Welcome to the 84th edition of Heartcore Consumer Insights. Curated with 🖤 every week by the Heartcore Team.
If you missed the past newsletters, you can catch up here. Now, let’s dive in!
After flying under the radar as "just" a chat app for gamers, Discord exploded into the public consciousness in 2020, racking up 100M MAUs and $130M in annual revenue.
Seven years ago, Discord was in a very different place. The company was a game development studio that wanted to bring multiplayer online games to tablets.
Its game struggled to attract users but one thing was working: the game's text & voice chat feature. In early 2015, CEO Jason Citron decided to pivot, betting the company on this chat tool.
There was just one problem - they needed users! The majority of gamers were using TeamSpeak and Skype, which were far from perfect but had the benefit of scale.
The first glimmer of Discord’s eventual success came from an unusual source: the Final Fantasy XIV subreddit. Discord’s initial wedge was quite narrow: Final Fantasy XIV only had 4M registered players. On May 13, 2015, u/chreescawk wrote: “Just switched to a program called Discord for our VOIP, has anyone else tried it?” The thread racked up 151 comments, with users weighing in on features or asking product questions.
This post drove 600 new signups, as users onboarded and invited other members of their guilds. As CEO Jason Citron wrote at the time, the team was blown away - they had a celebratory lunch and “danced around in circles.” A week later, Discord hosted an AMA with these early users (transcript here), capitalizing on this interest by sharing the roadmap and taking feature requests.
Once Discord started to gain steam, it just kept going. Six months after the AMA, the company had registered 3M users, with another 1M joining each month. By Discord's first anniversary, it had an astounding 11M users - and they were extremely active, sending 40M messages a day on the platform.
We all know COVID changed eCommerce forever; the industry grew by a record 28% in 2020, and volume shot through the roof as we were forced to buy everything from groceries to bedsheets online.
The past 11 months have seen continued expansion for some, but also very painful contraction for others. Merchants are facing a confluence of complex challenges: people are spending less time online, some shopping habits are reverting to offline channels, supply chains are crippled, and privacy changes are upending lead targeting.
For everyone selling online, competition and complexity are at all-time highs.
Primary.vc asked merchants what their biggest strategic initiatives were this year and what they see as emerging opportunities for growing their brand:
Improving Data Fragmentation: by far the most common response from merchants was optimizing existing marketing channels (predominantly email) either through enriching CRM data or improved automation. As leads or customer data flow in from a variety of different sources, it’s been more important than ever for brands to have a central repository and more effectively understand who their customers are in order to efficiently market to them. “Consumers today want to shop from any channel, on any device, at any time. Yet infrastructure to support this is still playing catch-up. Ecommerce stacks are fragmented. Core systems don’t easily talk to one another. ” - Jane Lee (Sapphire)
Leverage Existing Customers as an Acquisition Channel: merchants have also now recognized that traditional media channels have tapped out and there is a real need to start using existing consumers as a channel. Brands will always be price takers when it comes to digital media and cost of acquisition, however, it's up to their control to turn their best customers into marketers for their brand. “The most powerful driver of a brand’s growth has always been word-of-mouth. As traditional paid digital channels have become unsustainably expensive, we’re seeing marketers invent creative ways to drive this word of mouth online by mobilizing their best consumers as creators. We’ll see more and more brands considering ways to activate their customer community as they would think about investing in a performance media channel.” - Scott Norton (Investor at N+1)
On-site Personalization and Optimization: headless commerce platforms continued to grow in popularity in 2021 given their ability to allow merchants to build truly fluid and personalized storefronts for their customers. “2021 was the year that we realized just how hard differentiating in eCommerce really is, as a panoply of challenges from supply chain to marketing converged and combined with ever-increasing competition. We saw the beginning of the big switch to first-party (proprietary) data, as iOS 14 killed second-party data (and tried-and-true Facebook marketing techniques with it), leaving many companies scrambling to find and understand their own customers. It was also a year that we began to ask ourselves what exactly "Headless Commerce" is, with most of the answers still barely scratching the surface of what headless really can do for merchants, as it relates to personalization and brand-forward commerce.” - Henry Davis (Chord)
Inside Gopuff's Amazon-inspired vision
The inside story of Facebook Marketplace
How to Monetize Free Products
Turo S-1 teardown
Email exchange between Paul Graham & Fred Wilson about Airbnb
Mobile Subscription Predictions for 2022
1confirmation 2021 NFT Year in Review
Jefferies Metaverse Primer
A Founder’s Step-by-Step Guide to Getting Your First 1,000 Community Members
🇪🇺 Notable European early-stage Consumer rounds :
🇺🇸 Notable US early-stage Consumer rounds :
🔭 Notable later stage Consumer rounds :
🍭 Notable Consumer Exits
🛫 Our portfolio company TravelPerk raises $115M at a $1.3bn valuation (round led by General Catalyst & Kinnevik). Hats off to the whole team! 🍾 Learn directly from Avi (CEO) on how the company brilliantly weathered the pandemic 🛫
Heartcore Consumer Insights is a weekly newsletter covering notable consumer rounds and exits and top content in the B2C space.