Imagine a human website.
Imagine a place with emoji flowing like honey.
Imagine a place where humans and robots live in harmony.
Imagine a place like Discord.
Discord has the opportunity to become the natural social infrastructure of Metaverse. This is a potentially huge asset, so that attempts to quantify it are likely to be biased by orders of magnitude.
To build such an influential business, Discord needs more than imagination.
In this article, I will talk about Discord’s entrepreneurial experience, products, users and business model. Please enjoy
I will inevitably write about Discord. It is my favorite company and main aggregation platform. It has a Web3 interface and is the third space where I spend more and more time.
But Discord is too big and its potential influence is too far-reaching to write alone. So when Mario Gabriele tweeted that he was going to study Discord in depth, I texted him and we decided to join forces.
Mario is one of the best writers on the Internet. When he went deep into Web3, he was always excited. He wrote a lot on OpenSea and FTX, and wrote articles about DAO in collaboration with the best people in this field. He even initiated his own NFT project, Philosophy Fox. (I proudly own a project called “Second Life”.)
In addition, if Discord has taught us anything, it is that the imagination will be more interesting together.
Discord, imagine a place
Imagine a human website.
Imagine a place with emoji flowing like honey.
Imagine a place where potatoes thrive.
Imagine a place where humans and robots live in harmony.
Imagine, in other words, a place like Discord.
As part of its latest advertising campaign, Discord requires users to describe the chat platform to people who have never used it. This is a testament to the level of customer love and widespread use of the platform, and the result reads like a report from an unknown and intangible field.
Imagine a talking animal kingdom when a closet is opened.
Imagine walking through a wall to find your new school.
Imagine a pill that melts reality.
These are as effective as the official Discord entries and tell us some subtle meanings. Discord is not just a communication platform, it is a hidden world.
Although Mark Zuckerberg thinks he is best suited to build a Metaverse, he may be surprised to find that a thriving native species has taken the upper hand: Discord.
Compared with other businesses, the company is more like a true “primitive Metaverse”, unknowingly built for the future.It was originally designed for gamers-the pioneers of the Metaverse, and time allowed it to flourish in its neighboring fields. Educational groups, investment communities and enthusiastic fans all rely on Discord services to communicate and communicate.
Of course, it has also become the platform of choice for many new entities, from protocols to NFT projects to DAOs, building an unformed Web3 world.
However, it is best to describe Discord with such a rich and complex metaphor, which also shows that its identity has not yet been finalized. Unlike almost all other social enterprises, Discord feels fluid, biological, and an organism that has not yet fully evolved.
Although the company has been valued at 15 billion U.S. dollars and has revenues of hundreds of millions of dollars. But there is a feeling that its current manifestation may have only reached half of its final state. In order for Discord to fulfil its immense potential, CEO Jason Citron-no stranger to transitions-may have to accept new technologies, consider different sources of income, and lean towards the new model of Web3.
Discord has the opportunity to become the natural social infrastructure of Metaverse. This is a potentially huge asset, so that attempts to quantify it are likely to be biased by orders of magnitude.
To build such an influential business, Discord needs more than imagination. In today’s article, we will interpret different aspects of the company. This includes:
The origin story of the cycle. Discord’s legend involves more imposters and false starts than almost any other company.
A dazzling product: Discord can be difficult to understand, especially for older millennials like Packy and me. We tried our best to understand Discord’s dazzling chat interface.
A forked user base: Although originally used as a tool for gamers, Discord is now widely used. We will discuss its main supporters.
Slow monetization: Although it has developed rapidly, Discord has always been conservative in obtaining funds from users.
Opportunity for Web3. Discord has become the platform of choice for Web3, but it doesn’t seem to have completely won the hearts of the people. The company needs to use its leading edge and protect its positioning. We have some ideas in this regard.
An amazing online game: How Discord became a home for those who study and live on the Internet.
It’s time to join the server and get started.
Jason Citron may be one of the greatest startup founders of all time. Discord is not only a story that accidentally fits into the product market, but also the second case that occurred in Citron’s entrepreneurial journey.
OpenFeint, this story begins with Aurora Feint.
On July 10, 2008, Apple released the App Store. In the first wave of 500 applications, there is an independent puzzle game: Aurora Feint, the Beginning.
It is a work made by 23-year-old Jason Hitron and an unknown incubator company YouWeb:.
YouWeb was founded by former Webvan CTO Peter Relan (Peter Relan) and started at the same time as Y Combinator, but took a completely different approach, working with a few entrepreneurs, and maintaining a small group size. In a recent TechCrunch article, Relan explained: “We don’t have hundreds of companies. In 15 years, we have incubated about 30 companies.”
The YouWeb model at the time represented a certain market trend. In exchange for 50% of the company’s business, the incubator helps with ideation, marketing and recruitment. When Citron came here as a fresh graduate, he knew he wanted to build something in the game field, but he had no direction at this point. YouWeb paired him with the entrepreneur Danielle Cassley (Danielle Cassley) who joined and provided him with support so that he was able to launch Aurora.
It achieved a critical success. With the “World of Warcraft” aesthetic and mechanisms borrowed from “Tetris” and “Puzzle League”, Aurora is considered one of the most thoughtful debuts in the App Store.
One critic called it “this is the most interesting and addictive early iPhone game” and compared it to more well-known games such as Super Monkey Ball. (Remember that game?)
But praise does not always translate into income. Although Aurora released a series of follow-up products in the next few months, it never broke out as a commercial event. Citro lowered its pricing from $8 to $1, but this did not help.
