Jul 30, 2018 · 1h 3m · how-i-built-this
Slack & Flickr: Stewart Butterfield
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Stewart Butterfield shares the story of how two failed multiplayer online gaming ventures unexpectedly led to the creation of Flickr and Slack, offering lessons on startup pivots, ethical leadership, and rapid scaling. The episode also highlights teen entrepreneur Abby Kircher's journey building Abby's Better nut butters into a million-dollar retail brand.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 28.5% of the talking time here. How this is scored →
Guy as informed peer 4.2 Guest teaching 2.4 Guest disagreement 1.0 Guy pushing back 1.3
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 53:00 Stewart refutes billionaire label
Stewart directly corrects Guy's assertion that he is a billionaire on paper, reminding him of four co-founders and diluted equity.
Hardest push from Guy ▶ 43:24 Guy roleplays skeptic office workerGuy actively simulates customer pushback against adopting Slack, challenging Stewart on why anyone would want another notification stream.
Biggest teaching moment ▶ 35:30 Stewart breaks down channel vs email architectureStewart provides a comprehensive breakdown of the structural flaws in email onboarding compared to persistent, searchable channel history.
Guy holds their own ▶ 19:03 Guy demonstrates pre-cloud infrastructure knowledgeGuy jumps in to detail the specific hardware and memory storage cost burdens of hosting high-volume photo archives before the advent of modern cloud computing.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Off-Grid Childhood and Changing Names from Dharma to Stewart | 4 | 2 | 1 | 1 | Guy prompts Stewart about his off-the-grid hippie upbringing and early dot-com days. Stewart shares colorful anecdotes about his birth name Dharma and early domain-squatting jobs in a cooperative, storytelling rhythm. | |
| Building and Selling GradFinder | 4 | 2 | 1 | 1 | Guy inquires about the economics of selling GradFinder and meeting Katarina Fake. Stewart clarifies that the sale was modest rather than life-changing wealth, keeping the mood grounded. | |
| Funding Woes and the Pressure to Pivot Away from Gaming | 4 | 3 | 1 | 2 | Guy presses on the business model of Game Neverending and how an online game concept morphed into Flickr. Stewart describes the technological architecture and the food poisoning episode in NYC where Flickr was conceived. | |
| Convincing the Team to Pivot and Launching Flickr | 6 | 3 | 1 | 2 | Guy demonstrates strong domain knowledge regarding pre-cloud server costs and storage bottlenecks. Stewart explains how they negotiated the internal pivot vote and leveraged Blogger integration. | |
| The Yahoo Acquisition Decision | 5 | 2 | 1 | 1 | Guy explores the Yahoo buyout offer and the sudden media attention. Stewart explains the earn-out structure and recalls the humorous airport newsstand interaction with the cashier. | |
| The Corporate Reality of Working Inside Yahoo | 4 | 3 | 1 | 1 | Stewart describes navigating corporate bureaucracy at Yahoo like a corporate boot camp and the personal toll of his divorce. Guy acts as an empathetic guide through the personal and operational struggles. | |
| Developing Glitch: The Whimsical MMO | 4 | 2 | 1 | 1 | Guy questions why Stewart returned to gaming despite past difficulties. Stewart details the premise of Glitch and the ease of raising venture capital due to his Flickr reputation. | |
| The Leaky Bucket Problem and the Decision to Shut Down Glitch | 4 | 3 | 1 | 1 | Stewart educates the listener on the mechanics of the leaky bucket in user acquisition funnels. He explains how realizing the unit economics failed led to his tough decision to shut Glitch down. | |
| The Emotional All-Hands Meeting and Mid-Show Break | 4 | 2 | 0 | 1 | Stewart recounts the emotional all-hands meeting where he broke down in tears, followed by the Hire a Genius initiative that placed every laid-off employee into a new job. | |
| The Channel-Based Internal Tool Hiding in Plain Sight | 5 | 4 | 1 | 2 | Stewart breaks down the conceptual contrast between email inboxes and searchable, persistent channel-based chat. Guy tests whether they immediately recognized the value or took it for granted. | |
| Committing to Slack and Retaining the Founding Team | 4 | 2 | 1 | 1 | Stewart discusses why the core team stuck together after the failure of Glitch and how enterprise software mirrors massively multiplayer mechanics. | |
| Naming Slack and Acquiring the Domain Name | 5 | 3 | 2 | 4 | Guy playfully roleplays an enterprise client pushing back on adopting another communication app. Stewart responds with the pitch regarding searchable organizational archives and buying the domain from a cat website owner. | |
