United in Discord with Jason Citron (Discord) | Disrupt SF (Day 2)
2:53AM Sep 7, 2018
We're going to hear from Jason Citron talk about how the company he founded dominated an emerging market for messaging and leveled up online gaming by erasing the stereotype of the lonely gamer. Ladies and gentlemen, those lonely gamers now have a new profit in the form of Jason Citron with discord and to discuss this subject he will be joined by Lucas Matney from TechCrunch, give them a big round of applause. Ladies and gentlemen, see you
well Jason Welcome back to TechCrunch Disrupt now i was i was watching some videos earlier and back in 2013 you were on the battlefield stage and you're introducing a new game title.
So what? What were you showing off then?
Yeah. So back in 2013, we were working on a multiplayer game for iPad. It was kind of like League of Legends style game where you build essentially would have three vs three team based multiplayer experience on tablets, which were new and fresh back then. And as many startups go, that is not what we ended up doing.
Yeah. So fast. Fast forward five years, the game failed. But you pivoted a bit. And now you have a company worth $1.6 billion dollars. So what went on there? How'd that happen?
Yeah, you know, so we were building this game and through the experience of working on it and talking with our customers and reflecting on our own you know, behavior. We noticed that the tools that people were using to communicate inside the game with the people they're playing with, we're not great that also caused us to sort of reflect and look at the way that we were playing games on pc and
The tools that we were using like Skype, which was really popular at the time for this, and notice that they weren't that great, you know, people are playing these super fresh, modern games that have are pushing the boundaries of technology and using messaging and voice tools that had kind of
fallen out of favor, almost built in a different time. And so we came up with this idea of what if we built from scratch an amazing voice and text chat experience for people that play multiplayer video games and, and that's what we built. It's called Discord.
So you had some, you know, you have this very slick game like how, how did it feel to just kind of be like, okay, we like this little part of it, and just throw the rest out the window like, was it was it a decision that like, how tough was it to come to that decision?
Yeah, not easy. You know, people talk about the idea of pivoting, when you're building a company and how sometimes it happens. But the reality is that going through a pivot basically means you're acknowledging that the thing that you've been pouring your sweat and tears into is not working and sort of confronting that reality and then making some hard decisions. And so it was actually very challenging thing to go through personally and for, you know the team we ended up laying off a third of the company and all of our amazing 3d artists and then the rest of the team went on to build Discord.
Okay. And how many users do you have now?
Now we have 150 million registered users, which is kind of crazy. That's
when you look at when you look at the future opportunity for Discord. I know that there's some new stuff you're working on tell me about this new store that you have.
Yeah, so one of the things that we we also noticed is people using discord as people come to our app as a place to start and kind of check in with their friends and be like, Hey, what do you want to play tonight? And then they go and buy games elsewhere and and play them and we thought, well, we think we can probably sell games to people directly ourselves and build a great business and so
We actually just announced that we're launching a game store. So you'll be able to come to discord and see what your friends are playing. And then also buy some games from us. And in addition, we're having, we're gonna roll out a subscription service for games, which I'm really excited about sort of kind of like a Netflix for games, but it's not streaming, you can actually download the games. And so for a flat monthly fee, you get access to a huge library of games that will continue to change and evolve. And I'm really excited for that because I think subscription a subscription model like that is an amazing value to a consumer and I think can represent a new way that people find and buy games. Yeah, and then possibly impact the back end of how games get built in a cool way.
So So gaming subscriptions are kind of, you know, in their infancy now and a few people are trying them out as you look at something like how music subscriptions have worked out is the way that discord differentiates itself by going after exclusives on titles or like you know do you want to avoid having warring fashion tons of different, you know, gaming subscriptions or is that kind of the goal here as you're the underdog, right?
