In 2009, Slack was just an internal communication tool built for a failing online game. Fast forward a few years, and it’s one of the most powerful enterprise tools in the world, worth billions. So, how did a game development failure turn into a multi-billion-dollar enterprise? This article dives into the unexpected pivot that changed Slack’s fate—and how its evolution can serve as a roadmap for entrepreneurs. Whether you're looking to pivot, scale, or just get inspired by an unlikely success story, Slack's journey offers valuable lessons in adaptability, strategy, and growth.
1. The Birth of Slack - Origins in Gaming
Slack’s unlikely journey began not in the corporate world, but within the virtual realms of a game. Stewart Butterfield, co-founder of Flickr, created Glitch, an ambitious online multiplayer game. While the game itself never took off, the internal communications tool the team built for day-to-day operations was the real hidden gem. It’s a testament to how sometimes, failure can spark the next big breakthrough.
The tool wasn’t created with enterprise communication in mind. In fact, it was originally designed to solve a very specific problem: how to make communication within the Glitch team more efficient and streamlined. The development of the game required constant collaboration between a distributed team, and traditional tools like IRC (Internet Relay Chat) weren’t cutting it. They needed something that could bring their conversations and workflow together in one place.
Here’s where the idea for Slack started to form:
- IRC was limiting. It lacked the features necessary for complex team communication.
- The team wanted a tool that could integrate chats, files, and task management into one seamless platform.
- They needed a communication tool that would grow with the team, making it easier to track important information and ideas.
This spark of innovation became the first version of Slack. It wasn’t yet intended for mass adoption, but it solved a core issue within the team, showing just how powerful communication tools could be when tailored to a specific need. While Glitch was ultimately a flop, the tool's success within the team became clear. What started as a small solution to a communication problem ended up laying the foundation for one of the most successful software platforms for business communication.
Key takeaway for entrepreneurs:
Sometimes, your biggest breakthrough may come from solving a problem that seems insignificant at first. Look for gaps in your own business or team’s workflow. Can you build something better than what’s currently available? If Slack’s origin story teaches us anything, it’s that great ideas often come from unexpected places.
2. From Glitch to Slack - The Pivot
After the closure of Glitch, Slack’s transformation from a failed game to a billion-dollar business was far from immediate. Tiny Speck, the company behind Glitch, wasn’t initially aiming to create a product for the enterprise market. In fact, Slack’s pivot from a project management tool used by an online gaming team to one of the fastest-growing communication platforms in history was entirely unplanned. The failure of Glitch didn’t discourage Butterfield and his team; instead, it provided them with an unexpected opportunity to refine what was, at its core, an idea with huge potential.
Slack’s journey shows us how embracing failure can lead to success. While Glitch didn’t succeed, the internal communications tool that had been created for the game team proved invaluable. The team’s decision to pivot was pivotal. They took a product that was never intended for the mass market and turned it into something that spoke to the growing need for better communication tools in the business world.
The pivot was grounded in three key elements:
- Recognizing an opportunity:
The Glitch team saw potential in the communication tool they’d built and recognized that there was a significant gap in the market for a more effective, intuitive communication platform.
- Leveraging existing assets:
They didn’t start from scratch. Instead, they built upon what had worked in Glitch, using lessons learned to improve Slack’s features and functionality.
- Focusing on simplicity and integration:
Slack’s success wasn’t just about reinventing communication; it was about integrating tools in a simple, user-friendly way that addressed a pain point for businesses.
As a result of this strategic pivot, Slack emerged as a software-as-a-service (SaaS) tool aimed at solving enterprise communication issues, even though the original goal was merely to facilitate internal team collaboration. This unexpected change in direction set the stage for Slack’s meteoric rise.
Key takeaway for entrepreneurs:
When a business faces failure, it’s important to step back and reassess what could be salvaged. Is there a pivot opportunity? What existing resources or insights can be repurposed? By identifying opportunities within failure, you can often unlock the next step toward success. Slack’s pivot from a game tool to a business essential shows just how valuable flexibility and adaptability are for entrepreneurs. Could your business pivot in a way that solves a completely new problem?
3. Slack's Public Launch and Early Growth
When Slack made its public debut in 2014, it quickly became the fastest-growing enterprise software in history. But what made Slack stand out so rapidly in the crowded world of communication tools? The answer lies in its unique approach to user feedback and iterative development. Slack’s initial launch wasn’t a polished, finished product—it was a work in progress, shaped by feedback from its first users, which allowed the company to rapidly evolve and improve the platform.
At the heart of Slack’s growth was its ability to learn directly from its early adopters, a core group of around 45 companies who were invited to test the product. These companies played a pivotal role in shaping Slack into what it would become. Through their detailed feedback, the team at Slack was able to quickly identify what worked, what didn’t, and how to make the platform more user-friendly. The iterative process of refining the product based on actual user experiences gave Slack a competitive edge and helped it gain traction quickly.
Slack also understood that the key to sustained growth was not just about getting users but about creating something truly indispensable. Key features such as:
- Searchable message history:
Slack allowed users to easily search and find past conversations, making it more efficient than traditional email.
- Centralized communication:
Slack’s design simplified team communication by organizing channels for specific projects, topics, or teams.
- Integration with other tools:
Slack’s ability to integrate with tools like Google Drive, Trello, and Dropbox gave users a seamless experience without needing to jump between different platforms.
These features not only made Slack different from traditional communication methods but also helped businesses streamline their internal operations.
