Slack's Successful Startup Pivot Strategy

Imagine you’re the founder of a growing gaming company, Tiny Speck. You’ve spent years developing a massively multiplayer online game, named Glitch. Despite your team's passion and efforts, the game fails to raise substantial user interest and doesn't meet the revenue expectations. What would you do in such a situation?

What is 'Pivot' in the startup world?

A Pivot is a strategy utilized by startups when they recognize that their original business model is not working, and they need a fundamental change to survive or prosper. Pivoting means shifting to a new strategy, which can often involve modifying the product, target customer segment, or the entire business model altogether.

Why was the Pivot Strategy needed for Slack?

In 2009, Tiny Speck, the game development company founded by Stewart Butterfield, Eric Costello, Cal Henderson, and Serguei Mourachov, launched the online game Glitch. However, despite initial enthusiasm, Glitch's user interest dwindled over time, signaling that it was not going to be the success they'd anticipated. Recognizing this, Tiny Speck made a bold decision: to pivot from gaming to corporate communication, creating a platform now known as Slack.

How Slack Successfully Pivoted?

Here's how Slack turned failure into a massive success:

1. Identifying their Strength: The team noticed that their internal communication tool was genuinely effective and decided to turn it into a standalone product.
2. Market Analysis: They observed that existing corporate communication tools were lackluster and recognized an opportunity for a superior, user-friendly service.
3. Leveraging their Existing Tech: They used their existing technology developed for the game to build an excellent real-time messaging, archiving, and search application that could revolutionize corporate communication.
4. Iterative Development: They developed Slack iteratively, incorporating user feedback to constantly improve the product.
5. Effective Marketing: They employed a persuasive marketing strategy to spread the word about their new product.

Conclusion: The Result of Slack's Pivot

As a result of their successful pivot, Slack has become a leading platform in corporate communication. Several companies across the globe now find it an essential tool for team collaboration. The journey of Slack holds significant lessons for struggling startups: identify your strengths, read market signals, use what you've got, develop iteratively, and spread the word. Keep an open mind to acknowledge when your current strategy isn’t working, and be bold enough to pivot when necessary.