Discord and its early days | Product Stories #3
Part 2 of 2
Before I start with this mail, I would like to share a personal update with you. The startup I have been working on for the last 2 years was acquired by Twitter-backed Sharechat. You can read more about it here.
It feels a bit strange right now. I could write a long essay about those feelings but, I will save all of you from that rambling and just give you a few bullet points of what I am feeling right now:
Sad that we couldn’t achieve the outcome we had hoped when we first started
Happy that our 2 years of effort amounted to something
Happy that all the teammates have a great job at an exciting company (especially during these tough times)
Sad that we no longer work together as a small team; and no longer work in that small office
A little bit of “what if” feeling. What if we had continued building instead of exiting early? Best companies are the ones that persevere the war times, right? Sadly ours won’t be one of them.
On that mixed note, I will continue from where I left off last week. To summarize my last post:
Discord was founded by a repeat founder Jason Citron. He first made a game, pivoted to a social company, and sold it. Then again tried building a game; pivoted to a social company and that company is now called Discord (Slack also has this insane 2x pivot from game to social company story).
It was started in a space that already had a bunch of companies, but Discord has a very different approach than them. Only one other funded company was doing the same thing at that time (ie Curse; which was acquired by Amazon’s Twitch later on)
Discord solved a very specific problem of online gamers trying to coordinate and community while playing a team-based multiplayer game. I hypothesized that the same approach needs to be taken by all social apps if they have to become a less hit-or-miss game.
The early versions of Discord
After 5 months of working on the product, the team released the first version of Discord. It was not an MVP. It was a full-blown product. They were an 18 membered team working on it. Since the team had the DNA of a game studio, I guess they did not believe in “launch fast and iterate” mantra. They also had an example of Curse Voice and Teamspeak in front of them. They had to be better than them to survive.
(Screenshot of Discord from Oct 2015. Note that most of the functionality was built-in at that time itself)
Another thing to note is that even their homepage and branding hasn’t changed much since launch. Their main messaging of “It's time to ditch Skype and TeamSpeak” has remained exactly the same in the last 5 years. It’s an interesting first message to a user as it gives an exact idea to the user about what Discord is and it’s better than the alternatives.
While there are a lot of benefits of “launching fast and iterating”, this Steve Jobs style of building products also has its merits as proved by Discord.
Also, 5 months taken to build the product is significantly more than the likes of Reddit took to launch v0 of their products; but is significantly lesser than the 2 years it took Zoom to launch the first version.
Early distribution channels
After the launch of the product, there was a 3-week period during which Discord had no users. The first distribution channel they used was Reddit. They started talking about Discord in gaming subreddits and eventually some users also posting about Discord on those subreddits. This provided the first wave of growth for them.
The second and probably the most impactful distribution channel was Twitch - which is a game streaming platform. They built an integration with Twitch allowing Twitch streamers to voice chat with their followers (with privacy options such as which users to allow or ban, etc). But just building an integration doesn’t do the job. They had to solve for a specific problem for those game streamers as well in order for them to give a shit about Discord. It turned out that security was a big problem for these streamers since millions of people would watch a streamer and anyone could turn them offline by DDoS attack as existing solutions like Skype/Teamspeak did not provide that protection. This was one front where Discord was better than anyone else in the market (even startups like Curve Voice). This led to a lot of Twitch streamers aka influencers using the app and recommending it to their followers if they wanted to chat with them. This built a free influencer marketing avenue for them.
This move to focusing on Twitch streamers as a distribution channel is interesting. Discord’s main value proposition is helping video gamers voice chat with their friends while playing. It thus requires a strong friend network (like Facebook). Focusing on Twitch streamers would mean that they are going after a follower network (like Twitter). They basically used a follower based network to acquire users and then relied on their quality of service/utility to do the job of acquiring that user’s friends.
Metrics
From no users in the first 3 weeks (mid-2015), it quickly went to 3mn users registered in 6 months (Jan 2016). They had a growth rate of 133% MoM during that time (Adding 1mn users each month). 133% MoM is very impressive even for apps with a smaller base but to do it on a base of 3mn is an amazing feat. Within a year they reached 25mn registrations (70% MoM growth).
May 2015: 0
Jan 2016: 3mn (133% MoM)
Dec 2016: 25mn (70% MoM)
May 2017: 45mn (30% MoM)
May 2018: 130mn (25% MoM)
May 2019: 250mn (16% MoM)
Jason mentioned in an interview that the two metrics he used to determine if the product was working during the early days were - Week 1 retention and frequency of usage. I couldn’t find publicly available numbers for these metrics, but the growth rate itself is a very clear indicator that the product was working.
Currently, it’s retention is really impressive as well. It has a Day 30 retention of 27% (which is almost the same as Whatsapp’s) in the US. It’s lower in other parts of the world (range of 10%-20%).
I will end this product story right here.
Would love to get feedback from all of you at this point on the following two points:
Which aspects of a product’s journey I should cover more in more depth (metrics vs analysis of v0 product vs early go-to-market)?
Which other products I should cover in this series?
Feel free to reply to this mail for the same.
Interesting articles I read this week:
The Untold History of Facebook’s Most Controversial Growth Tool - Talks about “People You May Know” Facebook feature in decent depth
Top 90+ Resources for Product Managers - great curation of some of the classic articles written on product management
Inside the Clubhouse - Gives a good overview of tech twitter’s current favorite social app Clubhouse