Podcast Summary: The Twenty Minute VC (20VC) – Jason Citron on Hiring, Management, and Scaling Discord

Episode Title: 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

Release Date: November 25, 2024

Host: Harry Stebbings
Guest: Jason Citron, Co-founder and CEO of Discord

Introduction

In this episode of The Twenty Minute VC (20VC), host Harry Stebbings engages in an in-depth conversation with Jason Citron, the visionary co-founder and CEO behind Discord. With Discord achieving a valuation of $14.5 billion and amassing hundreds of millions of users, Jason shares his unfiltered insights on leadership, scaling, hiring, and the evolving landscape of gaming and technology.

Gaming as a Foundation for Foundership

Timestamp: [04:13 - 05:20]

Jason delves into how gaming serves as a training ground for CEO skills. He highlights that games provide "little sandboxes of life," where players develop critical skills such as problem-solving, resilience, teamwork, and leadership. These experiences subconsciously prepare individuals for the challenges of running a company.

Jason Citron [04:13]: "Games are such amazing little simulation sandboxes to get to interact with these things that are basically like microcosms of real life... you can learn these skills in safe places."

Scaling Discord: From 200 to 1,000 Employees

Timestamp: [05:34 - 14:44]

Jason recounts the intense period of scaling Discord from 200 to 1,000 employees over two and a half years. He admits to making significant management mistakes during this phase, primarily by hiring numerous executives and delegating excessively, which led to operational stagnation.

Jason Citron [00:00 in the transcript, which corresponds to around 13:10 in the conversation]: "That period for us when we went from 200 to 1,000 in basically two and a half years, was the moment in time when I think I made the most management mistakes at Discord."

He criticizes traditional management buzzwords like "empowerment" and "alignment," advocating instead for "highly opinionated people making decisions and then being accountable for them."

Jason Citron [14:11]: "I want highly opinionated people making decisions and then being accountable for them."

Leadership and Delegation: Revisiting Founder Mode

Timestamp: [14:44 - 17:24]

Reflecting on his management approach, Jason emphasizes the importance of direct decision-making over broad delegation. He explains how he shifted from empowering executives to setting clear problem spaces and selecting projects himself to maintain product coherence and company direction.

Jason Citron [16:13]: "We are not shipping great products anymore. It's not coherent. The stories we're telling don't make sense."

He introduces his revamped delegation process, where instead of leaving project selections entirely to teams, he outlines specific problem areas and evaluates proposed solutions himself, ensuring alignment with the company's vision.

Hiring Executives: Lessons and Best Practices

Timestamp: [21:19 - 24:53]

Jason shares his strategies for hiring executives, stressing the difficulty of assessing their true compatibility beyond their communication skills. He underscores the necessity of thorough reference checks to gauge whether he can effectively collaborate with them.

Jason Citron [21:36]: "I meet them to get a sense for like, do I enjoy being with this person? Can we debate? Do I enjoy being with them?"

He also outlines his onboarding process, where new executives spend the first 60 days learning about the company without taking on immediate responsibilities, fostering a smoother integration.

Jason Citron [22:59]: "I don't expect them to do any work for the first like 60 days they come in and they just need to learn."

Fundraising and Investor Relations

Timestamp: [37:08 - 38:40]

Discussing fundraising, Jason reflects on his experiences raising nearly a billion dollars for Discord. He recounts the challenges of early rounds, particularly the Series A, where convincing investors of his vision was tough until Benchmark's Mitch Lasky believed in him.

Jason Citron [37:30]: "Our Series A was actually pretty hard because a lot of investors said no..."

Choosing not to always pursue the highest valuation, Jason prioritizes strategic partnerships over mere financial gains.

Jason Citron [38:12]: "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."

Strategic Decisions: Turning Down Acquisition Offers

Timestamp: [27:08 - 28:38]

One of the pivotal moments Jason discusses is Discord's decision to turn down a substantial acquisition offer of $12 billion from Microsoft. He explains that the choice was driven by a desire to maintain control over Discord’s destiny rather than pass up strategic benefits.

Jason Citron [28:21]: "It was about controlling our own destiny... we thought we had so much opportunity ahead of us."

He acknowledges Microsoft's role as a valuable partner but emphasizes the importance of staying true to Discord's mission.

AI and the Future of Gaming

Timestamp: [28:38 - 35:35]

The conversation shifts to the transformative impact of AI on gaming. Jason envisions AI dramatically reducing the cost of creating high-quality content, enabling smaller teams or even solo developers to produce games of significant depth and personalization.

Jason Citron [29:47]: "It's going to dramatically lower the cost to create incredible content... someone who... a solo creator who will be able to make games that they can't make today."

He expresses optimism about AI fostering an era of personalized and endlessly expandable gaming experiences, akin to never-ending TV series, while also pondering the implications for business models and content discovery.

Jason Citron [34:03]: "I think consumers are going to have so much more choice and so much..."

However, he also raises concerns about the challenges of discovery amidst an influx of high-quality, niche games and the potential shifts in monetization strategies.

Reflections and Personal Insights

Timestamp: [35:30 - 43:44]

Jason reflects on his evolving beliefs and management philosophies. He admits to moving away from conventional advice on running a company, advocating for more hands-on and intuitive leadership.

Jason Citron [35:30]: "One thing we've talked about that I certainly believe that I no longer believe is... a lot of the advice out there for how you run a company."

He also touches on societal issues, expressing concerns about civic engagement and the future of education. Jason envisions a more hands-on, problem-solving-centric education system that leverages technologies like AI to enhance learning.

Jason Citron [43:48]: "I would try to redesign the school experience to be more about hands-on problem solving that is engaging and less about memorization..."

Quick Fire Round

Towards the end of the episode, Jason participates in a rapid-fire segment, offering succinct answers to varied questions:

• Favorite Pre-1965 Book: Winnie the Pooh – A story celebrating friendship and fun.

  Jason Citron [42:13]: "Winnie the Pooh because it's just such a wonderful book."

• Most Contrarian Advice for Founders: Build consumer products for oneself to ensure authenticity and passion.

  Jason Citron [43:15]: "If you're building a consumer product, you have to build it for yourself."

• Biggest Concerns: The deterioration of institutions, civic engagement, and the future of education.

  Jason Citron [43:28]: "I'm worried about our institutions and like civic engagement future of education..."

• Most Underrated Technology: Nuclear power, advocating for its potential in sustainable energy despite public misconceptions.

  Jason Citron [46:25]: "I don't know why we don't have more nuclear power plants... there's actually a lot of misinformation and fear mongering around it."

Conclusion

Jason Citron's candid reflections offer invaluable lessons on leadership, the pitfalls of scaling too rapidly, the importance of maintaining vision over rigid delegation, and the transformative potential of AI in gaming. His journey with Discord underscores the delicate balance between growth and maintaining a coherent, user-focused product. For aspiring founders and venture capital enthusiasts, this episode provides a treasure trove of insights into building and sustaining a billion-dollar enterprise.

For the full conversation, visit The Twenty Minute VC on YouTube.