Transcript

Live From The HIBT Summit: Stewart Butterfield

Hey everyone, so today we've got another one of my conversations from the How I Built This Summit that happened in San Francisco last October. And you know, in the world of startups, one of the most difficult moves to pull off is a pivot to maneuver out of your first idea into something that might have more potential. And Stuart Butterfield? He pulled this off not once. but twice. About seven years ago, out of the ashes of a failed video game,

Stewart launched Slack, an office collaboration tool that now has 12 million daily users. But before Slack, back in 2004, Stuart was struggling to get traction with another video game called Game Never Ending. He wound up shutting that one down too, but out of that failure was able to launch a photo sharing site called Flickr. which he sold just a year later for around$20 million. So when I sat down with Stuart on stage, I asked him about both of those pivots, starting with the first one, from Game Never Ending to Flicker.

There was a point, and you talk about this in the podcast where You had to decide whether to drop All of this work on this computer game. Like more than a year, I think two years of work on this game and pivot to the photo sharing site. And it was a debate, an internal debate. Um I I wonder how did you know that that was the right thing to do? Because our instinct

would tell us to push forward and to keep going, right? Like that's what carry on and and march forward. Yeah, there's a lot of advice that's just persevere, grit, resilient, gotta keep going in the face of adversity, um over and over. But there is definitely a point where you Either you know it can't work or kind of like the reverse manifesting um of I don't believe anymore that this could work, which makes it very unlikely. If if the person leading the project doesn't believe it can work, it's um it would be a weird fluke for it to actually um

To work out. We were just out of money, and it would have been a much more difficult, complex um project to complete the game. It would have taken us a minimum of another year, but probably realistic and closer to two more years, and we didn't have that kind of time. Whereas Flickr, we figured we can get a version of this out in um A couple months. And it actually was I don't remember the exact dates anymore, but it's sometime in December two thousand and two that we decided to do it and early February two thousand and three. It launched. Mm.

So you you guys end up selling Flickr to Yahoo. And you described yourself as briefly Internet famous. You actually were like on the cover of Newsweek magazine with s with some other people at one point, which I'm assuming got you some attention to allow you to kind of think about the next project you decide to go back and start Another company that was going to be a computer game.

Called glitch. Um What was driving you then? I mean, did you think okay, now I've failed you know, I failed the first time, now I know how to do it right. Mm. We can talk about the reasons that

um we used to convince ourselves that it would work this time. There was actually a lot of realistic stuff there. The cost of uh hardware, so servers in the background had fallen by at least ninety percent. And a bunch of things changed by a factor of ten. The number of people online changed by a factor of ten, uh the availability of great open source software tools. But stepping back one um I got online in in nineteen ninety two and I grew up in Victoria, British Columbia, which is a pretty small town. I mean actually provincial it's

on the edge of the continent and then it's on an island. So it feels very remote and cut off from the rest of the world. So you're kind of an an observer. And when I got to college, um I got an account on the school's Unix machine. And that meant I had access to the internet. And this is like Maybe six or nine months before the web really started to take off. So the internet at that time was a thing called News Group, which was a hierarchical directory of

kind of discussion boards for more or less everything in the world. So um hugely popular in the scientific community and academic communities, but also just recreational. In fact, um kind of mind blowing, but rec dot music dot g dead, the grateful dead Um newsgroup. was the most popular thing on the entire internet. It was like in terms of traffic, it was the Netflix of its day, just like the text postings going back and forth. And I just really remember that as being one of the most revelatory mind blowing experiences of my life that

Even though we were on the edge of the world, it felt like and kind of really outside um of everything that was really happening, I could connect anyone. And that Um kind of the possibilities for computer and technology to facilitate human interaction to me are endlessly fascinating. And I think when we look back Tens of thousands of years.

um to this time it will seem as significant as the development of written language because it just allows this accretive knowledge, um allows the accessibility, allows this instant communication coordination between people, and we're still like one percent of the way into exploring the possibilities. So I mean with Glitch, right? This is a beautiful game. You raise money around it, you had great developers, you convinced people to move across the country to work on this. What happened just didn't you in this case we had the money. In fact we had money when we decided to shut it down. But it was apparent that it wouldn't work. And I think this is a

