The $27 Billion Lesson: How One CEO's Worst Day Built Slack's Empire

When Stewart Butterfield shut down his gaming company Glitch in 2012, he did something unusual: he treated the 40 laid-off employees with extraordinary care. He extended their healthcare, personally helped them find new jobs, and wrote individual thank-you notes. Eight months later, when he started Slack, those same people came rushing back. The result? A $27.7 billion exit to Salesforce. The lesson: how you treat people during difficult transitions shapes whether they become allies or ghosts. Smart companies are now systematizing this empathy to turn every ending into a future opportunity.

Can a bad day for a CEO lead to a multi-billion-dollar empire?

When Butterfield had to shut down his gaming company, Glitch, in December 2012, he had a choice. He could follow the standard Silicon Valley playbook—quick layoffs, minimal contact—or he could do something different. He chose the latter, and it created the foundation for one of history's fastest-growing companies.

His secret wasn't a brilliant strategy or perfect timing. It was treating people like humans during their worst day at work.

The Layoff That Rewrote the Rules

Most CEOs would hide behind legal teams. Butterfield did something that seemed crazy at the time. He gathered his entire team for radical transparency and honesty. While his advisors probably cringed, Butterfield went further:

• He extended healthcare benefits for months.

• He became everyone's personal recruiter, actively working his network to help them find new jobs.

• He wrote personal, handwritten notes acknowledging each person's specific contributions.

The result? Zero burned bridges. Just 40 talented people who felt genuinely valued, even in disappointment. Eight months later, it looked like a genius.

What is the psychology behind building unshakeable loyalty?

Butterfield wasn't just being nice. He was using one of psychology's most powerful principles without even knowing it. Nobel laureate Daniel Kahneman's research shows that people judge entire experiences primarily on two moments: the most intense point (the peak) and how it ends. A layoff is inherently a peak negative moment, but how you handle the ending shapes how people remember the entire relationship.

This isn't just feel-good psychology. It’s a core business strategy. When Butterfield extended benefits and wrote personal notes, he transformed the final chapter. Instead of "I got fired," the lasting impression became "I was valued, even when they couldn't keep me."

The Return That Built an Empire

Eight months after those tearful layoffs, Butterfield sent out an email: "We're pivoting to something new. It's called Slack."

The response was immediate. The same people he'd laid off didn't just reply. They replied within minutes, asking how quickly they could start. The team trusted Butterfield with their next career bet because he’d proven he would have their backs when everything went sideways.

That trust became rocket fuel. Slack exploded from zero to 8,000 users in 24 hours. By 2021, when Salesforce wrote that $27.7 billion check, many of those original Glitch employees were ringing the bell on one of SaaS history's biggest exits.

How can businesses scale empathy and personal care?

The challenge isn't understanding why empathy works. It's scaling it without losing authenticity. Butterfield could personally manage 40 relationships, but what happens when you're nurturing hundreds of connections? The companies mastering this don't just care more. They create systems that deliver personal experiences at scale.

• They create systems that automatically recognize important transition points—when contracts end, when employees leave, when customers churn.

• They send personalized acknowledgments that reference specific contributions.

• They maintain warm connections that create natural opportunities for future collaboration.

The math is compelling: replacing a skilled employee costs 1-2x their annual salary. Meanwhile, reacquiring a lost customer costs 5x more than retention. A thoughtful gesture today, whether it's a handwritten note or a carefully chosen gift, can save five figures tomorrow.

The 5-Minute Action Plan

Ready to start building your own pipeline of loyal alumni? Here's where to begin:

1. Audit your relationship exits. Look at everyone who's left your company or stopped being a customer in the past year. These aren't closed books. They're dormant relationships.

2. Identify your highest-value alumni. Choose 5-10 people you'd genuinely want to work with again.

3. Send a no-agenda check-in. Reach out with genuine curiosity about their current projects.

4. Add a thoughtful touch. Consider sending something personal. Their favorite coffee, a book that made you think of them, or even just a handwritten note. For more tips on this, read our post on how a $20 gift accomplished what months of cold emails couldn't.

5. Build the follow-up into your system. Don't rely on memory. Set reminders to check in again in 3-6 months. Relationships compound with consistency.

Three Principles That Scale

• Endings shape memories more than beginnings. How you handle difficult moments becomes what sets you apart. Most companies optimize for efficiency; the smartest ones optimize for lasting impressions.

• Consistent care beats sporadic kindness. Technology should amplify human thoughtfulness, not replace it.

• Trust converts faster than marketing. When people have positive emotional associations with your brand, they become your most effective advocates.

The companies that master this aren't just managing exits. They're creating networks of advocates that become their biggest advantages. Every thoughtful goodbye becomes a potential future hello.

Ready to turn your relationship transitions into your biggest source of growth? RevSend's platform is designed to help you get started with scalable gifting.

Building Business Relationships That Last

The best time to plant the seeds of future loyalty is during today's transitions, especially the ones that feel final. Whether you're managing customer churn, contractor relationships, or team changes, you're either building bridges or burning them with every interaction.

The companies that master this aren't just managing exits. They're creating networks of advocates that become their biggest advantages. Every thoughtful goodbye becomes a potential future hello.

Ready to turn your relationship transitions into your biggest source of growth? Check out RevSend.

FAQs

What is the "Peak-End Rule" in business and why does it matter? 

The Peak-End Rule, from Nobel laureate Daniel Kahneman's research, states that people judge an entire experience based on its most intense point and how it ends. This means a positive final interaction, like a compassionate layoff, can shape a person's lasting impression of the entire relationship, even if there were negative moments.

How can businesses scale empathy and personal gestures? 

Scaling empathy means using technology to amplify human thoughtfulness, not replace it. Smart companies use systems and platforms to automatically recognize key transition points and trigger a personalized, meaningful response, such as a thank-you note or a gift.

How can I track the ROI of my gifting campaigns? 

To track the ROI of your gifting campaigns, you should monitor key metrics directly in your CRM, such as the increase in demo conversion rates, deal velocity, and customer retention rates. To learn more about this, check out our guide on how to track the ROI of your gifting campaigns.

What are the costs of losing an employee or customer?

According to a 2023 study by the Society for Human Resource Management (SHRM), the cost to replace an employee can be as high as 1-2x their annual salary. Harvard Business Review found that acquiring a new customer can be 5-25 times more expensive than retaining an existing one.