Introduction

Patrick: My guest today is Jason Citron, founder and CEO of Discord. Discord is one of the largest and fastest growing social networks in the world. It started as a place for gamers to congregate online, but thanks to how easy it makes it to create a community of any type and its offering of text, audio, and video as means of communication, it has expanded far beyond gaming. It has the potential to become the default digital “third place” that we go to find belonging in a variety of online communities. With over 100 million users, it’s also one of the most interesting communication services since the original social networks rose to power.

Our conversation focuses on his background prior to Discord, Discord’s founding and growth, its business model and how it has evolved over the past 8 years, and what the future holds for Discord. As we talked, I had this sense that I’d be willing to go work for Jason, and I think you’ll see why. I hope you enjoy our wide ranging conversation.

Jason’s learnings as a game creator

Patrick: [00:03:17] So, Jason, I was wondering how I should begin this conversation. I'm curious how you sort of made the leap from a video game player into someone in the video game ecosystem as a creator. I know you spent the first part of your career building games or as a game developer before starting OpenFeint in 2008. I want to learn a little bit about what you learned or picked up at each of those first two stops before Discord. So starting with the years as a game developer, what are the major lessons that you take away from that work?

Jason: [00:03:42] Well, I fell into that. Fell into is not even the right way to say it. I ran into it because I just love playing video games as a kid, because of all that they offered. And at my 13th birthday sleepover party, everyone fell asleep and me and one other guy were up and we were having a conversation and he was like, "I know how to make video games." And I was just like, "No, you don't. They're like this magical dark art." He's like, "No, it's this thing called computer programming." I was like, "What?" We booted up my Pentium one computer at the time and fired up this thing called QBasic, which is a very rudimentary programming environment, and he showed me how to draw circles on the screen. I was just like, "Holy crap. I have to learn how to do this."

And I just became obsessed with learning how to program and make games and all through high school and college, I just worked on side projects and made games and screwed around making like tools for the Internet and things that would make using AOL instant messenger more fun, and then I became a game developer. Working professionally and the video game industry was both thrilling and kind of disheartening. It was thrilling because I got to work on video games. I was working on titles for like PlayStation 2, X-Box 360 era, which was really fun, but also like how the entertainment industry and the video game industry really works. And the economics behind it, working at independent developers for a couple of years, it was tough to be in an environment where, as a company, you were really dependent on this sort of like hit-driven nature of the industry, that was challenging.

And so I ended up basically going to a studio that I was like, if I'm going to work at one place, I had three jobs in three years. So I changed studios pretty frequently because I was so frustrated with it. And the last place that I ended up was a fantastic experience. Funny enough, that's where I had an opportunity to kind of jump to the next part of my career. We're living with 10 other people who are going to UC Berkeley. I was about the age of a senior at the time, I had graduated from college a little early. And one of the people who was living there was talking to me about how his uncle was starting this kind of tech incubator and he was looking for people that wanted to start companies. And so I was like, that's me, I've always wanted to start a company. My dad was a small business owner, my grandfather was, and I always thought it'd be kind of cool one day to have my own game studios.

And one thing led to another and I ended up joining up with this guy, Peter. I ended up trying to build games on Facebook and on other social networks that helped bring people together. What I learned really quickly from that is it's really hard to make something that people want. I went through probably four projects, basically four different startup ideas that all basically went nowhere. The first one, we literally shut it down the day that we launched it. There was another one, we didn't even ship, another one that got a little bit of traction, but a couple months into working on that, actually, Steve Jobs announced the App Store and I was like, Holy crap, this is going to be huge.

And I thought back to my experience, working in the video game industry and looking at how that industry worked and what I realized was that whenever a new video game console generation comes to market every five to seven years, a new video game console ships, like the PlayStation 1, and the PlayStation 2, PlayStation 3 kind of a thing. Every time, a new console ships, there's always a new set of games, there aren't that many. And if you can be a launch title, you're going to make money. You're going to be able to get distribution because there's not a lot of stuff to pick from. So people are more likely to choose your title because of less competition.

What I really learned from that was distribution is really important. And you have to think about how you're going to cut through the noise and not only just build something that people want, but also get the word out.

So I thought that the launch of the App Store might be like the launch of the new console. And if we could get a game on the shelf, the day it launched, we'd have a really big shot at establishing ourselves in this new market. And if you can establish yourself, then that gives you the ability to build your next title, and your next title and maybe we could build an enduring games business off of that.

So I go ahead into building a game for iPhone. And back then, it was like, there was no technology. There were no tools. You basically took Apple's off the shelf stuff. And if you wanted to make games, I was in there trying to import some game engine that worked on Mac onto iPhone. Anyway, we ended up shipping a game on the app store, the day it launched and we got thousands of installs and it kind of took off. So what I really learned from that was distribution is really important. And you have to think about how you're going to cut through the noise and not only just build something that people want, but also get the word out.

Patrick: [00:07:56] It's one of my favorite things that I hear from entrepreneurs over and over again, which is the recognition of a platform shift of some sort. And the fact that I always think about it like the literal westward expansion or frontier, that if you're just the first, you just started to get your pick of the land or of the goods or whatever. But it's risky, it's hard to identify them and usually, there's a lot of unknowns and uncertainty that you have to be comfortable with. I'm curious what the leap was like from that early launch of a game to what became OpenFeint, which I think of as like a toolkit for others that recognize the same thing early on, that they want it to be building on this new platform.

Jason: [00:08:33] We launched this game and kind of took off because there wasn't a lot of stuff to choose from. And it was a cool new experience using an accelerometer and stuff. But what we discovered again, or maybe I rediscovered is that even if you get distribution, building business can be difficult. So we got a lot of users, but at the time our business model idea was to kind of shareware, hopping back to the '90s. In the early days of the iPhone, there were no in-app purchases, you could either make something free or you could sell something. So my thought was, let's give the game away for free and then build a premium version that has multiplayer experiences in it.