| Andreessen Horowitz Pitch and Viral User Adoption | 4 | 2 | 2 | 2 | Stewart recalls pitching Andreessen Horowitz and being dismissed, only to rapidly hit one million in sales upon launch due to negative churn and grassroots word-of-mouth. | |
| Hypergrowth, Unicorn Valuation, and Desk Shortages | 4 | 2 | 1 | 1 | Guy marvels at the meteoric rise to a 1.2 billion dollar valuation in months. Stewart describes the operational scramble of desk shortages and hypergrowth onboarding. | |
| The Challenges of Organizational Growth and Leadership | 4 | 3 | 2 | 2 | Guy asks if Stewart is now a paper billionaire and free of anxiety. Stewart politely corrects the billionaire assumption, describes three levels of wealth, and discusses the executive learning curve. | |
| The Golf Ball Theory: Luck, Momentum, and Success | 5 | 3 | 1 | 1 | Stewart articulates his golf ball theory on luck, momentum, and compounding feedback loops in tech success, reframing Guy's question about singular founder genius. | |
| Stewart's Three Interview Questions | 3 | 1 | 0 | 0 | Guy wraps up the main interview by sharing Stewart's three favorite quirky job interview questions before transitioning to the 'How You Built That' segment featuring Abby Kircher. | |
| Expanding Flavors and Farmers Market Success | 3 | 1 | 0 | 0 | Abby Kircher recounts starting Abby's Better nut butter at age fifteen, hand-spooning jars at farmers markets, and scaling to major retail distribution. |
Statements from this episode (35)
Butterfield lived without running water or electricity until age four
“Didn't have running water until I was three.
Didn't have electricity until I was four.”
Butterfield: Changed name from Dharma to Stewart at age 12
“And when I was 12 years old, like most twelve-year-olds really wanted to be normal, so I changed it to Stuart because for some reason I had the impression that Stuart was the most normal name you could have.”
Communicate.com founder held premium domains like Brazil.com and Makeup.com
“The guy who founded it had bought, in January, all of these domains, like Vietnam.com and Brazil.com and Makeup.com and Perfume.com.”
Butterfield left $10M in equity for a $35K buyout before dot-com crash
“And so around the end of February of the year, 2000, I quit. I walked away. I thought I was walking away from like ten million dollars in equity. And I got bought out for 35,000 dollars on my way out.”
GradFinder was acquired in late 2000 by a dot-com that soon folded
“By one of, like, these dot-coms that had raised a ton of money, like, I don't know, a hundred and fifty million dollars. I don't even remember what it was called now. And this is like the last gasp, so this is the end of the year 2000. And they ended up going …”
Butterfield: Non-violent social MMO games are commercially horrible ideas
“It's a horrible idea commercially. Like, it's just, there's not enough people who are interested in it.”
Flickr was initially built to be sold for $1M to fund gaming
“And that thing ended up being Flickr, and I think when we started it, the intention was, we'll build this, and someone will buy it for, like, a million dollars, and then we can use that million dollars to finish the game.”
Cal Henderson hacked Game Neverending's internal mailing list before being hired
“It turned out had hacked into our internal
Mailing list when we were working on the game and had been reading all of our messages, which is why he was able to develop all this stuff.”
Cal Henderson built Flickr's core architecture during his daily train commutes
“On the train to London every day, two hours in, two hours out, he wrote almost all of the guts of Flickr the way to upload the photos and to process them, to store them, display them.”
Butterfield originally paid co-founder Cal Henderson via Amazon wishlist purchases
“The original payment he got was me buying stuff off his Amazon wishlist.”
Butterfield initially lost a team vote to pivot to Flickr
“So we had this vote. I lost you know, or Flickr lost in game one, so that I had to call Eric on the side and, like, you know, do some, what I imagine happens in the Senate, some kind of, like, horse trading to convince him to change his vote. And that worked, …”
Google's early Blogger help docs explicitly recommended users host photos on Flickr
“Google had bought Blogger which was one of the early blogging programs, and they didn't have a way to host photos, so they put, you know, in their help materials online When people said, how do I upload photos? They said, use Flickr.”
Modern venture investors would unanimously advise against Flickr's early $20M acquisition
“I mean, like, a hundred percent of the time, they would give the opposite advice today.”
Flickr had just nine employees when acquired by 11,000-person Yahoo
“Well, at the time we were required, it was nine people. So Nine people being acquired by what at the time I think was like an 11 or 12,000 person company.”
