Slack began as a failed $17M game — the internal chat tool became a $27.7B company

In 2009, Stewart Butterfield — co-founder of Flickr, which had been sold to Yahoo for $35 million — founded Tiny Speck to build a new kind of online game. The game, called Glitch, was a whimsical browser-based MMORPG set inside the heads of eleven giant dreaming beings. Tiny Speck raised $17.2 million from Accel and Andreessen Horowitz to build it. The team grew to 45 people, working for three years in a San Francisco loft.

Glitch launched in September 2011. It was beautiful, quirky and deeply original — and almost nobody played it. The game was too complex for casual players and too slow for hardcore gamers. By November 2011, Tiny Speck 'unlaunched' to retool, but the player base never recovered. On December 9, 2012, Butterfield shut Glitch down. The company had spent nearly all of its $17.2 million. Tiny Speck was a failure.

During Glitch's development, the team had built an internal communication tool to replace IRC. It was a chat system with searchable history, channels, file sharing and integrations — built because the team needed it. When Glitch failed, Butterfield looked at what the company actually had. The game was dead. But the chat tool was something the team used every day and loved. He bet the company on it.

Slack launched in August 2013. It grew faster than any business software in history. By 2015 it had 1.1 million paid users. In June 2019 it went public via direct listing at a $19.5 billion valuation. In December 2020, Salesforce announced it would acquire Slack for $27.7 billion — the third-largest software acquisition in history at the time. A failed game about dreaming giants had become a workplace communication empire.