Nevertheless, some of Aurora’s features seem very promising, especially the social elements that Citron has added to his game. Chat rooms, personal profiles, asynchronous multiplayer games and leaderboards give Aurora a sense of community that other large games lack.
Citron made his first transformation.
In a conversation about Aurora’s future, the young executive said casually.
“No one has built Xbox Live on this thing. I want to know if we can turn some of our chat and video versions of things into Xbox Live for iPhone?”
What Citron foresees is that in the future, almost all game developers hope that their products have a strong social element. Instead of starting from scratch, they can pay for the tools he has built.
It turns out that people really need it. After trying to get coverage from TechCrunch, OpenFeint was almost immediately overwhelmed by potential customers.
“Oh, bad,” Citron thought, “this will be a big event.”
Since then, everything seems to be developing rapidly: customers and funds continue to flow in, and OpenFeint has added a separate mobile application to manage social interaction in the game; it has reached an agreement with AT&T to pre-install the application in new phones.
It didn’t take long for the company to attract interest in mergers and acquisitions. In 2011, the Japanese social network and game maker GREE offered a price that was hard to refuse. OpenFeint was sold for $104 million, bringing huge benefits to Citron, his investors, and of course YouWeb.
After working with the acquirer for a few months, Citron sent an email to Relan, the founder of YouWeb. “I’m back.”
This story may sound familiar.
A young founder was taken over by an incubating company. He doesn’t have a fixed business plan, he just wants to make a difference in the game field. He created a great multiplayer game that was loved by critics, but failed to win enough audiences. In order to find the market fit of the product, the founder discovered the function of an infrastructure and turned it into an independent hot product.
The story of OpenFeint is the story of Discord. It’s almost beat to the same rhythm, almost like a very serious and quite obsessive storyteller, not sure if you heard the story the first time, it will be louder the second time you try Some.
This time, under better conditions, Citron worked with Relan to create Phoenix Guild, which was quickly renamed Hammer & Chisel. Given his experience at OpenFeint, Citron was able to raise $1.1 million in seed funding and then $8.2 million in Series A financing. Benchmark led the second round of financing, and then partner Mitch Lasky was clearly impressed by Citron’s presentation on TechCrunch Disrupt in 2013.
Hammer & Chisel released its first car “Forever Destiny” in 2014. This is a battle arena game designed for tablets. Destiny failed to achieve the success that Sitron and his investors hoped for. As they did before, Citron and his team built an additional communication community in the game.
We have a hunch that people can communicate around a service before, during, and after playing games, but we don’t know what the result will be.
It’s time for Citron to transform again.
When considering the company’s next move, Chief Technology Officer Stan Vishnevskiy said:
“I don’t want to do more mobile games. We have been discussing building a chat service, and I have some ideas on how to do it.”
In the next few months, the Hammer & Chisel team researched a chat service designed for gamers. Their idea is to create something similar to an “always-on conference call” or “your own private gaming cafe”.
When they released the product – named Discord – in 2015, it failed to make a breakthrough. Sometimes dozens of people may enter the company’s server, but it does not seem to have formed a real momentum. This may be partly due to the existence of alternatives—Teamspeak and Skype are both used by the gaming community—but it seems to be more about spreading information and winning the trust of early customers.
The turning point was achieved through Reddit. The team contacted a member of the “Final Fantasy” sub-forum and asked if they would mention Discord. According to Citron, the content they released is roughly: “Who has heard of this voice application called Discord?”
Some Redditors reviewed the product and talked to the development team through the platform. One person responded: “I just talked to the development team, it’s really cool. Check it out.”
This comment is a miniature turning point. With more users coming in, Discord came up with a grassroots distribution model.
Citron said, “That was the day when we said it started.”
In the following years, Discord succeeded in rapid growth, accumulating hundreds of millions of users and nearly $1 billion in funds. Perhaps even more impressive is that it both successfully captured the game culture and helped promote it.
Mix and match products
Discord is built for gamers, and it is also built by gamers. Although the company has opened its arms to a variety of new user groups since the product became popular, the product still retains its gaming speed and vitality. Therefore, Discord can be a bit scary for outsiders.
We think we are quite comfortable with technology; but nowhere makes us feel more old than Discord servers. For newcomers, it may feel like a tower of the sky. But slowly, on one server after another, we have learned this language, and we are here to translate it for you.
So, what is Discord?
Quartz tries to capture its multi-faceted charm through mashups by analogy. “Imagine a combination of Slack, AOL instant messaging tool, Zoom, and a simple chat room, and you have something similar to Discord.”
PCGamer explained all the things Discord allows users to do.
Today, I did so many things on Discord, and it’s all free.
I want to chat with as many friends as I want, with high audio quality, almost zero delay, and unlimited time.
The game can be broadcast live to anyone on the server with two clicks, and there is no delay (to some extent). Watch multiple live broadcasts at the same time (again, no delay). Create almost unlimited text chat rooms, and chat records can be traced back many years
Share small files with friends
Bring robots into many things, and you can also broadcast music to everyone.
Oh, yes, these can be used on mobile phones, including live broadcasts and screenshots.
However, Discord has a higher view of itself, a view that cannot be captured by analogy or feature lists.
It requires users, whether it is present or in the future, to imagine a place…
Discord’s first brand marketing campaign invites people to treat its products as a blank canvas on which to project any digital space they dream of.