If there's one thing that's an actual like practical lesson for entrepreneurs in in all of this history, besides the Sometimes pivots work. It's um It's hard if it's really, really hard to explain, you're at an enormous disadvantage. And so with this the way games are marketed generally is there's kind of a two by two matrix and in one um axis it's the kind of veneer on it it looks like World War Two or post apocalyptic

sci-fi or it looks like Dungeons and Dragons or it looks like Pikachu or something like that, like Cutesy cartoon. There's that the the flavor of it. And then there's the the g the mechanics of the game, first person shooter and real-time strategy and puzzle games and and stuff like that. And Games are marketed as like their position on this grid. So it's a World War Two first person shooter game. And instantly people can see like at least I understand what that is, and maybe I'm interested in it, maybe I'm not. We tried to sell the world a massively multiplayer game with no combat, it's a cooperative, it was kind of Monty Python meets Dr. Seuss, surreal, absurd. Literally this is that like the game where you would milk butterflies um and you like collect milk, um you would squeeze it. Um squeeze chickens to get eggs.

Um It w anyway, it was it was very uh How did you raise money around that? It was uh I think the fact that we had been successful before was a compelling plan. But it was also right at this interesting juncture where um

It was um around the year that Android came out. It was around the year that iPhones actually started to take off, um, and suddenly there was this massive shift in people's discretionary internet time from desktop and laptop computers to mobile. Um and we had made a bet on um Flash as a technology for delivering the game, which wasn't gonna work on mobile, and uh I think in the end that that really is. was the nail in the coffin. If it hadn't been for that, I think it would have been worth trying a little bit more. But I was committed and every day I came in with optimism and I was sure that this next thing that we were going to try was going to work. Um and then we did it and it didn't work. By the end

kind of technological dead end we had find ourselves going down, the fact that it was desktop only in a world that was going increasingly mobile, the fact that it was already so hard to explain, you know, made it really tough, despite the fact that there was a super committed, very enthusiastic audience. Uh I just lost faith. I realized that like once I had done that, it was now impossible. I mean, we hear about, you know, the relentless optimism of entrepreneurs and and And it sounds like you inside you were actually you had a lot of self-doubt. And that voice got louder and louder until it got to a point where you were basically saying, I need to level with you, Stuart. This is not working. When you told your

closest colleagues that were they shocked? Were they like but yesterday you were so optimistic, what's going on? There was definitely a little bit of this, and I so I I told the board um and the co founders. And there's some argument back and forth about and there's definitely a belief that we should persist. Um but I think once I was out everyone realized that it wasn't gonna work. And

The next day or probably two days later, we told the whole company. And so we call an all hands meeting. We were based in Vancouver and and here in San Francisco. And There was one employee who had moved from my home town Victoria, British Columbia, to Vancouver. When he just had a new baby who's I think two years old. Um he left his in laws who were helping take care of the baby and bought a new house and moved to this new city and when I started

Telling everyone. We were going to shut it down. happen to be facing where he was sitting and locked eyes with him, and I knew that I had just, like, sold him on on moving over and making this massive change in his life, and now a couple months later I was telling him he didn't have a job anymore. And that was a very long time. really hard. Like that was really hard. I mean I think that the feeling of having let down all of these people To a lesser extent having let down the the investors, but that wasn't as much of a concern.

Um, having let down all these people because there was thousands and thousands of people who loved this game, were spending all of their free time, they'd formed these really important relationships. And any of you have participated in online communities, especially in the early days where like the online community was the nexus of all of these friendships and all these relationships, when they disappeared. That's it. Like people can say we're going to make a Facebook group and we're going to catch up this way or we're going to do this thing or that thing, but it's gone. And it's almost like a little Obviously in a very small scale, but like like a little civilization. going out of existence. I felt really bad about that. Yeah. So

In some sense there was like those were motivations to just keep going, just to pretend like there weren't these problems and and don't have to face up to this. Um The way that it ended I think was was really I mean as positive as it could be. Because we had money, because we didn't wait until we had um used up every dollar, we were able to take a little bit of time and work with everyone who lost their job. So there's 45 people at the company, and eight of them were going to stay on uh to work on Slack.

