2026-11-04 · 100 PMs Who Changed the World #46 (OVR 87) →
Global PM Ranking #50 Stewart Butterfield: Twice Bankrupted Making Video Games, Twice Salvaged the Internal Tool for $27.7 Billion
At #50 on the Global Top 100 Product Managers Ranking, we profile the undisputed “Pivot King of Silicon Valley”: Stewart Butterfield (87 OVR), co-founder of Flickr and Slack.
If you pitched Butterfield’s career as a screenplay, Hollywood executives would reject it as too implausible:
- Trained in philosophy at the University of Victoria and the University of Cambridge, his lifelong dream was to build a peaceful, quirky massively multiplayer online game (MMORPG);
- He tried twice—seven years apart—and both games flopped spectacularly.
- Yet both times, as cash ran out, Butterfield looked into the rubble of his dying game studio, extracted a tiny internal utility his engineers had built for themselves, and turned it into an internet-defining product: first Flickr (acquired by Yahoo in 2005), and second Slack (acquired by Salesforce for $27.7 billion in 2021)!
1. Two Failed Games, Two Iconic Pivots
| Dimension | Attempt #1: Ludicorp (2002–2005) | Attempt #2: Tiny Speck (2009–2021) | Core Product Lesson |
|---|---|---|---|
| Original Dream Product | Web MMO Game Neverending | Flash MMO Glitch ($17M raised) | Founder passion doesn’t guarantee market timing |
| Internal Side Tool | Real-time drag-and-drop photo sharing | Searchable IRC-style team channel logger | Tools built to solve your own pain are real |
| The Pivot Product | Flickr (Web 2.0 photo pioneer) | Slack (Fastest-growing B2B SaaS ever) | Kill sunk-cost bias; follow actual user dopamine |
| Exit Outcome | Acquired by Yahoo (2005) | Acquired by Salesforce for $27.7 Billion | Internal shovels often beat the gold mine |
2. Three Product Laws from “We Don’t Sell Saddles Here”
- Consumer-Grade Joy in Enterprise Software: Butterfield brought video-gamejuiciness—playful loading messages, custom emoji reactions, and sub-second search—into enterprise software, pioneering Product-Led Growth (PLG).
- Sell horseback riding, not leather stitching: In his legendary 2013 memo “We Don’t Sell Saddles Here,” he taught PMs to sell organizational transformation (“zero internal email chaos”), not a checklist of chat features.
- Zero Sunk-Cost Attachment: When your main thesis fails, inspect the custom tools you built along the way—your internal shovel might be worth $27.7 billion.
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