By focusing on building a simple, centralized hub for communication and collaboration, Slack was able to position itself as a necessity for teams, not just another chat app. What lessons can entrepreneurs learn from Slack’s early success? The value of getting user feedback early on cannot be overstated—by listening to the needs of real users, businesses can develop products that solve real problems and grow faster than their competitors. Is your product truly solving a problem for your audience, or are you guessing what they want? Slack’s early success proves that focusing on the needs of your users is the key to scaling quickly.
4. Slack's Growth and Strategic Advantage
As Slack continued to evolve, it didn’t just grow in numbers—it strategically positioned itself as the go-to communication tool for businesses of all sizes. One of the main factors driving this success was Slack’s relentless focus on user-cantered design. By prioritizing simplicity and ease of use, Slack ensured that even the most tech-averse teams could quickly adopt the platform and see its value. But what exactly gave Slack such a strong strategic advantage?
First, it was the way Slack approached product development. Instead of trying to build every feature imaginable, Slack honed in on a few core elements that users found most valuable. One of the key milestones in Slack's growth was reaching the “2,000 messages” milestone, which became their North Star metric. This metric helped guide product decisions and ensured that the team remained laser-focused on making communication efficient and enjoyable for teams.
Slack also succeeded by leveraging its integrations to create a seamless workflow. Businesses were already using a variety of tools—like calendars, project management software, and file storage—and Slack made it easy to connect everything within a single interface. The ability to integrate with tools like Google Drive, Asana, and Zoom, for example, meant that Slack wasn't just another communication tool; it became the central hub for all aspects of team collaboration.
Additionally, Slack’s commitment to making work fun played a key role in its growth. The platform’s quirky design, playful emojis, and customizable notifications made it a more engaging and enjoyable space for employees. This created a positive emotional connection between users and the product, encouraging them to adopt Slack not just for its utility, but also for the experience it offered.
For entrepreneurs, the lessons are clear: strategic simplicity and a focus on user experience can give your business a competitive edge. Does your product have a simple, clear value proposition that’s easy to use and integrate with other tools? Slack’s success wasn’t built on overwhelming features but on ensuring that its core functions were done well. If you're trying to scale your startup, consider how focusing on a few key features could help you dominate your market. Would simplifying your product experience help you build more loyal users?
5. The Acquisition by Salesforce - A $27.7 Billion Success
Slack's journey from a small internal tool to an essential enterprise communication platform culminated in its acquisition by Salesforce in 2021 for a staggering $27.7 billion. But what made Slack such an attractive acquisition for Salesforce? The answer lies in Slack’s strategic fit within Salesforce's broader vision of transforming how businesses operate in the digital era. By acquiring Slack, Salesforce gained not just a product but an ecosystem that could reshape corporate communication in an increasingly remote, hybrid world.
One of the most compelling reasons behind the acquisition was the way Slack revolutionized team collaboration. As companies embraced remote work, Slack became the central hub for communication, organizing conversations, files, and integrations in one seamless platform. The timing of the acquisition couldn’t have been better. Salesforce saw the growing need for businesses to optimize their internal communications and knew Slack's market dominance could give them the edge in a crowded SaaS landscape.
- Slack's role in the post-pandemic world:
Remote and hybrid work environments are here to stay, and Slack's ability to foster real-time communication while integrating with other tools positioned it perfectly for future growth.
- Salesforce's broader strategy:
By bringing Slack into their suite of cloud-based solutions, Salesforce not only gained a competitive advantage in the enterprise communication space but also fortified its position as a leader in digital transformation.
But beyond the financial figures, this acquisition holds lessons for entrepreneurs. How can your startup position itself to become an acquisition target for larger players? Slack wasn’t just acquired for its tech; it was recognized as a strategic asset that could fit into a larger vision. By continuously iterating on its product and aligning it with emerging trends like remote work, Slack showed how being adaptable and focusing on customer needs can lead to massive opportunities.
As an entrepreneur, are you positioning your business to be an essential piece in a larger puzzle? Could your startup be the next acquisition that accelerates the growth of a bigger player?
The potential is there, but it requires strategic vision and constant adaptation to industry changes.
Conclusion
Slack's incredible journey from a failed gaming project to a $27.7 billion acquisition by Salesforce is a testament to the power of adaptability, innovation, and the ability to pivot. What began as an internal tool for the MMORPG Glitch became a globally recognized communication platform, revolutionizing workplace collaboration along the way. As we’ve explored, the strategic decisions made by Slack’s founders, from pivoting after the failure of Glitch to building a product that truly addressed user needs, are lessons that every entrepreneur can apply.
Whether you’re a startup founder or an aspiring business owner, the story of Slack offers invaluable insights into what it takes to scale a business and position it for success in the face of unexpected challenges. The key takeaways include:
- Pivoting is powerful:
Don’t be afraid to change direction when necessary. A failed product doesn’t mean the end of your business. It might just be the beginning of something even bigger.
- User-cantered design matters:
By keeping user feedback at the forefront, Slack was able to build a product that users loved and couldn’t live without.
- Iterate and adapt:
Whether it’s refining your product or responding to industry changes, staying flexible and open to improvement is crucial for growth.
- Strategic partnerships can accelerate growth:
The right acquisition, like Salesforce’s buyout of Slack, can propel your business into new heights. Focus on building a business that has strategic value beyond just its technology.
At Founderli, we help entrepreneurs transform their ideas into thriving businesses. If you're ready to scale, pivot, or find the strategic advantages that will set your business apart, we’re here to guide you every step of the way. Explore our business strategy services and let us help you create the next big success story like Slack.
Kieran Audsley
Founderli CEO, Founder
