Slack Founder Story - Stewart Butterfield

Lessons from $0 to $27.7B

Hello to every unicorn in the galaxy.

The first time I used Slack I thought “Shit, someone is going to make a ton of money off of this.”

I still use Slack every day and it’s deeply integrated into many companies’ workflows.

It also has a great growth story as a startup.

Today we’re going to look at how Slack grew from zero to workplace hero.

We’ll see what insights we can shake out of interviews with cofounder Stewart Butterfield.

The info below is based on web research and the series of interviews linked at the bottom.


“I live in a van down by the river. But I still use Slack constantly.”

- Chris Farley’s ghost

Here are key facts, anecdotes, and insights about Slack's founding and growth:

Slack History

Slack was founded by Stewart Butterfield and his team in 2013. It evolved out of an internal chat tool they created for their previous startup, the multiplayer game Glitch.

Slack grew from 0 to $1 billion in valuation in just 8 months, without spending anything on marketing.

Slack pioneered the freemium model for enterprise software, allowing teams to use it for free up to a certain size. This fueled rapid adoption.

Slack focused obsessively on ease of use, interface design, and integrations to make collaboration seamless.

By late 2014, Slack had over 500,000 daily active users. It now has over 10 million daily active users.

In 2020, Slack was acquired by Salesforce for $27.7 billion.

Fun Facts

Both of Butterfield's successful ventures were pivots away from failing startups - Flickr from a game called Game Neverending, and Slack itself from Glitch.

The name "Slack" came from the acronym "Searchable Log of All Conversation and Knowledge".

Early on, Butterfield begged friends at other startups to try Slack and give feedback before launch. This shaped the product.

Slack's voice & video calling features, user profiles, custom emoji support made the product fun and engaging.

Slack took out a cheeky full page newspaper ad welcoming Microsoft to the market when it launched Teams.

Stewart Butterfield’s Founder Insights:

  1. Listen obsessively to user feedback from day one to shape product-market fit.

  2. Build for teams, not individuals. Understand group dynamics and get consensus.

  3. Start with a small market pain point, don't boil the ocean. Expand scope over time.

  4. Drive viral adoption by making freemium extremely generous and frictionless to upgrade.

  5. Delight people with well-designed, emotionally engaging experiences even in enterprise software.

  6. Pivot boldly and repeatedly until you find product-market fit. Previous failures can lead to success.

Slack’s Founder Story

Stewart Butterfield originally studied philosophy and started a web design company in the 1990s.

He co-founded the photo sharing site Flickr, which was acquired by Yahoo in 2005.

After leaving Flickr in 2008, Stewart began working on a gaming startup called Glitch.

Though Glitch ultimately failed, Stewart and his team noticed that they were using their internal chat tool more than email to communicate. This sparked the idea for Slack - a messaging platform for teams.

Stewart and his co-founders launched Slack publicly in 2014 and it quickly gained traction with its friendly interface, automation capabilities, and integration with other software.

Slack prioritized security and reliability early on to gain business customers' trust. Within a year of launch, Slack had over 500,000 daily active users and raised $120 million in new funding.

Stewart served as CEO overseeing Slack's rapid growth until stepping down in 2021.

Early Growth Tactics

Here are some key strategies Slack used to gain initial users and customers:

Word-of-mouth growth fueled by delivering an exceptional product experience

Create a high-quality, easy to use product from the start, focusing on reliability, security, and integration capabilities.

This helped drive viral adoption, as happy users spread the word about Slack to others. Stewart Butterfield notes that 90-95% of Slack's growth was organic rather than paid marketing.

Acquired early customers from existing network

As an experienced entrepreneur, Stewart Butterfield was able to leverage his network and connections from previous startups like Flickr to generate interest in Slack early on.

He notes that many early adopters of Slack were people he knew, or people who knew someone at the company.

Direct sales process

Slack employed a direct sales team early on to convert interested users into paying teams.

The sales team focused on educating potential customers on Slack's benefits and providing white-glove onboarding to new accounts.

Freemium model to reduce friction

Slack utilized a freemium business model, allowing teams to use a basic version of Slack for free. This helped reduce barriers to adoption.

Paid plans with more features, integrations and support were offered to convert free teams into paying customers as they expanded their usage.

Slack Hiring & Team Culture Tips

Hire slowly and carefully

Stewart emphasizes being very selective and taking time to evaluate candidates, rather than rushing to fill roles. He notes hiring is like a "two-way interview", allowing candidates to evaluate Slack's culture.

Seek out learners who match the culture

Beyond purely technical skills, Stewart looks for curious, lifelong learners who fit Slack's organizational culture. Cultural fit is considered more important than skills or experience.

Empower teams with autonomy and accountability

Slack structures its teams to have a high degree of autonomy and independence. Teams are given ownership of solving challenges that arise within their realm.

Use compensation to reinforce desired behaviors

Slack structures compensation and promotions to reward behaviors that exemplify its cultural values like empathy, transparency and user focus.

Develop managers into coaches and mentors

Manager roles at Slack evolve into more coaching and mentoring rather than traditional top-down management. Managers focus on supporting employee growth vs directing work.

Maintain open, transparent communication

Frequent all-hands meetings, open Q&A, and close contact across teams reinforces transparency in communication across the company.

Slack’s Product Development Philosophy

Focus on solving real user needs 

Build products that address actual problems or frustrations experienced by users. Don't get caught up in theoretical problems.

Prioritize simplicity and ease of use

Create intuitive, easy to use products focused on seamless user experience rather than extensive features.

Build for your users, not competitors

Focus on improving users' experience rather than reacting to competitors. Users don't care about matching feature lists.

Iterate rapidly based on user feedback

Release constant iterations and improvements fueled by user data, feedback and requests. Move quickly.

Balance quality with speed

Ship MVP quality products quickly, but maintain high bar for quality, security and reliability. Don't compromise too much on quality for speed.

Organize development into nimble teams

Small, empowered product teams maintain agility to iterate and innovate quickly as needs change.

Plan for scale

Anticipate future growth and build products that can scale up smoothly. But scale incrementally matched to user demand.

Focus on delighting users 

Build exceptional product experiences that improve lives. This will drive growth.

Stewart Butterfield Interviews

For a deep dive into the mind that shaped Slack, check out some of the interviews below:

That’s it for today.

I hope this helps you in your growth journey.

-Brian 🦄 

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