#57 2012 · Tiny Speck (Stewart Butterfield) · Software / enterprise communicationreframe
A founder shut down his second failed video game and looked at the tool his own engineers had built to survive it
the problem
Years of investment in a product had failed to find a market, leaving a team, some cash, and nothing else to show for it
background
Stewart Butterfield's Tiny Speck spent nearly four years and substantial funding building Glitch, a deliberately non-violent, collaborative browser game with no combat and no win condition, launched publicly in September 2011. Despite a devoted niche following, the game's unconventional design and Flash-based, non-mobile architecture meant it never attracted a mass audience large enough to cover its operating costs, and the company shut it down on 9 December 2012.
This was not Butterfield's first time watching a game fail: his earlier venture, Game Neverending, had also failed to find players a decade before — but a minor photo-sharing feature buried inside it had become popular enough on its own that Butterfield spun it out as Flickr, sold to Yahoo in 2005. Facing a second dead game, Butterfield's team had another asset most startups would have overlooked entirely: an internal chat tool they had built themselves during Glitch's development because existing options like IRC weren't good enough, one that was searchable, logged everything, and worked reliably across devices.
the move
Rather than wind the company down and return remaining funds, Butterfield proposed using the leftover capital and the same four-person founding team to turn the internal tool into a standalone product. Co-founder Cal Henderson reportedly summed up the pivot in one line: the tool is the product. Development on what became Slack began within a month of Glitch's shutdown, with almost no new hiring — the team that had built a communication tool to survive making a game now built it to sell to every other team facing the same problem.
the payoff
Slack's private beta in August 2013 drew 8,000 signups on its first day; by February 2015 daily active users passed 500,000, a 33x increase in twelve months, and the company reached a $1 billion valuation in roughly eight months without a traditional advertising campaign — 70-80% of early adopters were switching not from a competitor but from no dedicated tool at all.
what came after
Slack rejected roughly 8-10 acquisition offers by mid-2015, including a reported $8 billion Microsoft bid in 2016 (prompting Microsoft to build Teams as a direct competitor), before Salesforce acquired Slack for $27.7 billion in 2021 — Salesforce's largest acquisition to date — making Butterfield one of the very few founders to have built two separate billion-dollar-plus companies (Flickr, then Slack) out of the wreckage of two separate failed games.
references
- [1]The Video Game That Failed: The Origin Story of SlackStackSync, 2025stacksync.com
- [2]The death of Glitch, the birth of SlackBuilding Slack, 2024buildingslack.com