We basically built an $8 sequel that had all these really interesting multiplayer dynamics where you could level up your character, you could like add friends and then you could compete on leaderboards. And then you could even compete in kind of ghost matches. It was pretty fun, but no one was buying games for eight bucks. We launched it the first winter after the App Store came out and it was clear at that point, games are going to be a dollar. Some developers were abusing the system to basically do in-app purchases by selling coin packs that you could buy as separate apps. And we made, I don't know, 30 grand on that game. And then very quickly realized that it wasn't going to fund us, we were five people time, it wasn't going to be a business.

We started thinking like, what else are we going to do? I had maybe three weeks of runway left in the bank. We were sitting around trying to think about what to do. And I remember calling my dad and talking to him and just basically telling him, I think I might be moving home soon because I think that this whole startup adventure is going to come to an end for me in a couple of weeks because this game thing is it working, I'm not going to have any more money, not going to get a raise any money, get my room ready.

Turns out, we had this idea to take all of this asynchronous social stuff that we built inside of our game and turn into a toolkit for other developers to use. And the idea really came from looking at the ecosystem on mobile and looking at the ecosystem in consoles and on PC. And I realized that Xbox Live style services should exist on mobile devices, and they didn't at the time. We had basically built them inside of this game, and so we had the idea like what if we effectively launched the Xbox Live for iPhone?

I bet that developers would want to add leaderboards and ghost play and all this stuff to their games, but we didn't actually have enough money to fund, really, taking the technology out of the game and turning it into a standalone project. So this is another really interesting lesson I learned about validating hypotheses. We put together a landing page for OpenFeint.com and it basically said, Xbox Live for iPhone, add leaderboards, chat, multiplayer game, no servers required. Sign up here to get access to the data. I made fake screenshots in Photoshop of what the system would look like. And we convinced TechCrunch to cover it.

We got a couple 100 developers to sign up and we took that mailing list and raised a bridge round of financing and gave us enough time to go and actually build an MVP of the service, recruit the first 10 developers and we launched it three or four months later with 15 games. And we managed to get one of the big indie titles at the time called Pocket God, it was really cool to integrate, it just kind of started to take off. And two years later, at 100 employees, there were like 7,000 games in the service and we sold it for a decent chunk. And I really learned how to go from being an engineer to being CEO in that experience.

Patrick: [00:12:08] I love that story and I love the Sell, Build, Ship order versus Build, Sell, Ship. I think that's a common trait amongst good entrepreneurs, but it's all sequencing and timing. You sort of have to work your butt off to make it possible. What was the transition like from that sale of that business into the kind of early primordial ooze of idea around discord? How did you move from the lessons you've learned at OpenFeint into the first iteration of discord?

Jason: [00:12:38] It was not a straight line. These things always seem neat and clean from the outside, but they're often not. After I sold my company, or after I sold OpenFeint, I thought that I was going to stay on and really build a bigger thing. I really wanted to help people spend more time together and have these amazing shared experiences around video games because so many of the best memories of my life have been built around playing games and those moments of playing games together. So I really wanted to keep doing that and it turned out that that's just not what was in store for me. And we kind of didn't see eye to eye with the company that acquired us. And they actually asked me to step aside so that they could run the business the way they saw fit. And I felt like actually the best thing for me to do would be to leave. And I left actually after maybe three or four months. And I sat in my car and cried for about 15, 20 minutes when that happened because I thought I had failed.

It was not a straight line. These things always seem neat and clean from the outside, but they’re often not.

I had poured my heart into building this, and it's so hard to build something that gets that kind of scale that I kind of thought that that was my shot. And I messed it up, which was strange, financially it was a pretty decent outcome, but emotionally it was a very tangled moment for me. And so I ended up taking a couple of months and just kind of relaxing, taking a deep breath, recentering myself, spending a lot of time with my girlfriend who's now my wife, playing a lot of video games. One thing led to another and six to seven months after I left, I was working on a concept and just thought to myself, "You know what, let me try again." I think I was 26 at the time. I was like, "I'm not done. Let me try again. Let me start another company."

And what I zeroed in on was, this was in 2012 and iPad was a relatively new platform and it had been growing for the first couple of years and what was looking like it was going to become another hockey stick. I thought that perhaps the kinds of long-form cooperative multiplayer games that I love playing on PC would become popular on tablets because I thought that you'd be sitting in a place for an extended period of time and that tablets would be more accessible than PCs. So games like World of Warcraft and League of Legends and Counterstrike would become popular on these devices.

So I thought, "There aren't any of these games really at this point in time, why don't I start a company to build really amazing deep immersive cooperative multiplayer games on tablets." So that was the original thought. My idea was that if this is true, then there's also going to be an opportunity to build a communication service for groups of gamers that is mobile-focused and possibly more of the ecosystem that exists on PC will shift to mobile. So the vision for this company, when I started in 2012, was to build a competitive multiplayer game with team dynamics to bootstrap a group communication service. And then once we amass scale, build a business by distributing games on top of making our own. That was the plan because I thought to get to pursue my passion of helping people spend time together around games. I get to make games.

Having spent so much time in the industry, I understood that it was difficult to build a hit. You have to have something durable and what's durable about entertainment is the need for more of it. Whereas most pieces of entertainment content have novelty and sort of people move on from them, although that's starting to shift over the last decade now with games as a service. But at the time I thought if we could have a distribution mechanism for games, the need for more games never goes away, that could be kind of the durable core of the business. And what better way to have a durable core of the distribution service than having a communication platform there?"

So it was this sort of interesting confluence of all of the things I had seen in my life at that point of what I thought needed to come together, to build an enduring important company that could help bring people together with games. It turns out that's kind of what we've built, sort of if you squint.

