SLACK, THE GROUP-MESSAGING system, is one of the fastest-growing business applications in the world. But it didn’t start life as the workplace productivity tool that millions of people now use.
In 2009, entrepreneur Stewart Butterfield, who had previously co-founded photo-sharing website Flickr, decided to launch a social gaming company in Vancouver. The startup, called Tiny Speck, quickly raised $1.5 million in early-stage financing. While it spent four years as a gaming company, its main product—a game called Glitch—couldn’t sustain the business.
In October 2012, Butterfield and his partners made the decision to shut down Glitch (he recalls breaking down in tears, telling his forty-person staff). They offered investors their remaining money back, about $5 million, but were told to keep it and try to build something else with a skeleton crew.
They hit on one idea so obvious no one remembers exactly who suggested it first. While building Glitch, the team had been communicating via an internal communication system. It was a messaging tool “which we really liked,” Butterfield says. Maybe other companies would like it too? “It was a very short hop from there to “we should try to make this a product.”
Over the next seventeen days, Butterfield typed out a pitch deck (a presentation, usually based on slides, that provides investors with an overview of your business). He outlined what Slack would be: All your team communication in one place, instantly searchable, available wherever you go, a platform that “builds up to the edge” of other applications, like Excel or PowerPoint, but doesn’t seek to reproduce them. Almost to a letter, it’s the roadmap Slack has followed.
Some 8,000 companies signed up for Slack as soon as it launched. Within a year, it had 140,000 daily users. In October 2014, Slack officially became a unicorn (a tech startup worth more than $1 billion). By January 2017, it had more than 5 million daily users and had raised $540 million in funding.
An investor in Slack, Twitter co-founder Biz Stone, says aspiring entrepreneurs can learn from the company’s story. “Build a prototype just to see if your idea is a thing or not,” says Stone, who had invested in Slack when it still was a game developer. “You have to start somewhere and see where it takes you.” And then once you’ve found your way, map out the rest of the journey to success.