How to Startup: Pivoting to Success

Welcome to this edition of "How to Startup," where we explore real founder stories and the practical insights you can apply to your own journey. Today, we look at how a failed online game pivoted into one of the most popular workplace communication tools.

Founder Spotlight: Stewart Butterfield, Co-founder of Slack

The Beginning of Slack

Stewart Butterfield is no stranger to startup pivots. Prior to Slack, he co-founded Flickr, which began as a feature in a massively multiplayer online game. Years later, Butterfield tried to build another online game called Glitch under the company name Tiny Speck. Glitch never reached the success he envisioned, and the project was eventually shut down.

That internal messaging system, developed to coordinate Tiny Speck’s scattered teams, became Slack. In 2013, Butterfield and his team reimagined it as a dedicated platform for workplace collaboration.

Early Challenges

Despite having a promising concept, Slack’s early phase came with real hurdles:

1. Competition with Email: Persuading businesses to adopt a new platform over email and other established messaging apps was not simple.

2. Market Skepticism: Investors and prospective customers were wary of a pivot from a failed game. The Slack team needed to demonstrate how workplace communication could be streamlined.

3. Onboarding Friction: Convincing entire teams to move conversations into Slack required thoughtful user experiences, training, and guidance.

4. Scalability: Slack’s rapid growth meant they had to manage surging user numbers while maintaining service quality.

5. Defining the Value Proposition: Distilling Slack’s benefits (reduced email clutter, searchable chat history, integrations) into a clear pitch took time.

Turning the Corner

Slack began gaining widespread traction through a mix of product innovation and strategic moves:

1. Clean User Interface: The platform focused on simplicity, appealing to teams who wanted a communication tool that was easy to learn.

2. Free Tier: Slack’s freemium plan made it accessible for small teams or startups, helping word-of-mouth spread organically.

3. Powerful Integrations: By connecting with tools like Google Drive, Trello, and GitHub, Slack became a centralized hub for an organization’s workflow.

4. Viral Growth Loop: Each new Slack team invited more collaborators, driving a chain reaction of sign-ups.

5. Venture Backing: Positive feedback and steady user engagement helped Slack secure significant funding, fueling rapid expansion and product refinement.

Slack eventually evolved into a multi-billion-dollar company and a cornerstone of modern office communication.

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Advice for New Founders from Slack’s Experience

1. Recognize When to Pivot
   If a core product is not working, you might discover a spin-off or secondary tool that could become your main offering.

2. Make Onboarding Seamless
   Design clear workflows and helpful tutorials so users see benefits immediately.

3. Focus on Teamwide Adoption
   A communication tool thrives when entire groups adopt it. Encourage collaboration, not just individual sign-ups.

4. Offer a Free Plan
   Lowering the barrier to entry can drive viral adoption if your product delivers real value.

5. Integrate with Existing Systems
   Fit into your customers’ current environment. People appreciate tools that play nicely with what they already use.

Mistake to Avoid: Overcomplicating Your Value Proposition

One of Slack’s strengths was explaining, in plain language, why it made work better. Some startups struggle by piling on features or buzzwords without explaining the core benefit.

Why It Happens

• Feature Overload: Founders may believe more features equal more appeal, overwhelming users with complexity.

• Lack of Clarity: Startups sometimes fail to articulate their core value, trying to serve too many use cases at once.

• Fear of Missing Out: Adding every possible function to compete with bigger players can dilute what makes your product unique.

Potential Consequences

• User Confusion: A confusing pitch can reduce sign-ups or lead to quick drop-offs.

• Weak Customer Loyalty: If people do not fully understand what problem you solve, they are less likely to stick with you.

• Wasted Development Effort: Spending time on unnecessary features might prevent you from perfecting what truly matters.

How to Avoid This Mistake

1. Articulate Your Core Benefit
   In one sentence, define exactly what problem you solve and how.

2. Test Messaging
   Use A/B tests or surveys to find the pitch that resonates most with your target audience.

3. Launch with a Minimal Feature Set
   Avoid tackling every edge case until you have proven demand for the basics.

4. Iterate Based on Feedback
   Ask your users what they truly value and refine your messaging to highlight that benefit.

Quick Tips

• Product Development Tip: Start by solving your own problem. Slack was first an internal tool the founders needed themselves.

• Marketing Tip: Encourage teams to try your product together. Group adoption can amplify user satisfaction and word-of-mouth growth.

• Finance Tip: Consider a tiered pricing model that accommodates different company sizes and budgets, while keeping the door open for free users to explore.

Resource Roundup

1. Book

   • It Doesn't Have to Be Crazy at Work by Jason Fried and David Heinemeier Hansson

   • Explores how to create a calm company culture and streamline communication

   • Amazon Listing

2. Tool

   • Zapier

   • Connects and automates workflows between different apps, which can complement Slack’s integrations

3. Article

   • "How Slack Mastered Product-Market Fit"

   • An overview of Slack's approach to building a product that resonates with diverse teams

4. Podcast

   • "Masters of Scale, Episode 13: Slack's Stewart Butterfield"

   • Stewart Butterfield shares how Slack emerged from the ashes of a failed gaming startup

That concludes this edition of "How to Startup." Slack’s story highlights that a strong pivot, combined with seamless user experiences and tight integrations, can transform an internal tool into an industry-changing product. Stay open to unexpected ideas, continue refining your core message, and you might find success where you least expect it.

Until next time, keep iterating, keep simplifying, and keep building toward your vision!