How Discord Started

Patrick: [00:16:31] Were there early examples in Discord of the hypothesis testing mindset that you described a few minutes ago with the fake Photoshop images? How did you apply, if you did, that same idea at Discord?

Jason: [00:16:45] I mean, a bazillion times, honestly, it's just how I approach product development now, is I treat it almost like science. You express art through the framework of the scientific process, which is like, you have a hypothesis, you come up with the minimum amount of things you can do to actually get a real signal back on that hypothesis. You take the learnings from that and then you apply it to the next one and you just run that flywheel. The biggest mistakes that I've made building this company has been where we went too long before getting signal back, there was a hypothesis structure in a way, it was just too hard to get signal back without doing a lot of work. And I'll give you some examples.

You have a hypothesis, you come up with the minimum amount of things you can do to actually get a real signal back on the hypothesis.

So when we started in 2012, the idea was let's bootstrap the network by building a game. And so we spent, call it, six or eight months doodling around on game ideas, basically prototyping using the same framework of like, "Wouldn't it be kind of cool if Tower Defense was popular? So what would a caught up toward a Tower Defense game possibly be like?" Very quickly iterated on building that with just gray blocks and cylinders to kind of get the experience together and had a couple of ideas like that. Didn't end up creating enough conviction around them though, perhaps not due to getting enough signal, and so then we decided to bring one of the more popular titles, genres on PC, and kind of do a platform port.

You see this happen a lot where there's a game that will exist, or genre that exists on the platform and when a new platform emerges, there's an interpretation of that genre that ends up becoming really popular because I think that game designs are actually sort of a reflection of the way that human brains work. There aren't that many new genres because it's hard to discover new fundamental sort of gizmos and gimmicks that really enthrall people, but they happen from time to time. I thought one way to de-risk could be by taking something and interpreting it. So we decided to riff on the mobile concept, which was this sort of multiplayer online battle arena concept where it's, you're listening and you don't play video games.

You basically have a team of people, three to five people playing against another team of three to five people. And it's conceptually like soccer except there's dragons and fireballs and wizards and stuff like that. And so we built a free version of that game on tablets and we spent about a year and a half on it, but we tried to chunk it up in ways that we could de-risk the product by getting signal back earlier. So one example is to test our style. We actually did concept art and put it up on Reddit and said, "Hey, we're a gaming studio making mobile, like, what do you think of this, it's art style?"

And we tried it with actually a couple of different things and we got some great feedback that caused us to iterate on the art style. Ultimately, what we ended up with was much better because of that early signal that we got. We did something similar with the gameplay mechanics, where we were testing out different ways of control schemes could work and different sort of ways that the map could be designed and sort of session lengths. And we got a lot of good early feedback on what the right mix could be that ended up guiding us to launching the game that we launched, which was called Fates Forever in 2014.

Unfortunately though, even though we got lots of good signals along the way, the game ultimately wasn't a hit because I think we picked the wrong platform. We picked iPad and I also think we were a little bit early. Today if you look around, people are playing these kinds of games on their smartphones constantly. And so I think this was a situation where as an entrepreneur, I had perhaps the right hunch about where the market was going but I mis-timed the platform, and also the timing of the whole thing.

Patrick: [00:20:07] What did you learn about the right amount of signal? You've referenced that a few times, it almost sounds like the key in all of this is, first, you have to have the mentality, but then second you need to know what signal is real and strong enough to build upon any broad ideas maybe from successes or from mistakes at signal interpretation when you're running these experiments.

Jason: [00:20:31] One caveat I will just start with is that I have yet to make a hit game using this approach. So take that for what it's worth, what this approach has done is I think the games that I've built have been modest successes, but I think Fates Forever would have been a modest success, but I was looking to build something massive at scale and I just knew it wasn't going to get there. So maybe the learning from that is that if you're trying to build something that's going to be at scale, frequency of usage and longevity of usage of a product in the early days needs to be astronomically high because as you get to scale, you're just going to get people that are slightly less and less interested, the most passionate people about what you're building are going to be the ones that find you in the early days.

If you’re trying to build something that’s going to be at scale, frequency of usage and longevity of usage of a product in the early days need to be astronomically high.

When you're looking at this sort of behavior of people using your service in the early days, the people need to be rabidly obsessed with it. And this was true with OpenFeint, this was not true with our game. This was true with Discord. When I think about the early retention and metrics and timestamp and these kinds of things that are good indicators of the objective utility of what you're building, the amount of time that people were spending using Discord in the early days was just totally ridiculous because people really, really, really liked it. Whereas when you look at our game, even in the context of what great games should look like, it just wasn't there. And we could have realized that earlier and probably pivoted harder to something else.

Patrick: [00:22:09] What was that early intense usage of Discord? What was the original early adopter use case and what did the product look like at that point?

Jason: [00:22:19] The idea was really about building a better version of the tools that me and my co-founder, Stan, had used when we were playing those games on the internet using Battle.net, and probably MMOs. The communication tools that existed actually hadn't changed that much from when we were teenagers to then, and that was probably 15-ish years or so, 2000s to 2015 when we were starting Discord, that tools hadn't really changed that much.

And so, Stan, my co-founder, actually, has a really interesting story too, where he was also sort of like me, passionately obsessed with playing multiplayer games. And his particular story was more around falling in love with Final Fantasy XI, which was the MMO version of that game, and really using it as a way to find connection and friendship because of where he lived and sort of how his friends were spread around LA. He tried building a bunch of tools to improve that service and ended up joining up with me to build our game. We were thinking about, what do we do next? Because the idea was to take the game to bootstrap network. And we don't have a game with a lot of users, how do you bootstrap the network?

