Another week, another update in the video/audio/social sphere.
From TechCrunch
Discord wants to be more than just a place for gamers and is now billing itself as the Slack for users’ social lives.
The new pitch, and a new funding round of $100 million at a reported valuation of $3.5 billion, will help the company as it looks to erase its legacy as a home for gamers (and a virtual townhall for white nationalists).
What is Discord
Discord is “for anyone who could use a place to talk with their friends and communities”. Discord is a mix of a chatroom/Slack, video streaming, and a bunch of fun functionalities like emojis. The Slack analogy from the TechCrunch article is apt, except Discord is definitely not an enterprise software product.
There is one similarity between Discord and the enterprise software world : the concept of servers (or instances). When you sign up for Discord, there is no overall community like a Facebook or a Twitter. You have two options: create your own server (and invite your friends) or use an invitation link to join someone else’s server. Each server has a combination of persistent, text-based channels that resemble chat rooms and voice channels for talks/video chats/game streaming.
Discord’s original use case was shared communication for gaming. Enterprising individuals have begun to expand the software into exercise classes, study groups, and yes even some white nationalism.
Where does Discord sit?
Discord is playing across three different arenas at once: text, audio, and video.
Video is the most discussed medium these days. Discord mainly offers a real-time (synchronous) option for you to communicate with your friends, competing with Houseparty, Facetime and private Zooms. Games were the initial focus, but classes and study groups have momentum too. Some influencer/streamer/power users are also leveraging Discord, so we can see potential for networks beyond close-knit groups. Right now you can leave a video in the persistent chat, which is the closest thing to a Stories offering. Besides their core offering, where a dominant winner has not emerged, consumer video is hotly contested. Zoom certainly looms large, but Discord has a very differentiated vision.
Audio is discussed mainly in terms of podcasts, music or incidents on Clubhouse. Discord is mainly competing against phone calls/Facetime audio. Audio has less competition on these dimensions. Discord is a great fit with audio because gamers may need to focus on their screens not a video chat.
Lastly we get to text. For gamers, I could argue that the voice channels (audio and video) were the meat of the offering. As Discord expands more broadly, the text chat channels will become more critical. Here Discord is competing against: Slack for consumers, Facebook groups, email and a whole host of chat apps.
Text is crucial to Discord for several reasons
Unlike the voice channels, text is persistent. This enables more of a social community than other players like Zoom.
Text channels let them draft off Slack, a proven product offering. Slack needs to focus on Microsoft Teams and is less likely to fight for consumers.
Text is incredibly fragmented - iMessage, Signal, Telegram, Snap messages, IG DMs, WhatsApp. Order is needed.
Email doesn’t fit this use case or demographic all that well.
Discord’s opportunity
Ironically, while Discord is the consumer Slack they are in completely opposite positions. Microsoft Teams is the enterprise bundle, and Slack is one of many best-in-breed offerings that competes for one particular use case.
We have an abundance of consumer apps for video, audio and chat. Discord’s biggest opportunity is to be the consumer bundle for groups. Slack could be better for chat, Zoom could be better for video, Miro could be better for group projects and so on. Is the coordination cost of 3/5/10+ tools going to win out vs one unified tool you can do most everything in?