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VC Peter Relan helped launch Discord;  now he “manufactures” two new incubators – TechCrunch

Peter Relan isn’t much of a household name, but he’s seen a lot in his career and enjoyed quite a bit of success. A Stanford graduate who spent time at Hewlett Packard and Oracle before becoming the technical director of the hapless Webvan company, Relan has, in recent years, become known in founding circles for having created three incubators ” who hit over their weight.

The very first class in 2007 included founder Jason Citron who at the time was developing a social mobile game company, OpenFeint, which he then sold in 2011 to social gaming platform Gree of Japan for $ 104 million. of dollars. Relan, who was playing the operating partner role, owned half the business when Citron decided (almost immediately) to start another small business he would call Discord – and went straight back to Relan to help him out. build it. (Other “graduates” of Relan include social game company Crowdstar, which was sold to Glu Mobile in 2016, and Agawi, a game streaming company that was sold to Google in 2015.)

Relan has long given up on the game and is now focusing on climate change, equality and “tech ethics,” but recently spoke with us about his relationship with Citron. (Relan served on the Discord board until last year.) He also said he had “two big things in the works – one in AI and one in climate change,” so watch this space for more information. In the meantime, you can hear our conversation here or read slightly edited snippets below.

TC: You launched your accelerator, YouWeb, around the same time as Y Combinator, but it was structured very differently.

PR: Every year we were like, let’s just say [partner with a] few entrepreneurs here, and we’ll give them one year instead of the traditional three months, and we’ll co-create. So we don’t have hundreds of businesses. In 15 years, we have incubated around thirty companies.

TC: How did the founders find you?

PR: Everything is referenced by other people. So, for example, I met Jason when he was 22. He was a roommate of my nephew, who graduated from Berkeley. I was a Stanford alumnus, I asked a few people at Stanford, and we found the founders from there. It was very discreet. We weren’t trying to build this massive application process. We were just looking for founders who have particular inclinations; because i’m an engineer, i really wanted very tech-savvy developer founders.

TC: When you say “we”, who else was involved, and did you fund this incubator out of your own pocket or did you have outside investors?

PR: I started with my own funds, but then we built a network of founders, including seven or eight investors who were executives and other successful founders. [including at] Yahoo, Google, Oracle and Microsoft. It was about $ 2.5 million for that first class, and we sponsored eight founders.

TC: One was Jason, whose first company – co-founded with an EIR at YouWeb, Danielle Cassley – was OpenFeint. How ready was this company initially?

PR: Jason is a baseman at heart, and he came in saying, “I just want something in the game.” There was no idea, there was no particular game, there was no idea. there was no particular product, and in fact OpenFeint which is a social chat platform started out as a game called “Aurora Feint” which was a very nice game and was really well received, but in terms of financial success, all was well. And the most interesting thing about it, inside, was actually a social platform that had leaderboards and achievements and a chat. So we took the social platform out and we said: [put] the game aside and let’s scale that platform.

TC: What was your role?

PR: I was executive chairman. He was a co-founder and CEO. So we worked as business partners. He was the product guy. I was the mentor. And Danielle was involved, but she moved on. So it was Jason and me pretty much. I would help with funding and with strategy and business development. We have worked extensively with AT&T to pre-install OpenFeint on AT&T mobile phones. So there was a lot of that stuff. My goal was to be useful.

TC: Y Combinator takes a 7% stake for its first checks. What percentage of OpenFeint did you own?

PR: We were co-creating before, so we would be 50/50. Obviously, it was a great success for YouWeb [when it sold], because we were equal partners with Jason and Danielle. In our second [batch] where we worked with Discord, we [operated] much more like YC because I actually wanted to do a little less work and work in more areas, not just games.

TC: It says something about your relationship that Jason turned around and came back to you with Discord. It is also interesting that a 26-year-old who had just made a fortune immediately gets back to work.

PR: I remember when he left Gree. It was late October or November 2011, and he just sent a simple email saying “I’m back”. And I said, ‘Great.’

Again, it started with a game and – we’re moving forward here – three years later the game is doing well but not so well, and the features of the chat platform are very, very popular and, as already seen, it suddenly removes the chat platform and launches it as Discord. So [it’s] repeat [and] play but does a lot better this time, obviously, right? [Discord] now has over 300 million, 400 million users now – well over 300 million.

TC: And now, its valuation would be estimated at $ 15 billion. How did his series A go? I had heard at one point that some companies – maybe General Catalyst, maybe Accel – had missed this opportunity. Is it true?

PR: Actually, the first round of Discord was really interesting. It wasn’t even a prize round. It was really people who were investing in Jason, and maybe a little bit in the fact that we were working together – kind of like, “Hey, here are some people who got something done, and here is a guy who wants to go on and do it. something bigger now maybe. So the first round was really a bunch of VCs who basically decided to write those checks for $ 250,000. Accel was there and General Catalyst and IDG and Time Warner.

And then the question you ask is how does Benchmark, a completely different company that was not [part of] those first 10 checks and was not a seed investor, ended up getting the deal. What happened was TechCrunch Disrupt. He got to the finalist and people really loved his presentation style and his company and [longtime Benchmark investor] Mitch Lasky noticed it and said, “Hey, we should talk. I think it was almost so quick that if I remember correctly it was really just, “Hey, is anyone else really up to something? Otherwise, I have a condition sheet.