Since the product became popular, various types of users have flocked to Discord, attracted by its chat features, high-quality audio and video chat, privacy, the ability to connect directly, and free servers that are different from Slack.
The company chose to open its arms to non-gamers at the right time. As every community moves online, they are faced with a choice.
Each user pays $6.67 per month to use the more familiar Slack. Or set up a Discord server and invite unlimited members to join for free.
The choice is simple. It’s so simple that Discord never thought that someone who would find it in a gamer’s chat tool knocked on its door and took root.
In 2019, Taylor Lorenz wrote an article in The Atlantic about celebrities entering Discord. Celebrities no longer let Facebook and Twitter’s algorithm-based feeds regulate their relationship with fans, but began to join Discord in droves. According to Forbes, this article and Discord’s growing user base of non-gamers surprised Citron and Vishnevskiy.
They are no strangers to letting users’ behavior pull them in new directions, and they got in.
When Discord sent a 23-question questionnaire to its community, they found that more than 30% of Discord users did not primarily use the product for games. They are hosting book clubs, group chats with friends, fan communities, and even companies. Discord has become the “third space” of the Internet. As Citron told Patrick O’Shaughnessy.
I read the book “Great Places” written by Ray Aldenberg, which was written in the 1980s. He actually talked about this issue in the book and began to use labels and words to describe these third spaces. The concept of how it works. When I read this book, I thought, “Wow, this is what we built, but it’s digital. It’s incredible.”
It is commendable that at this point, Citron and Vishnevskiy are the protagonists of the turning point. They listened to the opinions of users and acted quickly to make all users feel at home. They developed the mission of the company.
They launched the “Imagine a Place” event in May of this year, which was the company’s first brand marketing event in history, and subsequently launched a 6-minute video starring Danny DeVito and Avafina .
This video is fast-paced, chaotic, and a bit confusing… and it captures the essence of Discord perfectly.
On the surface, Discord looks a lot like Slack. It is organized into servers—a space for each community—and in each server, there are channels, including voice channels, and users can also choose to open videos for up to 25 people.The voice channel can be open all the time, and users can join and exit at will, just like jumping on the sofa with a friend.
In the sidebar, users can see and easily click to enter all the servers they belong to. As can be seen from the number of unread information icons in Packy in the screenshot above, it may be a bit difficult to maintain this state.
The difficulty of getting started with Discord is very low. It’s easy to set up a server, and it’s easier to invite others to join.Each server has a unique link—discord.gg/name—These links are scattered all over the Internet, such as Twitter profiles, subreddits, and Telegram chat rooms. “Join Discord” is the new “smash subscription button”.
User joining is also easy: just create a Discord account and use it to join any number of servers. Slack is clearly designed for a company and its employees – every time you are invited to a new Slack workspace, you need to re-enter your email and go through the registration process.
Discord is designed for multi-person social networking. Discord users are expected to jump from one server to another and directly send private messages to any other Discord users.
This is another key difference from Slack, based on the same architectural differences. In Slack, employees can send direct private messages to each other in their company’s workspace; in Discord, users can directly send private messages to anyone, as long as they know their handles (and as long as the user accepts DMs).
This is an ingenious fundamental difference. Discord allows social networking within the group, but also adds a social layer on top of this structure. As a user, you can talk to your tribe in context, but you can also have a continuous conversation with your buddies, out of the environment where you might meet for the first time.
Now, it is worth noting that although Discord has added this social element, it has abandoned many other elements. This is not a traditional social network. There is no number of followers; there is no master feed determined by an all-powerful algorithm. Users can show off different avatars and whether they pay for the “boost” server, but other than that, there are few built-in ways to gain influence.
Perhaps in addition to the chat function and social architecture, the most striking part of the Discord platform is its booming robot ecosystem. In a blog post in 2020, Discord announced that it has created more than 3 million bots, some of which are used in millions of servers. For comparison, Slack has 2,400 applications in its catalog. (Of course, this is not a fair comparison in the strict sense, because many robots may be eliminated, but it is still directional and interesting.)
As you might expect, the types of robots used on Discord vary greatly. Some focus on emoticons, some make it easy to play music from Soundcloud and YouTube, and some focus on control. .
MEE6 is particularly popular in the last category. More than 14 million servers use it to create customized welcome messages, actively guide bad actors, assign community roles, and provide “XP” (“experience points”) for participation.
There are more creative options-IdleRPG is one of them. Once integrated with the server, community members can participate in Dungeons and Dragons-style role-playing games and coordinate through chat commands. Given Discord’s popularity among gamers, it is not surprising that Idle is frequently used.
Discord’s robot ecosystem extends to the field of cryptocurrency. In a recent article on DAO, The Generalist outlined some of the integrations that have become popular in the Web3 world. Especially products like Collab.Land-which allow holders of unique tokens or NFTs to access private channels-have become essential. Other participants in this subspace include Tip (accept cryptocurrency tips!) and Piggy (an RPG game with cryptocurrency rewards).
From the user’s point of view, Discord’s robot ecosystem is very important, with expanded functions and increased gameplay, but it is the most important when considering the company’s defensibility. By allowing developers to build on top of its application programming interface, Discord allows a new level of lock-in.
For example, if you want to start a DAO today, you are most likely to choose Discord to use Collab.Land, MEE6, Tip and other robots. These tools provide your community with superpowers you can’t get anywhere else. Although it may not be so obvious, it is also true in communities with different priorities.
