3 Pivot Lessons from the CEO of Slack
In business, a pivot is an important moment when a company decides to completely change its direction. It’s a bold and risky move that, when done without careful consideration, can even be deemed “deadly” for startups. How could some companies successfully navigate their way along the new direction they were headed to? To answer this question, meet Stewart Butterfield, Co-Founder of Flickr and CEO of Slack, who successfully pivoted twice.
Flickr and Slack are two companies worth millions today. Interestingly, both companies started with video games named Game Neverending and Glitch (respectively). Communication have been envisioned by Butterfield since the very beginning, as the games were intended for social interaction. Both cases of pivot, however, were far from easy. Here are some lessons from the successful person behind two successful pivots.
Get out of Your Comfort Zone
Flickr and Slack’s success is a cautionary tale that tell us not to pursue ideas that won’t work. In other words, these companies exist because random fresh ideas might be worth trying. Butterfield originally wished to incorporate photo-sharing feature in Game Neverending. However, it turned out to be something bigger as it became its own platform: Flickr. So, instead of making the idea a feature, the idea was nurtured to its fruition where it became a stand-alone product.
Similar story also happened to the game Glitch. After years of development, the game spawned a very solid community. However, 97% users who signed up for the game left it very quickly. In other words, although the game was doing well qualitatively, it didn’t generate enough revenue for the management to keep on going. It was at that moment that Butterfield knew that he had to pull the plug and left his comfort zone. Speaking of leaving comfort zones during pivots…
Be Prepared for Making Tough Decisions
“It was rough. And there were definitely differing opinions. There were a lot of arguments about what we should be doing. And for a time, we were working both on a game and on Flickr. The team was still really split, so we had a vote., ” Stewart Butterfield said. Like his experience, pivot undoubtedly generates rifts between team members who are loyal or very much invested in the initial goal that the business was heading for. And handling this is never an easy job to do.
During pivots, business leaders might need to persuade co-workers to work together to achieve a common goal. There will be lots of persuasion and arguments. In addition, existing customers might not be happy about the pivot, as it will generate different business models, products, and even customer experience. Pivots are the moments when business leaders need to make tough decisions, including severing ties with many parties involved. But it’s the necessary thing to do.
Prioritize People by Putting them First
Nonetheless, tough decisions do not have to be conducted inhumanely. In Butterfield’s case, he always thought of the well-being of his team and his customers. For instance, when they had to close Glitch, it was tough for him to tell his employees that they won’t have a job anymore. So his team created a website called “Hire A Genius”, where his employee’s LinkedIn profiles and portfolios were put there. And he did not stop until everyone on his team got a new job.
They also announced the end of the game Glitch to the users. Instead of giving the cold shoulder treatment, the developers and users of the game threw a virtual “end-of-the-world” party. Aside from being ethical, such acts created a good farewell image and potential retention. Ending an idea humanely leaves a good impression for not only users, but also your team. One of the engineers at Glitch even came back later to work in Butterfield’s Slack team.
Stewart Butterfield’s story told us that successful pivots do not come magically out of thin air. It’s a difficult business transformation that is accompanied with contradictions where leaders must prepare to stop pursuing an idea that doesn’t work, be ready for making tough decisions, and prioritize the people involved at the same time. Aside from these, it may take years of hard work before the new idea comes into fruition, so patience and persistence are other two important factors for a successful pivot.