20VC: Discord's Jason Citron on Why Everything We are Taught About Hiring & Management is BS | Do Richer Founders & Gamer Founders Make Better Founders? | Never Before Told Moments Behind Scaling to 200M Users

24:03How long do you give someone? Because in those cases, it's really hard. So I come in, thanks for hiring me, Jason Thrill, to join. I make a load of changes. And the team's like, who is this guy? And why is he making all these changes? And it's like, well, Jason, you hired me. Back me, I'm making these changes. And then the culture just gets worse beneath me. I just continue to make Titanic worse inside the company. But you should bat me for a while. How do you think about like how long to give versus cut it straight out? This was one of the other things that I came to learn, which is, you know, when we went through that period of hyperscaling, I did a lot of like, when the executive told me this is how something was supposed to be done, I would always try, I'm a curious person, so I try to understand why.

24:43And if I really couldn't figure it out, and my intuition said this doesn't make sense, I would actually let them do it anyway. Inevitably, I'd say more often than not, it didn't work and I was right. So now what I've come to learn is that executives and other people are their experts in their craft. We should trust them, but if my intuition says that this doesn't make sense, I now trust my intuition and I won't support them in whatever they're doing. I'll be like, I want you to do it my way and I need you to trust me. More often than not, now that has actually worked out well because it turns out that the The context of the company is so important and I have the context of the company.

25:17And the executive is the expert in the craft. And the context of the company, the reasons for why you do things should be the beginning point to derive how you run a team or what products you build or what stories you tell, right? You think about sort of first principles. Like what do we try to accomplish is what you are you start? Not like what are the tools for some, you know, some function or some craft. When did you have the strongest intuition that turned out to be wrong? At Discord, late 2018, we built a PC game store, which I ended up shutting down after like four months. That didn't work.

25:48Yeah, there's a long list of things where I have made wrong calls, but the thing that I've come to learn is that I am still more right than a new executive joining my company. Like, I still have more context than most people who join me. Given the nature of how long I've been doing this, and I also learn over time, and I think this is the trick. One of the challenges with like, trust your intuition, trust your gut as advice is like, you don't know where your gut is right and wrong. One of the things I've come to learn over the years is the kinds of things where my intuition tends to be right and the kinds of things where my intuition tends to be wrong.

26:22And so when it's one of those things, I discount myself a little bit. I spoke to many of our mutual friends. I pretty much know all of your camp table. After 2 ,800 shows, you'd expect me to. So at least they said, and I have it's okay for me to say, they said that, there's so many incredible things about you, but they said, you trust more experienced people's recommendations, sometimes more than your own, and that was a weakness. Do you think that's fair, and how would you reflect on that? I think there was definitely a period of time where that was true, and we talked about this a little bit.

26:54It's the sort of bringing in the executive, delegating the outcome to them, but also the approach to the outcome. That was one of the hard lessons that I learned over the last few years that I stopped listening to my intuition on some of these things. As a result, you know, a lot of things at the company went sideways. In terms of gut and tough decisions, it's a tough decision. You mentioned earlier, like, actually, it's helpful when you have a little bit of money because you're not tempted so early. You got a decision to sell a company for $12 billion. First off, how does that feel, Jason? It was pretty crazy to be in that situation, yeah.

27:26Do you remember where you were? It was not a short process, and there was a lot of things going on at the time. So, you know, it was one of those situations where we, I have always been very focused on trying to make amazing products, tell amazing stories, and build a great company. Along the way over the years, from time to time, we get interest from people. And sometimes we engage with it. We're like, okay, what's happening here? It actually began as just another one of those, where it was like, huh, okay. But ultimately, we decided that we really just wanted to focus on creating what we're creating.

27:57I love creating software, and I love solving problems for people around gaming, and having fun with their friends. That was the path that we chose to stand because we thought it had so much opportunity ahead of us. The reason you sell it is because you believe there's more strategic benefit to be hard from the aquarra and what it does to your position as a company. Say Instagram with Facebook, say YouTube with Google. Did you not feel that was the case here? Microsoft has been a really fantastic partner for us. There certainly are things that we could have done together with them that we can't do independently, but ultimately it was about controlling your own destiny, I suppose, and really season the opportunity in front of us.

