How I Built This with Guy Raz - Discord: Jason Citron

Episode Date: March 7, 2022

During his early career, Jason Citron stepped away from two stalled businesses and pivoted—twice—to something far more successful. The second time he did it, he created one of the most popular social media platforms in the world. It started at age 13 when Jason had a “holy crap” moment, discovering he could make his own video games. His first video game company morphed into a social platform for gamers, and after he sold it, he couldn't resist launching another. When that business failed to get traction, he again re-imagined it as a digital space for gamers to gather, and in 2015, Discord was born. Today, the platform has 150 million monthly users, and is a gathering place not just for gamers, but for anyone who wants to connect with friends. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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You know, when I started the company in 2012, the idea was eventually to build a games distribution business. And so fast forward to 2018, realizing that it wasn't going to work and isn't what our customers wanted, it kind of was one of those moments where I was like questioning everything. Like, do I know what I'm doing? You know, how are we going to build a business? And I actually was kind of physically ill for a week. because I didn't really know what to do because so much of our time and energy was leading up towards building that business. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists,

and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Jason Citron gave up on building video games and instead created Discord, a social platform for gamers that eventually grew into a moment. meeting place for more than 150 million monthly users. When I was in middle school, we had a phone in the kitchen with a very long cord. And when a friend would call, I take the phone attached to that

cord down the hall and into a closet where I could close the door for privacy. Every now and again, my mom or dad would pick up the phone in the middle of my conversation and I would say, Mom, I'm on the phone. Now, right at the start of the pandemic, a version of this exact scenario played out, except this time I was the one intruding on my child, and he wasn't even on the phone. He was at his desk on his computer playing Minecraft wearing a headset and mic. I walked into his room, started asking him some questions, when he looked at me in horror and said, Dad, I'm talking to my friends. And I could hear little voices coming out of his headset, multiple voices.

And he was talking back and talking to the other characters on the screen. And on top of that, there was a window on the computer screen with a constantly updating text conversation. Oh, and music too, Spotify was playing in the background. Now, at the risk of sounding like a very old and out of touch, Dad, all of this was made possible by a social media platform that I'd heard of but didn't know much about. Discord. And since its launch in 2015, it's become one of the biggest social media platforms in the world. Discord was built for gamers as a way to chat and send messages and talk while playing video games together.

And like Zoom and Slack, Discord grew at a massive rate during the pandemic because for millions of people, it was a lot. a way to socialize. And in our case, it kind of saved my kids during the almost two years of limited in real life social interaction. But what's most remarkable about Discord is that when it was launched in 2015, social media was dominated by Facebook, Instagram, Twitter, and Snap. And you would have been kind of crazy to try and compete with those. But Jason Citron, the founder and creator of Discord, wasn't competing at all. Instead, he entered that crowded social media space through a side door, a door that led to gamers. He built his platform for them, designed with their needs in mind.

And in return, they not only adopted Discord, they told all their friends to do the same. Now, like many of the tech founders we've had on this show, Jason Citron got into computers at an early age. But unlike many of them, he didn't study math or engineering. and he didn't attend Stanford or MIT or Berkeley. In fact, Jason got a degree in video game design at a for-profit college in Orlando, Florida, called Full Sail. And with that degree, he moved out west to design video games. But somewhere along the path to building games, he struck out.

Twice, as you will hear. He couldn't figure out how to make a game people wanted to use or pay for, But what he could figure out was how to create a way for gamers to communicate, and he did that also twice. In the case of Discord, it now has more than 150 million monthly users, and in 2021, it was widely reported that Microsoft offered Jason $10 billion for Discord. An offer, he turned down, but we'll get there. As I mentioned, Jason got into computers pretty early. Actually, to be more specific, he got into video games. And at age 13, his family moved from Long Island down to South Florida.

And for his future career, that move proved to be fateful. Yeah, that's a funny story. I actually, so this was shortly after he moved to Florida. And this is one of those things where it's like, if my family hadn't moved to Florida, like maybe this would never have happened. And my whole life would have been different. But I ended making a bunch of friends, you know, in eighth grade, when I moved there and had a slumber party for my 13th birthday.

And everybody sort of fell asleep except for me and one other guy. And we were sitting around talking and he's like, I know how to make video games. And of course, I'm like, no, you don't. Like, you're lying. Like, you don't have to make video games. And he says, no, no, I really know how to make video games. And so we installed this thing called Q Basic on my computer, which was like a very basic kind of computer programming environment.

and he starts typing in some commands on the computer and starts drawing these little circles on the screen. I mean, imagine like the lamest graphics you could possibly imagine, like a black screen with like a little circle on it. And I just like lost myself. I was like, this is amazing. Like, holy crap. Like you can actually make video games.

And I just became obsessed with computer programming. What was the first thing that you were able to successfully program? I mean, I'm assuming it was pretty room entry. What do you remember about it? So, you know, in high school, I built a couple video games, but I also made it, you know, learn how to build web pages. And I also, I think part of it, you know, when you think about as a kid, like how you get validation for what you do and how that reinforces your behavior, I learned pretty quickly that I could make money from programming and from computers and IT and these things. So that was something my dad taught me, you know, early on was like, got to have a skill that you can use to make money. Yeah. So I kind of, that all kind of compounded. How did you, I mean, eventually how were you making money in high school from some of the skills that you were learning? But big part of it was helping people around town learn to use computers.

Right. And then from the programming stuff, it was, you know, I would like meet people on the internet who were in these like programming communities who were like looking for people to help them build websites. And I was like, I can do that. And so I met, you know, a bunch of different people who contracted me to build, you know, websites. for them. And actually, I remember the first time that I was trying to get paid, I went and talked to my parents. And I was like, hey, mom and dad. Like, I need to, someone, I need to, like, be able to accept, like, a couple thousand bucks from someone on the internet. Like, how do I do that? And they actually thought I was, like, selling drugs or something. Because they were like, how are you getting paid,

you know, online? I was like, no, no. And, like, I showed them. I was like, no, look, this is all this computer programming stuff I've been doing. And they're like, oh, that's great. And so, you know, they helped me set up, like, a PayPal account. And I guess when it came time for you to go to college, you stayed in Florida. You went to a place called Full Sail University. I guess it's based in Orlando and it's a for-profit college. It's sort of like a trade school where a lot of people interested in video game design go. So you end up at a university that's not sort of the traditional kind of quote-unquote prestigious place, but more practical.

And it sounds like you were learning how to do what you wanted to do or wanted to learn. Yeah, that's exactly what happened. You know, I think higher education is kind of an interesting, an interesting part of society because in reality, you know, I'm now like almost 20 years removed from all of this. And when I work with people, the school they went to like never comes up, right? It's like, what can you do? What do you know? But that was a thing.

in Silicon Valley, 15, 20, 10 years ago, people were kind of snobby about, you know, they went to Stanford, Caltech or Berkeley. I mean, I don't know. Maybe that was the case. But I think at some level, one of the great things about Silicon Valley, I think, at least from my point of view, is that it's kind of really just about what you can do. Yeah. And not really about where you're from. There tends to be some of this, like, you know, if you're from a poor prestigious school, maybe you have like the network that helps you. At the end of the day, like the beauty of Silicon Valley is that if you have a great idea and you can show and you can actually bring it to life, you can convince total strangers

to give you money, join your project. And so this notion that you have to go to a great school, it didn't end up being a thing for me, you know, at least. And a lot of lots of people that I know didn't go to great schools that they're super successful. Yeah. And I guess after you graduated, you, clearly you wanted to go and make video games.

And you ended up, I think, first in Southern California, at a studio there, but it wasn't quite clicking. And then eventually you landed in Berkeley, right? Yeah. The funny story is so I had moved to Berkeley because I wanted to kind of be in more of a social environment. You know, I was 20 in the time, moved to the Bay Area, basically didn't know anybody.