Getting approval for new Flickr servers at Yahoo took five weeks
“Now when we wanted to get more servers, we had to go to the hardware review committee, and you had to make an appointment, and you couldn't get an appointment for like five weeks.”
Butterfield: Working with a spouse during an early startup is uniquely stressful
“It's pretty challenging to work with your spouse, especially in the early days of a startup, so this is going back many years now, when we first started working on Flickr, like, out of money, and it's not just the business is out of money, it's like, we're out…”
Being a CEO requires unnatural optimism that eventually exhausts itself
“Being in business, and I think especially being a CEO, requires a lot of unnatural optimism, and at some point, it's just that optimism is exhausted.”
Butterfield realized Glitch could never justify its $17.5M venture investment
“It was never going to become the kind of business that would justify 17 and a half million dollars of venture capital investment.”
Recurring fundamental doubts about a business or employee are almost certainly correct
“There's a saying, if you're thinking about firing someone, a lot
You should just fire them. Meaning that, like, that intuition, if that keeps coming up, it's almost certainly correct, and you wouldn't be thinking that all the time if there was a real shot at m…”
Butterfield shut down Glitch with over $5 million still in the bank
“We still had, like, over five million dollars in the bank.”
Butterfield ensured all 37 laid-off Glitch employees secured new jobs
“By the end of that process, we had gotten, you know, every single person who worked there who was getting laid off, and there was like, 37 of them, I believe. Every single one of them got another job, and in most cases, they got a better job than the one that …”
Email fundamentally cuts new employees off from historical company knowledge
“In email, if you join a company that has been around for 30 years and has been using email since its inception, You get an empty inbox. You're completely cut off from the whole history of what's happened before you got there. And almost all of the email, like,…”
Pivoting from failed game Glitch to building Slack took under a week
“My memory is, is it took us months to decide this, and there's a lot of debate. In fact, it took us, like, less than a week. The core was there, like, almost instantly.”
Investors treated the Slack pivot like buying another lottery ticket
“None of them wanted their money back, and not for altruistic reasons, but we had already spent two-thirds of it, so their options were, like, we can get back a third of what we gave you, or they can buy one more lottery ticket and say, keep the money we'll kee…”
Slack.com was registered in 1993 by an engineer hosting cat pictures
“Slack, speaking of .com registrations, was registered by this guy in 1993. He lives in somewhere in the Midwest, I think Wisconsin, who is an electrical engineer, and there's no more iconic internet thing than this. He had it as a website with pictures of his …”
Unlike most enterprise software, Slack requires unanimous team buy-in to work
“Unlike most software, you can't unilaterally decide to use Slack with your colleagues. Everyone has to buy in.”
Butterfield pitched early Slack investors on a $1B valuation target
“We went in there and told them our plan and, you know our grand ambition, which was, hey, we believe that there's, you know, we could one day get to a hundred million dollars in revenue with this business and thereby be a billion dollar business.”
Pre-launch Slack users almost never stopped using the product
“The leaky bucket problem that I talked about in the context of the game was completely eliminated. Like, we found that once people started using it, as hard as it was to get people to start, once they started, they almost never stop.”
Slack sold $1M in software within three weeks of its official launch
“Within maybe two weeks or three weeks of launching that officially, we had sold a million bucks worth of slack.”
Slack grew between 5% and 10% every single week in 2014
“And, you know, at that same period, we're still growing, like, somewhere between five and 10% a week.”
Organizational alignment dictates success more than an individual leader's strategic decisions
“What I found is what matters is performance at the level of the organization. Cause to the degree that everyone's pushing in the same direction, you're able to achieve something. If people are pushing in opposite directions, then, you know, you can put as much…”
Butterfield's three tiers of wealth: debt-free, ignoring menus, ignoring vacation costs
“I really feel like there's kind of, there's three levels of wealth in the world. The first level is, I'm not stressed out about debt. Like, people who no longer worry about their credit card bills or their student loans, that's like level one of wealth. Yeah. …”
Butterfield plans to donate almost all of his wealth
“I'm just gonna give almost all of it away, because I, there's no, I don't get any additional happiness in spending it, and there's a lot of suffering in the world, and there's a lot of inequality, and I think that's a place where, not just me, but the whole co…”
Butterfield asked early candidates: 3x17, three African countries, French Revolution century
“By the way, in the early days when Stuart was interviewing job candidates for the company, he would always ask three questions. The first one, what's three times 17? The second one, name three countries in Africa? And the third question, in which century was t…”