INTRO: For decades,
large companies have been trying to dominate the online video calling and messaging market. We’ve
seen everything from WebEx, MSN messenger, and Skype to Google Hangouts and Zoom,
but it seems like people’s favorite doesn’t come from any of these large companies. Rather,
their top choice is often Discord. This is quite ironic given that projects like Google and Skype
have billions of dollars behind them and thousands of employees. After all, Microsoft literally spent
$8.5 billion just to acquire Skype. So, clearly, they take this sector quite seriously. Yet,
they’re getting crushed by a relatively small startup that was founded by a gamer.
Skype does technically have more active users currently clocking in at 300 million while Discord
only has about half of that at 150 million. But when you consider that Skype was launched in 2003
and that Discord wasn’t launched till 2015, it becomes clear who’s really winning the user race.
Not to mention, a lot of Skype’s user base comes from companies forcing their employees
to use Skype while virtually everyone who uses Discord chooses it out of free will.
So, here’s how a gamer showed up big tech in one of the most saturated industries in the world.
JASON CITRON:
Taking a look back, the story of Discord dates back to a man named Jason Citron who was born on
September 21, 1984 in Florida. Jason’s interest in technology and especially gaming started very
early on in his life thanks to his father and childhood friends. Apparently, Jason’s father
was a massive fan of technology himself and he was always tinkering with personal computers in his
free time. At the time, personal computers weren’t actually all that useful to ordinary people
given that their capabilities were extremely limited and Windows 3.1 hadn’t even come out yet.
Nonetheless, being a businessman, Jason’s father could see that PCs were gonna become huge hence
the constant tinkering with PCs. While Jason’s father’s curiosity no doubt rubbed off on Jason,
Jason says that a lot of his passion for tech comes from gaming and it was actually a childhood
friend that introduced him to games. Apparently, one of his childhood friends owned an NES and
Jason had the chance to play Super Mario Bros on it. Jason describes this experience as
quote “the most amazing thing I’d ever seen in my entire life.” As he grew older,
his love for gaming evolved from being a player to being a developer. Jason took his first computer
science class in middle school and became friends with another coding enthusiast within the class.
Soon after, Jason hosted a sleepover for his 13th birthday, and once everyone else went to sleep,
Jason and his comp sci friend spent the night trying to code a role playing game using QBASIC.
Given that this was their first try, the game probably wasn’t that great; however,
Jason says that this experience made it clear to him that his career had to be related to gaming.
Moving forward, through the rest of his teenage years, Jason continued to be an avid gamer.
Some of his favorite games include Super Metroid, Chrono Trigger, Earthbound,
Uniracers, Street Fighter, Mortal Kombat, and most importantly Final Fantasy VI. Aside from gaming,
Jason started to use his knowledge of computers to start earning income as a teenager.
Jason says that he quickly realized that most people were relatively clueless about computers
which gave him an opportunity to help them fix computer problems and earn some money.
Jason’s father was especially supportive of this endeavor and would regularly drive him
all around the neighborhood, so that he could make this side hustle a reality.
As Jason slowly built up a reputation as being a computer prodigy, people started to ask him to do
bigger tasks such as writing code for them. In fact, this side hustle grew so big that Jason's
parents helped him set up a bank account and Jason started receiving wire transfers from customers.
If your customers are using wire transfers to pay you, you were clearly making big money.
Despite this, Jason didn’t instantly delve into starting a full on development company.
He says that he was intimidated of hiring people, so he preferred to keep his side hustle a solo
venture. But, with Jason’s ambitions, it was just a matter of time until his projects outgrew him.
MOBILE DEVELOPER:
Moving into college, Jason attended Full Sail University in Florida presumably to
major in computer science. Given that Jason had been coding for several years at this point,
college wasn’t that difficult for him and he would end up graduating early. After graduation,
Jason moved to San Rafael, California and picked up a job as a console game developer. Initially,
he got himself his own place and lived alone, but he says that this got boring pretty quickly. So,
he moved into a college house and became roommates with 9 UC Berkeley students.
While this may seem suboptimal at first glance, this actually turned out to be extremely valuable.
You see, about 6 months after moving into the house, a man named Rohan Relan moved in.
Like Jason, Rohan was a software enthusiast and his uncle and he were actually planning
on launching an incubator called YouWeb that was supposed to help mobile games get off the ground.
As you would guess, Jason was extremely intrigued by this idea, and Rohan would eventually invite
Jason to join the incubator. At the incubator, Jason would meet another developer named Danielle
Cassley and together, they would develop their first major mobile game called Aurora Feint.
The game combined two of Jason's favorite genres which were role playing games and
puzzle games. So, Jason was basically living his dream being able to work on developing a
game that really interested him as a career. All of this took place in late 2007 and early 2008,
so Apple had just released the iPhone and the app store wasn’t even a thing yet.
Jason and Danielle weren’t exactly developing the game specifically for the iPhone, but once the
app store was launched, it was clear to them that they had to address the iPhone market.