28:38What does no one see or think about the gaming industry in the future that everyone should be thinking about or speaking about? We're in kind of a tough period in the games industry right now. We're after COVID. It's kind of contracting and there's a lot of consolidation. Yet it's really, really large. If you think about how much money consumers are spending and how much time people are spending and how important games are in people's lives. And I think that while it seems it's both large and also feels kind of like we're in a slump I think in 10 years from now it's going to be so much bigger, so much more important and so much more pervasive than it is today Yet if you think games games just kind of follow the trajectory of digital technology And it seems like in 10 years from now there's going to be more digital technology more people using devices Crazy new ways that we interact with this stuff and games are always at the leading edge of how people take advantage of and harness technologies.

29:29So you think about how is AI going to change the creative side of game development and the interactive side of game development? How does AI change the creative side first? Before we, I've seen many tools addressing different elements of the creation process. In your mind, most succinctly, how does AI change the creation process for gaming products? I think it's going to dramatically lower the cost to create incredible content, which means you're going to get, I think you're going to get games like Elden Ring, that are made by teams of like 20 people, not 300. And then it's also gonna mean you're gonna be able to have someone who, an individual person, a solo creator, who will be able to make games that they can't make today because it takes either five years or it's just too hard.

30:11And so I think we're gonna find that what that does to discovery. I think that's amazing the democratization, but with democratization comes a massive increase in supply. And with that increase in supply, discovery just becomes a war. Often in that case it's just a game of who has the most dollars. Do you worry about discovery being that problem? I think discovery is already a problem for developers. It's going to get harder to break through. It's really hard for me to predict how the world will be if there's like 10 times more games and they're all high quality because you can imagine when the cost drops so dramatically, the whole business model changes, the whole dynamics change.

30:48My part of the challenge today is that it's hard to break through and it costs $200 million to make a big game, right? If the costs were much lower, then you could have games where the subject matter is much more niche. And then in that world, what happens? Imagine if you had 20 Elden rings and they all had different themes and they were all as good, you don't need to make $7 billion from making Elden ring, you could make $10 million or $50 million, maybe it's a great business. So I think that consumers are gonna have so much more choice and so much.

31:19So much. It could lead to a lot of personalization in gaming. People still like to play games in community, so I think you're still going to have situations where maybe groups of friends will try certain titles. I think we see potentially echoes of this, if you look at how video entertainment happens today, like on the streaming services. Like there are shows that are really popular that no one's heard of. Because there's so many people who watch these things that you can have these kind of more niche subject matter shows. I think that you're going to start to see something like that music is kind of even more like this if you think about the music industry, how much content there is.

31:53It's amazing for consumers, but it is harder for the creative side. What is the biggest misnomer or mistake that people have or think about how AI will impact the future of creation of gaming products? It's really hard to predict what's going to happen. We're in this world where the in gaming there's this there's this concept of a fog of war, which is like, you know, when you're playing a game like Starcraft, you can't see what's going on on the other side of the map until you've been there. And so you have to plan without knowing what's happening in the future. And I feel like we're in a moment in technology and because of the nature of AI, it's sort of challenging us to reinvent so much about how we do things in our lives.

32:30That when I think about where are the capabilities of AI going to be in 10 years, it's just like so hard to reason through to reason through what are the implications of that. Like if we actually get AGI then what happens? I don't know. There's like a tech tree and you can imagine different paths through it that could result and so many different outcomes that it's just very hard to predict. So anyone who's really certain about what happens is probably wrong. How does AI change the interaction side? How we engage with these games as consumers? Again, I don't know. But some things that I think about which could be pretty compelling are you could imagine how today you know you might play a game, Legend is El the Breath of the Wild for example, or Tears of the Kingdom.

