Discords new dumb acquisition
On January 17, 2023, Chat Messaging company Discord announced they were buying the app Gas for a currently undisclosed amount. The gas app is a compliment-based social media app popular with teens. Gas follows a modern tech social media trend that seems more focused on positive mental health, unlike the old generation of social media apps. This trend is also seen with the Popular social media app BeReal which allows a more realistic and, therefore, healthier alternative to Instagram and Snapchat. Though the Gas app seems to have a positive impact, I believe Discord’s acquisition of the company to be a mistake for a couple of reasons, including the company’s founder, a loss in popularity, the rise in competition in the space, and the fact that it seems to have little to offer Discord.
Nikita Bier founded gas app, an ex-facebook employee who, before launching Gas in august of 2022, was known for founding tbh, an app with the same concept as Gas that Nikita sold to Facebook in 2017 for $100 million after being the number one app in the united states app store only for Facebook to shut it down less than a year later for low usage. A founder launching a similar company to an old one seems like a red flag as the concept was already proved to be a fad with no long-term potential. Still, the founder just remade the same company and sold it to a different buyer than last time, probably using their short-term popularity to seduce Discord; however, their popularity has already fallen.
In October 2022, Insider wrote about how Gas had dethroned other popular apps, Tiktok and BeReal, to become the number one social media app. But much like other popular social media apps that come and go out of the spotlight like they were one-hit wonder artists, Gas has fallen from its heights. As of January 2022, Gas sits at a low sixty-two on the lifestyle apps category charts. Despite this drop in popularity and lack of growth, many competitors to Gas are being released, such as Nocapp by 9 count, inc, an app that has a better name. The rise in the competition will surely help Gas fall down the charts even more than it already has.
It seems that an app with falling popularity, a concept that proved not to work long term, and the rise of competition in the space would make any company keep a nine-thousand feet distance from Gas, but for some reason, Discord bought them, so why did they? The answer is that the acquisition of Gas was an acquihire that would lead the Gas team to join Discord. However, even this isn’t a good reason to buy Gas, as the rise of layoffs in tech means Discord could quickly get employees without acquiring companies that have fallen off.
