming a public company.

Marshall says organizations planning to go public need a more thoughtful communications strategy to establish a relationship with analysts, consumers, and investors, many of whom are only learning about an organization through its IPO process. That strategy includes not just communications around business performance and competitive positioning, but also social media posts and other personal communications by the board, senior leadership team, and management. 

In part of because of the tepid reaction to the debuts of Lyft and its larger competitor, Uber, all eyes will be on Slack’s IPO later this month. Though Slack is much smaller than Lyft and Uber — Slack is valued at around $7 billion, while Lyft is valued at $17.2 billion and Uber at nearly $70 billion — analysts are looking to its debut as an indicator of market appetite for tech IPOs.

This year was supposed to be a record-setting year for IPOs thanks to the big tech names, which also includes Pinterest and later this year WeWork and Airbnb, making their debuts. Experts say Slack’s decision to pursue a direct listing, where it will convert currently existing shares into public stock instead of selling new shares, will be a key gauge of investor appetite for tech IPO since performance will be driven entirely by outside investors. 

Peter McDermott, a principal in Korn Ferry’s corporate affairs practice, says that historically it has been challenging for investors to build trust with founder-CEOs. “The fact that Butterfield is listening to the advice he is receiving will serve Slack well as it navigates operating as a public company and in future interactions with Wall Street, regulators, and other stakeholders,” says McDermott.