Yeah, it is the chat program treadmill. Spend investor money to host a completely commoditized program. Of course it is better than the version that costs money by virtue of being free. Eventually run out of investor money and do something unpopular to raise revenue, leaving the opportunity for the next iteration to come in for free and take your spot.

The only thing I don’t really understand is why investors keep falling for this? The only real business model is giving their money away. Maybe they get some good ad network profile data in the time between the heel turn and the point where everybody ditches the service.

Investors aren't falling for it. Users are falling for it.

Leaking millions for years pays off in the end, or even half way through. Some investors would exit at some stage. Taking profit due to valuation going up, despite no revenue/profit.

At the end of the tunnel is acquisition by a major player who is basically buying the users.

Typical examples: Skype, whatsapp.

But also LinkedIn. GitHub.

Businesses that offered some (basically) free offering for over a decade until reaching critical user base, then sold off for billions. Reason being precious data along with millions of daily active eyeballs.

Skype is ending this year. Some founders and investors won but only thanks to greater fools.

(notable that three of the four greater fools in your post are Microsoft)

May not be clear, even to finops at Microsoft. Skype tech ended up in Lync subsequent versions, aka Skype for enterprise. The user base also became a free ad target (to buy the entire consumers tool suite) I remember being constantly nudged to sign up for the free 30 days One Drive to backup Skype pictures and the jazz. So creative these heads of sales at MS.

Cheaper and harder to end up in spam folder.

It's shocking really that Microsoft didn't buy Slack and drive that into the ground too.

I'm glad to see WhatsApp is proceeding relatively slowly down the Shit-en-slide, since it's completely entrenched in some countries. I've had companies who just assume that I have WhatsApp and it's cool to message me on it instead of sending a text or email.

you can make something free and still profitable. Google search for example. I've been waiting for years to see something replacing it

I haven't used Google search in over a decade.

> they took

They are more than likely still taking, based on the 17% layoff a few months ago

As is Snapchat, miraculously (Snapchat is the most wildly mismanaged social media company from a fiscal perspective it’s wild)

> The secret is how did they get popular with young kids? Well they offered a free service obviously, just like Google, just like Facebook.

In 2015, when they first got started, they marketed towards gamers (i.e. boys and men in their teens and early 20's). Even though the company's tagline at the time was that it offered a better Skype, Discord was more inclined to be a better replacement for a moribund Xfire and an aging Teamspeak. Word of mouth marketing on Reddit didn't hurt either.

They also have ties to Universities with their student hubs. This part is great if you're a student, as you can find clubs and people with similar interests. There is immense power in what an older sibling does, and soon the younger siblings are using it to chat with them. They can chat with their friends from any mobile device or a desktop without the dreaded green bubble or restrictions of SMS / iMessage. In groups, they can hide their identity.

It gives the server "owners" the ability to enforce rules, ban those who are disruptive, and has an impressive bot API. I can see why it is immensely popular.

Skype was also still popular among gamers when Discord was first available. That's what my friends and I switched to Discord from.

These days I refuse to use Discord for political reasons though.

What political reasons? I googled for discord political controversies but didn't find anything too shocking.

I don't like depending on a proprietary commercial product to facilitate my personal relationships. I don't like the fact that they can (and are likely to) ban / block me from talking to my friends for choosing to run a client other than their proprietary web browser wrapper on my computer. I don't like that it's a single point of failure (that often does) for something as easy to host as chat. These reasons probably fall under the "not too shocking" label, but they're important to me.

Curse was becoming more popular than TS at the time, but Discord offered a better quality of audio and stable connection. That's why my group of friends migrated to Discord around 2016.

TeamSpeak was usually the default option at the time (with some on Mumble). Skype had some presence, but was usually grumbled about beyond 1:1 calls. RaidCall was starting to gain some presence because it was free but otherwise followed TeamSpeak's UX, but was still pretty niche.

Curse Voice was absolutely nowhere to be seen.