And after living by myself for nine months or something, I was like, I want to go, like, be somewhere where I can make more friends. So since I was kind of the same age as, like, the fourth year students over at Berkeley, I found some, you know, house in Berkeley where there were, like, nine other college kids living, and I got a room in there with them to, like, make friends. And one of the folks who was living there had an uncle who was starting a tech incubator. And, you know, I remember I was, like, walking to the kitchen to get some cheese or something from the fridge. And he's sitting and talking with another one of the kids on the couch, you know, explaining how

his uncle's looking for folks who want to start a company. And I just remember stopping and being like, hi, can I meet your uncle? So we got to talking. And that was kind of how I got into Silicon Valley was another one of these like totally accidental situations. This was a small tech incubator, I think called the Uweb. That's right. And the guy's name was Peter Raylan or Relan? Yeah, Peter Rellon. Yeah. He was a technologist himself who had started a company and been pretty successful and was looking to do something and had this idea to help up-and-coming entrepreneurs, like programmers, like learn how to build and launch companies. But that ended up being, you know, one of the best decisions and fortuitous situations of my life. And the idea was you have a year to come up with something.

Yeah, we had a year to come up with something. And so the first idea that I worked on was an online dating site where you could place charades with people to kind of get to know them. Like through video chat? Yeah. Yeah. This was like back when like Flash was new and like webcams were kind of new. Turns out it was a horrible idea. We actually shut it down the day that we launched it.

Like no one wanted to do this. Right. But you actually started to work on it and create like a wireframe for it and an interface? Yeah. I built it. But I realized that like there were so many things about. about that interaction that were just not what people wanted. So we ended up building a kind of multiplayer Uno game

where you could match up with folks play Uno, but it had chat. So while you're playing Uno, the point was actually to make friends. And you launched this through Facebook? It was on Bebo, which was a different social network at the time. This was back when it wasn't clear which social network was going to be the one that everyone used. And how did that do? It did pretty well. We had, I think maybe 10,000 people using it and playing Uno with each other.

And the interesting thing here is we were working on it for probably a couple months, I think. And then Steve Jobs announced the App Store. And I remember watching the keynote, I think that was in early 2008. He announced the App Store. And I just remember listening to that going like, holy smokes, this is going to be like a new game console launching. And what I mean by that is like, you know, whenever a new video game console launches, that's the opportunity for a new video game studio to get started because there aren't 200 games available. Like, you know, when the PlayStation 3 comes out or, you know, one of these new systems, it's just a handful of titles. And so if you can be a launch title, you can get a lot of distribution because you'll get a lot of awareness because the console makers will push the games.

And so it's a great opportunity to launch a new business. And so I saw the App Store and I was like, oh my gosh, this might be the opportunity to launch the video games business. We shut down the Uno game and started hacking on an iPhone title before there were even any tools to do it. And we ended up launching a game the day the App Store opened about five months later. We were one of the first 50 titles on the App Store. And I remember thinking like if we get a thousand players in the first week, that would be. be incredible. And we got a thousand in the first hour. I was like, oh, this is, this is something. This is a game that you launched called Aurora Faint. And it was a, can you describe what it was?

It's like a puzzle game, right, for iPhones? Yeah. So the idea was we have a new device in an iPhone. And how could we make a game that takes advantage of the device in a fun and interesting way? And so, like, what was unique about an iPhone is it had an accelerometer so you could turn the device sideways, and it had contact list. So your friends were already sort of there. So we decided to build essentially a puzzle game. Effectively, imagine Tetris, but with a kind of Lord of the Rings aesthetic with some role-playing mechanics, so you could level up and unlock characters and compete against other people. And you could turn the phone sideways to kind of change the direction of how the board moved. And it was pretty popular. We won a bunch of awards for it, but it didn't end up

becoming the business that we thought it would be. You were partnered at the incubator at U-Web with somebody named Danielle Cassley, who you ended up creating this with. Tell me about Danielle. Who was she? Yeah. Danielle was another entrepreneur at the incubator. And Peter suggested that the two of us team up because she was working on a related

game project. And I think he thought that the app store was going to be a big thing. And so Danielle and I ended up. teaming up to build a war of fate together, and we hired some really great artists to help us. All right, so you put this out on the app store, and you get some interest. And by the way, was it, was it free? Yeah, the game was free. The big brain idea we had at the time was to follow the shareware model. If you can imagine, this was before ANAP purchases. Free to play video games were like not really a thing. And our idea was, let's make it free, get a lot of people to try it,

And then in a few months, we'll launch like a bigger version that's like $8. And then we'll upsell people from the free version. And it didn't work. Did you make any money off of Orophane at all? I think we cover our spend for maybe one month when we launched the $8 version. I think we made like $30,000 on it. And then the next month we made like $15,000. And the next month we made like $7,000.

And by the second month, we were like, okay, this isn't working. Like all the other games in the app store are trending towards 99 cents. And so we actually got to a point where we had about three weeks of runway left, of money left to spend to run our business. And I remember very vividly calling up my dad and being like, hey, dad, I think this startup adventure is coming to an end. Can you get my room ready? I'm going to have to move home before I get my next job. And he's like, okay. I'm like, all right, great.

But it's clear that there was a desire to, figure something out. It sounds like there was a kernel of something there that you had worked on with Danielle and Peter. Yeah, we ended up, Danielle, Peter and I were sitting around talking about, like, you know, is this really the end? Like, what else can we do? And I had the observation that we had built all of this stuff in our game, leaderboards, chat rooms, multiplayer capability. And I thought other developers might want to use the technology in their games. So, So that's what we ended up, we ended up building that. You basically said, hey, instead of making video games,

let's just sell the technology that we created for this game to other game makers who were making games for iPhones. Yeah, that's right. That's right. So we ended up setting up a webpage and basically saying, like, if you're making a video game and you want to have drop-in multiplayer support, use our system. We called it OpenFaint.

And, you know, in three days, you can take your iPhone game and make it multiplayer. and people will play it more, you'll get more users and all that kind of stuff. But the thing is that we actually didn't have enough time, enough money in the bank to build all that stuff. Because while we did have it in the game, the technology wasn't set up to be used by other titles. Right.

So we came up with this kind of wacky idea to basically check and see if people really wanted this. So we put up a webpage, TechCrunch covered it, and we got a couple hundred, people who signed up on the mailing list. And so we actually took that mailing list and went out and raised a seed round of funding. And then we spent the next three months building and launching to launch the service. Because you didn't actually, you had to extract the technology, right?

I mean, you built it, purpose built it for the game, but you had to essentially remake it could be generic. It could be white labeled. That's right. We had to completely rebuild. We basically rebuilt all the technology from scratch to make sure that it could be really easily dropped into any, any iPhone, or Android game. So it was like plug-in-play technology, that it would just save people time, that they would not have to code it themselves. Yep. So if you had a fun kind of

high-score-based iPhone game, if you added OpenFaint in a week, you could turn it into a competitive multiplayer game where you and I can compete for high scores, we could unlock achievements, you had a chat room, and it would also go across games. So if you had,

if you and I were playing two different games, we would not have to like add each other as friends again in two different places. And so it really kind of created this social layer across iPhone and Android games. So you had to start working on this, right? Because you had at least 100 people who were interested in it and using it.

And what did that mean? Was it just the two of you back starting from scratch? You and Danielle? Well, there were actually five of us at that point in time. Okay. My friend Andy had joined us, and then there were two other folks. But yeah, basically we were starting over.

Like we went file due and started coding again. And, you know, Danielle and Peter kind of did the business development and went out and started, you know, reaching out to all those people who were on that mailing list and talking to them and pitching the idea. And I was, you know, furiously coding. And we ended up launching it about three months later with 15 games. Is it an April, like April of 2009? Yeah, probably March, April, something like that. and we launched it with 15 games.