And Stan actually had a really interesting insight, which was that perhaps instead of bootstrapping a network through a game on mobile, if we actually started with PC where people were already playing competitive multiplayer games a lot, including us, that we could build a better version of the apps that people were using then, and then be ready when the wave took off on mobile for the next billion people. So the original idea that he actually pitched me for Discord was, "Let's build TeamSpeak meets Skype with a modern twist that works great across desktop and mobile for people who play games like Final Fantasy and World of Warcraft."

Patrick: [00:24:04] And what literally did it feel like? I'm literally thinking about, like, the computer screen right now. If I've got some game up on the screen, is Discord on in the background, is it also on my screen? I'm just curious how you shoehorned communication and the different styles of it into the activity that it was surrounding.

Jason: [00:24:22] We didn't shoehorn anything; it fits snugly nice and gracefully.

Patrick: [00:24:26] Even better.

Jason: [00:24:26] Even better, yeah. Discord is an app that you would download on your computer. In the early days, for us, it was mostly people on Windows who were playing cooperative and competitive multiplayer games. And you download the app on your computer, you create what we call the server, which is kind of like a group where you can invite your friends, it's an invite-only space that lets you text chat, and voice chat at the time. So you could have the server set up for your Guild, 10 or 20 people who you were playing with, and when you turn on your computer because you want to go play, Discord will be there and you can see if your friends are there.

So the way it would work is people would click on what we call the voice channel, you could name them whatever you want, you could call one The Lounge, we have one called The Cactus Garden right now, you can click on that and it would show that you're in voice chat. And then other people in your server could see that you're on a voice chat, and they could click and show up there with you. So it was kind of an always-on conference call experience. This concept though, we didn't actually invent it. There were apps that came before us, TeamSpeak, and Mumble, and early days, going back to the first one, I think was called Roger Wilco, that had this kind of voice communication feature. And it was popular, really popular with a small group of people that played MMOs online.

And our thought was like, "This is the best way to talk while you're gaming, so let's make it really easy and really accessible." You could hop into that voice channel and then open up your video game, and the video game would be your full screen, but your friends were in your headphones. And then, because you're playing in a virtual space with your friends, you also see their characters and it created this really amazing experience and made it really easy. So more people were able to do it. And then, because it worked on your phone, you could also see if your friends were in voice and talk to them when you weren't at your computer, so you could coordinate between games.

Patrick: [00:26:15] I read somewhere about the sort of early days of growing this concept. I always loved how businesses are distributed in the early days and how the word spreads. I'd love to hear a bit about how you sort of used existing networks of people that you cared about to reach them, whether that's Reddit's or subreddits or specific games, what did you learn about distribution and getting the word out about Discord once you knew you had something that was popular or was it mostly just word of mouth?

Jason: [00:26:40] It was both, but word of mouth starts slowly when there's no mouths to have words. You need people to be excited to share it, to generate momentum. So I had learned in my earlier experiences, that distribution is really, really important. And one of the insights that we had was that people were not going to download another voice chat app. Because at the time, there were other companies trying to innovate in this space, Game Box was one, Curse Voice was another, there were a couple, I forgot the other ones.

Word of mouth starts slowly when there’s no mouths to have words. You need people to be excited to share it, to generate momentum.

But there was a reason why really, one of them was most popular it's because the way that they would work is you have to download an app on your computer and then to join with a group of people, they have to send you an IP address, for those of you who don't know, it's basically, I think it's 12 numbers, basically, you sort of type in, enter a password in order to join, and you have to pay for it. So it was pretty hard to use this stuff. And if someone was using TeamSpeak, and you had Mumble, and you wanted to go on a raid with them in the game, sometimes you just wouldn't do it because you didn't want to download all the other apps. So we knew that it had to be really easy to get people in. This is another one of those timing things that was just sort of lucky.

But in 2015, there was this thing, I'm going to get technical for a second, there's this thing called WebRTC that was becoming part of the new web browser standard, HTML5. And just the year before, it had shipped in the web browser Chrome, and it was shipping in Firefox just a couple months after we were planning to launch. Stan had the idea that the way we could solve this friction issue is by using WebRTC and building the app in web technology frameworks. So we could make the whole application run inside of a web browser so that you could join it by just sending someone a link, you don't have to install anything. And then, if you really like the app in the browser, which is just really a website, you could download it to your computer. And then we had essentially a customized web browser that looked like an app that had extra features because we were able to run natively on your computer.

And so, having it work in the web browser was a fundamental part of the experience of getting people to even try it. So the way we ended up getting people to try it was, well, first, we were like, "Hey, friends, go check this out." Because we knew a lot of people who played games like this and our friends were pretty excited about it. It took them a couple of months to actually switch to use it, which is a different story, but they were excited about it. But once we got them to really use it, just through friends, we probably had, I don't know, 20 daily active users, 20 people maybe using it. To actually get the word out and grow at scale, we basically went to where people who play games hung out and congregated.

And the initial growth hack, if you want to call it, was Reddit, where we got one of our friends to post in the Final Fantasy XIV subreddit. And Final Fantasy XIV was the other MMO that they made. And there was a new expansion coming out at the time. And so, we thought, "Why don't we focus on this game which is going to have a new expansion coming out?" When a new expansion comes out, there's new content, new reasons to play. So we thought, "Let's focus there." We knew that blatantly advertising to people was probably not going to work. So we thought, "Why don't we just ask people what they think about this? Maybe they'll tell us that they like it, maybe they'll give us feedback, we'll make it better." But that's the approach we took.

And so, we asked our friends to just make a post, just sort of asking people what they think about it. So he posted, "Hey, everyone, has anyone tried this new voice-over IP app called Discord?" And in the Reddit posts, actually, we went in and responded like, "Hey, where are the devs, here's a link, here's a URL to a server that we set up, come and talk to us if you want to learn more." This is another thing with the link. So we were basically sitting in a Discord server, which is what we call the groups, and people were finding this thread on Reddit, clicking the link because you didn't have to install anything, they'd open the website, come into the app, see us in those voice channels, click jumped in, and then be talking on voice chat to us, to the devs.

