Slack: How a Failed MMORPG turned into a $12 Billion Dollar Company

Slack: How a Failed MMORPG turned into a $12 Billion Dollar Company

If you are work at a tech company, or in modern corporate office, then there is a good chance that you use Slack.

Slack today is a cloud-based instant messaging platform that allows companies to essentially have their own private communication network.

In these chatrooms people can do anything from sending content, links, and files… to talking smack about their boss. In a sense, Slack is a much more efficient, faster, and more organized version…of company emails.

And because of it rapid growth over the last 7 years, Slack is now valued at about $12.7 billion dollars today on the New York Stock Exchange.

But…Slack was never supposed to be an instant messaging platform. In fact, Slacks main product was created by accident and was a byproduct of what Slack used to be…a video game company.

This is the story of slack.

Stewart Butterfield was working in the tech sector in the year 2000 when he decided to quit his job, and raise $50 000 to start a company called gradfinder.com.

The purpose of the company was to help users find other people who graduated from their college or high school. It was actually similar to what facebooks original idea was. But after about 6 months, Stewart Butterfield ended up selling the company and ended up taking home somewhere around $50 000-$100 000.

Now, 50k-100k is a good chunk of change, in fact, it was good enough for Stewart to take some time off to think about his next project. So after meeting with a few of his friends, they decided they wanted to make a video game company together.

But not a normal video game. You see, at the time in 2002, virtually every video game involved some sort of combat. Whether it was casting spells in elder scrolls morrowind, running over people in cars in grand theft auto, or hitting people with swords in the legend of zelda windwaker.

So, making a game that relied more on creativity rather than combat was a requirement.

They also wanted to make a game that people could play online and co-operate with eachother. And at this time, this was a relatively new idea. I mean massive multiplayer online games like World of warcraft were still a couple years away from being released.

So, the team got together, made a prototype. And even though most people were uninterested in this type of game, there were a group of die hard fans that thoroughly enjoyed.

So, the team decided that the positive reception from their die hard fans, was enough to pursue the project full-time.

Stewart began trying to raise money for the online game, but this was 2002. A year when no venture capital firms were interested in video game companies, and most were still weary of investing in the tech sector at all because of the dot com crash.

After pitching the game to investors and having zero success, the team decided to fund the game themselves and with about $100 000 dollars of money from friends and family.

After about a year, the game, which they had ironically called… game neverending…. was not even close to being finished. And after burning through most of their funds, the team needed a new idea to help fund their game.

The idea was to build a company that could potentially sell for about a million dollars within 2 years, then use that money to help finish their game.

So, they brainstormed some ideas. One of their ideas was to take a part of their video game that was responsible for a lot of the social interaction, and put that into its own website. This was the part of the game that was responsible for uploading photos, creating annotations, having user chat, and more!
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