One of them was one of the biggest independent developer hits at the time a game called Pocket God. And having a really cool marquee title kind of really put us on the map for it. And it just kind of took off. And when you say put us on the map, I mean, this is back-end technology,

but puts you on the map among developers, game creators, right? Yes, it put us on the map for game developers. But the interesting thing about how we built it was it wasn't just back-end technology. A big part of it was that end users would have an open-faint account. They would set up a username. And so when you would go across games, all of your friends and all of that stuff

would come with you. So it actually started to generate a lot of end-user awareness. Developers would start to put the logo on their app icons in the corner. So like when you were browsing the app store, you'd be able to see like, oh, this game has open fain. So like my friends will be there with me. And it got to a point where, you know, you were scrolling that app store list. Like every other game had our logo in the corner.

It was pretty wild. Yeah, OpenFaint became like a brand. Yeah. Because it was an app too. That's right. Yeah. It really was like a whole social platform for people to play games with their friends. How did you, what was the revenue model?

Would the video game come, because presumably they would buy the software that you created and they'd plug it into their system. And then what? And then they paid you subscription? Like, how did it work? When we launched OpenFaint, the idea was that we kind of have like a tiered plan. So like initially it would be free. And then once your game starts to get popular, we would say, okay, now pay us for this,

you know, some kind of software is a service fee. But very quickly, we actually realized that that was not a great business model. And so we just made it free for initially. And we never really figured out how to make money off of it, frankly. So essentially you started to raise money, right? You were attracting more and more interest from investors. I think you eventually raised like $12 million, but you had no revenue coming in. That's right.

I mean, I think a few people had paid us, you know, with the initial thing. But this was one of the – I thought was like the growth rate of it was such that, like, was just focused on growing, and then we'll turn our attention to making money later. And did you – I mean, as you – as you just attracted more and more interest from gaming companies, or people building games, were investors coming to you or were you guys going out and, you know, going up and down Sand Hill Road and pitching people? Yeah, we were pitching people. Like, it was actually very hard to raise money. You know, this was 2009. So it was a very odd time in that in this very sort of small place of Silicon Valley focusing on smartphones, it felt like

opportunity was endless and that it was just this amazing new thing that was growing. But the world around us, like it was the financial crisis just was happening. Like, it was very difficult to raise money. We raised money from a couple strategic investors, but actually no Sandhill VCs invested in that company. How did you find, I mean, you were, I don't know, 23 years old and, you know, still relatively new, but how did you find that process of going and pitching for money? Did you, do you remember in the early days?

Did you, would you get nervous? Did you feel awkward? I mean, or was it, were you comfortable doing it? Was it easy? It was kind of all of the above. The thing about it is I really knew what I was pitching and I really believed in it. The numbers were just up into the right. And so it was just about finding people who believed in that and who understood it.

And, you know, the first investment we got was from actually another company that, was working on something similar in a different market. And so they really understood it. And then later on, we got a little more traditional venture capital arm of Intel actually invested. Yeah. I think $3 million. Yeah, that's right.

But it was just a difficult time, I think, generally in the market. And maybe this was where like not going to Stanford didn't help, you know, I don't know. Because you didn't have the network. Yeah. But I mean, you had this experience with Peter Rellen who kind of, I'm assuming maybe he kind of mentor you. Is that where you kind of learn the ropes about, you know, how to value your company and

and which lawyers to work with and or was it through some other channel? Yeah. No, that's right. That's right. Yeah, he really kind of showed me the ropes of Silicon Valley. And he had a network of some really good folks that kind of he brought in to support the company. So, and he had some connections to help us get in front of some investors, uh, and,

and navigate that a bit. How did you, um, how did you do as a lead? when you were so young. I mean, you start out with five people, and I think within a year and a half, it grew to almost 100 people. So help me understand how you figured out how to be a leader of 100 people. I mean, that's for anybody that's hard. For somebody, you know, 25, 26 is really, you know, it's not so easy. No, it wasn't easy. I made, you know, not every mistake in the book, but I made a lot of the mistakes in the book. It really was like a business school of hard knocks kind of an experience for me. You know, I have a very clear memory of like probably around year two. I think we were maybe 70 people at the time. And Andy, you know, my friend, who is still working with me, came to me and he said, you know, Jason, it kind of sucks working here.

But I'm not leaving. I'm just letting you know. We need to work on making it better to work here because it's not awesome. What was not awesome? Well, we just, you know, because we grew so fast and everything was new, we were not focused on building a great culture. Like it was very much just like we have to solve the problems and we just were just trying to stay, you know, above water. You know, when you're building software products, like you've got to be really intentional about paying down technical debt and thinking about how you run the process around building software at scale because if you're not thoughtful about tool development and and building code that is reusable and easily to maintain you find yourself in situations where like everything is really hard to do and when things get hard to do people get

stressed and I was I kind of leaned more towards the like more more more like I have really high expectations like we got to get this done so I wasn't getting mad at people like I'm definitely not the guy who gets angry but I have really high expectations and High expectations combined with lots of technical debt and management debt made it, like, difficult to make progress. And I would get frustrated. But you didn't know anything about management. You had no management, no training or experience. I didn't.

I didn't. And I think, you know, there's also a difference between, like, leadership and management. They're both skills that can be learned. But I think I was a bit of a natural leader. Like something about how I approached my work and approached the problems we were solving for our customers. was inspiring to the people we were working with. But my management ability was just like so raw that I really leaned on on some of the executives that we ended up hiring. Peter certainly helped teach me some things about that. But a lot of it was just trial and error and reading books. And, you know, I studied a lot

as I did when I was learning programming. I was like, I'm going to learn how to build this business. So I read management books and talk to people. And, you know, I kind of got some of the basics in place. but, you know, it's really hard to do that, you know, what do they say? Like you're building the plane as you're falling out of the sky kind of a thing. And you've never built a plane before. Yeah. Yeah. So I guess open faint started to make a little bit of money by, I think, probably by early 2011.

And then basically in April of 2011, the company was sold to a Japanese social networking game maker called Gree for like. $100 million, which is unbelievable. Yeah. And I think anybody would have done that. But was there any, I just had a curiosity, was there anybody who said, like, don't do this? Like, we can, we can get bigger. Or was everyone like, yep, let's do it, let's sell?

It was not clear that we should sell. The thought process was really kind of a combination of the opportunity we have in front of us and how much risk we felt was in that opportunity. and then the financials that everyone in the team would get, including myself, and sort of how that might change people's lives. And ultimately, because of where we were with the business, like we had strong user growth, we hadn't quite figured out how to make money, and the market was changing a lot. You know, free-to-play games, games were starting to become popular,

and free-to-play games kind of had less of a need for OpenFaunt. And we were also competing with Apple and now Google at this point. So given all of this dynamic, I sort of felt like it could go either way. Like we could keep doing it and we could figure it out or not. And ultimately the reason I chose to sell the company was because, you know, the arrangement we had with with Greene, the acquirer, was that we would get more resources to go on and continue building the open feint and

see where we can take it. But, you know, unfortunately, I very quickly realized that we actually didn't see eye to and they wanted to take the business to the left. I wanted to take it to the right. And so after like three or four months, you know, they asked me to step aside and basically like, we're going to take the business in this direction.

And so I left. Let me just back up for a sec. When you sell a company, oftentimes part of the deal is you go work for them and they were buying your talent and a talent of your team. And you were not, you weren't profitable. You were far from profitable. You were more making much money, but you had tons of users.

