Failed products often lead to financial losses, workforce reductions and tough decisions about the future direction of the company. Stewart Butterfield experienced all of these outcomes because of an online game’s failure. But buried within this failed experiment was another product that was to be far more successful than the game.

Glitch was an ambitious online multiplayer game created by Butterfield and his team at Tiny Speck. The company raised investment, gathered a team of more than 40 people and spent years developing the project. But the game lacked the necessary user base to remain profitable. Tiny Speck announced in November 2012 that it would be shutting down Glitch the next month, ending about 30 jobs.

In later interviews, Butterfield spoke of the failure and the strange chain of events that followed. Another snag in the development of "Glitch" was that the team members were spread across a number of cities, including Vancouver, San Francisco and New York. Initially, they communicated with each other through IRC (Internet Relay Chat).

Then the team started to change the system to fit their needs. They added search capability and features that saved messages for later review. They also incorporated a wide array of information, such as notifications, files and statistics, into one centralized hub. Eventually, this tool became so essential to their operations that the need for internal email was almost nonexistent. In an interview with Startups.com, Butterfield said that the Glitch development team of about 45 people sent fewer than 50 messages to the company-wide email list over three years. Most communication took place in a system the team had built themselves.

The failure of the Glitch project forced Butterfield and the rest of the team to figure out what useful parts could be salvaged. They soon saw the answer. They realized that the communication system they had devised for their own use would also solve the problems of other organizations. Slack, Butterfield would later say, was a new version of the internal system the team built while making Glitch. Instead of chasing a game business that failed to gain sufficient traction, the company shifted from consumer gaming to enterprise software. Tiny Speck would later evolve into Slack Technologies.

The shift was dramatic. Slack started as an internal tool during a failed video game project and grew into a major business communications platform. Slack went public through a direct listing on the New York Stock Exchange (NYSE) on June 20, 2019. The next year, Salesforce said it would buy Slack for $27.7 billion.

This is not simply a story of Butterfield stumbling across another product. The communication system was the product of the team's years of hard work to solve the challenges they ran into while developing Glitch. The most difficult time was when Butterfield had to acknowledge that the existing business model was no longer sustainable and that the company needed to move in a whole new direction. The failure of "Glitch" did not wipe out the work and accomplishments they had built up, even if it meant the end of one effort. Butterfield and his team saw valuable components in what remained and started a new company based around them. His experience suggests that to get past failure, it may be necessary to do more than refine the ideas you already have in hand; often, it is necessary to recognize that better opportunities may present themselves as the project unfolds.

Source:
https://www.startups.com/founder-interviews/stewart-butterfield?utm_=
https://techcrunch.com/2012/11/15/as-flickr-co-founder-butterfield-shuts-down-glitch-is-he-planning-a-new-photo-service-you-will-know-it-well-he-says/?utm_
https://www.sec.gov/Archives/edgar/data/1764925/000176492519000174/a7311910-q.htm?utm_

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