So for the other um Thirty-seven people we did kind of career coaching, we wrote reference letters, we set up interviews for them. Um we ended up getting everyone a job, and in most cases a better job than than what they had. And I think that goodwill got us a long way. Seth Tibbet started out selling Tempe. And he pivoted towards toefer keys. Um Stacey Madison, you know, started out as a pita cart, but rolled up pita sandwiches.

They they they sold pita chips because they had extra pita at the end of the day, and they cut them up and handed them out to people and eventually people were coming to the to the car, not for the rolled up sandwiches, but for the pita chips. Is there a way I mean is there ever a way to know when it's time to Abandon this thing that you love and Totally shift direction? Yeah, so I mean

Uh that it's probably more survivorship bias rather than I have some special talent or ability to identify those situations. I just happened to do it twice. Kind of like Someone who won the lottery um advising you on which numbers to pick. But Because this game was so weird and so hard to explain, it was uh much harder to get into people's heads. And you really need to be able to get like purchase in someone's mind, which is why you hear things like um it's Jaws meet Star Wars or it's Uber for whatever, because people already have those concepts in their head and they can kind of put it together to figure out what this thing is.

With Flickr, I think we had a real disadvantage because we never really explained what it was or what it was for. With the game it was very hard to identify. I think we still face that as a as a major challenge for Slack, because it's like a brand new category of software that doesn't really replace anything specific that we were using before. Uh So part of it is is this an idea that I can make clear enough. for someone else such that that person can go on and explain it to someone else when I'm not there. That's a little bit complicated grammatically, but what I mean is like can other can other people be advocates for you? Can other people explain it?

The the ideas where that's possible, I think, have a lot more possibility than the ones where it's And Slack is easy to explain. Yeah. But you can't. It was kind of jammed up on the on the plane and the it was taking everyone a long time to sit down, and so I was chatting with the um flight attendant. And she said, What do you do? I work in software, oh what company, Slack, what's that?

And there's this critical moment where I realized I was gonna say It's a messaging app used by businesses, but if you go to our website, Until two months ago it said, Imagine what your team can do. And then now it says like Uh whatever work you can do, you can do it better with Slack or something like that.

And I realized like We really should probably tell people what it is. What people are taking time out of their day to come to the website and they want to understand it, and there's this uh This is like Restaurant websites, uh the only time I've ever gone to a restaurant website I want the hours that they're open, their address, the phone number, or the menu.

There's really no other reason to go. You go to a restaurant website and this like pa the photo like starts to fade in and it kinda Ken Burns effects. And there's a meal and the music starts auto-playing, and you're not allowed to use the menu, like the the thing to to navigate the website until all this crap is finished. And

The people who make restaurant websites and the owners of the restaurants who commission them must have gone to other restaurant websites before and be frustrated. So I tweeted this years ago. It's like what's the name for this phenomenon whereby it's definitely not what anyone wants, and yet you people persist in providing it. And someone came up with uh the owner's delusion. Like

Your thing because it's so important to you seems like something that everyone else will really be interested in. Like You're so into the style of food you've created and this um Photograph you took of the dish was so Like came out so perfectly that. You really it's like people who tell you about their kids' activities for a little bit too long.

Um That's a real tough one. It can be really tough to be out there hustling and if you're just completely incorrect about the degree to which someone else cares and like how quickly you need to get to the point. It can be like the the death of the business. Uh I'm definitely trying slowly over my career to bias towards things that are a little bit easier to explain. And that people care about. Yes, Stuart Butterfield, Downher's Slack. Thank you, Stuart. Thank you.

That's Stuart Butterfield. Co-founder of Flickr and founder of Slack. Stewart joined me live on stage at the How I Built This Summit, which happened in October at Yerba Buena Center for the Arts in San Francisco. We'll have a few more of my conversations from the summit over the next month or so, so keep an eye out for them. And thanks to Candace Lim, who produced this episode, and Martin Arablui, who wrote the music. I'm Guy Raz, and you're listening to how I built this. This

is NPR.