Table: Examples of side hustles or internal tools that surpassed the original startup idea, with timelines and outcomes.
Slack: From Failed Game to Enterprise Chat Unicorn
Original vision: Stewart Butterfield’s Tiny Speck studio was building Glitch, a whimsical online game launched in 2011. Despite $15M in funding and a talented team, Glitch struggled—it was too slow, Flash-based, and “not fun” enough to retain players. By late 2012, Butterfield saw the writing on the wall and shut the game down, even offering to return remaining funds to investors.
The side project: To coordinate their geographically dispersed dev team, Tiny Speck had built an internal messaging tool – basically a souped-up chat room with searchable history. Butterfield and his team loved this tool and realized they “wouldn’t work without a system like this again,” thinking maybe other companies would like it too. Instead of dissolving Tiny Speck, they convinced investors to let them pivot to develop this communication platform.
Pivot and growth: In early 2013 the company rechristened itself Slack and focused entirely on the team chat product. Slack publicly launched in Feb 2014, and growth was immediate. Within weeks, it saw 5–10% weekly growth, reaching 120,000 daily active users by that summer. Paying customers signed up quickly as well, with 38,000 paid users by August 2014 (93% of all users retained). Less than a year from launch, Slack hit 60k daily users and 15k paid seats. The product’s timing and design struck a nerve: tech firms and enterprises alike adopted Slack as an “email killer,” drawn by its fun, game-like user experience and integrations. Venture capital followed: Slack raised a $42M Series C within months and reached a $1B+ valuation shortly after.
Outcome: Slack’s internal tool had clearly eclipsed the original game. Over the next years Slack grew to millions of users (exceeding 12 million daily users by 2019) and ~$400M annual revenue by 2019. In 2021, Salesforce acquired Slack for $27.7 billion—a massive outcome that vindicated Butterfield’s pivot. (In a twist, this was Butterfield’s second such pivot: in 2002 he spun a failed game into the photo-sharing site Flickr, proving lightning can strike twice.)
Twitter: From Odeo’s Side Project to Global Town Square
Original vision: In 2005, entrepreneur Evan Williams founded Odeo, a platform for podcasting. But within months, Apple’s iTunes launched podcast support, effectively making Odeo obsolete. With their main product going nowhere, Williams asked his small team for new ideas to salvage the company.
The side project: An engineer named Jack Dorsey pitched a simple status-sharing app via SMS—essentially a micro-blog where you could broadcast short updates to friends. The idea (code-named “Twttr”) was built as an experimental side project in early 2006, and Jack sent the first-ever tweet (“just setting up my twttr”) on March 21, 2006.
Pivot and growth: Twttr officially launched to the public on July 15, 2006, still as a side feature under Odeo. By the fall of 2006, it was clear this little side project was the only thing with traction—Odeo’s podcast portal was dead in the water. Williams acquired Odeo’s assets back from investors and refocused the company (renamed Obvious Corp.) entirely on the new microblogging service, which soon became Twitter. Usage started modestly, but a turning point came at South by Southwest (SXSW) in March 2007: conference-goers embraced Twitter en masse, sending over 60,000 tweets per day during the event. This publicity snowballed user growth. By 2011/2012, Twitter became a global phenomenon used for everything from breaking news to celebrity updates. By 2013, Twitter reported over 200 million active users and more than 2,000 employees. In November 2013, Twitter went public at a valuation just north of $31 B—not bad for a side project born out of a company in crisis.
Why it won: Twitter’s one-to-many messaging hit an unmet need for real-time public conversation (a far broader vision than Odeo’s niche podcast tool). The simplicity and novelty led to viral adoption, far eclipsing anything Odeo attempted. In short, product–market fit was astronomically better for Twitter’s “status updates” than for Odeo’s original idea.
Discord: Gamers’ Chat Tool That Surpassed the Game
Original vision: In 2012, Jason Citron’s gaming startup Hammer & Chisel set out to build Fates Forever, an online multiplayer game for mobile tablets. Despite raising a sizable Series A and developing the game for years, Fates Forever never took off commercially. By 2014, Citron faced the reality that the game’s prospects were dim.
The side project: While making the game, Citron’s team felt a constant pain point: existing voice chat for gamers was awful. Skype was a resource hog; TeamSpeak and Ventrilo were clunky to set up. So the team built a lightweight voice and text chat app for internal use during playtests. This tool allowed them (and a few beta players) to coordinate matches more easily.
Realizing many other gamers had the same communication problem, Citron made a bold move in 2015: pivot entirely to the chat app, named Discord, dropping game development. In May 2015, Discord launched to the public with a simple value prop: free, high-quality voice and text chat for gamers, available on both desktop and mobile.
Growth strategy: Early growth was slow until the Discord team did things that don’t scale: they personally engaged small gaming communities on Reddit. One pivotal moment came when Discord developers participated in a subreddit for Final Fantasy XIV, inviting gamers to try Discord and give feedback. When users saw developers actively chatting with them on Discord, word spread quickly. “I just talked to the devs… It’s really cool. Check it out,” an early user posted—an authentic endorsement that sparked a chain reaction. By focusing on one tight-knit group (hardcore gamers needing better comms) and delivering an amazing user experience for them, Discord achieved grassroots virality.