And they thought it was the coolest thing. They'd go back to the Reddit thread comment, "I just clicked the link and was talking to them, the app seems really cool, check it out, try it." We ended up getting a couple 100 people to register that day. And that was kind of the first kicking the snowball off of the mountain kind of a thing that helped us start to generate word of mouth.

Patrick: [00:30:51] I love that story; I love it's progressed from there. I think Discord now, a lot of people will have used some version of Discord, whether it's Slack, or Discord, or Teams or something else. Well, Discord has this very distinct feel to it and feels like just a place to go to be with people that you want to be with in a digital sense, and there's that famous story about Starbucks and the insight being that it's sort of this other place other than your home and your work that you go to hang out.

And it seems like Discord, more than any that I can tell from using the product, sort of has that third-place type feel to it. And even beyond games, obviously, now we'll talk about that in a minute. But I'm curious how much of that was intentional. As you thought, "Okay, we got the initial traction." I know you said the early engagement was off the charts high, people were using it a ton. How did you think about product slate from there? What has been your product philosophy for how to grow the platform and was this third-place idea intentional?

Jason: [00:31:46] The third-place idea, it's funny your question asks if it's intentional because it was intentional, but we didn't know that we were making a third place. We were intentionally trying to create the experience of a communication service that felt like your friends were around, where you could interact with them without having a lot of friction and do it in ways that felt playful and had low commitment. And it turns out those are actually the attributes of a third place. We were doing it, but because we thought that those were the things that we wanted to have as a gamer in our communications service.

And it was only four years later in 2019, when we started really realizing that people were using Discord for so much more than just playing games with their friends, that I actually did research on this concept of the third place. And I read the book, The Great Good Place, by Ray Oldenburg, which was written in the '80s where he actually talks about this, and starts to put labels and words to describe the concepts of how these third places work. And as I was reading the book, I was just like, "Holy crap, this is what we built, except it's digital. This is incredible."

Repivoting Discord’s Purpose

Patrick: [00:32:53] You say a bit about how your thinking has evolved on who your audience is. So, I mean, it's incredibly clear early on. Very often, I think companies fail because they don't know who their actual customer is and you clearly knew, it was yourself and it was built sort of versions of it before you knew the community, you knew how to attack it. I think what's so cool about Discord is that my engagement with it was not for gaming. When I first tried it, it was for a separate type of community. And I think there's all sorts of communities now that exist on Discord. How do you think about that, from a philosophical standpoint, about starting with a very, very specific audience and core, and sort of having more pulled out of you by other types of communities beyond gaming?

Jason: [00:33:34] I think it's wonderful and fascinating. The journey has been really interesting because when you start building a company and focusing on a customer and a set of problems, a lot of that comes from personal connection, when a founder does it truly authentically, I think, like I did. I'm normally interested in video games and they played a big role in my life. And when we started realizing how people were using Discord for other things, we started having a lot of conversations around, what should we do about it? It's cool, definitely, it's great that our work is helping other people find belonging and spend time together. It's not within our mission. Our mission was to bring people together around games. What does that mean if we want to acknowledge this, and we did a bunch of research to figure out really how big the phenomenon was.

And when we look in 2019, we ran a survey, and people self-reported that actually about 30%, it was 30% of the people who took our survey self-reported that they did not primarily use Discord for gaming. Clearly, we have to engage with this because it's not like 2%, it's a lot of people. We started having some really deep conversations around, what are we trying to do in the world? What is our mission really about? What do we really care about?

And Stan and I did this exercise where we both kind of went into separate rooms and starting with our mission of bringing people together on games, we did the five whys exercise. I don't know if you've ever heard this, but it's a great technique for doing root cause analysis kind of. We just ask why, and then you write down the answer, and then you ask why of that, and you write down the answer, and you ask why of that, you do it five times. And by about the fifth time, you start to get at fundamental truths, that ladder back up to what you're doing.

Stan and I both did it and then we shared our answers with each other. And what was fascinating was at around the fourth or fifth why, we both said, "To find belonging in the world," or something to the effect of belonging, and that we both realized that bringing people together around games, for us, was about belonging and connection with humanity, and a deep social need. And the more we sat on this and thought about it, we realized how profound this was. Maslow's hierarchy, belonging, I think, is the third one. It started to become clear as we started talking to more of our users and listening to them about what they're doing with Discord, and how it's about talking, and it's a place, and it's about friendship.

We realized that actually, people are just using this tool that we've built to actually help us cultivate belonging in the context of games, they're using it to cultivate belonging in the context of all sorts of shared experiences and activities, and that actually, we could just go more fundamental with our mission and expand the aperture to what we're doing to be valuable to literally everybody. We sort of rewrote our mission as giving people the power to create belonging in their life.

And now, that we actually imagine a world where everyone has the ability to belong in a more easier way than they could before because using these amazing communications services that we have in our pocket powered by the internet, can keep in touch with friends that may have moved across the country or across the world, or you can't hang out with your friends on an evening because of whatever reason, you can hop on your phone or hop online and they're there, and you can talk to them, and pop in, pop out and have this experience of running into your friends, almost like you have your own private cafe, or shopping mall, or living room, but it's online, it's in your pocket. And we think that it's just amazing.

Monetize with Expression

Patrick: [00:37:03] I love it and I love... it makes me just think of, and many people listening will be too young to remember AOL Instant Messenger, but just sort of the internet has been a place where, oftentimes, you're not there together. And the cool thing about AIM was you'd see that color dot, whatever it was, and see someone was there and knew this cool opportunity to just jump in and start talking. And it seems like that is belonging in many ways. And that's what you've built.