I think when you sold to Grie, I read like 30% of the apps in the app store were using OpenFaint. So huge penetration in that market, right? But they had to figure out presumably how to make it a revenue generating product. Is that where the clash of ideas came from? No. I mean, I was all supportive, like how can we build a business around this? Right. But I think that the strategy that they want to.

wanted to take to do that, I believed would destroy the stuff that we had. And, you know, when you sell a business, you're selling it. And they had the right to choose. You're an employee. They could choose what they wanted to do. And so they did. But was it was it a, was it a kind of a clash of personalities too? I think it was, it was just expectation setting. Like it wasn't a clash of personalities. But ultimately, there was actually a big language barrier between them and myself and I think that contributed to some of not seeing, you know, eye to eye on it. I was fully intending to stick around for a long time. Like, I didn't build this, you know, pour my heart and soul into this company with the expectation that I was going to walk away from it.

I mean, you did well. You came out of that set for life financially. You were 26. So, I mean, you could look at it, and of course, perspective matters here, but you could look at it from a number of different perspectives and say, okay, big deal. So they ask you to leave, but you're set for life. But I'm assuming you didn't quite see it that simply. No, I didn't. I mean, it's true. You know, like selling a company and having, you know, for good economic outcome is phenomenal. It was life-changing for myself and for a lot of the people at the company. You know, we all recognize that money is important. You know, my dad grew up super poor in the projects in, you know, in in New York City and so you know I think for him he was really like wow this is an incredible

conversation to be having should we sell this company yeah I'm right amazing right but you know I got into doing this and and even to this day like I I do what I do because I love building things I love creating experiences for people that make them smile and at the time when I left I I remember sitting in my car actually crying because I thought maybe I wasn't ever going to have the opportunity to build something that mattered again. When we come back in just a moment, how Jason finally does what he's always wanted to do, start a video game company, and how that idea ultimately fails in the most successful way possible. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2011, 2012, and Jason is taking a bit of a breather after selling

his company Open Faint. And during this period, he plays a lot of video games. Final Fantasy 6 is a special favorite, and he does a little traveling with his girlfriend. But he's also thinking really hard about what he wants to do next. Now I was sitting there thinking, like, okay, I always wanted to start a video games company, and I could do it now. So, like, how do I want to do it. And, you know, one of the things that I'd seen over my life is when there are these new distribution channels that get created, that's opportunities for new businesses to get to get launched. You know, I mentioned this earlier with, you know, consoles and the app store. And so sitting around in 2012, I was like, okay, where in the world is there kind of a leading edge innovation that may

have some new distribution opportunities where there's less competition? So a startup has an opportunity to stand out. Yeah. And this was around, I think, you're two or three of the iPad. And early days, iPad growth was like a hockey stick. Yeah. And so I remember thinking, you know, maybe iPads will end up replacing how people use desktop computers.

And the way that people play games on those devices are quite different than mobile devices. You tend to sit for a longer amount of time. You can have deeper experiences. And the idea I had was, what if we built a game? gaming business that was more like traditional kind of video games, but on tablets, as opposed to kind of the mobile games, which I had been doing before, which were more kind of bite-sized pickup and play ideas.

So that was basically your idea to start a company where you would do multiplayer games for tablets? Yeah. And the thesis there was I studied entertainment businesses, and I realized that the ones that end up being around for a long time tend to have some kind of durable advantage beyond just a single title. It's changing a bit now with games as a service, but a decade ago, video game businesses that were around for a long time tended to have a distribution mechanism of their own that they could use to kind of buffer the time between making hit titles because it's a very hit-driven industry.

Yeah. So I'm talking, you know, Nintendo, Sony with their PlayStation, Microsoft Xbox, you know, Val, has their Steam store. And so as a technologist, I'm like, I probably can build some kind of distribution mechanism or something. And I had the notion that there might be an opportunity to build a group communications app for people who play games. And so the idea was build a team-based multiplayer game

that had voice chat and text chat kind of built into it, kind of similar to how Aurora Faint was. Yeah, except it would have voice chat. Yeah. It would be team-based real-time gameplay. and then use the game to kind of bootstrap the communication network, and then use that to launch additional titles and eventually build a distribution business for games.

It sounds like the idea was to build like a media technology company where you would offer this service similar to Aurora Faint, but with audio chat component, but also to make games that were designed to be used with this social interactive platform. Yeah, that's right. But instead of like OpenFaint, where it was primarily a, service that we sold to developers who then put it in their games for their users. This time, I was like, I want to go direct to consumers and have a direct relationship with the game players

and then eventually make it into its own app. So you were really thinking about building a social network. Yes. This is around 2012, and I think you originally called the company Phoenix Guild, and then you changed to hammer and chisel. And you raised a, a little over a million dollars in seed money to launch it. And when you pitched it to, I mean, I'm assuming at that time, lots of people who wanted to throw money at you because you've taken a, you know, a company from zero to $100 million in two years. But when you explained what you were doing, how did you describe it?

Did you describe it as a, we're going to make video games? Or did you describe it as we're going to create the social network or both? Yeah, I described it as we're going to build a new, kind of gaming ecosystem on like the next generation of computing devices. And it's going to be a combination of things. It's going to be games. It's going to be a communication service. And then it's going to be a distribution mechanism.

How did you begin to recruit people to join you? How did you find people? Were there people from Open Faint who came? Was it just a network of people you knew? Yeah. How did you start to gather the team? I mean, the initial place that I started was, I was like, I need an artist.

I was like, I'm a software engineer who kind of understands product and game design, but I'm not an artist. So I need an artist to make any progress. And so I, you know, called up some of my friends from the games industry to see, like, is anyone interested? What are people doing? And I started looking online to find, like, great talent. And there was this website, I think it was called CGHub.com, like computer graphics hub.com,

where artists would, like, put up their portfolios. So I just kind of started going down these portfolios and sending messages to people who looked like they had really awesome work. And then ultimately really hit it off with one guy who was just incredible. His name is Brandon. I actually flew to Texas to meet with him. And he ended up being the first person to join the company. He's actually still with us today. Which is pretty cool.

Did you have an idea, a specific idea of what the game would be? Or did you just go to him and say, I'm not really sure what it is, but I want to make a video game and I want to do it together? Kind of had a hunch of the space to explore, but I didn't have a specific idea. You know, I knew that I wanted to build a game that was real-time multiplayer that allowed you to spend time with your friends and have these really fun experiences to, like, create memories together. And then that would also plant the right kind of seeds to be able to build that, you know, communication service that we wanted to build on top of the game. Right. So how did you come up with it? The concept would eventually be called Fates Forever.

It was a first game, I think, that you came up with. Yeah, Fates Forever is a three versus three real-time multiplayer game. The genre is called Massively Online Battle Arena or Mova. You're fighting other people. Yeah, yeah. It's kind of like playing soccer, but instead of a ball going into a goal, it's like dragons and fireballs and stuff. And the three of you are all kind of on the same team fighting them. Yeah, so yeah, it's like you and two other friends against three other people.

But I have to give credit. Like, we didn't invent this. This game was already really popularized on PC by something called League of Legends. And so... Yeah, we've done the... We talked to the founders of Riot games on the show. Great, great. Yeah, they're phenomenal.

An amazing story. But keep going. And by the way, I know I sound like a complete bozo when I'm asking these kinds of questions. Because people who play these games are like, are you kidding me? You don't know how this works? And the answer is, no, I don't. Even though I've seen it, I see my kids play it. I'm like, okay, so it's three of you and you're fighting this guy and the fireballs come at you, and there's a dragon there.

and then there's this guy and you're fighting. And sometimes you kill each other. Yeah, kind of. Okay, keep going. Yeah, it's, there's a lot to learn. But so that's what the game is. So we basically took one of the game modes from League of Legends and we said, how could we reimagine this for like a 12 inch piece of glass, you know, where you're playing on a tablet?

And so we came up with a new kind of touch mechanics. You could like draw, you know, you could draw a squiggly line and like the fire would like follow the line that you drew. Oh, cool. So, like, we had a lot of interesting interaction design that we did to try and really create like a mobile native experience to offer something different. By the way, how long, I read that it was an eight-person team that made this game. Because you had, because you raised some money, I think about $2.5 million to make this game.

