How Discord Went From Gaming to Everything - The Story of a $15B App

Seven years ago, Discord launched its app to help gamers communicate with each other. Today, you can find all kinds of communities and topics of discussion on Discord. Is Discord the next big thing in online communications??

The business is worth an estimated $15 billion, which shows just how popular the platform has become.?

So how did they do it? Let’s break down Discord’s startup story to find out.

What is Discord?

In case you don’t know, Discord is a chat app that was developed for gamers. The idea was similar to Slack or Whatsapp.

Discord allows users to communicate via text, video calls, and voice chat. This communication happens through “servers,” which is how Discord organizes different communities. Users set up servers where they can connect on a certain topic or event, privately or publicly.

How Discord Works

Discord servers host conversations in real-time. Users can join these conversations at any time and connect with other users on the server.

A Discord server can either be public (freely joined by anyone) or private (invite only). This means it’s a great place to join communities or just chat with your friends.

The app is completely free to use and doesn’t interrupt users with ads. Unlike social media sites, Discord doesn’t sell customer data or share it with any other third-party advertisers. This is because the app is entirely focused on creating a simple, enjoyable space to connect with others.

Image: Discord

How Discord Makes Money

So if Discord is free, how does it make money? Discord has three main revenue streams:

• Nitro: This premium subscription version of Discord gives users extra perks - higher-quality streaming and more personalization options. Nitro costs around $5.
• Server Boosts: Users can improve their own servers through server boosting. Discord makes money by offering three different server boost levels, with each level offering different functionalities and better performance.
• Game Distribution: Discord partners with game developers that sell games exclusively on Discord servers. Discord promotes the game and server to provide more exposure. Each time a game sells on a Discord server, the company takes a 10% commission.

Discord is also experimenting with new revenue streams, helping professional streamers make money through the platform with their ‘Stage Discovery’ feature that allows businesses and creators to list their public events.

How Discord Started

Discord never actually started as a chat app — it was originally just a game feature that the founders developed.

The app emerged from a gaming studio run by Jason Citron and Stan Vishnevsky. The studio developed a tablet-based multiplayer game with an inbuilt voice function to help people communicate. After realizing that the best part of their game was the inbuilt chat, Vishnevskuy suggested focusing on building that feature into a product.

At the time, communicating while gaming was a real challenge. Most people used a variety of apps (such as Skype or Teamspeak) to talk to their friends during gaming sessions.

Citron and Vishnevskiy realized that these apps were outdated, leading to a less-than-ideal gaming experience. So, they decided to fix that problem and develop a platform that would allow gamers to move past all of these issues.

At the time, Citron and Vishnevsky didn’t have a lot of competitors because even the most popular gaming servers, such as Teamspeak and Ventrilo, had their fair share of problems.

These apps would ask gamers to rent servers and pay monthly fees. They would also have to share their server’s IP address, and their friends would then have to download the application.

Citron gave gamers a way to solve all their communication problems with the Discord app. The platform featured a clean, easy-to-navigate design. Along with that, it was completely free to use.

With a desktop and web app, users could invite their friends with a simple link that could be opened on any browser.

The Discord founders rustled up their first users through a gaming thread on Reddit. Word-of-mouth started taking over, and Discord eventually became the go-to platform for gamers to communicate.

Above: Discord co-founders Stan Vishnevskiy (left) and Jason Citron (Image: Discord)

How Discord Became a Platform for Everyone

Today, Discord is a lot more than just a bunch of gamers chatting with each other.

There are communities, or servers, for all kinds of topics and events. Musicians release new music on Discord, businesses run public events, friends do their homework together after school, and much more. You can find Discord communities chatting about cryptocurrency, sneakers, and plenty of other topics.

This shift away from gaming really started to take action during the pandemic. From February to July 2020, Discord’s user numbers increased by 47%.

These users weren’t all gamers. Loads of people started using the app as a convenient way to connect with their friends. Soon Discord became populated with ‘servers’ featuring all kinds of interests.?

In June 2020, having realized that it could tap into a brand new market, Discord rebranded with a new tagline: “Your place to talk,” which was changed to “Imagine a place” a year later.

The homepage for the app was also cleaned up, making it more inclusive to communities outside of gaming. By the end of June 2020, Discord had around 300 million users - which increased to 350 million by June 2021.

Discord’s growth doesn’t seem to be slowing down. Who knows, it might just become the next big platform in online communications.?

How Much is Discord Worth?

Currently, Discord has a valuation of about $15 billion thanks to its latest investment round of $500 million.

While the company hasn’t released any official figures, Discord generated an estimated revenue of $130 million at the end of 2020.

There has been a lot of speculation around Citron selling Discord while the company is in its prime. According to Citron, he’s in no hurry to sell. Even though rumors say Microsoft recently expressed interest in purchasing the platform for around $12 billion.

Above: Discord video chat (Image: Discord)

What We Can Learn From Discord

Discord started as a place for gamers to chat, and now it’s used by everyone. It’s a great story of how a startup can grow away from its original idea and into something much bigger.

Discord also started out of a pivot from a game to a chat platform. Being avid gamers themselves, the Discord founders saw a problem in the gaming world that they genuinely wanted to fix - and they did.?

With a simple launch through Reddit, it’s incredible how far this business has come.?

Since its 2015 launch, this easy-to-use, feature-packed platform has emerged as a tool that’s useful to communities beyond gaming, helping to grow it into a market leader in online communications worth billions.

Learn more about Discord in our full business model breakdown.