Discord Started With Gaming, but It Might Just Sneak Up on Enterprise Apps
A little less enterprisey than Slack. A little more structured than Clubhouse. It’s just right.
In 2007, when BlackBerry was still the leader in the enterprise mobile space, a new competitor launched an irresistibly sleek touch-screen smartphone that epitomized the marriage of art and science. (Yes, we’re talking about the iPhone’s debut). BlackBerry executives scoffed at the seemingly pretentious device, which they thought would only appeal to consumers seeking mindless escape on YouTube and who possibly couldn’t care less about BlackBerry’s inner beauty — its relentless focus on security and its efficient, almost miserly, use of network bandwidth. BlackBerry’s bet was on what it called the “prosumer,” or the professional consumer.
Apple, however, changed the rules of the game by breaking down the barrier between enterprise and personal mobile devices. It partnered with AT&T to make data usage an expectation, not a limitation. In the workforce, employees enamored by the iPhone began requesting it to be used as their enterprise phones. BYOD (bring your own device) soon entered our vernacular. Consumers increasingly gravitated towards the iPhone, and enterprises followed.
As Mike Lazaridis, founder and then CEO of BlackBerry, later acknowledged, “Conservation didn’t matter. Battery life didn’t matter. Cost didn’t matter. That’s their genius. We had to respond in a way that was completely different than what people expected.”
Similar to the iPhone’s early days, Discord currently occupies a sweet spot between the enterprise and consumer-facing communities with its Slack-like interface combined with open voice-room features popularized by Clubhouse. What’s driving the chat startup’s sudden intrigue in corporate America? For starters, the pandemic showed us what it looks like when our professional and personal worlds share the same space, and it has led to an irreversible, albeit uncomfortable consolidation of virtual, digital spaces. The virtual collaboration space is already experiencing an amalgamation of sorts, most recently with Slack rolling out a feature that lets users privately message employees outside of their company. While it’s designed for companies working with partners or clients, it also works with friends at other external companies.
Discord is what you get when you throw Slack, Zoom, and Clubhouse into a mixer and shake it while doing a Fortnite dance.
Micro-communities like the ones within Slack, Discord, and WhatsApp are sitting on reserves of inert social energy, enriched by the virtue of their positions relative to other groups as well as through the stresses within themselves. And if there is any underlying idea that ties together the whirlwind events of 2021, from the GameStop frenzy to the rise of cryptocurrencies and NFTs, it is that inert energies from micro-communities can unleash into enterprise-level momentum.
We witnessed nostalgic avengers and blockchain-cum-art-aficionados mobilize niche communities that were able to stir up millions of dollars. GameStop’s market cap grew from $305 million in April 2020 to $11.1 billion a year later. An NFT by the artist Beeple sold at Christie’s for over $60 million. Dogecoin (DOGE) went from being worth barely a cent on January 1 this year to an all-time high of 46 cents.
Micro-communities are popping up everywhere, from Finstas and WhatsApp groups to subreddits and Discord servers. Discreet and intimate social media apps such as Kinship and Cocoon are another indication of this trend. It is the startling declaration that the world is finally ready for a remote-first, enterprise-level mobilization that is a little more intimate — and gives off less enterprisey vibes.
If Microsoft’s recent history of failed acquisition targets is any indication, Discord has surely emerged as the latest social media app to hit a cultural nerve. Last summer, Microsoft attempted a bid to purchase TikTok’s U.S. operations amid a high-profile geopolitical standoff. And Discord recently ended deal talks with Microsoft as the startup continues to explore paths to going public.
Discord is what you get when you throw Slack, Zoom, and Clubhouse into a mixer and shake it while doing a Fortnite dance. Translation: It’s fun and cool, and it benefited from the social distancing and remote-work culture during the pandemic-induced lockdown. Why sell out to Microsoft only to risk becoming the next Skype? (RIP) According to the Wall Street Journal, Discord doubled its monthly user base last year to about 140 million as daily life moved online in the coronavirus pandemic. It generated $130 million in revenue in 2020, up from nearly $45 million in 2019, though it still isn’t profitable.
The pandemic showed us what it looks like when our professional and personal worlds share the same space, and it has led to an irreversible, albeit uncomfortable consolidation.
Discord has been trying to rebrand itself from an app for gamers to “Your Place to Talk.” Interestingly, it is Discord’s roots as a hub for gaming enthusiasts that allows it to anchor away and differentiate itself from other communication platforms.
Gamification is a good example of how app builders and regular users don’t always see eye to eye. When regulators got Robinhood to remove its confetti animation, what they didn’t realize was that the popular consumer-facing investing app had already transformed into the confetti-laden expression itself — representing investor autonomy via gamification. It was this representation of autonomy, competence, and social connection, not the confetti per se, that eventually moved the markets.
While a serious trading app like Robinhood leaned into gaming, we saw the flip side play out in Reddit communities trying to emulate daily standups similar to the agile methodology used in software development. During the GameStop frenzy, HOLlers and YOLO enthusiasts subscribed to daily updates not so different from software developers who tactically discussed what happened the day before, what they planned to do next, and what was blocking them. Along the same lines, in his intriguing essay, Simon Pitt observed that Fortnite was effectively Jira for children in what he dubbed as the “enterprisification” of games.
As enterprise apps and social gaming vie for the same perceptual real estate, there are dozens of new startups working to create virtual HQs for distributed teams. As reported by TechCrunch, startups like Branch, Gather, and Huddle are racing to build the next generation of workspaces. These apps are using elements of multiplayer gaming culture, spatial technology, and productivity tools to create a metaverse dedicated to work.
Discord’s strength as a brand is in empowering micro-communities. What we’re experiencing is that social spaces are pivoting from a locus of entertainment to a locus of purpose. This shift, especially fueled by the pandemic, has added a dimension of enterprise to micro-communities. Virtual book clubs, homework groups, and trading coalitions are all adapting to Discord’s Slack-like interfaces that allow for spontaneous conversations as seen on Clubhouse. The lines between enterprise and social are blurring. Turns out the confetti was only symbolic.