Discord needs to move closer to this. In 2020, the company announced that it will seriously develop robots, verify established projects, and expand possible uses. This is a good start, although it is still unclear whether these plans have actually been implemented. To take the next step, Discord needs help in discovery, monetization and usage.
How does the company do this? By creating a real Discord robot store.
Now, to find bots for your server, the best place to start is to search aimlessly, or visit Top.gg, a Discord catalog owned by game highlight company Medal. The fact that a different startup has stepped in to help discover the gap left by Discord.The robot store will enable Discord to catch up; it will immediately be the starting point for robot discovery.
In turn, this is also an obvious benefit for robot developers, giving them a trustworthy place to showcase their work and gain access to new .NET technologies. Like other app store owners, Discord can play the role of creator by promoting the most promising products.
Over time, Discord can extend the robot’s discovery through smart suggestions. For example, anyone who notices that they are starting a cryptocurrency server should be prompted to use Collab.Land or similar tools. Anyone who is building a new anime fan group might want to check out Mudae, a multiplayer manga robot.
As developers make money through Discord, more people will flock to this platform to realize the potential for wealth creation. A benign, compound flywheel is thus produced. (i) Discord highlights bots, (ii) customers see these bots and start using them, (iii) bot creators make more money, (iv) their success attracts new developers to the platform, ( v) This makes Discord’s platform more powerful, (vi) a more powerful platform attracts more users, (vii) more users create demand for and use of more robots
The bot may be the opening line of a larger platform game, bringing Discord closer to its original vision of making money through the game store. Now the entire product is built not only within Discord, but also on top of it.
For example, Stir’s Newsroom (coming soon) takes Discord’s chaotic existence for granted, and establishes a regular and organized cooperation interface on Discord’s dialogue channels. It did not try to replace Discord, but improved it. While abstracting its huge weaknesses, it gave degraded users an opportunity to take advantage of the product.
This may be a sign that an excellent platform is being formed: when entrepreneurs measure their strengths and weaknesses and decide to build complementary tools to compensate for weaknesses, rather than creating competitive tools to take advantage of them.
This is also the beginning of a trend. A new wave of entrepreneurs is building tools to help DAO operate more smoothly by improving user onboarding, project coordination, and performance tracking. Most people take the centrality of Discord for granted. Although many of these tools are specific to DAO, they should be applicable to any community organized in Discord and hope to accomplish something outside of the conversation.
Discord can support these tools, make them as seamless as possible, and expand our robot store to accommodate all Discord-based applications.
If Discord can do this, it will be difficult to replace. When the Discord team focuses on making its core products as strong and reliable as possible in face-to-face growth, the surrounding developer ecosystem can work hard to adapt Discord to the needs of any type of user.
300 million users
It is estimated that Discord has 300 million users, of which 150 million are monthly active users. They are distributed on 19 million active servers every week, involving games, investments, politics, animation, and many more.
As you might expect, given the company’s origin story, the foundation of Discord is still mainly gamers. Anyone who browses the “Explore” tab (where new servers are discovered) will quickly see Discord’s emphasis on the game and its obvious popularity.
Among the top ten featured servers, nine are focused on games.
The only exception is? “Animation Soul Discord”, an anime fan community with a population of 500,000. Even if this is only a slight deviation-the community also pays attention to the game “Shenzhen Shock”.
Given the strong cultural overlap between gamers and anime fans, this is not too surprising. This also illustrates how Discord has expanded its influence. With games as the core, Discord has been able to organically expand to neighboring subcultures, including animation and technology. Starting from a large niche market and expanding outward is a key part of the company’s success.
In addition to these themes, Discord seems to have established server densities around education, investment, cryptocurrency, and Web3. We can use a similar perspective to understand the company’s success in these groups-these groups are fundamentally Internet-native.
First, one in five American gamers are under the age of 18, making school an important part of their lives. They will naturally choose to use the same tools for learning and for social activities. This is not to say that all Discord educational communities are for high school students and below-some of the most popular servers cater to people of all ages. You can join one to learn English, another to learn Korean, and the third is to practice your favorite game. (The line between gaming and education can become quite blurred).
The focus of other educational communities is to provide accountability or assistance. For example, Study Together, a Discord community with more than 280,000 members, claims to improve one’s work efficiency. Homework Helper does exactly what you want: help with the community to complete homework.
Such groups are the magic of Discord-people gather to discuss, learn, and help each other improve.
The company seems to be encouraging this use case. When you start a new server, two of the first three suggestions are related to education, and the user is prompted to start a “school club” or “study group”.
A new product of Discord is the “Student Center”. These are Discord servers and are only available to individuals affiliated with high schools or universities. You can only access these groups if you have a suitable email account to prove your connection. This feature is highlighted in the “Explore” tab, which is another sign of this focus.
In view of the turbulence faced by Facebook and Instagram in terms of young users, Discord’s interest in this area is particularly noticeable. As users of Gen Z and below are excluded from these platforms, or leave voluntarily, Discord may benefit.
Not surprisingly, Discord’s most popular investment group showcased the tone and cultural references of the gaming community, full of n00bs and Pepes. This is not a value investor club. It makes sense for Reddit’s WallStreetBets (WSB) to choose Discord to host synchronized conversations in its community-no other platform can handle the level of real-time chaos. It has 570,000 members and is one of Discord’s largest servers.
The prominence of WSB implies Discord’s positioning in the social field. Specifically, it is located downstream of asynchronous, broadcast platforms such as Twitter and Reddit. For example, there are many other subreddits, and they all set up Discord servers to strengthen discussions. Specifically, the “Explore” function shows that 399 servers are classified as “Subreddits”, including communities such as r/Memes, r/teenagers, r/Pokemon, and r/dogelore.
