He and Caterina (Fake, the other co-founder of Flickr) were working on a game, a so-called "Game Never Ending" when they realized that they needed to come up with a way for people to store screenshots and share them. Thus, Flickr was born (this is why some URLs in Flickr had ".gne" extensions).
Yahoo acquired Flicker in 2005, and a few years later, both Butterfield and Fake left.
Butterfield then went back to his game. In the process of developing the game, he realized that he needed a good, reliable chat system: and hence Slack was born.
I wonder if he's back working on the game, which, really seems like a "game never ending" for him...