Stewart Butterfield isn’t a typical Silicon Valley tech billionaire. A philosophy graduate who grew up in a commune, Butterfield went on to be the man behind one of the fastest-growing apps of all time, business messaging platform Slack. And he has more than a few feathers in his cap: as well as his role as Slack's CEO, Butterfield is also the founder of photo-sharing phenomenon Flickr and a former Yahoo employee. But his route to success was anything but ordinary. Here we take a look at the incredible life of Stewart Butterfield.
Butterfield was born in 1973 in the sleepy fishing village of Lund in British Columbia, Canada, originally named Dharma Jeremy Butterfield. His American father had left the US to avoid serving in Vietnam, and the young family settled in a commune, where home was an unassuming log cabin. The family had no running water or electricity until Butterfield was three years old, so bathtime was spent in a tub in the garden.
The Butterfield family moved to Victoria when Stewart was five years old, and it wasn't long before his entrepreneurial spirit became apparent. He had his own lemonade stand and sold hot dogs from 7-Eleven at the beach. From the young age of seven, he began to teach himself to code on an early generation Apple computer, and at 12, in a bid to move away from his unconventional upbringing, Butterfield changed his unusual birth name, Dharma, to Stewart.
Butterfield seemed to lose this interest in computers as he got older, choosing to study for a Philosophy degree at the University of Victoria, and then a Master of Philosophy at the University of Cambridge. But he didn't completely abandon his childhood computer skills, using them as a way to make money at university by designing websites, and teaching himself computer programming in place of the software engineering degrees held by most Silicon Valley big hitters.
But the academic 20-something admits he felt lost after completing his studies, telling Bloomberg: "By the time I finished my master’s degree I really had no idea of what I was going to do except for be an academic because, you know, the big five philosophy firms aren’t always hiring". But it was his enthusiasm for computers that eventually led him to make the move to Silicon Valley, shortly after he graduated from Cambridge in 1996.
In 2000, he started working with his friend Jason Classon at Classon's startup, Gradfinder.com, a site that enabled recent college graduates to connect with one another. The pair managed to sell the site for what they've described as "a healthy profit" just six months after its launch. Classon then took a job at Highwired, the company that bought Gradfinder, while Butterfield took up freelance web design again.
While freelancing, Butterfield created the "5k Competition": a contest challenging people to design websites using fewer than 5 kilobytes, a highly desirable attribute in the era of dial-up internet where larger sites took a long time to load. The contest went global and turned out to be incredibly popular. Butterfield landed more high-paying web design jobs as a result.
It wasn't long before Butterfield and Classon reunited again. In the summer of 2002 the pair, along with Butterfield’s then-wife Caterina Fake, founded Ludicorp. The original idea behind the startup was to build a huge online multiplayer game, but this developed into a chat system that had a photo-sharing option. However, after the internet bubble had burst and in the wake of 9/11, the game failed to attract investment and never launched.
Other couples who built billion-dollar business empires together
The project didn't go to waste, though. While suffering from food poisoning at a New York hotel, in a somewhat delirious state Butterfield realised the photosharing element of the platform did have some potential. However, he also realised that it needed changes because in its current form users were only able to share photos when both of them were online.
The new and improved photosharing platform called Flickr was finally launched in February 2004. A year after its launch, in early 2005, Yahoo showed an interest and made an offer to buy the company. Butterfield and his team were torn: on one hand, selling it to the then-top search engine was a safe bet, but on the other hand, they had substantial investment already. They decided to accept Yahoo's offer and Flickr was purchased for $20 million (£16m). Butterfield and Fake both went to work for Yahoo following the acquisition, although the pair separated in 2007 after six years of marriage, shortly after the birth of their daughter, Sonnet Beatrice Butterfield.
Butterfield stayed at Yahoo until 2008, by which time he felt he had no more to offer the company. Being a self-confessed avid fan of satirical site The Onion, he penned a quirky resignation letter detailing his "87 years of service" in which he'd "accomplished many feats", joking that after resignation, "I will be spending more time with my family, tending to my small but growing alpaca herd and of course getting back to working with tin, my first love."