There is no doubt that it has become a coordination platform for various projects, including NFTs, DAOs, cryptocurrency investment groups and cryptocurrency startups. This is really surprising, and this has become a norm in the industry.Starting an NFT project today and inviting supporters to join the Slack group will be a taboo that you cannot recover; it is equivalent to using the encryption currency of your Hotmail account, or telling everyone that you use Bing as your search engine.
Prominent communities include Axie Infinity (800,000 members), Sushi (150,000 members), Solana (86,000 members), Loot (83,000 members), Uniswap (72,000 members), and Bored Ape Yacht Club (69,000 members, not bad).
In addition to these categories, Discord inevitably gave birth to a prosperous NSFW crowd. When researching the top Discord channel, a name appeared on two different server aggregators, or near the top. “Sinky 18+”.
This shows that the use of Discord has become very extensive. DiscordMe is a tool for categorizing servers and usage. The categories it provides show the company’s breadth, while also emphasizing that gaming is still at the core of Discord. For all the attention it has received-including in this article-cryptocurrencies are clearly lagging behind.
The number of servers is not necessarily the most useful metric; the number of members by category may be better.Likewise, DiscordMe is not an exact authority. But nonetheless, using the available information, we can learn about the widespread use of the platform. From art to fitness, from emoji to mature content, Discord has evolved from games to occupy all aspects of culture.
Discord is a difficult company to understand. At the time of writing this article, we all tried to talk to leaders, employees, and investors – but nothing was gained. At least when it comes to creators, they choose to keep their cards secret.
This does not mean criticism. The focus is a valuable resource, and Discord may have reason to believe that they have told enough stories. However, this does mean that our analysis of leadership is limited to third-party accounts and resources.The following are the key figures provided by The Org.
As mentioned earlier, Jason Citron is a visual mark of ordinary Discord users. He is a real gamer and has a sincere love for this industry. Of course, this has been proven by the two companies OpenFeint and Discord and emphasized in his message transmission.
This true connection with the mission has always been a key part of Discord’s success. While researching this article, we interviewed Mac Reddin, CEO of Commsor, who was an early user of Discord. One of the reasons for the company’s rise, especially relative to its competitors, is the company’s ingenious understanding of game player culture. Reddin said: “There weren’t many products aimed at gamers at the time. Even if there were, they were all nondescript things.” He added, “No one thinks Discord is a multi-billion dollar company. It doesn’t think so.”
Discord speaks the language of gamers, and Citron is an important part of it.
Stanislav Vishnevskiy also brought similar qualifications. He and Citron had overlaps in GREE (OpenFeint’s Japanese acquirer). When the founder of OpenFeint wanted to build something new, he took Vishnevskiy as the chief technology officer.
While working on GREE and Discord (then Hammer & Chisel), Vishnevskiy also founded Guildwork, a social network for massively multiplayer online role-playing games (MMORPG). It supports games such as Final Fantasy, World of Warcraft and Aion.
Except for Steve Lin-part of the original OpenFeint team-the rest of the leadership team has no more experience in game companies. But they are still impressive and capable of guiding Discord forward.
Tomasz Marcinkowski was hired as chief financial officer in March of this year. He joined from Pinterest, and it is speculated that he will be responsible for managing future mergers and acquisitions and possible IPOs in the next few years.
Chief Personnel Officer Heather Sullivan is also worth emphasizing, because she held the same position at Udacity.Although Discord is clearly a universal tool, it has seen strong growth among students of all ages.
One thing is obviously missing from the team? Cryptocurrency. No one in senior management seems to have worked in this field. This may be expected. First, cryptocurrency giants are still being born and growing rapidly. Currently, it is much easier to find an executive who is willing to quit Google than to find a cryptocurrency executive.
Discord also seems to be caught off guard by the level of adoption by Web3. Until 2021, encryption experience is unlikely to benefit potential new members-it is becoming more and more important. If Discord wants to expand its presence in the web3 ecosystem, it may hope to increase executives who can help this area.
However, perhaps the most unique attribute of the Discord leadership team is its seeming aversion to monetization.
Fast growth, slow commercialization
In August, when rumors about a new round of financing began to circulate that would make Discord worth $15 billion, Packy tweeted that he would buy all the shares at this price.
He insisted on this. Driven by COVID, gaming, and Web3, Discord is one of the fastest growing products on the planet and a gathering place for many of the most important communities in the world.
Discord decided to open its arms to all types of people and started marketing in earnest for the first time. Judging from the breadth of the community now home to Discord, it is paying off. Last year, there were 6.7 million active servers every week, basically there was at least some room for conversations in a given week. This year, there are 19 million weekly active servers—a three-fold increase from the previous year—and this year is not even over.
With the launch of the new NFT project, DAO and DeFi protocols, we will not be surprised to see Discord break the 20 million server mark by the end of the year.
More servers means more users. In 2017, Discord had 10 million monthly active users (MAU). This year, just four years later, it has 150 million. For those who keep accounts at home, this is a 15-fold increase in four years, or a compound annual growth rate of 96.8%.
For comparison, Facebook, uh, now called Meta, has 3 billion MAUs in the app, Snap has 347 million, and Reddit has 430 million. Twitter stopped reporting MAUs in 2019 and instead reported monetizable daily active users (mDAU), which has 211 million. According to the last statistics, it has 396 million MAU. This means that Discord, which has only been established for 6 years, is almost the same as the social media giants (except for the Big Mac Meta), and the growth rate is much faster than all these giants.