I'm really curious how the business itself has evolved. So people are familiar with business models, like say Slack and other communications companies, how do you think, or think about, or describe Discord's business model, and how much time, cumulatively, as part of the pie, do you spend thinking about that part of things versus, say, the product? My thing was software, it just seems like there's always so many different choices for how to build the model and how to charge people. I'm just curious what your deliberations were and how that lined up with product thinking.

Jason: [00:37:59] Originally, our plan was to sell video games to people. And we actually tried to do that. We launched a video game store on PC at the end of 2018 with about 1,000 games. And very quickly what we learned was that people actually just wanted us to build a better communication service. And this was kind of one of the first pieces of signal that we got, that maybe we were actually overemphasizing video games in our mental model than our audience was. In addition, the competitive dynamics of the market at the time, which ended up being rather sleepy for a while, got very, very competitive, very fast. I think that other big companies saw the similar opportunity that we did.

And so, while we had a large audience, we actually were not capitalized in a way to fight a real content war with Microsoft and Epic who makes Fortnite, it was very clear that it was going to become a battle of who can throw the most money at game developers to get exclusive content. And as a startup that hadn't had scale, that didn't seem like a prudent thing to be doing. So we very quickly actually backed out of the games business and kind of pivoted away from it and then, doubled down on communication services.

We had launched this service called Discord Nitro in 2017, as a way for our users to basically support us and get some chat perks. And it was like a $5 subscription service and it was modestly successful, it was covering I think about a third of our burn rate in early 2019 when we were moving away from the game store. And we were debating whether we should double down on that, the concept of selling ads came up. Again, we had talked about not selling ads before it came up because it's a way that other companies have been successful in sort of the social media space.

But I really didn't want to sell ads because I felt like selling ads would require us to spend a tremendous amount of energy investing in building all this ad technology that actually doesn't make the end-user experience directly better, it actually subtracts from the end-user experience. So we'd be spending a ton of energy taking value away from our users so that we could make money. And I really wanted to build a business that the incentives of our team and our user base would directly align with our users or our customers. That was why we launched the game store, and that's why, in that moment, I said, "Let's not do the easy thing and just slap ads on this, let's double down on Discord Nitro, which is all about making it more fun to talk and hang out and see if we can build a real business around that."

I really wanted to build a business that the incentives of our team and our user base would directly align with our users and our customers

So we spent a lot of 2019, probably about a third of our time in terms of sort of product headspace, maybe even closer to half, really trying to figure out how do we make Discord Nitro more exciting and more valuable to people so that our people would pay for it. Because of the sort of early-support modeling and we called it like a donation, it wasn't super popular, even though it was making a little bit of money. So we doubled down on that and we launched a number of features, including boosting, which is basically a way for you to give back to your server, to your community, by sending some money that makes you feel good and makes everyone else feel good. There's this lovely human dynamic that happens there. And that just took off. And as we've added more features to Nitro, people have just continued to buy it.

And now, it's a tremendous business that's growing incredibly fast and we haven't shared specific revenue numbers about it, but it's clear that we can now build a really massive business by making it more fun to talk in a way that doesn't take away from the free experience either, which is an important part of what we offer, so everyone can access and hang out.

Patrick: [00:41:30] I really want to double click on what you've learned so far there because I think the history of businesses that aggregate a ton of people like you have is that they become advertising businesses. And some of those are incredible businesses, but it is sort of the natural tendency. And my friend goes by the pseudonym, Modest Proposal, on Twitter says, "Long enough timescale, everyone sells ads." And I love this idea that you sort of flipped it and said, "Let's take what makes people love us and try to make the experience better and premium instead." What are those enhancements, the literal examples or the literal examples or the kind of frameworks for how you think about enhancing communication through Nitro?

Jason: [00:42:07] The most popular feature is actually what we call custom animated emoji. So people love emoji. You can text chat, people love text-chatting, and the fact that you can insert visual expressions of what you're thinking, whether it's a face or a pizza slice or a rocket helps you add and express a color and flavor to what you're expressing. On Discord, we have a feature where each group of people, each server can set up their own custom emoji that they can use to allow themselves to express things in a more fun and sort of personalized way. And people love that custom emoji feature, that is free.

What we charge for is if you want to use those custom emojis in your direct messages. So in your one-on-one conversations or in other groups that you're with, if you want to take them with you, that's a premium feature. And then if you want to also allow them to animate, that requires you to pay. We took sort of the basic emoji feature. We added one level of personalization to it which is free. And then sort of the next level is where we put the paywall.

So we try to make sure that the things that are premium on discord are exciting and fun but don't feel necessary because we don't want people to really feel left out, we want it to be still fun to hang out and talk, so that's one. Another example is we have a feature on Discord called Go Live where you can basically stream video games to your friends. And it recreates the experience of kind of sitting next to a friend on the couch, watching them play a game but online. So it's ultra-low latency and it works great with 10 people although it supports up to 50. So you can watch your friends play games.

For free, you can do it at 720p, 30FPS. And if you pay, you can do 1080, 60 FPS or go all the way to source. So you can get ultra-high quality for your friends to watch. So really cool but not necessary, but a lot of people like it. And then boosting is another one that you have to pay that we charged for. So boosting is you can choose to boost the server, depending on how many times the server gets boosted, it unlocks a different set of perks for that server, which range from more custom emoji to the ability to have a banner, make the space feel a little more personalized to an animated icon or a splash screen when new people join.

And so people can contribute, can sort of pitch in together to unlock those perks for their community and people love doing that. And you get a little badge next to your name that shows your booster. So it's kind of stuff like that. When you talk about it, it doesn't sound like it's necessarily that profound. But I think the reality is that it feels profound when you use those things because they're really delightful and people love it.

