Breakout Startups #36- Discourse
The Forum Software taking over all the Internet Communities
Hi,
Ankit here. Welcome back to Breakout Startups. I am really not good with introductions so let’s get straight into the newsletter.
Today, we are going to talk about Discourse, the community software which I am pretty y’all have either used or come across especially if you are active in communities.
Yesterday, just as a pastime I was going through top products on IndieHackers to discover some unknown who are making $100K+ in Revenue and was somewhat surprised to see Discourse there.
Just seeing this made me super curious about the startup and its origins and I ended up spending the next few hours reading about Discourse. I found it really fascinating. So, here we go!
Why do we need a thing like Discourse?
Jeff Atwood, Founder of Discourse, describes Internet Forums as,
“Forums are the dark matter of the web, the B-movies of the Internet. But they matter. To this day I regularly get excellent search results on forum pages for stuff I'm interested in. Rarely a day goes by that I don't end up on some forum, somewhere, looking for some obscure bit of information. And more often than not, I find it there.”
And to be honest, that’s more than enough reason to justify the existence of a company like Discourse.
Humble Beginnings
Prior to Discourse, Jeff founded StackOverflow, the Q&A platform for Developers which is perhaps the world’s most useful company built for developers. After leaving StackOverflow in 2012, Jeff was meeting a lot of people who used to ask him for advice and his advice was always to not ask him but to “ask your customers, your fans, your users, your patrons, your own community!”.
But, there was no software then which you can use to start a community of your own. Seeing this problem, Jeff set out to build “WordPress for Communities”.
He writes in Discourse announcement blog,
Sure, they'd say. Great idea. What software do we use to do that? Then I looked at the state of forum software in 2012 and I had a bit of a sad, because it was incredibly awful. There wasn't anything I could recommend that I wouldn't be completely embarrassed to install on my own server.
I set out to change that. Inspired by the WordPress model, I wanted to build next-generation community software that we could all be proud of, that was built for the next decade of the internet and competitive with the Twitters and Facebooks and Snapchats of the world, that was completely open source, and free to everyone forever.
Founding Team
In March 2012, Jeff met Robin Ward, his technical co-founder who had previously worked on ForumWarz, a web-based game about forum culture with its own custom forum alongside. Soon, after building out a Demo which helped them raise the initial seed round(more on this later), the duo added Sam Safforn, who worked alongside Jeff at StackOverflow as the third co-founder.
Interestingly, they named the company Civilized Discourse Construction Kit, Inc
Launch
On February 5th, 2013, the team pushed code on Discourse and launched the open-source project. The team knew that the product was not usable by everyone and they even recommended people to not use Discourse for now. Jeff writes,
“……..we're not even pretending that we have open source discussion software that works for most communities. Hell, the FAQ literally tells you not to use Discourse. Instead, we're spending all our effort slowly, methodically herding the software through these three select partners, one by one, tweaking it and adapting it for each community along the way, making sure that each of our partners is not just happy with our discussion software but ecstatically happy, before we proceed to even tentatively recommend Discourse as any kind of general purpose discussion solution.”
P.S- The FAQ page has been updated since then :)
The team planned to not have any paying customers for about two years as they were still figuring out what exactly people wanted in the software, and in the meantime get some open source contributors for the project and generally grow it. This is where the seed round raised came in really handy as it gave them a solid runaway for about 2 years.
After this launch, Jeff & team focused on getting three big beta customers who, in return for running our raw beta software on their real live sites, we promised white-glove anything goes support and free hosting for two years, and then at considerably reduced rates thereafter. This validated Jeff’s “Rule of Three” which states,
To build something truly reusable, you must convince three different audiences to use it thoroughly first.
Then by 2013 end, the team started working on getting paid to host customers. And they got their very first paying enterprise hosting customer in January 2014.
Middle Phase
At the company’s 2 year anniversary in 2015, the team added the $100/month standard hosting plan in addition to already existing $200/month for business and $,1000/month for the enterprise. At this point in time, the company was making $40,000 in Monthly Revenue.
After the introduction of this plan, Discourse doubled its monthly revenue to $80K by February 2016. It was at the same time that the company was able to obtain the domain discourse.com.
By 2017, the company was raking in $120K in monthly revenue with 700+ paying users and since then, has quadrupled the metric to $480K with 1500+ paying users.(Source)
Growth
Since then, the project has grown strength to strength to reach over 30K Stars on GitHub with over 737 listed contributors.
Currently, it has more than 1500 paying customers which pay the company $500K+ monthly in total to keep their communities running on Discourse.
Some of the customers are companies such as Patreon, Codecademy, Udacity and several others. Interestingly, the company is not something that’s popular in tech circles but it also used to run a fan club such as Linkin Park, a community of Keto-diet fanatics, a community where pilots answer your questions and several others.
You can view the list of Marquee Customers here.
Funding
This is where it gets interesting, Jeff & team have raised only one round of financing till today. It was a $1.7M Seed Round led by First Round Capital, Greylock Partners, and SV Angel.
After acquiring it’s first paid user in January 2014, the company has become profitable and currently has about 43 Full-Time employees. Also, the company is fully remote.
Market Outlook
Discourse has a good number of competitors in the space, however it has been able to create a good niche for itself. I found this graphic to give you an idea of the competition Discourse has-
Also, all the chat products remain a formidable competitor to Discourse.
PS- The team at Commsor has written a really good blog mapping the Community Tools ecosystem. Highly recommend reading it. I got the above graphics from there.
Summary
While reading up on Discourse, one of the things that stood out to me was how much Jeff was focus on “Complain Driven-Development”. He was okay with shipping a not-so-good version of Discourse and then working with team for the next two years to ship a money-making version of the product.
In the blog, he discussed his building process like this
Do detailed research on space. Know more than anyone. Know the history.
Assemble a Team & Build the MVP
Start using MVP & iterate. On this point, he adds, “If you aren't living in the software you're building, each day, every day, all day … things are inevitably going to end in tears for everyone involved. And honestly, if I have to explain this to you, guess what? You're screwed.”
PS- The Discourse team uses Discourse as the primary team coordination tool to build Discourse & keeps instant messaging, calls, and meetings to a minimum😉
Launch a closed beta and get feedback from your “Special Internet Friends”
Public Launch. This will suck but worth it.
Spend the next year doing nothing but fixing all your idiotic screwups and stupid mistakes.
????? (otherwise known as the messy middle)
PROFIT
The above steps were more like a summary of his steps. Highly recommend reading Complaint Driven-Development.
Coming back to Discourse, so far, Jeff’s master plan seems to be working and I am excited to see what they go on to achieve next😀