Discord’s revenue growth even exceeded its user growth. From 5 million U.S. dollars in 2016, to 2020, Discord’s revenue has grown to 130 million U.S. dollars, with a compound annual growth rate of 126% in four years.
Even after such amazing growth, there is still a lot of market space to squeeze. When it comes to monetization, Citron seems to be half a beat slower than Zuckerberg.
In 2020, Discord’s average revenue per user (ARPU) is only $1.3. This will put it at the bottom of the public social media company with a great advantage.
This is not surprising, because the company’s only real monetization engine is basically a voluntary upgrade, usually out of support for the product or a specific community, rather than to get the upgraded features and emoji brought by the Nitro subscription. Put the same user group in the hands of Zach, and he will complete billions of dollars in revenue in his sleep.
At present, Citron pays more attention to products and communities than to advertising and income, creating a user group with strong stickiness and loyalty. They are also high-value users. The average ARPU of global video games is between US$20-60, depending on the platform (the highest on mobile platforms). Cryptocurrency traders often pay more for gas in a transaction than Discord pulls from ordinary users in a century. If and when Discord focuses on monetization, money should flow out.
Discord has time to solve this problem. At present, investors seem to be more concerned about Discord’s huge potential, rather than its monetization flaws. There are not many opportunities to invest in social platforms that really matter; Discord is one.
Early-stage investors like to say that in the initial stages of a company, you support the founder more than the idea. This idea can and often changes, but the right founder can navigate the tortuous road to success. Discord is a hallmark of this theory.
In July 2012, the Phoenix Association announced that it had obtained a seed round of $1.1 million from YouWeb, together with top venture capital funds Accel and General Catalyst, to establish a “post-PC era Blizzard,” as Citron said everyone is building The antidote to “crappy F2P simulation game”.
In the second year, the rebranded Hammer & Chisel raised $8.7 million in Series A financing, led by Benchmark’s Mitch Lasky, to create Fates Forever, “the first MOBA (Multiplayer Online Battle Arena) made specifically for tablets. “.
Hammer & Chisel also conducted a Series B financing in February 2015, obtaining USD 4.5 million from Benchmark and Tencent. The investment valued the company at 45 million U.S. dollars. In VentureBeat’s financing announcement, Citron said that the company’s flagship game “is the first step in carefully building a meaningful game company.”
Only three months later, on May 13, 2015, Discord celebrated its unofficial birthday. At this time, Citron must know that Fates Forever is not the future of the company.
Fates Forever, a critical success, was worthless financially, but those early investments in Phoenix Guild and Hammer & Chisel were profitable.
According to Pitchbook, Benchmark and others bought Series A shares for $1.95 per share. By December of last year, Discord’s H series, the company’s valuation was 7 billion U.S. dollars, and the price per share has risen to 280.25 U.S. dollars, which is conducive to a return of 143 times. With the company’s recent funding of $15 billion, Series A investors are sitting on paper returns of about 300 times…This is incredible because the games they invested in no longer exist.
In January 2016, Discord made its first financing in the name of Discord, a US$20 million Series C financing led by Greylock and Spark Capital, which valued the company at US$100 million. Since then, it has started to run.
Within three years, Discord raised $50 million in Series D financing from Index and IVP, and $50 million in Series E financing from existing investors, making the company a unicorn at a valuation of $1.65 billion. , And raised US$150 million in Series F financing under the leadership of Neil Mehta of Greenoaks, surpassing the US$2 billion valuation.
In 2019 and early 2020, Citron & Co suspended 18 months of fundraising uncharacteristically, then in June 2020 it raised a $100 million G series from Index at a rumored valuation of $3.5 billion, and in 2020 Raised 100 million US dollars of H series from Greenoaks in December, worth 7 billion US dollars.
In March of this year, Microsoft tried to acquire Discord for a rumored $10-12 billion, but negotiations broke down in April.This will be a complement to Microsoft’s strong gaming portfolio, which includes XBox, Minecraft and the recently acquired ZeniMax. In addition, Discord will definitely become a technological upgrade for Microsoft Teams products and a strategic weapon for enterprises to compete for Metaverse. But Microsoft’s $12 billion offer is not enough to complete the transaction. Only a few months later, the decision to reject Redmond paid off.
In September, Dragoneer led a $500 million round of financing, bringing Discord’s valuation to $15 billion. Cross-border investors including Baillie Gifford, Coatue, Fidelity and Franklin Templeton also participated in this round of financing, indicating that the IPO may not be too far away.
For now, Discord’s $15 billion valuation, or 115 times its 2020 revenue, looks expensive, but the company can pull more leverage than our unread Discord notice. In a rich world, Discord can capture the rarest asset: attention. “Whoever controls the attention, controls the universe”.
If Discord maintains a MAUs growth of more than 50%, and even reaches Pinterest’s ARPU level, it will soon appear cheap.This does not count as its call option on web3.
Opportunities for Web3
Some of the most compelling investment opportunities are those with clear investment thesis around the core business and sprinkled with free call options. Meta is an advertising giant and has a Metaverse launcher. Tencent is the most important application in China and one of the best venture capital portfolios in the world (including Discord), as well as a Metaverse launcher.
Discord is a social platform with a fast-growing user base and recurring revenue subscription products, and it is one of the most strategic positions in the web3 value chain. The question is: Will it respond to the call of Web3? What if it does?
The company has maintained a conservative attitude towards its Web3 strategy, but they left a clue. In August, some Discord users saw this banner.
The company has maintained a coy about its web3 strategy, but they left a clue. In August, some Discord users saw this banner.
Investigations have played an important role in Discord’s recent history. In 2019, the results of a survey drove the company’s growth, expanded its audience, and welcomed all user types. Therefore, this recent survey posted by @HsakaTrades on Twitter may hint at Discord’s next zag.
The survey is vague-the only product query is about “Discord’s native cryptocurrency wallet”-but it shows that Discord is aware of the increasing use of its products by the web3 community, at least exploring how it can play in this space effect.
Since there is no more information, we have to let our imagination come into play. Here are some ways we think Discord can play web3.
In the August Web3 survey, Discord directly asked its users about “Discord’s native cryptocurrency wallet.” This is a common application, and we will advance it soon. If we do not advance, it is our negligence.
The idea is simple: imagine that every Discord account has a cryptocurrency wallet. Maybe this wallet will support the Ethereum ecosystem, such as Metamask or Rainbow, or Solana, such as Phantom. Ideally, considering Discord’s Swiss identity, it will create a wallet that can work across chains. Considering Discord’s large non-cryptocurrency user base, this wallet may not look like a cryptocurrency wallet at all on the surface. These two ideas sound simple, but they bring real technical and UI challenges. It might be worth a try.
Maybe no company has the distribution and trust of its user base at the same time (sorry, Meta) that can incorporate so many people into web3 so quickly. Integrating the wallet into Discord’s core product has certain benefits for users and community leaders.
Letting users send money and tokens to each other is as easy as sending messages.
Set token thresholds for certain servers and channels within Discord itself, without the need to click into third-party solutions, such as collab.land.
An easy way for the community to airdrop tokens to its members.
Having a wallet is also good for Discord itself. Allow Discord to monetize transactions, exchanges, lending, and mortgages.Let Discord become a wedge of the wider Internet and serve as its passport. Build an experience around the user’s wallet inventory.
The wallet will serve as the identity and account in Web3; having a wallet is a key strategic position that will enable Discord users to travel everywhere online.
This is easier said than done, and Discord’s current team does not have the cryptocurrency capabilities to complete it, but it can acquire a wallet and the team behind it, or hire a team that promises unprecedented distribution. If Discord is serious about web3, then a wallet will be a bold entry point to promote bolder moves.
Earlier this week, Mario posted a silly emoji on Twitter
It is no coincidence that Discord ranks first in the “DAO Starter Pack”. It has become an important part of DAO communication and coordination; it is embedded in the culture.
Earlier we discussed how Discord is located downstream of platforms such as Twitter and Reddit. Interestingly, when it comes to web3, Discord is located upstream of most important activities.
For example, if you want to set up a DAO today, where would you start? First, you might connect with some friends through Twitter and Telegram. Once you have tested your ideas and aroused interest, you will quickly move to Discord to maintain the conversation, flesh out the details, build an early audience, and develop a plan for the movement.
Of all the possibilities, only at this point will you build a multi-symbol wallet, raise funds through on-chain sales, and begin formal governance on platforms such as Snapshot. We have seen that, whether in social DAO or NFT community, this situation is staged in Web3. Usually, the best way to build hype for a project is to start Discord and let it grow.
This provides Discord with a unique opportunity to be used as a quasi-operating system of DAO to undertake some downstream functions. This may be best handled through integration, but it can be driven by Discord’s internal product team.
In particular, you can imagine a world in which Discord promotes forum-style discussions and voting. In doing so, it can bridge the gap between off-chain democracy and on-chain consequences. Likewise, Discord can be better integrated with the financial management tools used by the DAO, allowing community managers to coordinate payments without leaving the community itself.
Although Discord firmly controls the DAO world and occupies an important position in the value chain, it is not a universally popular tool. The following is what Jon Gold said in response to one of our tweets.
To some extent, Discord and DAO have always been a loveless marriage, driven by lack of choice rather than natural kinship. In order to deepen this connection and ensure that it is not replaced, Discord may wish to expand its functionality.
Discord’s business model started as an afterthought. According to Citron, the company’s initial plan was to make money through a game store, similar to Steam. (This did not get a good result in the end).
Prior to the release of this store, Discord did not generate revenue-this makes users very worried. Many people believe that the company is selling customer data or preparing to adopt an advertising-based model; in order to calm people’s concerns without reminding competitors of their wishes, Discord has released “Nitro”, which is a paid subscription. In exchange for charging, users can get special treatment, such as having multiple avatars, using custom emojis, and increasing their video resolution.
This is a reserved item that has proven to be unexpectedly effective. This proves that customers love Discord, but seemingly relatively thin products can be produced so effectively. Mac Reddin, a long-term Nitro user, pointed out that the premium membership does not bring you much, but as a member, you can support the company. This is very fascinating; not many billion-dollar companies rely on the kind sponsorship of their customer base to make money.
In order to diversify its income, Discord can consider integrating purchasing and investment behavior. Of course, this feature can prove useful in various fields. You can imagine a world where users sell music, pictures, hourly jobs, or other things to each other, all in the context of Discord discussions. (Or push to “Discord Market”).
Given Discord’s unique position and the amount of funds flowing in the space, cryptocurrency will be a particularly interesting example. What if Bored Ape holders could buy and sell in the same channel they host the conversation? What would it look like if members of the unbanked DAO could buy new tokens in discussions about them?
(Of course, any purchase can be made in your local Discord wallet.)
Discord is the place where bubbles and speculation begin; it is the soil where buying intentions germinate. Now, once a person makes a purchase or investment decision, they will leave the platform and go to the exchange or NFT platform.
Although it may be technically complex-and admittedly a deviation from the core product-adding features that support this behavior can be very powerful and profitable. The end result may look like a contextual OpenSea or FTX-an exchange that starts from a discussion and can capture the intent it generates.
This last idea exists, and given that investors have purchased more than $1 billion worth of shares in Discord to date, it is extremely unlikely to happen, but imagine a token…
As discussed, Discord and web3 have a love-hate relationship. There are many reasons, some of which include: Discord server is too messy; scammers’ private messages are full of Discord messages; Discord is a centralized company.
A centralized chat application seems to be a strange place from which to initiate a decentralized revolution. Therefore, many people called for the establishment of a Web3 Discord.
Phelps himself predicts that there will not be a web3 Discord, but Discord will be disassembled into its components, and a specific web3 tool will be used to form the Transformers version of the product.
This is one option, but there is another option: What if Discord itself is decentralized? What if Discord does not go public, but issues a token? $DISCORD has a nice name.
To be sure, this will represent a comprehensive turn that has never been seen in the corporate world, and everything is moving closer to Discord at this time. It will also represent a legal nightmare, if possible. But if there is a multi-billion dollar company capable of doing this, it is Discord.
First of all, it is obvious: Citron and Vishnevskiy are no strangers to turnarounds. They are experts at turning points. This will be the latest achievement of a career forged in the fire of the fulcrum.
There are also some less superficial reasons.
Discord has acted very much like a decentralized protocol. It is the most authentic and largest user-generated community on the Internet. It thrives on the creativity, passion and missionary spirit of those who choose to run the community within its digital wall. It is a minimal extraction-users can experience all the rich content of Discord without having to pay a penny or accept any advertising services. Damn it, the company launched Nitro as a way to prove to its community that it won’t introduce advertising; putting a governance token gives the promise the power of a smart contract.
Decentralization will be both defensive and offensive.
On the defensive side, a token may help solve the problems that plague Discord. For example, it can use $DISCORD to reward community members because they help regulate the channel and eliminate bad actors that plague the service.Require users to pay a small portion of $DISCORD to send messages to users who are not friends with them to reduce spam.
From an offensive perspective, allowing users to benefit from the development of Discord will encourage more communities to open stores on Discord and serve as a retention tool against the well-known whims of fickleness. It will promote and inspire the prosperity of the in-app economy. It will allow users to reward each other with simple “thanks”, and can even provide infrastructure for the community to issue their tokens on the tracks of Discord, right where they already exist.
In addition, combined with the wallet, airdrop DISCORD to its 150 million MAU will immediately make Discord the world’s largest web3 platform and enable tens of millions of people to join web3. The decline of DISCORD will be one of the most important moves in the history of the Internet.
Hey, Discord told us to imagine a place, so we let our imagination run wild. The company 99.999% does not intend to decentralize and tokenize.
But we firmly believe that the company should follow the lead of its users to enter web3. The company’s biggest success to date has come from its decision to build a communications infrastructure for gamers; now, it has the opportunity to build a more complete set of tools for the game we all play on the Internet.
Great online game
As life on the Internet becomes more and more like playing a great online game, the place where everyone chooses to gather is a chat application originally built by gamers for gamers, which is very suitable.
If Twitter is the city hall of the Internet, Discord is a hidden network of comfortable lounges, dark basements and smoky secret rooms. Companies and DAOs are established here, bonds are formed here, plans are brewed here, alpha is leaked here, wealth is won and lost here. If this feels familiar, it’s because it is. We spend more time in comfortable classrooms, crowded restaurants, and friends’ living rooms than in large stadiums. Human evolution is not to live on stage.
With the development of the Internet itself, from Web2 to Web3, from the Internet to Metaverse, it is likely that the next things will be inspired by Discord’s architecture. Meta will not control the metaverse; no one will. Instead, it will be a series of connected spaces, established and managed by a community of people who care about the same things.
This new world will be a confusing place for some time. The advantage of centralization is that everyone knows where to go. A decentralized Internet will require maps and meeting places, and no one has built a product more fully prepared for the world than Discord.
Today, people on the Internet have to go through a funnel. Twitter to Discord and then to their final destination. Whether Discord ultimately becomes a very important and valuable company or one of the most influential and valuable companies in history may depend on its decisions in which part of the funnel. Should it merge with Twitter and have attention flow in great online games? Should it integrate downstream, splicing web3 products into its own products, and create more immersive worlds for users to roam in it? It has already begun to make acquisitions in the augmented reality field. Imagine a place…where the server becomes the world.
Discord has become an indispensable part of the Internet, so that it is easy for people to forget that it is a six-year-old product and are still looking for themselves. We don’t think Discord knows what Discord wants to be.
This may be its biggest advantage, and it is also the advantage that makes it most suitable for development in the era of decentralization among all competitors. It is flexible but stable, chaotic but organized. It is willing to follow in the footsteps of users and build infrastructure in their footprints.
The company will figure out how to monetize it. It will generate billions of dollars in revenue every year for the next five years. But this may be the least interesting part of it.
Discord is where this great online game belongs, and this game has just begun.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/4d-detailed-discord-dao-launcher-dark-basement-web3-new-mode/
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