33:08One of these big open world adventure games where you're a character and you're in this fantasy land and there's people and adventures to go on, that gets handcrafted by a team of people. And because the nature of it, it's an amazing game, but there's a lot of repetition for how the sort of structures play out because you just can't make the spoke content for 90 hours in a game like that. But you could imagine if you had AI that like every one of those characters can have a complete backstory, can respond to you in the totality of all the decisions you've made inside of a game world. And you could have literally hundreds of hours of bespoke content customized to your experience that just never ends as long as you wanted to go.

33:45And I think that being able to explore and play in a in a in a game world that you're passionate about forever could be really compelling. You think about like watching TV shows and how it's always bitter sweet when a when a series ends because you're like I'm done being in that world. It's terrible. You have to find a way you like ration it out so it lasts longer. Yeah, I mean, I've watched Game of Thrones the whole like four times over because I enjoy it so much. Imagine if it like could never end and it was always great. Does that change the business model? Certainly. How does the business model change in that world?

34:17Again, I don't really know, but you could imagine. You would be a tarot. I've got to interrupt you. You'd be a terrible venture capitalist. We know this future. I will tell you the future and you will listen and write it in your Wall Street Journal last year. You know, if you think about the nature of AI and how one of the key differences with it is, if this kind of technology could run on a device, on a console or on a phone. Then the business model might be different than if it has to use so much compute that it runs in a server, for example. So these details matter, but you could imagine a game like that being more of a subscription service where you subscribe to the game kind of like World of Warcraft is.

34:54It's this never -ending story that you participate in. And by paying a little bit every month, you get to continue to explore and be part of that world. That, to me, feels like it could be an approach. The micro -transaction model probably has a place You could potentially imagine micro transactions working there, but when everything is AI generated, you know of all the micro transaction content is AI generated, you know, how will people react to that? If it's effectively free, you know, will some Enterprising creator figure out a different way to monetize it that makes all the content free? So you have to worry about that.

35:23My guess is probably so yeah, it's hard to say. Jason What did you believe that you now no longer believe? One thing we've talked about that I certainly believe that I no longer believe is you know a lot of the advice out there for how you run a company. The politics have a place in the workforce. I think that each CEO and each leader needs to decide for themselves how much they want to talk about politics in their workplace. The one thing that seems clear is that we are in a very kind of heated divided time in the world. I think it's up to each person to make that call. I spoke to Danny Reimer before this show and he said that his first encounter with you was probably his most memorable first -founder encounter ever.

36:03I think he described it as an interrogation to be quite blunt. So take me to the first Danny Rimey meeting. Where was it? What did you do? How did it go? It's funny he calls it an interrogation. I remember I was meeting with him and I had just read an article maybe the day before about a company that he had invested in and I think kind of went bankrupt or something. I wasn't raising money but I was like, I'll go meet with this guy. People say he knows what he's doing and he's... We met at a coffee shop somewhere in the mission in San Francisco. I forget which one. I'm a pretty curious person. I love to learn from people.

36:37There's two ways to learn in life. You learn from your own mistakes or from other people's mistakes. And so I love to read books and talk to other people to learn about what are their mistakes and what can I learn from. So I'm meeting with Danny and I'm like, well, I don't know what we can talk about. I just read this thing. It was really interesting to hear about a company that just went bankrupt. So I was just really curious about it. So I just start asking him questions about the experience and what happened and what he learned from it and what did he take away from it and And you know, I have to be honest, I don't even remember what he said.

37:02It was so long ago. But I remember the conversation and I know it really stood out to him. Do you think you're a good fundraiser? And with the benefits of the many rounds you've done, what's been your biggest lessons on how to fundraise successfully? I guess I am a good fundraiser. We've raised almost a billion dollars. At some level, I think raising money when you're building a business that is growing really fast and has a lot of consumer love, it's kind of easy. I don't disagree with you. which was the hardest round. We definitely had hard rounds. Our series A was actually pretty hard because a lot of investors, this was before we had discord.

37:38So when we were working on our game title, this was I think maybe 2013. And at the time, what I was fundraising on was this vision to build a big gaming business around a group chat app starting with a game. And most people said no, because they thought the game wasn't gonna get there. So we got a lot of nose in that round. And Mitch Lasky from Benchmark said yes. And he thought the vision was exciting and he thought we would figure it out. And so that was a hard round, but I'm very grateful to Mitch for seeing what I saw and supporting us in that. Once we got to Discord and the charts were all up into the right, it was much easier.