In the first few months, user numbers leapt from a few thousand to tens of thousands. By the end of 2015, Discord had 2,000+ users; a few months later (January 2016) 20,000; and by April 2016 over 100,000 users. From there, growth was explosive: Discord reached 3 million users in 2016 and 45 million by late 2017. Communities from other games (Minecraft, League of Legends, etc.) started adopting it, and the network effects kicked in—if your friends or guild were on Discord, you joined too.
Discord’s user growth spiked in 2020 amid the pandemic and popular games like “Among Us,” reflecting how a tool built for gamers expanded to mainstream communities.
By 2018, Discord had over 130 million registered users and broadened beyond gaming; people began using it for study groups, clubs, even workplace teams. The once-side-project had clearly outshone the original game (which few remember). In 2021, Discord reportedly boasted 150 million monthly active users and attracted a funding round valuing it at $15 B (having even turned down a $12B acquisition offer).
Key lesson: Discord’s origins as an internal fix for a painful problem gave it an authentic product–market fit from day one. Gamers needed this solution, and once they had it, they enthusiastically promoted it to friends. The failed game never found its market, but the side-tool did—in spectacular fashion.
Instagram: Pivoting a Check-In App into a Photo Revolution
Original vision: Kevin Systrom’s initial startup idea in early 2010 was Burbn, a mobile app that combined location check-ins (à la Foursquare) with social features. Users could check in, make plans, and post photos of what they were doing. Built as an HTML5 app, Burbn was ambitious but clunky and hadn’t yet launched publicly beyond a prototype.
The side project: In Burbn’s beta tests, Systrom noticed a striking user behavior: people weren’t using the check-in features much at all. Instead, they were mainly sharing photos of lattes, dogs, and daily life snippets. The photo feature was just one part of Burbn, but it was the only part users loved. Systrom, joined by co-founder Mike Krieger, made a gutsy call: strip away everything except photo sharing. They rebuilt the app from scratch with a focus on quick photo posting, filters, and social feeds—this pivot project was dubbed Instagram. (The team even built a precursor app just to test filters, then folded that learning into Instagram.)
Instagram launched on October 6, 2010 as an iPhone-only app. The founders weren’t sure what to expect—but 25,000 users signed up on day one. The app struck a nerve in the early smartphone market: it was simple, fast, and made mobile photos look great. Within 3 months Instagram hit 1 million users, purely through organic growth. By summer 2011 it had 5 million, then 10 million shortly after without any paid marketing. Users loved how easy it was to share and view snapshots of daily life.
By early 2012, Instagram had around 27 million users on iOS alone. When Instagram finally released an Android app in April 2012, it gained over 1 million downloads in a day (showing the pent-up demand). Just a week later, in April 2012, Facebook stunned the industry by acquiring Instagram for about $1 B (in cash and stock). At the time of acquisition—only 18 months after launch—Instagram had roughly 30 million users and just 13 employees. Many thought $1B for a tiny, revenue-less startup was insane, but history proved it a bargain: today Instagram has over 2 billion users and is one of Facebook/Meta’s core platforms.
Why did the side project win? Burbn was trying to ride the check-in trend, but that market was crowded and the concept wasn’t compelling enough. The photo-sharing pivot zeroed in on something people really wanted to do on their new smartphones. By solving a clear user desire (sharing photos easily with friends) and making it fun (filters!), Instagram achieved instant virality that far eclipsed Burbn’s prospects. The founders’ decision to focus on their app’s unexpected hit feature made all the difference.
AWS: Internal Infrastructure That Became Amazon’s New Engine
Original context: In the early 2000s, Amazon was known primarily as an e-commerce retailer. As Amazon grew, its engineering teams had to build a lot of internal tools to scale the website—data storage, computing, databases, etc. Under CEO Jeff Bezos’s guidance, Amazon started re-organizing internally around common services around 2003. The company realized it had developed a core competency in running reliable, scalable IT infrastructure to power its retail operations.
The “side” idea: What if Amazon offered its internal infrastructure building blocks to external developers as a service? This idea emerged from an executive retreat in 2003: Bezos and lieutenant Andy Jassy saw that Amazon’s expertise in compute, storage, and databases could fulfill a huge need for other businesses. At the time it was a radical notion—Amazon was not a software vendor. Yet they quietly began developing this side initiative, codenamed Amazon Web Services (AWS), over the next few years.
Launch and growth: AWS launched its first services to the public in 2006, starting with S3 (cloud storage) and EC2 (virtual servers). Initially, it might have seemed like a niche experiment. But the timing was perfect: startups and enterprises were moving online fast and hated managing physical servers. By being first-to-market with modern cloud infrastructure, AWS quickly attracted developers with its pay-as-you-go model. Amazon’s “side business” grew steadily under the radar. By 2015, AWS was generating billions in revenue and was immensely profitable. In fact, in 2015–2016 AWS became the primary profit engine for Amazon: the AWS division contributed the majority of Amazon’s operating income despite being only ~10% of total revenue. This trend continued – for example, in late 2024 AWS accounted for 15% of Amazon’s sales but over 50% of its operating profits.
