Stewart Butterfield: From Failure To $8 Billion Slack

This is the story of how Stewart Butterfield built an $8 billion company by refusing to let his failures define him.

The man walks into the room — before starting his talk he looks around. Everyone is here: his employees and stakeholders. He can feel the nervousness in the room. He stands up and with a heavy heart he starts talking. He doesn’t even get to the first sentence and he begins to cry.

A little over a year ago his team successfully raised $17.5 million in funding. The money was used to develop his massively multiplayer game. Unfortunately although they managed to build an enthusiastic community around the game, it failed to attract a sufficiently large audience. He had the unpleasant task of announcing his decision to close the game down. The investors wanted to keep the game going; the other co-founders wanted to give it another shot. But it was apparent to him that continuing wouldn’t ever result in something economically viable, or even sustainable.

It was his second attempt to develop an online game. He started his first project 8 years before, but the game didn’t take off. One night, while trying to recover from food poisoning in a hotel, he got this novel idea: what if people could share photos with other people? This feature was already built within the game. It only needed a few adjustments and it was good to go.

Soon enough, his online photo sharing platform became increasingly popular and was acquired by a large internet services company only a year later after it launched.

Although he managed to pivot his failure into a new successful product, he didn’t give up on his dream of building a multiplayer online role-playing game. Talking to his employees and stakeholders, he realized it was time for him to acknowledge that it was never going to happen. Not in the foreseeable future anyway. He ends the meeting in a shaky voice and everyone leaves the room. He looks out the window and lets his mind wander.

Forty years ago he was a seven-year old boy staring with curious eyes at this new thing his parents had just brought home. It was a computer. Two years earlier he and his parents were living in a log cabin with no running water, in a small fishing village in British Columbia called Lund. His parents had managed to earn a little more money, so they afforded to move to Victoria, the capital of British Columbia, Canada.

Getting a computer was a life-changing experience for the young boy. Thanks to his first computer, he taught himself to code and fell irrevocably in love with tech. While in college he earned extra money designing web pages.

As a young man he created a contest called “The 5K competition”. The contest encouraged people to design websites in under 5 kilobytes. The contest took off and became unexpectedly huge, in every country in the world.

Standing in his office, wondering what to do next, he remembers the immense pleasure and sense of fulfilment he felt while working on his first computer. That’s when it hit him! The idea for his next project came naturally because it was staring him in the face. His second game may be a flop but the app his team had developed while working for the game had all the makings of a successful product. He jumps from his chair and almost runs out of the office looking for his team colleagues. He had a strong feeling that his idea would be a great success.

The man in our story is Stewart Butterfield, co-founder of Flickr and Slack.

Slack, the instant-message-based team communication tool was launched in 2013; 8,000 customers signed up for the service within 24 hours of its launch. As of May 2018, Slack has 8 million daily users, 3 million of whom have paid accounts. According to Forbes, Slack is now valued at an estimated $8.3 billion.