And then another $8 million or a little bit more after. But, but I mean, how long does it take for eight people to make a game? I mean, I guess I guess the answer is a year and a half, right? But is that just like crazy intense schedule? Because it seems so complex. And eight people is not a lot of people. Yeah, it's complicated making games. But it's interesting because for the first six months of the company,

we were kind of noodling around on different prototypes and different ideas. We had like a tower defense concept, a couple different kind of concepts. And then after about six months, we kind of had this interesting moment where, you know, I decided like we should reinvent this MoBA concept on tablet. because I believe that it's a really great game design, and I thought it would be huge on mobile. But a couple of the people at the company time didn't agree. And so actually, two people ended up quitting,

and I had to let one person go because they didn't want to work on it. They thought it was a bad idea. I mean, they were kind of right. But it was an interesting formative moment for us, because there were like three of us left, and it was Andy, this fellow that I've mentioned a few times, he ended up joining up, and then Brandon, that first guy that I hired.

And we were sitting around thinking, like, do we even want to go do this? Or should we just kind of close up shop and go get jobs, you know, somewhere else? Yeah. And we ended up deciding that we didn't want to go get jobs somewhere else. And we wanted to take a shot at building our own games company because if we could make a great place to work and collaborate with people that we, you know, respected, like that would actually be kind of an end in and of itself and good things would probably happen. You know, we all had difficult experiences working in the games industry. So that was actually the moment we renamed the company to hammer and chisel to really honor the craft of making something. And so we ended up then hiring actually up to about 18 people to build the game. And it took us about two and a half years, I think, because that was early, maybe actually it was a year and a half, you're right, to build it and launch it.

But we worked hard, but we didn't crunch a lot. we had pretty good work life harmony. It had a lot of fun doing it, but we just tried to be smart about it and took a long view on building a great place to work. You launched the game for wide release in I think in April or maybe in July of 2014, but it didn't do that well, right?

It didn't really take off. Yeah, it was kind of a similar story to what happened with Aurora Faint. We got iPad Editor's Choice, We got a lot of people downloaded it in that first week. Critics liked it. Critics liked it won a lot of awards. But ultimately it became clear that the genre on tablets was not really going to work.

And that tablets generally, while popular, were not going to be as big as we thought and not going to be kind of the inflection point around like how people change their relationship with computers. And that actually it was going to be smartphones all along. So we started porting our game to smartphones. And did that help? Well, we never actually found out because as we were working on that port, one of the engineers at the company, a guy named Stanislav Vishnevsky, came to me and was like,

hey, Jason, and we've been talking about this gaming communication thing for a while. And he was like, I have an idea for how we could build a communications app that doesn't require us to bootstrap it with a game. And he actually pitched me the seed of the idea of what Discord is today. And so I call Stan a co-founder because of that moment. Huh. But what was the exact idea that Stan brought to you? Like, what was that insight that he had? The insight that he really had was kind of putting together a couple of dots, which were kind of counterintuitive, which was we're seeing our customers cobble together, you know, communication around our own game with all these different apps. And also ourselves, like, we kind of do this when we play, you know, games on PC. And, like, maybe we can just solve that problem directly rather than, you know, you know, we can. And, like, maybe we can just solve that problem directly. rather than needing to build a game to get people to use something which we can then focus on.

And the real counterintuitive part was, and we should start by doing it on PC. You know, because in 2014, like, mobile was exploding. Everyone in Silicon Valley was focused on mobile. And we ended up basically talking about launching a communication service on PC first. Our board thought we were kind of nuts, but ultimately, to their credit, they believe that we understood our customers. and as individual users, like, we would go home and play games on our PCs and consoles all the time. Because they're more powerful, right?

Yeah, they're more powerful. It's more comfortable if you're going to sit and play a game for like four hours with your friends. Like you want a bigger screen, you want to use a keyboard and a mouse. It just seemed natural to us. So while it wasn't kind of like the top of mind conversation of the day in Silicon Valley, as people who play games ourselves, it was, it seemed obvious. Once Stan, like, put it on paper. We were like, oh, this should probably work.

Let's take a swing at it. When you, I mean, the idea of Discord initially was a way to communicate while you're playing video games and then to communicate around video games to talk after. Because video games, and I know a lot of people listening know this, but just bear with me for a moment. Sure. If you know this, because lots of people listening will not know this, which is a lot of people playing will not know this, which is a lot of people playing. video games, not because they care about winning the game or they even care that much about the game. It's just a chance to hang out with friends and you happen to be playing a video game, but you're really hanging out. That's the thing, right? Yeah. And so this tool would just facilitate

that. That was your thinking? Yeah, that's exactly right. You know, growing up, video games were the way that I spent time and hung out with my friends. You know, I wasn't the kid going outside playing sports. And so through my whole life, I just have... so many amazing memories with my best friends, my wife, my brother, playing video games. You know, the video games themselves were not the point, like you're saying. And half the time we'd be just talking about random stuff, talking about life. And fundamentally, Discord was about was creating a place that you and your group of friends could come together to talk and hang out.

So it really created almost like the feeling of like having your own private cafe or a dorm room or living room that's just for you and your friends, you know, on your computer. And then very quickly, you know, in your pocket on your phone. Yeah. Here's the thing. Here's what I'm trying to understand. I mean, all of these things were available in different formats, right? Like, you could just very crudely, like you were playing video games with your friends, you could all just get your iPhones out and do a conference call and just put on speaker and you could, communicate that way, right? You could hear each other's voices and talk. Slack was out there, and there were other ways to communicate.

So why did you think that people would, was it just that all of those were disparate, they were all over the place, and there just needed to be a simple one-stop shop where you could do all of that in a game? Was that the way you were thinking about it? Yeah, there were a couple parts, but having an all-in-one experience

was a big part of it. Because, you know, having to coordinate between all these different apps is kind of a pain in the butt. You know, like if you want to talk to your friends while you're playing a game, you know, people would, use one set of apps. And then if you weren't in the game, but you wanted to join, you'd be

texting people on a different app. But, like, they're playing the game. So, like, are they checking their phone? Are they checking their messages? It's like you're somewhere else. And then when the game is over, if someone leaves, let's say someone drops out of the game, but they want to keep talking. If you're using the built-in voice chat in the game, like, the person has to keep the game on their computer. They can't go, like, browse the web. So, like, there's all these little, like, nuanced behaviors that just made it kind of complicated to use. Whereas with Discord, The way that voice chat works is it's like an always-on-conference call. Because you invite people into a group space and then create a voice channel,

if you and I are talking, our friend can see that we're there and just click the button and hop right in without us having to get interrupted. And so it's just a magical experience. You can run into people online in a way that didn't happen in Skype. So there was clearly an opportunity here. But if you were going to focus on building discord, presumably that would mean that you were going to have to abandon the, the video game part of the company.

Yes. Well, initially it was a little more incremental than that. Initially, it was just Stan and a designer who were working on Discord. In January 2015, we kind of went filed new and started working on that. And did you have that name, by the way, Discord? No, we did not have the name Discord at that point. But it was just a side thing inside of hammer and jizzle. Yeah, that's right.

That's right. And within like a couple of weeks, kind of started to stand up a basic app. And I was like, this is kind of cool. So like I started coding on it. And then a couple weeks later, like, you know, one other engineer joined, another engineer joined. And after like two or three months, we were in a situation where we basically had like all of our engineers working on this chat app. And then all of our artists and game designers building games. And I realized like, this is crazy. Like as an 18 person startup, we can't be betting on these two things at the same time. Yeah. It's too much risk.