Well, we're not trying to create warring factions, you know, we always start when we're designing products and thinking about what to do, based on what we think is best for the customers, like for the for gamers, for people, and having like fragmentation actually is not generally good or there is a lot of fragmentation in the industry. I think one of the interesting things that discord has, I think one of the reasons why we've been successful is because there has been so much fragmentation, particularly around social tools in games that we actually create a centralized place for people to come. And so in our for our retail business that we're building we're going to have games that you can buy on other stores as well as on ours. We will have some titles that we're calling first on Discord. So they're kind of exclusives but they're going to be for short time windows. Okay, so if you want to play a game, but you really don't want to buy it from us, you can get it somewhere else and then our subscription business for now.
It's more like great games that you may have missed in the past. So they're available elsewhere if you want, but there'll be the cheapest way to get them will be through this subscription package that we're offering.
Okay. So going along with this music subscription,
analogy like valve with steam, like they're obviously like, I don't know, the Spotify of a few years ago. How do you ensure that discord is, you know, an Apple Music not a title,
right. Well, so the, our competitor that you mentioned, they actually don't have a subscription service for games. They're just a store. So we're offering something that's totally different than what they have. So we're the, for the first I think we're going to be the first big gaming business to offer a subscription service. Okay, so I think one of the ways that you make sure that you're a market leader is to do it first in a big way
when with you know, steam obviously has a vast library of titles like how do you compete when you're just kind of curating a little bit at the beginning
Yeah. So one of the big challenges with with the other stores from a retail perspective is that they have so much content that it's very hard to figure out
their store being steam.
Yes, that they have, it's hard to figure out what you want to play. And so you go in there, and it's sort of like this huge wallet stuff. And unfortunately, as more content gets added at a rate, that's fashion, you can get through it, it becomes challenging to make decisions about what to get. And so what I personally end up doing is I often look to see what my friends are playing. And then I choose to play games based on what they're doing and what they're telling me and discord is where that's happening. So it seems very natural for us to to make it really convenient for you to buy the game that your friends are playing, which is kind of the approach that we're taking
How do you like get users utilizing this feature and like sell it to them without annoying them with the fact that like, I use this for chat I didn't want to be sold anything like but you still make it visible enough that they know it exists.
Yeah, that that's a that's a great question, you know.
It's an art for like, how do you, how do you tastefully and tactfully suggest content to folks The nice thing about discord right now is there is some very natural places in the product experience where we actually show what games your friends are playing. So there's already places for that. And so we think there are ways to tastefully add buy buttons that people will be excited about.
Okay, um, you know, not long after you announced this product kind of encroaching on Steam Valve announced that they were coming out with their own war in a chat app.
You know, it seems like it would be easier for them to get into chat than to take on Steam as you know, the monster it is right now. Like how do you how do you approach this huge revenue market without losing you know, the ground that you already have? Like, how do you protect what you have already?
Right. Well, the majority of our team is still focused on on building and evolving our core messaging product. And and so that is that as our focus, you know, our mission is to bring people together around games. And so most of our energy is going into the bringing people together part of growth. And so, you know, just last a couple like two weeks ago we launched a new overlay with that has text chat, which is a fantastic feature that people have been asking for. We have lots of cool core messaging products that will be rolling out.
And then structurally, you know, messaging products have strong network effects. You know, people talk about network effects and in the valley answer, what does that mean? And essentially, it's this idea that because your friends are using the service if you want to make a decision to go somewhere else, you have to pull all your friends with you and so the Scituate that we were successful, because our product was like 10 times better and 10 times easier to use them the things that came before it. So people have been switching we continue to rebuild and re reinvent Discord. And so I think it's gonna be hard to make a compelling offering and that would convince someone Their entire group of friends to switch,
okay, the subscription product is not going to have any network effects. So that's going to be a whole new animal for you to tackle
remains to be seen. I know I do suspect that by having a subscription service with games, if you and your friends all are subscribed, you can now play these games together. And so I actually think there may be some network effects that happen if you all have a shared catalogue of games.
Gotcha. So your company's raised a lot of money, you're pre revenue, and you've committed to your users that the core product is always going to stay free with a $1.6 billion valuation and your user base growing like, can you continue to commit to that and how are you going to continue? Like, how are you going to grow a huge business?