This was actually perfect timing because it allowed Aurora Feint to be one of the first
games on the app store. And given that most of the original apps on the app store weren’t that great,
Aurora Feint was quickly able to build up a solid user base of over 1 million users. Despite this,
the game wasn’t very profitable given that there was no recurring revenue from customers.
Apple didn’t even support in-app purchases at the time, so Jason and Danielle only earned money on
the upfront cost of the game which was $1. At one point, Jason only had two months worth of funding
left, and he remembers calling his parents and telling them that he might need to move
in with them. But, luckily for Jason, that’s when he would come up with his best idea yet.
OPENFEINT:
Jason’s breakthrough moment came when he was having a conversation with Rohan’s uncle, Peter,
about where to take Aurora Feint. During this conversation, Jason said that it was weird that
XBox live wasn’t available on iPhone. Given how fast the mobile gaming market was growing,
you would think that either Microsoft or Apple would’ve released something similar to XBox live,
but this wasn’t the case. And this is when Rohan’s uncle realized that Aurora Feint already had
aspects of XBox live within it. So, it wouldn’t be that difficult to create their own version of
XBox live called OpenFeint. Jason didn’t have any money left though, so he pitched this idea to a
few investors who agreed to fund the app if he could prove that game developers would support
the venture. Later that week, Jason posted the idea of OpenFeint on TechCrunch which resulted
in hundreds of game developers signing up and pleading their support. And with that Jason was
funded and he would code like crazy over the next several weeks. And on February 17, 2009,
Jason would launch OpenFeint. Given that there no native alternative and the overwhelming support
from game developers, OpenFeint quickly caught on amongst mobile gamers. OpenFeint’s user base grew
into the tens of millions which allowed Jason to complete funding rounds that each raised
millions. It looked like things couldn’t get any better, and that’s exactly when Apple launched
Game Center. Jason said that he felt like the air was being sucked out of his lungs as he
realized that he was now competing against Apple. Despite Jason’s fears, Game Center actually ended
up being a massive propellant for OpenFeint. You see, Jason integrated OpenFeint into Game Center
and integrated Game Center into OpenFeint. So, OpenFeint users could enjoy the benefits
of OpenFeint while new Game Center users could naturally discover OpenFeint. It was a win-win
scenario, and at the peak of OpenFeint’s success, they boasted 120 million users and supported 7000
games. Given this popularity, I don’t think you’d be too surprised to hear that GREE would go on to
buy OpenFeint for $104 million. It’s not clear what percentage of OpenFeint Jason owned before
the acquisition, but I think it’s safe to assume that this sale made Jason a multi millionaire at
the very least if not a deca millionaire. While Jason has a pretty nice ending, the same cannot
be said about OpenFeint. Around the same time, a coalition of gamers would sue OpenFeint for
violating their privacy, and a little over a year later, GREE would announce that they’re shutting
down OpenFeint due to overwhelming backlash. And that was the bitter end of OpenFeint.
DISCORD: While losing
OpenFeint was likely a massive blow for Jason, he was pretty well off financially.
So he had the luxury of taking some time off and focusing on something else. Initially, Jason
actually turned to creating another gaming company called Hammer & Chisel in 2012. This company would
release a mobile game called Fates Forever, but this never really garnered much attention.
Disappointed by the launch, Jason often spent a lot of his time playing games like Final
Fantasy XIV and League of Legends. One of the first things that stuck out to him as he
played these games was that their in game voice communication services were absolute garbage.
Soon after, Jason set out to develop a user friendly voice communication service that had
minimal impact on game performance, and that’s how Discord was founded. Over the next year
Jason worked with YouWeb to develop Discord, and given that he’d been a gamer for his entire life,
he knew exactly what gamers wanted. Jason would go on to launch Discord in May of 2015, and he says
that he didn’t market it to any specific audience. But naturally, one of the first communities
that started embracing the platform were gaming subreddits. This quickly made it popular amongst
Twitch streamers and eventually eSports and LAN tournament gamers. One of the first companies
that saw the potential of Discord was Time Warner Cable who invested into the company in late 2016.
Two years later, Microsoft would also embrace the company by bringing Discord support to Xbox live
users. Microsoft would actually eventually try to buy Discord for $12 billion, but Jason would
turn down this offer in April of 2021. And given that Discord has since successfully completed a
funding round at a $15 billion valuation, it looks like turning down the acquisition deal was the
right decision. But, it’s not all sunshines and rainbows ahead for Discord. Given that Discord
doesn’t directly charge any of its users, they’re revenue per user is likely not that great. And
considering how they’re constantly completing new funding rounds, it’s likely that Discord is losing
money. This is fine for a startup, but you can only keep up a money losing company for so long.
So, Discord needs to focus on monetization and profitability ASAP, but I think Jason is
well aware of that, and that’s exactly what he’s trying to do. So, over the next couple of years,
it’s likely that Discord only grows even bigger and potentially even becomes the world’s largest
voice communication platform, but we’ll just have to wait and see. What’s your favorite aspect about
Discord? Comment that down below. Also, drop a like if you think that Discord blows out the
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