And I think we could have had a really good small to mid-sized business if we had focused on that game. But from the experience I had building OpenFaint, I knew that I had these powers that I could use to have positive impact on like tens or hundreds of millions of people. And I wanted to do something that was really big and important. And I knew that that game in that form wasn't going to get there. So rather than being okay with hitting a single to first base, I was like, okay, how do we, how do we change this up so we can get, you know, a triple home run grand slam or whatever? So when did you make the decision to totally shift your focus to what would become Discord? So it was the beginning of April. I very distinctly remember actually I called Brandon, the artist that I had, you know, that was leading our art team and told him like, hey, we're going to focus on this app.

And so, like, I got to let you go and let, like, all the artists go. Like, y'all are amazing creatives. Your talent is wasted here. So, you know, we had a long conversation about it. And ultimately, that's what happened. Like, the entire art team left and went and got jobs making, you know, great, amazing games. So May 13th, I think, is what you consider this. This is the unofficial launch date of Discord, because that was the day where you released it widely.

and people who weren't your friends could sign up for it. How did you get any attention for it? What was your plan of attack? Yeah, you know, during those first five months as we were building, we would constantly be talking to our friends, showing to them, getting their input, and trying it ourselves to really try and get a sense for how is it resonating with people, how can we make it better?

And ultimately, from doing that, you know, we ended up getting a handful of our friends to actually start using the service. Yeah. And we could tell that it was going to be something, but it wasn't there yet. Like it was buggy. It would crash sometimes.

You couldn't like you actually really use it quite so much to play. And so come April, you know, we were thinking about like how do we get this thing to grow? And we had this idea to ask a friend of ours who was sort of in the video game community to make a post on Reddit asking people like what they thought about the app. And then maybe some folks will try it. And in the comments of that post, Stan, went in and posted a link to a Discord server, which is kind of what we call our communities. It's called a server.

And people were finding this post on Reddit. They'd click on the link. And then people would ask us questions and they'd share their opinion. And most folks thought it was really cool. And from that post, we got, I think, a couple hundred signups. Maybe 50 people really started using it. And that was the day we say we launched because, like, people we never knew were now coming and inviting their friends.

And yeah. Wow. I want to just pause and talk about this word server for a second because people who aren't familiar with Discord might be confused. When lots of people think of a server, they think of like a rack in an air-conditioned basement of a building with lots of servers stacked up on top of each other that function as data processing centers. That is not what a server means on Discord. Just briefly, can you explain what a server is on Discord? Yeah, on Discord, a server is what we call the space that you create for your community. You can make it invite only or you can make it open to anyone.

But it's kind of the place that you go for your community or your friends. So you can name it whatever you. It's like a club or a group. Yeah, it's like a superpower group chat kind of you could think of that. Like friends talking about coffee. There you go. And that could be your server. Call it the coffee shop, customize it up, and it can be your own little private cafe on the internet.

Okay. And then within the server, there are channels, which can be like even more specific. It's just like Slack. Like it can be Arabica beans or third wave coffee, right? Like more specifically granular. Yep, that's right. And it was very, very viral because it's fundamentally a group communication service. So if someone is like, I want to use this to talk with my friends while we play, you know, they make a server, which is free.

It takes one click. And then they get a link, you know, send it to their friends. using whatever other messaging app they were using. Everyone clicks the link, types in their name, and boom, they're in. No download, no app install on desktop. And then people would go, holy crap, this is pretty cool. And then they would tell their friends and then tell their friends. And it just kind of started to grow.

When we come back in just a moment, how Jason comes up with the name Discord, and how, after remembering a certain conversation with a colleague, he sets out to build a workplace culture that does not suck. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2015, and Jason and his team have decided to go all in on a new social platform for video gamers. Basically, a comfortable hangout where you can talk to your friends while you play. Initially, the growth was good.

I mean, it was, like, big things start small. So, you know, I think on our first day, we had, maybe. maybe a couple hundred people who registered, and then the next day was a little bit more than that, and then a little bit more than that, and a little bit more than that. I think by the end of the first nine months or so, we had maybe almost a million people who had signed up, a couple hundred thousand using it every day.

Like, it was clearly useful, and people were very excited about it. And at this point, I mean, by May of 2015, had you completely, was hammer and chisel done? Was it now Discord? No, the company was still, called Hammer and Shizzle. We didn't change the name until, actually, I don't remember a year or two later. You called it Discord, which we know means is the opposite of Concord or Harmony. Why did you give it that name? Well, the story is kind of funny. The name Discord actually came from like a set of criteria that we came up with for what we wanted the name to be.

The original name that I had picked was Bonfire, because a bonfire is a place you gather with your friends. It's cozy. You're hanging out. But there were like 15 other communication apps called Bonfire, so we couldn't use it. So the criteria we came up with was basically we had to be able to get the copyright. We had to be able to get the website. We had to be able to get the app name on the app store. And it had to be a word that you could read it and know how to say it.

and if you hear it, you know how to spell it. I wanted it to be one or two syllables, so it was kind of short and snappy, and something that had to do with talking to your friends. And so we ended up making a list of like, I don't know, 20 words, and Discord was the best one that fit all that criteria. And it just kind of felt, it felt right. And we joke, and we say Discord is the problem we're solving when you use our service, because you win more and you have more harmony with your friends.

And Stan became the co-founder of Discord with you? Yes. Yeah, he ended up stepping into the role of building and leading our engineering team. And so he took the title of CTO and scaled that team up. And today he runs, you know, like 40% of the company. Wow. And was there nothing of no competitor at the time, no one else who was offering a competitive product? Oh, we had like a dozen competitors.

It was a very competitive market. There were a couple of kind of incumbents, if you will, who had products that were popular but kind of niche. There were products that were popular but maybe too simple, like Skype. And then there was a bunch of companies innovating creating new kinds of gaming chat apps. But I felt like we could do a better job than everybody because I knew that we were just really good at building stuff. And you didn't have to download anything. You could just click a link and then you were there. You were using it.

Yeah, that's right. One of the key innovations we had was making Discord work in your web browser. In early 2015, this was a time when there was a new capability that was kind of just becoming mainstream in web browsers, something called WebRTC, which it's basically video chat and voice chat embedded into a web browser. And so our thought was, people aren't going to download another app, but if we can make it just work in the browser, people will click a link. and that was a material driver of our growth because people were willing to try it and they could try it quite easily.

But here's what I understand. I mean, when people click that link and then started using it, they didn't, presumably, they didn't have to give you an email address. They didn't have to give you any personal information. So how were you, what were you selling? What was the revenue model at that point? Was there one? At that time, we did not actually have a business model implemented. Our plan was, you know, to fund it with venture capital for a little while. And then once we got to scale to build a games distribution business. And then the games would finance the company and people would want the games because the games would enable them to continue to use Discord. Yep. Or they were integrated with Discord.

Even though you could use Discord with any game, might you play World of Warcraft or League of Legends and use Discord. Yep, that's right. you started to attract more and more money from investors who saw the potential in this. And one of the things that I read about, and this is like a good year, year and a half in, is you partnered with Twitch, which is, I think, still the biggest streaming platform for gamers. How did you get in with them? How did you get them to partner with you?

You know, with Twitch, early on, we had this hunch that streamers would be benefit from using Discord. Obviously, when they play games with their friends and they're streaming, they can use Discord to talk and chat and keep up. But as we began talking to more streamers, what we started hearing was that they would often have these kind of VIP communities of their fans who they would give access to if they were subscribing to them on Twitch. So if you were a paid subscriber to somebody on Twitch, you would get access to a VIP voice

chat experience, usually powered by something called TeamSpeak, which was one of the competitors at the time. And streamers had this interesting problem, which was if you stopped paying them on Twitch, they wanted to like get you out. You had to get removed from the VIP club, but the software didn't talk to each other. So they would like reset the password and kick everybody out and then send the new password and ask everyone to come back. And basically people weren't doing it. So we built this integration using Twitch's APIs so that you could, if you subscribe on Twitch, you would get access to a Discord server. And if you stop paying, after like a grace period, you would just get removed and it was just automatic.