Discord’s Hiring Philosophy

Patrick: [00:44:43] You have the history of humanity. You said earlier, the five whys. If you just think about how people act, it's sort of the same as buying certain types of clothes or people like to express themselves and then have something unique about themselves to show other people and people spend more time online. So it makes perfect sense that they would want to do the same thing in a digital context. I'm curious how, talking a bit about company building here. So you mentioned earlier leaving the acquire of OpenFeint, not seeing eye to eye thinking very carefully about what you want Discord, obviously the product but also the company to be. Having now overseen, I don't know how many employees you have but you've raised a few hundred million dollars. There's obviously I'm sure a ton of R&D that's gone into that. I'd love to know kind of how you think about R&D as well but what are the big principles that you have for company building specifically at Discord?

Jason: [00:45:31] Well, the first one is to be intentional. My last company, I wasn't, I didn't really know what I was doing. I was 23, 24, I'd never really managed people before, let alone run a company and somehow have 50, 80, 100 employees. And I remember there was a moment or I was around 80, I think maybe 70 people, one of the early employees, a guy named Andy Dale, good friend of mine from college and actually works with us now at Discord, he came to me and he said, "Jason, it sucks to work at OpenFeint, it sucks working here." And I was like, "Oh crap, that's not great." He was like, "But I'm not going anywhere but I'm just letting you know. we're okay, not great." And we started trying to fix it, but we ended up selling the company and it's hard to fix culture when you haven't been intentional about it and you have 100 people.

It's hard to fix culture when you haven’t been intentional about it and you have 100 people.

So when I started Discord, Andy joined within a couple of months. And so we were around maybe six people or so it was three people by December he and I, and Brandon, who is another person who was with us, we were sitting around and we were talking about the kind of company we wanted to build and how we've got to be really intentional about the environment that we create. Because if we're not, then it's just going to be by accident, it's just not necessarily going to be the kind of place that we want for the kind of world we want to live in. Having also worked in environments earlier in my career as an individual contributor, I found it very frustrating due to the nature of the gaming industry, workload crunch and all this stuff.

I really wanted to go a little bit slower this time building this company and be more deliberate about it. So we did, and a lot of the sort of intentionality resulted in a couple of early values. I have a blog post I wrote about, but essentially what it boils down to is as you add more people, everything gets harder because you have to communicate more and it's like an N-squared problem because it's a network. So one of the original insights that I had which to this day holds true is if you can hire slower, everything gets easier. We had this sort of company building value that I called small and mighty teams, which is this notion of you can get a lot of stuff done with really, really, really smart people that make high-quality decisions that compound if you choose the right technologies and the right sort of path to building and realizing your vision.

It means you don't have to communicate as much. It means there's less management overhead, less coordination issues and it has largely worked for us. I think we're around 280 people now. And given that we have over a hundred million monthly active users, I think our employee to user-based scale is quite unusual for this kind of service.

Another one is I really wanted to create an environment where people came because they were in love with the change we were trying to create in the world. And so early on, we instituted this concept of what I call mission fit when looking to hire people. So we really screened for people who cared about our mission in the early days that was about bringing people together around games. And now it's about giving people the power to create belonging in their life. And so we look for people who have had experiences that allow them to personally connect with the products that we're building and the change we're making.

And when people really care about the purpose of your mission, they just naturally care more about everything, about the details, if they worked a little bit harder. They pay attention to the details. They don't let the garbage on the floor sit, no one picks it up, they'll go get it because they want to make sure that everything is great. So people try a little harder when they really care about what change they're trying to create.

Third is creating an environment that fosters intrinsic motivation. I really wanted people to feel motivated, and the purpose is part of it. And actually, there's this guy, Dan Pink, who wrote this book called Drive, which I discovered kind of after thinking about this stuff and helped me sort of codify these ideas more. But there is some science behind this notion of how do you create intrinsic motivation. And it boils down to basically three things, autonomy, mastery, and then purpose, which is the mission fit thing I talked about. And I add compassion to it because I think it's important that we acknowledge that we're all humans.

So I wanted to create an environment where people felt relatively autonomous. They were treated like adults. They could learn and grow, get challenged, cared about what we're building and felt supported by the people around them. And then the fourth one, which is the last one is taking a long-term view. So I say it's a marathon, not a sprint. Building enduring companies and creating change in the world is a result of compounding value over time which takes time. Having a 10, 20-year view on what we're doing, allows us to make decisions that can result in incredible yields in the future. That may not seem necessarily the best in the short term, but it causes you to do things like invest in management training.

We did this thing early on, I think we're around 20 people when we went from just me and 20 people to like, "Okay, now we need managers." Actually, it was me and my co-founder, Stan, and our early CML Arrows. And we said, "Okay, we need a middle line of managers." Instead of just continuing to hire, we actually froze hiring for three months, created a management training program, and asked who wanted to be a manager. So those people took the program and then we restarted hiring. And I'll tell you that our Silicon Valley VCs, they thought we were crazy for not hiring people for three months, but I knew it was the right thing to do.

So to this day, we spent a tremendous amount of time on training and learning and development because investing in your people, while in a month may not have great returns, in two, three or four years have incredible returns. And if you come back to the notion of small and mighty teams, how do you get more done? You either make your existing people more productive by giving them better tools or you make them smarter. Those are two big things that we do; so long-winded answer. But that's kind of my philosophy for how I think about building a workplace and, knock on wood, so far, so good.

Patrick: [00:51:20] You're obviously very team-focused, very product-focus. I'm curious, given the scale you've now achieved and this is with me with my investor hat on, how often you think about competitive advantage around Discord the business. I mean, obviously, you've got the most prized thing on your side which is a network effect, communications companies tend to have that. It's hard to get where you've gotten and that sort of its own best defense. But do you think beyond that, intentionally about competitive advantage as a business?