Yeah, so I mean, the games industry is huge. It's 100 billion dollar business bigger than Hollywood box office sales. I think people sometimes forget that. Gaming is like the world's largest niche and people who play games like love to spend money on games, I've spent way too much money on games. And so I think if we can add value into the lives of gamers in a meaningful way that has that is around games, commerce, I think people will buy content by games and allow us to participate in that. And I think the developers will be excited about it because they want to get their products to market in front of customers and people want to buy them
as is the store like necessary to your growth like if you can, if you can tell that you really need to devote more resources than you have focused on your chat product into the store product like is that you know, kind of leaving behind this, you know, monopoly of sorts that you have,
I don't think so. I think if we do the interesting thing about this the store from the way that we think about it from a growth perspective is more games should mean that more people are come to use discord, which then means they're more users which then means it's more attractive for people to put their content up. So I actually think it can create a positive flywheel
for us in terms of growth, and like I mentioned, we have really 120 people now. And he's still growing. And the majority of our team is not working on this, this piece of the product,
okay, are subscription products going to be good for indie developers, you think?
I think they might be, you know, right now, indie developers spend, you know, a couple years to five years of their life pouring their hearts into these games. You know, I was an indie developer myself, I was on stage here pitching an indie game and then the launch it and you kind of have to hope that either you catch that lightning in a bottle that that happens sometimes in pop entertainment, or oftentimes the games don't even make back the money that went into building it, right? And so in a subscription business, I think what can happen is the economic structure of how that all works will change right. If you look at how Netflix behaves, you know, they have effectively created a new golden age of streaming content and basically golden age of TV
Because they're able to take the money they're earning from their subscription service, and basically go to developers and buyout shows. And because of the way that model works, different types of shows are getting made shows that maybe weren't, wouldn't have seen a profit before are now seeing a profit. And so I don't think that
they're spending 10s of billions of dollars to do that
They are. I don't know that that model exactly will translate into video games. But I'm really excited to see as the program starts to work like what that economic structure can empower us to do and what sort of games you might be able to help bring to life
do you think it's easier for you to do that just starting out and it would be for a large store like steam to be able to pull that out and push that new monetization structure on all the developers on their platform already?
I certainly think they couldn't just flip a switch and be like, Hey everybody, we're changing the game haha but uh. So from our perspective, you know, we have the benefit of starting from first principals Today in 2018, and thinking about what's best for customers, given where we're at now
you know, it's it's always this sort of like startup versus big company thing. You know, everyone's like, Oh, well, some big companies just going to copy that and clone it. But the reality is that they have a million things they're working on that are very important to them from where they're at. And, and the, the, the strength that a startup has is its speed and sort of lack of baggage.
So and we've had other big companies try and compete with us, and that has that dynamic has played out.
Gotcha. So, you know, speaking of startups and big companies, there have been some issues that discord have, have has had, that big companies have had to deal with also, which is, you know, having neo nazis on their platform. It's something that you've brought up like, how has your stance on that not evolved towards neo nazis? Hopefully it was always bad, but how has the way you've approached that topic kind of evolved over the past year as you've seen other companies deal with it also?
Yeah. Actually, in our approach and philosophy hasn't really evolved in so much as we've just sort of scaled our implementation. You know, from the beginning, we were super clear that discord is a place for you to spend time with your friends and the people you care about. And we're not interested in having those folks doing things that they shouldn't be doing on our platform, they can go somewhere else. So like we never had any sort of clarity about or any sort of, like confusion about what we were about. And so from very early on, in our in our company's history, we've had a trust and safety team has been very proactive about making sure that discord say stay safe, stay safe for people.