38:09Should you always take the highest price? No, in fact, I got an offer, I think our series A, I had one other offer for a little bit of a better valuation, but I really wanted to work with Mitch. Is it a needle move at having benchmarks as an investor? Mitch has been very helpful. You know, I haven't spent a ton of time with the other partners. So one thing that I have learned working with so many investors over the years is that it's not really always about the firm It's about the person my sense is the other folks of benchmark are great But I haven't worked with them so I don't know but working with Mitch was great I heard another story I had to discuss was rock star games where apparently you walked in feeling pretty confident with bags of cash Expecting to buy a ton of IP.

38:50Why happen there Jason? Yeah, so we went to New York This was around the time when we were building our PC Game Store in late 2018 and I went to go visit with the Rockstar folks to talk to them about Whether they would list their upcoming title on our store. They were very gracious folks and we chatted with them and Discussed a lot about like what their priorities were and you know tried to do the normal beaty thing Like what's going on over here? And what I realized as we were coming back was that the Games Store business was such that they only wanted basically what I realized was that we were gonna have to spend a lot of money and minimum guarantees to get developers to put their games on our store.

39:27And it wasn't just Rockstar, but that trip to New York was like one of the moments where I realized that the best games are gonna cost us a lot of money. In that moment in time, other people had just launched game stores as well. You know, the PC game store industry was kind of slow moving for a while. And in that window, like Epic launched theirs, we launched one, Microsoft was coming. And I realized that to compete in this business, we were gonna have to spend a lot of money on minimum guarantees on a lot of titles. and I didn't feel like it was gonna really be worth it. I decided we weren't gonna spend the money, you know, the bags of cash on that title, or on any titles, and we shut down the game store 45 days later and completely pivoted out of that business, which I had just raised around a funding off of.

40:07So I remember calling the investor who had put the money in, and I was like, Hey, which range round was this? I don't know, we've done a lot of rounds. I forget the letter, but in any case, I remember calling them and telling them that we were gonna do this and I was like, do you want the money back? They were like, no, keep going. We think of it as something out. And they were right. I have to ask a question that is top of mind for me. I think there's a generation of incredible private companies, your stripes, like your starlings, your discords. The question that I have is, what is the ultimate destiny for this?

40:42Does it go public? Does it get bought? Does it run as an independent private company for years and years and years? I'm not saying to make predictions, any teases, spoilers. Just what would you most like? Well, there's a couple ways to answer this. What I like is creating software for people that is useful and having fun doing it with a team of great folks. That's what I enjoy. I enjoy waking up every day, coming to work, and talking about the features we're building, and talking to my customers, and trying to figure out how to solve problems for them, and then telling our story. So that's what I would like to keep doing.

41:16And then the question is, what's the context around that? And of course, we raise a lot of money and the business exists because we've had amazing investors, a lot of wonderful employees who give us their time. So all of those folks are expecting liquidity at some point and I really want to give it to them. So there will have to be some liquidity situation eventually because people want to get paid. But when and how and what, that will figure that out as we move on. Would you like to be a public company CEO? Does that hold any desire or interest for you? It's an intriguing mode of operation, but I'll do it.

41:48But I don't wake up and go like, I cannot wait to be a public company and have it in due learning's call. Like, that's not the reason why I started the company. I started the company because I'm passionate about our customers and their problems and I want to solve them. Listen, I would love to move into a quick fire round. So I will say a short statement. You give me your immediate thoughts. Does that sound OK? Yes. So what but written before 1965, would you most recommend? Winnie the Pooh, because it's just such a wonderful book. It's a story of friendship and fun. Yeah, I can see why you're not an investor.

