This startup is solving a huge problem for over 45 million video gamers, and it's growing like crazy (MSFT)
"If the headline of this article read: 'This company wants to help Nintendo with its mobile app,' I would be content with that," Discord CEO Jason Citron tells me.
Citron is joking, but he's on to something: The new Nintendo Switch console requires players to use a separate app on their phones if they want to voice chat with their teammates. It's a frustrating hurdle that's turning people off to otherwise well-received games like "Splatoon 2."
Meanwhile, Discord is a red-hot app amongst PC gamers, allowing them to chat for free with friends via text or voice no matter what they're playing. From December 2016 to May 2017, Discord went from 25 million users to 45 million, almost doubling in five short months. The company says that growth is still strong.
"When I talk to gamers, I say, 'it's like Skype for gamers," says Citron. "When I talk to [venture capitalists], 'it's like Slack for gamers.'"
And yet, Citron says that he has different ambitions for Discord than those of Slack or Skype. Microsoft increasingly sees Skype as a social network for your closest friends and family. $5 billion startup Slack sees its popular work chat app as something like an operating system unto itself.
Discord, then, has one mission, and that's to help people play video games together. That's it. So far, it's working. Here's what makes Discord special — and why Citron says Discord could never have existed if he hadn't failed twice as a video game developer.
'If I hadn't been running out of money'
Before Discord, Citron was best known in the industry as the co-creator of OpenFeint, an early social network for iPhone games.
OpenFeint itself got its start as part of "Aurora Feint," an iOS game that Citron had co-developed and released in 2008. The game itself was a commercial failure, but Citron found success in licensing the OpenFeint technology to other developers. In 2011, OpenFeint was purchased by Japanese games giant GREE for over $100 million.
History has a way of repeating itself. In early 2015, Citron and his team had released "Fates Forever," an iPad game that was intended to capitalize on the success of "League of Legends" and similar titles. It was well-reviewed, but the revenue just wasn't materializing.
Meanwhile, Stanislav Vishnevskiy, a key developer on "Fates Forever," noticed that gamers were unhappy with the chat tools available. He got permission from Citron to start hacking on the side-project which would eventually become Discord. It quickly became apparent that Discord had much more of a future than "Fates Forever."
Work shifted from the game to the chat program. It was "gradual, and then fast," as engineers moved from the game to the app one-by-one until it was the entire company. He says the most difficult decision he's ever made as CEO was to take "Fates Forever" off the market, laying off the five full-time artists who were working on the game.
"We can't do two things as a startup," Citron says, and "Fates Forever" had to die for Discord to live.
Discord was officially born, with Citron becoming CEO, Vishnevskiy becoming CTO, and investors like Greylock Partners and Benchmark investing more than $70 million to date. The app caught on, first with players of the online game "Final Fantasy XIV" and then the rest of the world. It's looking like a real success, with over 80 employees working from its San Francisco headquarters.
"If I hadn't been running out of money, I would never have pivoted," says Citron.
Above all, Citron says that Discord is born of his personal love of video games — he could have walked away with his money earlier in his career, but he didn't. Now, he says, Discord is here for the long haul, and doesn't rule out the possibility of an IPO if that's what it takes to keep it a strong company.
Optimized for gaming
For the last decade and a half, gamers in need of voice chat have either been using TeamSpeak, a voice chat program first made available in 2001 that's largely remained the same, or Microsoft's Skype.
Discord is designed to take what gamers like about those programs — notably, the ability to quickly and easily form a group and chat with them — and bring them into a more modern interface. Like WhatsApp, Slack, or Facebook Messenger, Discord is available on PC, the web, and the smartphone.
In a technical sense, Citron says that Discord has the sole focus of serving gamers. That means that the company's number-one priority is making sure that the Discord app doesn't eat up too much of your system's resources. After all, if you're using Discord in the background to chat, you're probably playing a graphics-heavy game, too.
You can see that priority made manifest in the app's little details. For instance, an animated .gif image doesn't play automatically in a Discord chat; the processing power could be better used elsewhere. Next up in the product are features like screen-sharing, but it's meant for small groups, not the huge audiences enjoyed by Amazon's Twitch.
As for the business model, Citron says the company is still figuring it out. Earlier this year, Discord introduced Nitro, a $5/month premium service that gives users extra privileges that are mostly cosmetic. Discord is also delving into partnerships with game developers, allowing them to build Discord chat straight into their games.
The app's general snappiness has won Discord acclaim from users outside of video gaming, too, including groups of programmers. That's fine, Citron says, but the company is very happy catering specifically to gamers. In fact, the very concept of a version of the app for businesses is a running gag at the Discord offices.
"We joke sometimes," says Citron. "Maybe we'll do it for April Fools."
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