And Discord ended up kind of going viral amongst Twitch streamers because it was a really easy and meaningful benefit that they could offer their paid subscribers on top of what else they were already offering on Twitch. I just think it's so weird. I'm just going to say this. I know I sound like a grumpy, crazy man. But it's so weird to me that there are people who are video games. influencers and people will pay money to subscribe to watch them play video games. And I just, I cannot wrap my head around it. And I'm sorry. I may be in a minority of one here on planet Earth. Maybe it's me versus seven billion people. I just don't get it. Yeah. Well, I think you might

be, I don't know if you're on an island of one, but it's age-old human behavior to say, I want to be part of a club that cares about me and make friends by being there. Like, that's not new. You know, more and more people are looking to spend time with smaller groups of people that have that share like-minded ideas to find a sense of belonging. And that's fundamentally like what, you know, what games were for me and what Discord offers for people. I mean, as one of the things that I, that just fascinates me, there are like YouTube influencers and or YouTubers and others who have Discord channels, servers. and if you want to join one, they charge you for it. You can pay them through Patreon or other ways, and this is a revenue stream for them. Like, if you want to be in my club and have access to talk to me, you know, you pay me for it.

And that makes sense. People's time isn't free, influencers or anyone. It's a really interesting business model, right? And by the way, you guys don't get a cut of that, right? No, if someone is in those situations, like we don't take a cut of the revenue, but we have begun testing native subscriptions in Discord where you can come directly to a server and buy a subscription and then earn money as a influencer or a server host and then we share it in a part of that. Yeah. So, but I want to go back to the growth of it because it really just at this point seems like a self-generating just engine. And you were still relatively small by 2017, right?

Like, I think you had 58 or 55 employees or something around that time. But the scale of Discord was already really big, you know, billions of messages being sent. And was it just crazy? I mean, how are you managing just the growth of the company with such a small team? You know, one of our philosophies was small and mighty. teams. You know, I fundamentally believe that you can get a tremendous amount of work done with a small group of really talented people by making smart technology choices that give you a lot of leverage and also by focusing really clearly and saying no to a lot of stuff. And by staying small

and growing slowly, we were really able to lay the foundation and create a great place to work so that when it came time to grow faster, like we had a lot of good stuff in place that I didn't put in place at my last startup. Like? Well, for example, we, the first summer, this was, I think we were maybe 25 people or something, maybe it's the second summer. And we were like, okay, we need to hire managers now because we can't have a flat organizational structure where people won't get, you know, career development and career coaching and all

this stuff. So rather than bringing in managers from the outside, we created our own manager training program and asked anyone at the company, we said, hey, does anyone want to try? and learn management. So we stopped hiring for a quarter and basically talked about and taught people like, what does good management mean? What's the value of it? And I remember our board was like, you're going to stop hiring for three months. Like, you're crazy. This startup's taking off. Why aren't you hiring people? And I'm like, we've got to pause and get our ducks in a row so that we have a good foundation to build on. And we still teach a version of that management

training class today to everyone who becomes a manager at the company. That's hard to just pause when you're growing so fast and to do that. But it pays dividends later. We've done stuff like that a number of times, you know. I think the experience that I had at OpenFaint where my friend Andy came to me and said, it sucks to work here, just letting you know, like really stuck with me. And I really wanted to be proactive and intentional about building a great place to work at Discord because I knew that all of the amazing great stuff that we're going to create is just going to comfort.

from the people in the building. And if we don't really focus on building that great foundation, that great engine, everything's just going to get harder and slow down as we make more progress. One of the things that was inevitably going to happen was the platform would be used by people who were not using it in the spirit that it was designed to be used for, which was connection, collaboration, friendship, hanging out with friends, et cetera. And it turns out that in 2017, Discord had been used, what was being used. I don't know how many people, but some people who were involved in the white supremacist riots in Charlottesville,

they organized through Discord Channel. How did you learn about that? How did you find out that happened? I actually don't really remember how, but we had taken privacy and safety very seriously from the first day of building Discord. You know, when we launched Discord, like back in May 2015, every server had moderation capabilities.

You could kick people and ban people. You could enforce a code of conduct in your space. You could decide who could join and what was okay. But what we didn't quite realize was that we also were going to need to think about moderating the kinds of groups and communities that were on Discord themselves. And so when the Charlottesville thing happened, this was kind of a wake-up call where we realized we were behind the ball in building tools that allowed us to actually moderate the groups, as opposed to just allowing the groups to moderate themselves.

So we took it as a real learning moment and came up with very clear community guidelines of what's acceptable on our service and built a trust and safety team that relatively in the life cycle of our company was much earlier than most tech companies tend to do. It's like an important thing for the world that we make sure our technology is used for good, but also people just don't want to use it if it doesn't feel safe. What about, I mean, in terms of data and privacy, I know you say that it's super important,

and you don't track users. You don't track how they use it or what they talk about or what their interests are. Is that right? We do track some basic usage data so we can understand, like, is the product being actually helping people, spend more time with their friends?

but we do not track or read people's messages. We do not use any of your actual communication data to do anything other than send it to your friends. So that means that you can't target ads. You don't have any ads anyway in Discord. Correct. We do not target ads. We do not sell your data for ads. Will you ever accept ads?

Will you ever run ads? No. You will never run ads. We have no plans to run ads. Right. You know, it's interesting because you sort of started in games, went away to, like, then went to social networking for games, then went back into games, then went back into social networking for games. But you couldn't shake games. In 2018, you actually launched a game shop called Discord Store. And for people who don't play games, a lot of people get their games from something called Steam now, where you just download a game. The idea, I guess, for the Discord store is like a Netflix for Games type of service. But it didn't last very long. What happened to Discord Store?

Yeah, we launched the Game Store in late, I think it was late 2018, and this was actually one of the first moments that we started to realize that people really wanted to use Discord for things other than playing games or with their gaming friends or gaming communities. So, you know, we launched this game store and we got a lot of feedback from people that they actually just, like, wanted us to make our communication service better. and that by making it have like actual now, now you can get video games in it, it made it even harder for them to convince their friends who maybe didn't play video games to come on to their servers

to talk and hang out and maybe study homework or work on an art project or something. And it also, it ended up not being differentiated enough from the other ways that people buy games. And so we found ourselves in this situation where, well, we had a pretty large user base, we were competing against companies that were like 10 or 100 times bigger than us in terms of like capital.

And in order to be able to get great games in the store, it was starting to become a situation where you would have to spend a lot of money to offer these upfront guarantees to developers to get them to list your game. And I realized that like that was a war we were not going to win. It was another one of those moments where I just had to kind of embrace the brutal facts of what was happening around us. and realize, like, this is not going to work, we've got to listen to what our users want and just lean into that. And so we ended up shutting it down after a couple months and really doubled down on a subscription service that we had launched a couple years earlier

but weren't really investing in called Discord Nitro. This was the – because Discord is free, but if you want an sort of upgraded experience, the Nitro subscription model, and there are different levels of it, And basically you can have an avatar, like a cartoon avatar, and you can choose your, I guess, part of your username and your audio is better, right? For example, and maybe a couple other things. Yes.

Yes. Yes. But you, I mean, you shut down the game side. How long did the game store exist? It took us nine months to build it. And then we shut it down after, I think, three months. I mean, was it hard to do that? Oh, it was very hard.

I had been thinking about this for, I don't know, seven years at that point. You know, when I started the company in 2012, the idea was eventually to build a games distribution business. And so fast forward to 2018, late 2018, realizing that it wasn't going to work, it kind of was one of those moments where I was like questioning everything, like, do I know what I'm doing, you know, how are we going to build a business? And I actually just kind of physically ill for a week because I didn't really know what to do because so much of our time and energy was leading up towards building that business.

