Network Effects and The Growth of Discord
YouTube Video Source: https://youtu.be/NNJ2n6XKmmA
Discord has quickly become one of the fastest growing and largest gaming communication platforms. In the linked video, CNBC Reports that Discord “launched in may 2015” but its usership “tripled in may 2018”. It is evident that Discord is experiencing network effects, as more people sign up to use the service, it becomes more appealing, making it even more popular. Something that may be aiding Discord’s network effects is the structure of the platform itself. Instead of having individuals talking to other individuals, the platform is group based. That is, users can create groups that are completely customizable to their settings. It seems as though network effects in general may be increased by how well a platform can connect friends together, as part of Discord’s success was through enabling people to create their own look and feel for their friends.
However, Discord needed to overcome a tipping point in order to set off this massive growth, otherwise it could have crashed to zero users. At 2:44 in the video, it is noted that “Popular streamers… were early adopters and others quickly caught on”. Large amounts of people became familiar with the platform through widely watched gaming livestreams, bringing large amounts of users to the platform. More importantly however, is Discord’s pricing structure. It is free to create an account and use nearly all of the features of Discord. Lowering the price of a service, especially making it free, enables more people’s reservation prices to fall above it. By lowering the barrier to entry on the platform, more people were able to join and use it. The combination of large amounts of early users joining the platform behind their favorite content creators combined with the service being free most likely set Discord up to gain enough users to overcome their tipping point and spur the massive growth they have seen.
Network effects may also spread a product beyond its original intended audience as well. It is noted at 4:20 that even though the product is marketed for video gaming, other groups have started using it as well. As network effects drive up usership and a product becomes more appealing, the type of person the platform is targeting may not be the only ones using it. Although gamers may have a lower reservation price than people of other groups, Discord may have gotten so popular that people with higher reservation prices about the service also want to use it, and thus the platform grows even more. Discord has gone far beyond the gaming market to become one of the largest communication platforms in the world, and its growth is still accelerating.