The Challenge
Tiny Speck had raised $17M to build Glitch, a massively multiplayer online game. After years of development, the game failed to attract a sustainable audience and was shut down in 2012. The company had money left, a talented team, and no product.
Butterfield had been here before — his previous gaming company (Game Neverending) had also failed, but produced Flickr as a side effect. Could lightning strike twice? The challenge was identifying what, if anything, from the wreckage was worth building on.
The Approach — Tools in Action
Butterfield used Issue Trees to break down their assets MECE-style:
- Technology assets: Game engine (not reusable), internal chat tool (very useful), backend infrastructure (partially reusable)
- Team assets: Talented engineers, designers who loved the chat tool
- Market insights: Every team they talked to had the same communication problems they'd solved internally
The internal chat tool — originally built because IRC and email were terrible for team coordination during game development — emerged as the most valuable asset.
Abstraction Laddering reframed the opportunity:- Going up: "Why did our team love this chat tool?" → "Because it made team communication effortless" → "Because it reduced the friction of working together"
- Going down: "How do we make team communication effortless for everyone?" → "Channels, search, integrations, file sharing"
Butterfield then used Working Backwards to write the press release for what would become Slack: "A messaging platform that makes work life simpler, more pleasant, and more productive." The press release clarified that Slack wasn't a chat app — it was a platform where work happened.
The Outcome
The pivot produced spectacular results:
- Slack launched in 2013 and became the fastest-growing enterprise software in history at the time
- Reached 12M+ daily active users within a few years
- Acquired by Salesforce for $27.7 billion in 2021
- Changed how millions of teams communicate daily
- Proved that a failed product can contain the seeds of a much bigger success — if you diagnose honestly
Key Takeaway
Failure isn't the opposite of success — it's often the raw material for it. Break down what you have, reframe the opportunity at the right level, and be willing to pivot completely.
Tools Used in This Story
Issue Trees
Problem SolvingStructure and solve problems in a systematic way
Abstraction Laddering
Problem SolvingFrame your problem better with different levels of abstraction
Working Backwards
Problem SolvingStart from the ideal customer outcome and work backward to build the right thing