Jason: [00:51:48] Definitely, I think if you're trying to build a business at scale, you have to think about competition, no business exists in a vacuum. I think it's important to pay attention to competition, to think about where your weaknesses might be, where your strengths might be, where you need to shore up defense, where you can go on offense, what your core is, all of these things. But I don't think you want to focus too much on competition because this is sort of a weird analogy because I don't really play sports, but I just sort of remember learning this when I was a kid that when you're throwing a baseball, you need to look where you want to throw the ball. And if you look somewhere else, you're not going to get the ball where you want it to go.

And I've heard this also in the concept of driving, don't look at the wall, look at the road because you're going to go where you're looking. I think it's human behavior that you will go where you focus. So if you focus too much on your competition, you just end up copying them and chasing things instead of focusing on customers and their needs and going where they want you to go. So we spend a tremendous amount of time mostly focusing on fundamental human needs. What are people doing with our service? How can we better serve them?

We spend a tremendous amount of time mostly focusing on fundamental human needs. What are people doing with our service? How can we better serve them?

Patrick: [00:52:54] I love the idea that Discord is almost like a bundle of communications because you're able to do text and video and voice and all these different things. How does the usage shakedown? I feel like you're a petri-dish for how people like to communicate digitally because they have every option. What is the breakdown of those methods and how often people use each?

Jason: [00:53:11] Well, I think what's important actually is to kind of take a step back to that third place concept and really talk about the holistic experience, because what really makes this Discord magical is the particular concoction of what happens when you put all these things together, you have an invite-only space with just the people you want to be there. You can organize your communication in channels which prompts people to talk in certain places and helps keep multiple conversations going. So you can have different people gather. We have this thing called permissions and roles, which allows you to kind of set the rules and norms for your space, which in real life is such a fundamental part of how people gather.

You have hosts and you have regulars and you have entry areas and you have people sitting and you sort of have ways to organize people. The fact that we allow you to have roles and organize people and then actually have powers to have VIP conversation areas or to kick people out really gives you the feeling of having a space with people that can invite you in and that you have to behave. And then the way that the sort of the live features work, presence and voice and video makes it feel like people are around.

So, because you got the green dot or you can see if someone's playing a game or listening to music or if they're on voice-chat with two other people, it gives you this sort of, I call it the busy restaurant phenomenon. You look at a restaurant and it's full of people. You're like, "That place is cool, it's fun, it's alive." You look at a restaurant that's empty, you're like, "Eh, that's not so exciting." Discord service feels like a busy restaurant because it's full of people who you know, if you don't know then that you want to talk to. And so these three things: Have an invite-only space, Easy to hang out, and You can control the rules and norms, really creates this experience of having a place that you can go to.

Now, to answer your question specifically though, what ends up happening is that people use text, voice, and video kind of evenly split because depending on sort of the amount of focus and attention and intensity you want to have in that moment, you can pick a different tool to use. So text-chat, sort of lower energy, lower attention required to be in a text conversation. Voice is the next level, and then video takes your whole being. It turns out, text and voice are about even, and video is kind of an up and comer. We just launched video chat actually after the coronavirus stuff happened, mostly because from the context of gaming, video-chat wasn't that important. But when we started thinking about moving beyond gaming, video-chat became obviously very important so we added it.

Patrick: [00:55:43] You mentioned earlier this idea of hiring slowly and it banks a couple of questions on people and hiring everyone always asks, what do you look for in somebody? And maybe I'll ask the opposite question, which is when you're interviewing somebody, what bothers you the most?

Jason: [00:55:59] Two things come to mind. One is people who are not humble. You got to be humble because if you're not humble, I think it's too easy to sort of drink your own Kool-Aid and get carried away with things. You have to be curious and open-minded. And I think being humble is an important part of that. But a random pet peeve, then I'll share it, maybe we'll give away part of our interview process, but this is a trick. Maybe I don't think it's a trick but I think it's really, really great to watch for it, to see if people are compassionate which is our interview process is we take people out for lunch and we have three people who are not part of the rest of the interview loop, go out to lunch with the person and we watch for how they treat the waiters. And if they don't respect the waiters, eye contact, be polite, then we assume that they don't respect people who don't have power over them.

We want people who are going to be kind and polite and compassionate when they don't have to be, our culture is all about belonging. And so we're looking for people that are warm and want to enjoy being around them. And that's like a little kind of human behavior that we look for, obviously now that we don't take people out to lunch because of the coronavirus, it's harder to check for that in interviews . So we look for more around when they have our virtual lunch, are they speaking to each person? Are they focusing on men more than women are these kinds of behaviors to try and get a sense for, are they just a kind warm person? Are they ignoring the junior people and only talking to the senior people? Things like that. When people do those kinds of things, we've rejected a couple of VP candidates because of stuff like that, it's a hard line for us.

Patrick: [00:57:32] I loved the story. Your story is so specifically unique and interesting. Maybe I'm biased because I like so many of the same things that you loved as a kid, a lot of the same games, et cetera. And I think given a lot of what you said about how you hire people, you like my traditional closing question for everyone, which is to ask for the kindest thing that anyone's ever done for you.

Jason: [00:57:49] I really think that so much of life is about the little things and about the consistency of the little things that people do. Making coffee for your husband, my wife making coffee for me, it's sort of unexceptional grandiose way, it's not the most kind thing that everyone's necessarily ever done to me, but where that comes from and that kind of kindness I think is really what's magical about relationships. And when a coworker thanks me for doing something nice for them or for a job well done, that kind of consistent small kindness, I think is really what makes the world go round. I'm going to go with that.

Patrick: [00:58:26] It's kind of similar to the five Why's exercise. There's something behind it all that's most pure and interesting. I love it as a different kind of answer to a question. Really appreciate your time here today, Jason, I've learned a lot. It's great to meet you.

Jason: [00:58:39] Yeah, likewise, Patrick, this was fun, thanks for having me.