Overview
Slack began as an internal messaging tool at a company building an online game. After the game ended, the team turned its communication software into a product for other workplaces. Slack grew into a widely used platform for channels, direct messages and integrations. It listed publicly in 2019 and became part of Salesforce in 2021. The product continues under Salesforce ownership. [1][2][3]
Founding Story
Stewart Butterfield, Cal Henderson, Eric Costello and Serguei Mourachov worked together at Tiny Speck, the company behind the online game Glitch. To coordinate development, the team built its own messaging tools. When Glitch closed, that internal tool offered a different opportunity: teams elsewhere also needed a shared place for conversations and work information. [1][4]
The transition was not simply a game being renamed. Tiny Speck stopped pursuing Glitch and developed the communication system into a separate workplace product. Slack dates the product's founding to 2014; its predecessor company began earlier. The team retained lessons from building a social product, including attention to ease of use and visual character. [1][4]
Timeline
- 2009–2012: Tiny Speck developed Glitch and built internal communication tools; the game later closed. [4]
- 2014: Slack launched publicly as workplace messaging software. [1][4]
- 2016: Andreessen Horowitz-affiliated entities purchased $5 million of existing Slack shares from co-founder Cal Henderson. This was a secondary share purchase, not a new financing round paid to Slack. [5]
- 2019: Slack listed its shares publicly through a direct listing. [4][6]
- 2020–2021: Salesforce announced an agreement to acquire Slack for about $27.7 billion; the acquisition closed on July 21, 2021. [2][7]
Watch: Stewart Butterfield demonstrates early Slack
What They Built
Slack organized workplace conversations into channels as well as direct messages. Users could search past discussions, share files and connect other software. A channel gave a team a persistent place to discuss a project, making relevant context more visible than a chain of individual emails. [1]
Integrations extended that shared space: updates from other tools could appear alongside a team's conversations. A free version let a small group begin using the product, while paid plans offered additional capabilities and administration. The same features that made conversation easy could also create notification and information overload, so how teams organized channels and expectations mattered. [1][8]
Market Position
Slack competed with email, workplace chat and collaboration suites. Microsoft Teams became a major competitor with the distribution advantage of a larger enterprise software portfolio. Slack's appeal included adoption by individual teams before a company-wide purchase, while Salesforce brought a broad enterprise sales and application portfolio after the acquisition. [7][8]
Slack's origin in Glitch mattered because the team had already relied on its own tool. It still had to make that tool understandable and reliable for other organizations, build integrations and persuade businesses to pay. The existence of an internal prototype alone does not explain the later scale of the business. [4][8]
Business Model
Slack used free and paid subscriptions. A team could start with the free product and upgrade as its needs grew; larger organizations could buy additional security and administrative capabilities. In its annual filing, Slack reported $902.6 million in revenue for the fiscal year ended January 31, 2021, up from $630.4 million the prior year. Revenue is not profit. [8][9]
Traction
Slack's registration statement reported more than 10 million daily active users across over 600,000 organizations in 2019, including free and paid users. The annual revenue figures show substantial commercial adoption by 2021, but do not mean every organization was a paying customer. [5][9]
Andreessen Horowitz was already a shareholder before the November 2016 transaction. Slack disclosed that affiliated entities bought 674,291 existing shares from Henderson for approximately $5 million. The filing identifies the transaction precisely; it should not be described as a new 2016 funding round. [5]
Outcome and evolution
Salesforce agreed to buy Slack in December 2020 and completed the transaction on July 21, 2021. The announced deal valued Slack at approximately $27.7 billion in cash and stock. Slack had already become a public company, and it continues as a Salesforce product after the sale. [2][7]
Salesforce said the combination would connect Slack with its customer relationship management products. The transaction brought Slack a larger distribution partner and gave Salesforce a prominent workplace interface. The public sources do not establish a single cause for the sale or a complete long-term financial return for the combined business. [2][7]
Key Lessons
Slack's team found a product in a tool it had built for its own work, then developed it for a much larger audience. Its free entry point supported team-level adoption, while paid features and enterprise sales supported a business. The Salesforce deal changed ownership rather than ending the product; its continued success depends on users and organizations choosing it amid strong competition. [1][2][8]
Sources
- Slack: What is Slack?
- Salesforce: acquisition completion
- Salesforce SEC filing: acquisition completion
- TechCrunch: The Slack origin story
- Slack registration statement
- Slack registration statement overview
- TechCrunch: Salesforce agrees to buy Slack
- Axios: Slack and Zoom's business models
- Slack fiscal 2021 annual filing