we also design the product fundamentally to be kind of different. It's not like a social media product in a sense, where it's this big public space and it's an every conversation is opt in. So you're talking with your friends in sort of these small group chats, almost like Skype. So by default, because people have so much control over what content they're seeing because it's just sort of a messaging product, a lot of that stuff doesn't become an issue. We have very clear community guidelines that are on our website and have been just been very proactive in general about this whole time
in the gaming gaming community has really seemed to have an issue with, like feelings of inclusion. And like, you know, there's a lot of toxic stuff happening, particularly in communications from like, very popular people in the esports community and everything like that. Like, do you feel that as a very preeminent company in the gaming space that you have a little bit of a heightened responsibility to police some of the conversations that are happening or do you feel like your users are even more sensitive to, you know, kind of the free speech arguments
um, I actually feel like just as a, as a technology company with lots of users, we have a responsibility to do the right thing. There's been a lot of discussion from different companies, especially over the last year about what the right thing is.
but like I said, for us, our philosophy has has always been very clear, you know, like that stuff is not acceptable on Discord. And if it gets reported to us, you're off.
I mean, so that that works for something like, you know, with neo nazis who are inciting violence and that's clearly against your guidelines if it's something where it's, you know, if there's a discord sub that's just talking about white supremacy, there's not targeted harassment of individuals, there's not anything that's, you know, inciting violence specifically that would seem rare, but, you know, that wouldn't necessarily be against your guidelines, correct?
I'm actually probably would be
in what in what capacity
I mean, I don't have the specific list in my head. And
I know I know that your guidelines there, you know, it's not there. The word racism and sexism aren't anywhere to be found in there like do you feel like they need to be or do you feel like it's a situation where you just want to put the onus on the users to submit the harassment reports
Yeah, I mean we when you make so in discord, like I said, most of the groups are these small private opt in conversations
and so the most basic thing that happens is if something is going on that you don't like, you can just click a mouse and you can just reject out and then you're gone. So you can remove yourself from the situation is very easily as an individual right as far as like as a company if people if there are three people sitting in a chat room talking about something like we're not monitoring people's massive
it's not just three people though with for fortnight and some of these large titles you have pretty massive servers.
Yeah, well in those cases like racism and that sort of stuff is completely unacceptable for large public communities which we do have some those have very, very clear and I don't want to say rigid but the guidelines for behavior in those servers it's like like you if you go to the fortnight server you're there because you want to talk about fortnight you want to look for folks to play with you want to talk about what the heck the giant cube is in the sky or like you start talking about other crap you just get kicked.
Okay. And then the kicking is done by the moderators?
okay. As you look at you know some of the struggles that the social media platforms are having and I'd say, you know, you're not like discord isn't slack this chords more has a lot more to share with like some of the like Reddit just in terms
were more like slack than Reddit
you to say more like slack.
Yeah, the super majority of our users are in small groups chatting with their friends conceptually similar to the way that many of you might use slack.
Okay, so so these neo nazi things that you're banned quite a while ago, those were those were small communities, not larger ones.
I mean, some if Yes,
okay. Do you have any impressions that any of these questions are going to get easier for companies like yourself to do worse? Or is it kind of, it's going to be an eternal struggle. Like it seems like some companies have the advantage of just having end to end encryption, which obviously doesn't work which just how discord operates, and then they don't even know what you're saying. So it doesn't really affect them.
Yeah, I mean, encryption is effectively like a non answer.
Right. Like the discussion has been the philosophy conversation, you have
your, your company has to answer it, but they don't really have to worry about it.
But, but I think if we say, well, there's no, if someone says, There's no encryption, they're effectively abdicating responsibility, which I don't think is what people want. You know, this, this conversation is sort of like the, one of the biggest discussion points of our time right now, I think, for Internet companies who've been wrestling with figuring this out. Now, in our case, like, We are not trying to be like the, the bastion of you know, a free speech the way that Twitter talks about it, like I said, we have very clear community guidelines. And if you if you step over that
No, no, I mean, and you keep asking me, but it's cool that but like, we have very clear community guidelines, and if you step over those boundaries, you will get kicked off the service and we do it a lot. And so, you know, there's no, like, we don't waffle on sort of what our perspective is on this stuff.
Okay. Well, I don't, I don't envy the company's having to make these decisions. But I appreciate it.
Alright, cool. Well, we're all out of time. Thanks so much.
Cool. Thanks for having me.