How Slack Turned a $17M Gaming Mistake into a $27B Empire

Slack wasn’t always the beloved workplace chat tool it is today. In fact, it was born out of a failed online game and a desperate need for better team communication.

This is the incredible story of how Slack transformed from a near flop into a multi-billion dollar success.

The Game That Didn’t Win

Before Slack, there was Tiny Speck, a gaming startup founded in 2009 by Stewart Butterfield, who had already co-founded Flickr.

Tiny Speck was working on a quirky and creative MMORPG called Glitch, a 2D side-scroller with a whimsical art style and complex economy.

• The game launched in beta and gained a small but passionate fanbase.

• Despite its charm, Glitch never hit mass appeal.

• The company raised over $17M from prominent investors including Andreessen Horowitz and Accel.

• But by 2012, they had to pull the plug. Glitch shut down after failing to attract sustainable traction.

The game was dead. But the team wasn’t.

From Glitch to Slack: The Pivot

During development, the Tiny Speck team had built a custom internal tool to communicate, because existing tools like email, IRC, and Skype just weren’t cutting it.

After Glitch folded, the team realized this internal messaging system could be valuable on its own.

In 2013, they repackaged it, rebranded it, and launched it as Slack (an acronym for “Searchable Log of All Communication and Knowledge”).

Slack’s promise was clear: “Be less busy.”

Rapid Growth: When Email Felt Ancient

Slack launched to the public in February 2014. The market response was immediate:

• Within 24 hours, over 8,000 companies signed up.

• Within two weeks, that number grew to 15,000.

• The UX was smooth. The tone was playful. Teams loved it.

Slack did something brilliant: it made enterprise software fun.

• Custom emojis, gifs, integrations, and a great mobile experience made it sticky.

• Developers built bots, marketers used channels, and remote teams found a hub.

By 2015, Slack hit 1 million DAUs.
By 2017, it was integrated with over 1,000 apps.

The Business Model: Freemium Done Right

Slack followed a freemium model:

• Free tier for teams getting started

• Paid tiers unlocked advanced search, admin controls, and integrations

It allowed virality to drive growth while monetizing serious users. The model scaled impressively.

By 2020:

• Slack had 12 million DAUs

• 156,000 paying customers

• Nearly $1 billion in revenue

Key Stats

📊 Chart-Ready Slack Stats for Visuals

Slack Revenue Growth (2014–2020)

Slack Daily Active Users (2014–2020)

Slack Ownership at IPO

Tech IPO Valuation Comparison

The Salesforce Acquisition

Slack went public in 2019 via a direct listing, not a traditional IPO. This allowed existing shareholders to sell without issuing new shares.

But just two years later, Salesforce acquired Slack for $27.7 billion, making it one of the biggest SaaS deals ever.

The acquisition gave Salesforce a direct competitor to Microsoft Teams and bolstered its collaboration suite.

Slack, the underdog, had become a central player in the enterprise software game.

Lessons from Slack's Journey

• Pivots aren’t failures. They’re opportunities.

• Build for yourself first. Slack was an internal tool before it was a product.

• Delight matters. Enterprise doesn’t have to be boring.

• Focus wins. Slack didn’t try to do everything, it did messaging really well.

Final Thought

Slack’s journey is a lesson in resilience and reinvention. From a failed game to a tool that changed how millions work every day, Slack redefined what a pivot could mean.

The right product at the right time, backed by strong execution, can turn failure into fortune.

Want a simpler way to share startup documents with investors, clients, or acquirers?
Try Plox - a secure, branded data room and document sharing tool.