Ben Horowitz is the cofounder and general partner of Andreessen Horowitz, one of the most powerful VC firms in Silicon Valley with $US4.2 billion in assets.
Before becoming a VC, Horowitz was the cofounder and CEO of Opsware, a data center software company acquired by HP for $US1.6 billion in 2007.
With that kind of success, you would think Horowitz would be the type that tracks every metric down to the wire, making sure every move is calculated.
But it turns out one of his most successful investments – Slack, a business app now worth $US2.8 billion – was, in fact, totally “accidental.”
Horowitz first invested in Slack CEO Stewart Butterfield when Butterfield was working on a company called Tiny Speck. It was a company that built an online game called Glitch. The problem was, it was built on top of Flash, a software that was later abandoned by Steve Jobs and Apple’s iPhone. That made it impossible to move into the broader mobile market.
Eventually, Tiny Speck didn’t grow fast enough and was left with about $US6 million in cash. At that point, Horowitz had to decide whether he would continue supporting the company or not. He could either raise more money and complete the game, or just shut it down and get the remaining $US6 million back.
That’s when Butterfield shared the idea of possibly turning the communication app he was using internally at Tiny Speck into a real product.
“It sounds like a really horrible idea,” Horowitz told Recode’s Kara Swisher at the Milken Institute Global Conference earlier this week.
At first, Horowitz wasn’t sure if Butterfield was the right person to build an enterprise software product. But $US6 million wasn’t big enough to make any difference to Horowitz’s bottom line, so he just let Butterfield continue working on it.
That internal communication app turned into Slack.
Since its launch in 2014, Slack has grown at a crazy pace, reaching a $US2.8 billion valuation within just about a year of its official launch. It now has over 750,000 daily active users, and is adding $US1 million in new contracts every 11 days. That easily makes Slack the fastest growing enterprise app of all time.
“[Slack] is now considered the fastest growing enterprise software product in the history of enterprise software,” Horowitz said. “I couldn’t have gotten it any more wrong… that was the accidental venture capitalist.”
Disclosure: Marc Andreessen, co-founder of Andreessen Horowitz, is an investor in Business Insider.