42:20Yeah, where you're looking for like, age, big, grand or something. This top, do you enjoy my takeaway from this episode, is honestly, I think you are fricking great. You are such lovely human being, but we also could not be more like other runs of the spectrum. I had a great conversation the other day, and there was like, hey, how faith impacts how you act in the world. And I responded, I have faith. I believe in liquidity. Capitalism is a well, yes, okay. Don't say anything that purges you. Don't say anything. Yeah, I'm like, I'm that's not a sound bite. We're gonna. What's the most what blog post written post 2000 other than founder mode is your favorite?

42:59Yeah, I really enjoyed a series of posts by Mark Schuster. He used to write in the late 2000s. He had a blog called both sides of the table where he would share his experience. And I really, really learned a lot from him. What's the most contrarian or unorthodox advice you'd have for founders this needs to day? Yeah, I think it's that if you're building a consumer product, you have to build it for yourself. It's really hard to build consumer products if you are not the customer. Is it wrong to do it for the money? No, do it for whatever reason you want. What concerns you most in the world, Stage Aison?

43:29I'm worried about our institutions and civic engagement, future of education. There's things about the world that seem to be getting worse and I'm worried that we may not figure out how to fix them. So I'm trying to think about how to help fix them. If you were to reshape parts of education in any way, how would you change education? Well, I think that I would try to redesign the school experience to be more about hands -on problem solving that is engaging and less about memorization. Because I think people, I think, you know, heard a thing about games like people learn better by doing and through experience and repetition.

44:07So much of what you learn in school about recalling facts is like just not actually that useful. Like even today we have Google and with AI's in the future, like it's going to be more about creative problem solving and critical thinking and judgment. These are soft skills that you do learn in school, but they're not they don't really seem to necessarily always be the focus. So I think that's one. On a smaller scale, I think like access to higher education for people in America at least is something that is a problem. So there's a really cool startup that I'm involved in. It's actually the only other company I'm on the board of called campus.

44:41They're in a credited online university where any work at students in America can get joint like apply and get accepted and take online classes taught by adjunct professors from Ivy League schools and get a two -year degree that they can then transfer to a regular school. And it's such a cool company run by this amazing founder. And last, it is mission critical degrees. Do you think university is worth the hugely inflated cost anymore? I do think it's too expensive. So if I were 18 and I said I have this offer from this great school, should I take it or should I go and work at a startup and learn?

45:16If you're turning down an application, you know, an acceptance letter to an Ivy League school, that means you've already figured out a bunch of things about like how to about some of this stuff I talked about. Like, you probably have figured out some level of critical thinking and follow through and, you know, focus and you're probably quite smart. Maybe you should actually not go to Harvard and go work at a company and start, you know, doing something. But if you're not that person, there may be value in going to a higher education to learn some of those more structured skills. You can change anything about the internal workings of Discord today.

45:49What would you change for getting difficulties and logistics? I've changed pretty much everything. Do you have recurring meetings? I have meeting slots, but I have very few actual recurring meetings. Do you like them? The ones that I have now, I like. The ones that I used to have a lot of them, but I no longer have those. That was elegantly done. I like that. Yeah, it was strong. Final one. In other words, I fucking hated the old ones. Final one. I said it. As long as I said it's fine. Final one for you. What is the most underrated piece of technology or advancement that not enough people discuss today?

46:24but you're excited about. I don't know why we don't have more nuclear power plants. Energy is such an important factor in our society. And we have this amazing technology that we have for some reason, at least in America, regulated essentially out of usefulness. And wouldn't it be amazing if we just had kept building them over the last 50 years? Like, wow, wouldn't that be pretty amazing? There's something there. I think it's the mass potential harm to surrounding areas that could be caused to prevent it, My understanding from the little research that I've done is that there's actually just a lot of misinformation and fear -mongering around it.

46:59It's actually much safer than people think, and that living next to a coal plant is actually more harmful to your health and living next to a nuclear power plant, and that they're quite safe. You have been fantastic. Thank you so much for putting up with my prying, and I so appreciate it. Yeah, thanks, Harry. Really great questions. It's been fun. I absolutely love shows like that. For me, shows which are a real reflection on the lessons taken to build a 14 and a half billion dollar business, just an incredible opportunity. If you want to watch the full episode, you can find it on YouTube by searching for 20 VC.

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