How Slack's co-founder turned failure into success - twice

He's CTO of Slack and co-founded Flickr too. Find out how Cal Henderson became one of the most successful Brits in Silicon Valley, and why there aren't more like him.

by Andrew Saunders
Last Updated: 09 May 2017
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Future Business

From the age of five I wanted to be a software programmer. Prior to that I wanted to be a fighter pilot, but I am colour blind. Then when the internet came along in the 90s it was like software but way better. You could make something and a million people [at that time] could see it. I knew it was the thing for me. 

My passion project has failed twice, and each time we managed to salvage something different out of it. The first time was with this group of people doing a really interesting social game. It had a bad name – Game Neverending – and it’s hard to describe because it wasn’t about combat or beating up people.

But the technology was really cool and the whole idea was just super interesting. I was in London designing websites for Emap magazines and they were in Vancouver and New York, so I broke into their email server and joined their mailing list. I basically just badgered them until they gave me a job.

They had no money to pay me, so the deal was to build something on the side to make revenue and help fund the development of the game. That became Flickr [sold to Yahoo! for a reported $35m in 2005]. We ended up dropping the game completely – it was a bad environment, we had no funding and there weren’t many people on the internet. Everything was against us.

The first time I met my Flickr co-founders was when I flew to San Diego for the  launch in 2004. It was right around the time that cell phones started getting cameras and we were there, the first website you could upload a photo to and show it to someone else. We were super lucky with that.

In retrospect Yahoo! looks like a terrible company for Flickr to have been acquired by, but there were a lot of good things too. They had infrastructure that we could rely on. But we didn’t catch the smartphone wave which was where Instagram came along and just filled it. Flickr still has tens of millions of active users but it didn’t grow to the next level.

The second time the passion project failed [the game was resurrected in 2009] it was much worse. It was easy to raise a bunch of money because with Flickr behind us we had a track record. But games have to be fun to be successful, and our game was not fun for at least the first three and a half years. We knew we’d either have to take a ton more investment which we’d probably never earn back, or shut it down. We chose to shut the game, a pretty terrible experience because we had to lay off 40 or so people and it was all our fault.

But we had a bit of money left our investors didn’t want back. We’d been using real-time chat to communicate internally and we realised that if we liked working like that, maybe other people would too. People were using smartphones and had got used to WhatsApp, i-message and Facebook messenger. So why was messaging so much worse at work than for messaging friends? That’s where Slack came from.

Slack [founded in 2014 in San Francisco and now valued at $3.8bn] replaces internal email. Email is pretty formal, you’ve got the subject line and the salutation and then your message – I would never email any of my colleagues, or my partner. By comparison Slack is a much higher bandwidth experience, there is so much less scaffolding around it.

People spend so much time at work, and so much of that time communicating with their co-workers, knowledge sharing and asking questions. If we can just make that communication like 5% more efficient that makes their lives better.

The thing that sets Silicon Valley apart from other places is the attitude to failure. You don’t get to be successful without failing a bunch of times, and failing is learning. I feel that in the UK the attitude to failure is shame, you don’t talk about it. If somebody fails they give up and get a normal job, whereas in the Valley you just do the same thing over again. If there is a continuum of  places that could be more like the Valley, I think the UK is quite far down the other end.

The bar for great enterprise software is much lower than for consumer software, but it is being raised all the time. The number of segments, and the quality of those segments, is going to massively increase over the next decade. [With 43% of the FTSE 100 now using Slack, the firm has just opened its first London office].

As Slack has grown from four people to more than 800 employees in seven cities around the world [with 5m daily active users, Slack is the fastest growing business application in history], a lot of the challenge has been about how we keep the wheels on as it gets bigger and bigger. So I don’t code at work anymore. I do miss it but building Slack into a successful company has become more interesting to me.

I love to build things that have an impact, so I love to see people using Slack on their phones out in the wild. But although email use seems to be dying out especially amongst the young, it’s so deeply embedded I don’t think it will disappear for a long time. Email is the cockroach of the internet.


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