And I guess that really kind of began this conversation around focusing Discord less on video game players and more on a broader audience of people. Right. I mean, this was sort of what I guess could be described as a rebrand or redesign that you started around 2019. Yeah, we started in 2019. we went out and ran a bunch of surveys and asked our users to like answer a bunch of long questions about like, what do you use Discord for in your life? And, you know, what are the biggest misconceptions that you think people have about it? And we heard things back like, biggest misconception is it's only for gamers. And like, I want to use it for my study group.

And like, could you stop marketing it for gamers? Like, please? So in late 2019, we had all this data, you know, so Stan and I kind of did this exercise where we tried to figure out, like, what is our mission, what did our mission really mean to us? And like, why was bringing people together around games actually important? Then we realized, like, wow, we've built a service that because of how it works really gives people the sense of belonging and togetherness. That's a pretty profound opportunity to improve the world. So we kind of expanded our mission. We went more fundamental and said, instead of bringing people together around games, we're going to help give people the power to creep belonging in their lives.

All the things we were doing for people who play games was still in our mission around communications, but now we can welcome in all these other people. And so in early 2020, we kind of did a small rebrand, and then COVID happened, and everyone just flocked to Discord. It just exploded. I mean, yeah. I want to just, I want to touch on this idea of like making the world a better place and, you know, because I've had dozens of conversations with tech founders on the show, and I've heard the same thing in different iterations.

And I'm not trying to push back and sound cynical. But I also want to be clear that techno-optimism is also a problem. I would say in your case, it's somewhat different because these servers are not, it's not like a Twitter conversation where anybody can respond, right? I mean, from what I understand, that vast majority of people on Discord are just in a small group with their friends, just a small group of people they know talking. That's right. That's right. So, but you know that by human nature is not flowers and, you know, fields of joy and milk and honey, whatever it is, right? I mean, humans are humans. We behave in really bad ways sometimes, especially when we get together.

Why do you think that that couldn't happen on Discord? Well, I think what's important, at least the way that we think about this, is that you have 150 million people inevitably, like, we're not reading everyone's messages. You can't police all of it. But Discord is designed in a way that gives each individual a lot of power over their own experience. You know, every conversation on Discord is opt-in. Like, people can't just show up out of the air and start pinging you like they can on, you know, perhaps other. their services. And then we give the moderators of those servers of those spaces, a lot of power to control and enforce their rules and norms for their space. And then we have very clear community

guidelines on what's acceptable. And we have a trust and safety team that does investigate reports. And while we don't proactively read messages, if a group gets reported to us, we will go and investigate and look. And we ban communities if they're violating our guidelines. Like we just, we do it. You, this has been widely reported. So I'm not saying anything that you don't know or haven't heard a million times. That in March of 2021, Microsoft, you were in talks with Microsoft, apparently to be acquired. Apparently the number was $10 billion.

You had sold OpenFaint for $100 million, you know, back in 2011. Last track. And you're thinking back then was, hey, who knows where this is going to go? Who knows where gaming is is going to go? who knows if we're going to be able to compete against other people. And this is probably a safe exit. By the way, does OpenFaint exist anymore? Is it still around?

No, OpenFaint shut down, I think, in 2013. Right, wow. So they've had it for two years and shut it down. So it was a smart move to have done that. Now you're obviously much bigger. You are a big player in this space in audio, social media. But Microsoft is bigger. I mean, they're one of the biggest companies in human history.

I mean, technology is going to change. there's no guarantee that you are here forever, right? At the same time, you're now valued at $15 billion. So clearly, investors have a lot of faith in you. I mean, I know you probably can't go to the details of Microsoft and what happened there, but there are reasons why it might make sense for you to be acquired one day, right? Don't you think? Well, you know, we have a fiduciary responsibility to our investors and our investors. employees. You know, when people invest in a company with their time or their money, you know, they're doing it because they expect to get a reward for that eventually. That's obvious to me. And myself included, too. And so you try to build a business that is durable and can be, you know, big and exciting and important that creates value for folks. And inevitably, if you stay focused in that way, like, you have to either go public or get acquired, right? Yeah. That's just sort of how it works. But the interesting thing about the experience we went through earlier this year,

you know, I can't come on any specific companies. But it was a really crystallizing moment because, you know, I was talking to some of the folks on my team about sort of what path we could choose. And the cool thing was actually that most of the team wanted to keep building. You know, like technology changes so quickly. So we're always thinking about, you know, who's going to launch the thing that might disrupt our business and how do we stay ahead of that. But I think what's fascinating and so exciting about being in technology is that it's just constantly a game of innovation and what's next. So every year we have plans of like what is the new thing that we're going to build and how are we going to evolve discord and it's just always this constant forward motion of making new

things. So when I mean I know and this is common for tech companies, you are you're not yet profitable, right? Is there a path to profitability that is clear, that you can clearly see? We haven't shared our profitability numbers, but we're doing very, very well. Nitro is a very healthy business. It's growing very fast. And I'm very excited that we've been able to find real success in building a business by creating more value for our customers so that we can really just focus on making something that people love. Do you see, do you, I mean, You mentioned you either get a choir or you go public. So there's a chance you could be running a public company in the next couple of years.

I mean, there's only two ways that this goes. Yeah. Yeah. When you think about this journey that you took, you know, you got to Berkeley, you were like 20 and the Bay Area and living with all these people. And you didn't have the best, you know, fanciest degree. And you were so young. And here you are. You're still so young.

And you've built not one, two huge companies. One is massive, $15 billion valuation and social media, which is really hard to break into. As we know, the graveyard of social media companies is vast, wide and deep. And here you are. You've done it twice. How much of that do you think has to do with, you know, how hard you work and how smart you are,

and how much do you think has to do with luck? Oh, I think it has a lot to do with luck. I think that, you know, I worked hard and I think I got lucky, you know, luck again, with, you know, having good genes and being able to be smart. But so much of my life in hindsight are unplanned situations where I took a leap and things kind of worked out. And, you know, those leaps were out of my control. And so I think there's a tremendous amount of luck. involved and it keeps me humble because, you know, I've been successful, but I've also had enough situations where I thought I was going to make the right call and it ended up not being right. And, you know, one of the biggest lessons that I've learned over my career is that being right and being wrong, don't feel that different before you know the answer. Yeah. So I have an appreciation for luck.

You know, I grew up. My dad was a small business owner. my grandfather was a small business owner. Like I knew that you could build a business in America and have a good life by doing it. And that was kind of the path I wanted to take. And I got lucky that I sort of stumbled my way to Silicon Valley and all the dots kind of connected. But it's been a wild ride. That's Jason Citron, co-founder and CEO of Discord.

And by the way, there's something like 4 billion minutes of conversation. 6 billion messages on Discord every single day. And some of the biggest Discord servers are not surprisingly dedicated to video games, Minecraft, Fortnite, Roblox, but there are also sites for marble players and snake lovers and Harry Potter fans. And there's also a place called the Matmosphere, which is a special hangout reserve for people named Matt. Hey, thanks for listening to the show this week. please do follow us on your podcast app so you always have the latest episode downloaded. If you want to contact the team, our email address is H-I-B-T at NPR.org.

If you want to follow us on Twitter, our account is at How I Built This, and mine is at Guy Raz. This episode was produced by Alex Chung with music composed by Ramtin Arablewe. It was edited by Neva Grant with research help from Claire Murashima. Our production staff also includes Casey Herman, J.C. Howard, Julia Carney, Carrie Thompson, and Elaine Coates. Our intern is Margaret Serino. Jeff Rogers is our executive producer. I'm Guy Raz, and you've been listening to How I Built This.