From Underdogs to Champions: A Business Story
By: Warwick Levey
Almost everyone loves a good underdog story; from Rocky to Frodo Baggins in The Lord of the Rings, our culture is filled with examples of the relatable underdog. The underdog might not always win, but when they do people go into a motivated frenzy. “If they can do it, so can I!”
The Philadelphia Eagles recently became the poster child for the underdogs by winning their first ever Super Bowl title – Super Bowl LII. During preseason speculation, almost no one thought the Eagles stood a chance. One commentator went so far as to say: “They don’t appear to have the right guy running things. The coach is unproven. The QB is a rookie. They don’t have a running back, their top receiver is a one-year rental coming off an injury, and at a crossroads in his career.”
Despite not many people having faith in the team, they were undeterred. Instead of having a single star player, the Eagles worked together as a team. They showed humility and weren’t afraid to try new things. Ultimately their attitude is what allowed them to go from being underdogs (who had never won a Super Bowl) to surprising everyone by going home with championship rings.
Great underdog stories are not just found in sport and entertainment though. In the business world, all startups are underdogs. Startups have limited resources, and often, since what they are doing is brand new, they need to build their infrastructure from the ground up. Only about 31% of startups make it past series A funding, with that number almost halving for every series after that. Every startup that makes it to their exit strategy has beaten unbelievable odds to succeed.
One of the best underdog startup stories is Stewart Butterfield and Slack.
In 2002 Stewart Butterfield founded Ludicorp with the intention of building a game called Game Neverending. By 2004 the game had not gained any form of meaningful growth, so Butterfield abandoned the game. While the game itself didn’t do well, the in-game photo-uploading tool was hugely popular. So, Butterfield took the photo uploading tool and turned it into Flickr. Just a year later he sold Flickr to Yahoo for over $20 million.
In 2009 Butterfield once again tried his hand at game development, this time with a game called Tiny Speck. While he was able to gain over $5 million in series A funding for the game, the game itself was unable to draw an audience big enough to sustain itself. By 2012 Butterfield had shut down development of Tiny Speck.
During the development of Tiny Speck, Butterfield and his team had developed an internal communication tool to connect the Canadian and USA offices. After Butterfield shut-down development of Tiny Speck, he took his internal communication tool and launched it as Slack.
Slack proved to be an instant success. On the day it launched it gained 8,000 new users, a number which it doubled within two weeks. A little over a year later, Slack had a valuation of $1 billion, making it the fastest company ever to reach the $1 billion mark. Six months later they were valued at over $2 billion, and four years after being founded they are valued at over $4 billion.
“We are setting out to define a new market. And that means we can’t limit ourselves to tweaking the product; we need to tweak the market too.” – Stewart Butterfield
Like the Philadelphia Eagles, Stewart Butterfield’s early history wasn’t great. But neither gave up on the dream. They kept working towards their goals and trying new things, which is why they became champions at what they do.
If you are interested in investing in a SaaS platform that is not afraid to try new things, head on over to the investor section of the Eventerprise website.