This is how tech startups work, isn't it? Use investors to build a product with no business model, then the founders cash out via purchase or IPO, and soon after the fact that you have no business model comes to light and the product falls apart trying to find a business model, while users move on to the next shiny thing with no business model.
Glad I'm not the only one thinking this. Seems obvious, but I always felt like I was missing something. How is it that most of the tech/SV world is just the same con being run over and over again, yet it keeps working? Does it operate on the same psychological glitch as a lottery? Do the giant corps buying these startups all think "I know how it's been in the past, but surely THIS startup WON'T turn to shit the moment I buy it because it was never a real business to begin with! This time for sure!"
Or are the real suckers the investors, and the corps are just doing these purchases in a performative capacity to keep razzle-dazzling them?
A lot of actual profits have been made by mature tech companies. Valuations seem too high right now, but I don’t think it’s a giant fraud. More like there’s nothing better to invest in.
Yes, the model is entirely built on acquisitions, where discord itself can't be profitable, but part of Microsoft it can deliver value by deepening the mote around everything else.
Many things are only valuable as a public good or part of monopoly. Such is funny relationship between monopolization and socialism.
Discord has a business model: Get people engaged in a community, sell them Nitro so they can boost their communities [1][2]. The "buy benefits for you community" scheme is wildly successful in mobile games, so I wouldn't be surprised if it works well for Discord.
The fact that they are trying to sell/IPO is pretty strong evidence that they are not profitable, I think. But regardless, I will give them massive props for not just doing the ad thing, which is the last gasp of this style of startup before they finish circling the drain. Lookin' at you, Imgur.
I would in all honesty give them even bigger props, as someone who used to be but isn't a fan anymore. They tried to add a game store a la steam into it but realized it didn't get the engagement they'd hoped for so they stopped putting time and effort into it and shut it down.
My first impression when they first added it was that they'd just shove it down people's throats and keep trying to make it work.
I hope I'm not wrong about them getting rid of it again and I've just gotten used to tuning all that out when using discord.
This is what flailing around trying to find a business model looks like. If Imgur was profitable without those ads, they wouldn't be abusing their users like this.
The second they try to monetize discord like a mobile game is the second all of my friends stop using it and hop to the next silicon Valley chat app that pops up
I’d slightly revise your description of the scheme from no business model to a intentional no revenue business model allowing for the valuation speculation to run rampant (i.e. at anytime we could stop investing in our growth, then it’s all profits). Of course by the time they go public like say Uber and set multiple records on quarterly losses and the investors drop the bag on the public it becomes obvious they can’t stop spending or the business will go under so instead they will continue accumulating billion dollar plus losses every quarter so by the time the shit hits the fan original founders and investors are on to the next thing and can always say they took a xx billion dollar startup public and that’s when the company lost its culture and the corporate greed ruined it.
