Metric The Slack Stats Company Name Slack (Originally “Tiny Speck”) Founder Stewart Butterfield Original Product Glitch (A failed MMORPG video game) The Pivot Date November 2012 (Game shut
| Metric | The Slack Stats |
| Company Name | Slack (Originally “Tiny Speck”) |
| Founder | Stewart Butterfield |
| Original Product | Glitch (A failed MMORPG video game) |
| The Pivot Date | November 2012 (Game shut down) |
| Growth Speed | $0 to $1 Billion valuation in 8 months |
| Exit | Acquired by Salesforce for $27.7 Billion (2021) |
| Key Secret | Turning an internal byproduct into the main product. |
It is November 12, 2012. Stewart Butterfield stands in front of his team at Tiny Speck. The mood is not celebratory. It is a funeral. He has to tell 30 of his 45 employees that they are fired.
They had spent nearly four years and $17 million of venture capital building Glitch, a whimsical, non-violent massively multiplayer online game. It was beautiful. It was creative. And it was a commercial failure. The economics didn’t work. The user base wasn’t growing.
Butterfield had failed. Again. (His previous gaming startup, Game Neverending, had also failed, though its photo-sharing feature became Flickr).
But as they shut down the servers, there was one thing the remaining team refused to delete. It wasn’t the game assets. It was the internal chat tool they had hacked together to talk to each other while building the game. They called it “Linefeed,” then “SLACK” (Searchable Log of All Conversation and Knowledge).
They didn’t know it yet, but they were holding a $27.7 billion lottery ticket.
To the world in 2011, Tiny Speck was a gaming studio. Glitch was a weird experiment. It involved growing onions, petting giants, and customizing avatars in a surreal 2D world.
Investors like Accel and Andreessen Horowitz had bet on Butterfield’s creativity. But by 2012, it was clear that the world didn’t need another MMORPG. When Tiny Speck announced they were “pivoting to enterprise communications,” the tech world rolled its eyes. “Great,” the critics thought. “Another chat app. Just what we need to replace email and Skype.”
Enterprise software in 2013 was a graveyard of boring, grey, clunky tools (think Microsoft SharePoint or Lotus Notes). The idea that a failed gaming company could disrupt the enterprise seemed laughable.
Inside the company, however, the team knew something the world didn’t. They were addicted to their own tool.
While building Glitch, the developers got frustrated with email. It was too slow. They hated IRC (Internet Relay Chat) because it didn’t archive messages; if you logged off, you missed the conversation. So, they built a layer on top of IRC.
They realized that whenever the chat tool went down, work stopped. They weren’t just using it to chat; they were using it as the “Operating System” for their company.
Butterfield had a realization that defines the “Phoenix Pivot”: “We are not a gaming company that uses chat. We are a chat company that accidentally built a game.”
The genius of Stewart Butterfield wasn’t building Slack. It was having the guts to kill Glitch.
Most founders fall victim to the Sunk Cost Fallacy.“We spent $17 million on this game! We have to make it work!” Butterfield looked at the data, saw the game was dead, and returned the remaining capital to investors.
He told them: “The game failed. But we have this tool. We want to use the remaining money to pivot.”
Because he was honest about the failure, the investors let him keep the money. He kept a core team of 8 people. They stripped the game code, kept the chat infrastructure, and spent the next year polishing it.
They didn’t try to add more features. They tried to remove friction. They focused entirely on the “first 2 minutes” of user experience.
Why did Slack win when HipChat and Skype already existed? Because Slack was built by game designers, not enterprise architects.
This is the Architectural Masterstroke. Enterprise software is usually designed for the buyer (the CIO), not the user (the employee). It is functional but joyless. Slack was designed like a consumer app.
Slack injected Dopamine into the workplace. They took the “stickiness” mechanics of a video game (variable rewards, social validation, instant feedback) and applied it to work. While Microsoft built tools for efficiency, Slack built a tool for engagement.
Slack’s success challenges the traditional “Visionary” narrative.
In industrial manufacturing, “waste” sometimes becomes valuable (e.g., Molasses from sugar refinement). In software, your internal tools often solve problems better than your commercial product because they are built to survive, not to sell.
Slack worked because the team used it for 4 years before selling it. They had ironed out every bug because they were the ones suffering from them.
If Butterfield had tried to save Glitch for another 6 months, they would have run out of cash. By killing it early (while they still had money in the bank), he bought the runway needed to build Slack.
Are you ignoring your own Slack?
Insight: If your employees love it, other employees will too.
Insight: If you hate the existing solutions enough to build your own, the market is ripe for disruption.
Insight: Follow the user behavior, not your original roadmap.
Slack teaches us that innovation is often an accident of execution.
Stewart Butterfield didn’t set out to revolutionize communication. He just wanted to build a game. But by paying attention to how his team worked, he found something bigger.
Success isn’t always about having the perfect 10-year vision. Sometimes, success is about looking down at the “trash” you created while building your vision, and realizing that the trash is actually gold.
Don’t just look at what you are selling. Look at what you are using.