However, the game turned out to be, in Butterfield's own words "not a good idea". Despite raising investment of $17 million (£13.6m) and with a team of 45 helping to build the game, it became clear that Glitch wasn't viable as a big business. Although it gained a cult following, Butterfield described the game as "too weird for most people", and it was shut down in December 2012. The art, animations, and code has since been made publicly available on the game's site. Glitch was, fittingly, a bit of a glitch in Butterfield's wider career success.
As with Ludicorp, the cloud that was left by Glitch's failure did have a silver lining: Butterfield and his team had created an app which made it much easier for them to chat and share ideas with each other. It was such a hit with the team that they felt the technology had potential to be used by other companies. But little did they know just how far it would go...
The communication app which we now know as Slack formally launched in 2014, after a preview release in August 2013. However, despite the immediate buzz around the tool, Butterfield didn't hold back on his criticism of the product. He said during an interview with the MIT Technology Review that it "needed a lot of changes to make it less 'terrible"'.
It wasn't long before the app really took off. In 2015 the company became the first Canadian startup to reach a billion-dollar valuation, only eight months after launching. As a result, it attracted investment from some of the most notable venture capital firms in Silicon Valley, including Kleiner Perkins and Andreessen Horowitz, which pumped $340 million (£274m) into Slack during its early days.
Slack enjoyed rapid growth in its first two years, reaching more than 1.25 million daily active users, over 230 employees and seeing annual revenues of $35 million (£28m). This rise didn't go unnoticed by the giants of the tech world; Bloomberg reported that Amazon was keen to buy the company for $9 billion (£7.2bn) in 2017.
Despite his earlier criticisms, Butterfield has credited the success of his app to three key factors. Firstly, its simple, mobile-friendly design; secondly, the fact that most colleagues use their phones and laptops to share ideas; and thirdly, the attention of the press, who were already interested in Butterfield thanks to Yahoo's acquisition of Flickr.
Slack's revenues are increasing at a rapid rate; from $105 million (£84m) in 2017 to $400 million (£320m) in 2019. However, like many startups, operating costs are still an issue. The company has yet to turn a profit, with losses of almost $139 million (£111m) in 2018. The company expects these losses to continue in the near future, with the possibility that the app will never able to reach a profit.
In June 2019 Slack went public in a direct listing on the New York Stock Exchange. While it was expected to achieve a valuation of around $16 billion (£12.8bn), the stock market closed at $38.62 (£30.93) per share, giving it a valuation of $19.5 billion (£15.6bn). With Butterfield having a stake of around 7%, he is set to make $1.2 billion (£961m).
Slack may have over 10 million daily users, including giants like The New York Times, Spotify, and BBC, but it also has stiff competition from Microsoft. In July 2019 Microsoft announced it had reached 13 million users on its chat software, Microsoft Teams, overtaking Slack for the first time. However, Butterfield doesn't seem fazed…
He pointed to Microsoft's failed bid to compete with Google via their search engine Bing. He said at a business conference: "Tens of billions of dollars into that and I don’t know what their market share is now — 9 percent or something like that...". Microsoft banned its employees from using Slack in June 2019, citing concerns that the company's intellectual property isn't adequately protected on the app.
Despite being at the helm of one of the fastest-growing apps of all time, Butterfield remains humble. He has undergone several years of business coaching to better lead a large company, and has stated he attributes 98% of everything he has achieved to luck. Therefore, one of the first questions he asks when interviewing candidates is how much of their own success they believe is due to simple luck, his preference being candidates who recognise the opportunities they’ve been handed.
More recently Butterfield has been named half of Silicon Valley's latest power couple, following his engagement to Jen Rubio in June 2019, having made a "joke" proposal over Instagram a few days earlier. Rubio is an entrepreneur in her own right, with a net worth of $130 million (£104m) thanks to her Away luggage brand, another highly successful company, which was valued at $1.4 billion (£1.2bn) just three years after its launch.