Stewart Butterfield perfected the art of the pivot, by turning two failed online game companies into Flickr and Slack.  Slack recently got acquired by Salesforce, at over $27.7 billion. However, Stewart was unusually far from technology at the beginning of his life.

His parents were counterculture hippies who lived in the remote backwoods of British Columbia in Canada. Stewart grew up in a cabin that was built around the turn of the last century. The cabin didn't have running water until Stewart was three. It didn't have electricity until he was four. They had a bathtub in the front yard. They didn’t have many possessions.

When Stewart’s grandfather visited them, he was in total shock. The out-in-the-woods lifestyle was very different for him.  He came from Poland to Montreal to have a better life. When he saw the living situation of his daughter,  he said, “I can't believe I escaped the Stalag Luft (a prisoner of war camp in Żagan, Poland)  and sent all of you to university. Now you're back living like this.”

Things changed quickly enough.  When Butterfield was 5, his family moved to Victoria, the capital of British Columbia, for better education. A few years later, they got a computer. It was very rare at that time. Stewart fell in love with the computer. He taught himself to code. At that time, coding was the only way to set up and play games.  Stewart dived deep into his computer to configure the machine. During his college time, he made money designing websites.

Stewart eventually went to study philosophy at the University of Victoria, and graduated in 1996. After all, his birth name was Dharma Butterfield. Dharma means cosmic law and order in philosophy. However, At the age of 12, he wanted to have a more normal name, and according to him, “I had the impression that Stewart was the most normal name you could have, and I didn't want to be Dharma.” He named himself Stewart Butterfield.

After his bachelors, he went to University of Cambridge and completed his master's in Philosophy in 1998. He wanted to become a philosophy professor. Still, during the summers, he designed websites for local businesses. After finishing his masters, he changed his mind. Instead of a philosophy professor, we wanted to work in tech. He thought that would provide him a stable job. He moved to Vancouver, and got a job in a tech startup called ‘Communicate.com’. ****

Around the end of February 2000, he quit his job at the startup. He sold his equity in the Company for $35,000. At that time he thought he was giving up his million dollar equity of the company. But soon the dot com bubble crashed.  With 35000 dollars in hand, he joined his colleague, Jason Classon, at his side project ‘gradfinder.com’. Soon the company was acquired, Stewart and Jason got enough money to live comfortably for a few years. However, an entrepreneur at heart, Stewart did not want to stop.  By this time he met another tech enthusiast,  Caterina Fake, and they got married in 2001. They had big plans coming up.

Together, the three of them started working together on a project called the “NEVER ENDING GAME”, which was an attempt to build a web-based, massive online multiplayer game. The game was based on creativity and social interaction, which was quite revolutionary for that time. However, it was the early internet days. Not a lot of people had even had computers. Internet connection was awful. What kept them going was a small group of early adopters. The adopters played the prototype and got hooked to the game.

But the finance side of the game was flashy enough for the investors. Stewart and his co-founders tried everything to raise some money, but the investors had zero interest to invest in their business. Also, the timing was bad in general, because it was after the dotcom bubble crash. No one wanted to put their money in the tech world.

Stewart started to ask his friends and family to invest in the project, and they raised a few hundred thousand dollars. With that money, they hired more developers to build this massive game. By the middle of 2003, within a year, it was clear that the game would be a very complex task. In order to succeed, they needed a large amount of money. Stewart had a feeling that they are not going to finish building the game, which is named “GAME NEVERENDING”.

They became desperate for ideas that they could complete in a short amount of time. According to Stewart, “The intention is we'll build a website and someone will buy it for like a million dollars, and then we can use that million dollars to finish the game.”

In reality, the company was losing some serious money at that time, and they had one last chance at a virtual world conference in New York. If they fail to impress the investors at that show, the business will collapse.

On the plane to New York, Stewart got food poisoning. He couldn’t sleep. So he started to think about ideas and wrote them down. The ‘GAME NEVERENDING’ had an amazing feature, where the players could upload photos. Stewart convinced the whole team to give the idea a shot, and Flickr was born. Soon, Flickr was very popular. The rise of blogging made it huge for the online community. At the time, the tech giant Yahoo bought Flickr for $25 million dollars. Suddenly, all his friends and family who invested in the company received a big payoff. Stewart started to work for Yahoo to continue to build Flickr. The  ‘GAME NEVERENDING’ ended without a huge success.

Stewart had to work for Yahoo for three years as a part of the acquisition deal. But he described his experience in one example: “I was never in the army, but I look back at that time at yahoo, the way I would imagine some people would look back at boot camp. Which was horrible at that moment of time, but it’s  very rewarding and enriching.  And I learned a lot and developed character”

At the beginning of 2009, Stewart had finished his contract with Yahoo. He had another idea for an online game. This time he had some money to start with. Also, the general environment towards online and the internet had  changed quite a bit with the rise of Facebook, Google, and so many other websites.

In 2009, there were more people online. In 2002, when Stewart was creating Never-Ending game, the majority of people didn't have internet access at home. Now the majority did.  Computers are way faster, all the hardware was way cheaper and  online games were something that were really popular. All the condition was perfect for Stewart. Now he is a veteran CEO, so he gave online gaming another shot. This time the concept is different. It would be a virtual world. People would build things in that reality. The called the game “Glitch”.

However, the fundamental problem in the business side remained same. When they launched the game, there was some early success. They raised some cash. However, only a very small population of people were playing the game, and soon they finished all of their money on developing and marketing the game. There was not a lot of people playing the paid version of the game, which was the only way for them to generate revenue. Then in November 2012, they shut it down.

It was a horrible experience for Stewart and the whole Glitch team. It was specially hard on Stewart. He personally convinced many people to join the company, and he felt that he failed all these people. With very little money remaining, they created a website to showcase the resumes of the employees. Almost everyone got a different job within the next few months.

The impressive thing about Glitch was while it wasn't successful as a business, the team were extraordinarily productive.  There was a system for internal communication that they had developed. They didn't think about the communication tool as something different or extraordinary. It didn't have a name. They never talked about it. “ It was just how we happen to communicate”, Stewart said.

It was all built around the concept of a channel, and you can have a channel created for anything for a project for a functional group, or for a topic of conversation. The channel exists whether you remember or not, and it can continue to exist after you leave. It was a unique kind of  interoffice communication tool.