Today, AWS is a behemoth that has far outshined Amazon’s original retail business in terms of cloud market influence (if not total revenue). It’s a $80+ billion/year segment serving millions of customers from startups to Fortune 500 companies. Few remember that AWS started as an internal toolkit to help Amazon’s retail site run better. Now it’s the global backbone of cloud computing. Amazon’s willingness to spin out and invest in this “side project” from 15+ years ago gave it a massive head start on competitors and ultimately redefined the company’s trajectory.
Groupon: Turning a Social Cause Platform into a $1B Deal Marketplace
Original vision: Andrew Mason’s first startup in 2007, The Point, was an online platform to mobilize people for collective action. The idea was to get groups to reach a “tipping point” for a cause or goal (like fundraising or petitions). The Point saw only modest traction in its early days in Chicago.
The side project: Interestingly, one group of The Point’s users tried leveraging the platform for a lighter goal: group discounts. They figured if enough people agreed to buy a product together, they could get a volume discount. Mason’s former boss and seed investor, Eric Lefkofsky, noticed this quirky use-case gaining popularity and pushed to pivot entirely to “collective buying” deals. In late 2008, the team spun out this concept as Groupon (short for “group coupon”).
Groupon started by offering one daily deal in Chicago (their first was half-price pizzas at a local bar). The model was simple but effective: if a minimum number of people purchased the daily offer, everyone got the deal. Consumers loved the deep discounts and the novelty of the model, and local businesses loved the influx of guaranteed customers.
Growth and outcome: The decision to focus on group deals proved incredibly successful. Groupon expanded city by city at breakneck speed. Within a year and a half, the staff grew from a few dozen to over 350. By October 2010 (not even two years in), Groupon was live in 150+ cities and had 35 million users subscribed. Remarkably, Groupon hit a $1 billion valuation just 16 months after launch, the fastest company ever to that benchmark at the time. Revenue was soaring—by late 2010, Groupon was on pace to generate $1B in annual sales, the quickest to that milestone as well. In 2011, Groupon famously turned down a $6 billion acquisition offer from Google, opting to go public instead. Its IPO in November 2011 valued the company at around $12–13 billion.
While Groupon’s longer-term story had ups and downs (competition and scaling challenges eventually shrank its value), the pivot itself was undeniably a success in eclipsing the original idea. The Point’s social activism concept never broke out, but Groupon’s daily deals became a household name and a new e-commerce category. The key was zeroing in on the one use-case that users truly wanted (saving money with group discounts) and doing it far better than anyone else.
Conclusion: Side-Hustle Lessons for Founders
As these stories show, a startup’s Plan A isn’t always the winner. But a side project born of genuine need can sometimes capture lightning in a bottle. For founders, a few takeaways stand out:
- Scratching Your Own Itch Can Pay Off: Many pivots (Slack, AWS, Discord) started as internal tools solving the team’s own problems. If you feel that “we wouldn’t want to work/live without this tool”, chances are others feel the same.
- Follow the Traction: Be brutally honest about what your users are actually doing. Instagram’s founders saw users flock to photos and wisely killed the rest. Pay attention to usage patterns and double down on the features or side projects that show organic traction, even if they’re outside your original vision.
- Speed of Iteration: Side projects often start simple and focused, which aids rapid improvement. Discord’s team engaged directly with early users to iterate quickly. This user-centric, fast feedback approach can hone a side project into a superior product faster than a grand big-company roadmap might with the main product.
- Don’t Be Afraid to Pivot Big: Pivots require humility and courage. It wasn’t easy for Stewart Butterfield to tell investors the game had flopped but an enterprise chat tool might work. Yet in each case, founders who made the bold pivot were rewarded. Investors often back teams and their ability to find new opportunities – as Accel partner Andrew Braccia told Butterfield: “If you want to continue to be an entrepreneur and build something, then I’m with you.”
- Timing and Luck Matter, But You Make Your Luck: Twitter rode the SMS wave and SXSW hype; Instagram rode the iPhone 4 camera improvement; AWS anticipated the rise of web startups needing hosting. These pivots succeeded in part by being in the right place at the right time—with the right product. You can’t fully control luck, but by staying attuned to technology shifts and user behavior, you increase chances to catch a big wave.
In the end, the biggest “overnight successes” often come from ideas that were lurking in the shadows. As founders, we should nurture our side projects and listen when a secondary idea starts to outshine our primary one. The next Slack or Twitter might be hiding in your codebase as a tool or feature that users already love—you just have to recognize it and be willing to bet on it. In startup journeys, plan B isn’t failure; sometimes, it’s your ticket to the billion-dollar club.
Sources: