The State of Gaming with Discord CEO Jason Citron
The global video game industry is thriving. According to PwC, gaming is expected to grow from $71.3 billion in 2015 to $90.1 billion by 2020. Jason Citron, the CEO and founder of Discord, understands this space very well. He started gaming on the NES when he was five, learned how to program games in high school, founded and sold a social platform for mobile games, and is now building a messaging platform for gamers. His first company, OpenFeint, was acquired for over $100M in 2011 and now he’s at it again with a mission to transform how gamers communicate.
While Jason has seen much success as an entrepreneur, the path leading to Discord was not without its share of bumps and turns. After selling OpenFeint, his team initially launched a MOBA (Multiplayer Online Battle Arena) game exclusively for iPads called Fates Forever. The game was well received by critics, but it didn’t scale the way the team had hoped. There came a difficult time when, despite his passion for the game his team built from the ground up, Jason realized the company was better off pursuing another problem. They realized communication tools for gaming were extremely dated, and there was a need for a better way for people to connect. They pivoted and launched Discord, an all-in-one voice and text chat app for gamers.
Greylock investment partner Josh Elman caught up with Jason to talk about his entrepreneurial journey, the gaming industry, and what’s in store for Discord. The podcast is now available on iTunes, SoundCloud, Pocket Casts, and Stitcher.
Below are a few excerpts from their conversation:
The Art (and Challenge) of Pivoting
“ When I think about the pivot that we’ve done, it actually really sucks. People talk about it in a sort of glorified way that you want to fail fast and you’re not going to end up doing the thing you start doing and pivoting’s normal, but the reality is that being inside of that, it really, really, really, sucks.”
Many great tech products like Instagram, Slack, and Nextdoor are the result of a pivot. Looking at the success of these companies, outsiders might assume the decision to pivot was an easy one. But almost always, these choices are unclear and entrepreneurs have to make a tough call with heavy weight on their shoulders. Their passion, people’s jobs, and investor’s money are all at stake. But, if you find yourself in a situation where a pivot is a logical next step, Jason says you should address it head on. On a personal level, you have to fully acknowledge that something you care deeply about is not working, and think through with your team what a constructive next move will be. He also says that “you want to be totally straight with your board.” Even before the pivot, he was very transparent with his investors about metrics and traction of their game. So, when he broke the news to his board, they were supportive and helped him work through the process of figuring out what to do next.
Distribution Matters
“Even if the product is right and the distribution channel exists, if you don’t know how to find the distribution channel and get the word out in the right way, you can have the right product and it doesn’t matter.”
After shutting down Fates Forever, Jason and his team began working on Discord. Five months into testing and building, they started to feel good about the product but it wasn’t taking off. His team began wondering “maybe this actually isn’t as important to people as we thought.” So, they started mulling on ways to kickstart distribution. Their first successful strategy was to share Discord on Reddit. People began discussing the product in gaming subreddits and invited friends to the service. Jason’s team then started working with Twitch streamers. They built a Twitch integration to Discord, which allowed gamers to talk about Discord on steam and invite others in the community to join. According to Jason, today thousands of partner streamers use Discord with Twitch. These two strategies helped ignite viral word of mouth growth, and today more than 2 million people join the service each month. “One of the most interesting lessons for me from that experience looking back on it is that, yet again, it underscores how important distribution is to a product.”
The Future of Gaming
“It’s not clear to me yet though when core gaming will arrive in a big way on mobile. PC is vibrant, it’s thriving. I spend most of my gaming time there. People have been calling the death of the PC for a very long time and it’s just kicking ass.”
Just a few years ago, Jason bet that gaming would make a big shift from consoles and PCs to mobile when he created Fates Forever. Today, he feels differently. While many critics have cited the slow decline of the PC, PC gaming on the other hand has been booming. In 2015, total revenue from the PC gaming market ($32B) topped mobile ($25B). Jason says that Discord will follow whichever platform core gaming goes to, but it’s not clear to him yet if there will be a major shift anytime soon.
