The Story of Clubhouse

Just when we thought that social media couldn’t get more innovative, Clubhouse entered the room. Clubhouse has over 10 million downloads globally, 2 million weekly active users and within two months of its beta launch, Clubhouse was valued at 100 million dollars. With two employees and no website, the platform still blew up. Clubhouse is a new type of network based on voice. When you open the app you can see “rooms” full of people talking—all open so you can hop in and out, exploring different conversations. You enter each room as an audience member, but if you want to talk you just raise your hand, and the speakers can choose to invite you up. Or you can create a room of your own. It’s a place to meet with friends and with new people around the world—to tell stories, ask questions, debate, learn, and have impromptu conversations on thousands of different topics.

Clubhouse is voice-only. With no camera on, you don’t have to worry about eye contact, what you’re wearing, or where you are. Instead of typing something and hitting send, you’re engaged in a back-and-forth dialogue with others. The intonation, inflection and emotion conveyed through voice allow you to pick up on nuance and form uniquely human connections with others. Think of Clubhouse like being at a party where you don’t know anyone, so you casually poke your head into conversations and chat with people around the room. The keyword here is “chat,” as in with your voice. You can upload a profile photo of yourself, but aside from that there are no options for images or video.

A peep into the app shows what the buzz around Clubhouse is all about. One room on ‘How to become a great public speaker’ with Robbie Crabtree helps people get professional advice and feedback with just a few clicks. Another room in the startup ecosystem helps budding entrepreneurs get valuable insights into the corporate world from the people who have the expertise. Clubhouse has given a new definition to social media. As opposed to being a distraction, Clubhouse is a place that people seem to be coming back to because it’s a place where they can talk for hours at a time and leave each day feeling better rather than worse, because they have deepened friendships, built new ones and learned something new.

Let’s look at Clubhouse’s timeline to understand its growth trajectory. In March 2020, the app was first introduced to iOS by Paul Davison and Rohan Seth of Alpha Exploration Co. Originally designed for podcasts under the name Talkshow, the app was rebranded as “Clubhouse” and officially released for the iOS operating system. Paul and Rohan, both have a strong standing reputation amongst the tech community of Silicon Valley. They took advantage of their established network and contacted mega influencers to form the initial user base on the platform. This strategy worked in their favour. With an influx of influencers, Clubhouse gained 5,000 beta users. As more and more people started joining the platform, the beta version of the app started crashing. In order to tackle this chink in the armor, Clubhouse sought out Series A funding. Their reputation gave them access to top VCs like Andreessen Horowitz, who invested $10 million in the platform. This investment from a renowned VC, vouched for the brand quality and played in their favour indicating that Clubhouse had a bargaining power during the negotiations. After getting a boost in its valuation from Andreessen’s investment, Clubhouse improved its user experience and user interface. Clubhouse strongly believes in growing their communities slowly, rather than 10x-ing the user base overnight. This helps them ensure that each and every flaw is addressed and customers find the platform attractive. Building a strong product is the one aspect that has contributed so highly to the success of Clubhouse. By maintaining momentum, Clubhouse’s user base increased from 100,000 users in June 2020, to 6,00,000 users in December 2020. In January 2021, CEO Paul Davison announced that the app’s active weekly user base consisted of approximately 2 million individuals. On February 1, 2021, Clubhouse had an estimated 3.5 million downloads globally and grew rapidly to 8.1 million downloads by February 15th. This significant growth in popularity occurred after celebrities such as Elon Musk and Mark Zuckerberg made appearances on the app. In January 2021, the app became widely used in Germany when German podcast hosts Philipp Klöckner and Philipp Gloeckler started an invite-chain over a Telegram group, bringing German influencers, journalists and politicians to the platform. In January 2021, the company announced that it would begin working on an Android version of the app.

What makes one curious is how did Clubhouse do what it did. Number 1 answer to that is Exclusivity. Knowingly or unknowingly, we all associate exclusivity with status symbols. Clubhouse is a platform that expanded on this premise. They introduced the ‘Invitation only’ feature, wherein users can join the platform by either getting invites from already existing users or buying invitation codes from ebay for $400. People Selling out invites added monetary value to the platform thus proving that had it been an open platform, their popularity wouldn’t have been the same. This feature creates a sense of FOMO amongst the people who do not have access to the app. Fear of missing out: you can’t record the conversations so if you miss, you miss. So when influencers like elon musk announce they’ll come on the platform it generates a lot of interest, sense of mystery and allure. Another major contributor is the timing. Clubhouse was introduced in March 2020, a time where people had to severe ties with the outside world. Since the chaos of 2020 had taken away so many jobs and physical connection, Clubhouse was a balm for people who wanted to connect with others and feel the human touch. After months of endless scrolling and screen fatigue, clubhouse was a refreshing start to audio networking. If there is one reason that helped Clubhouse achieve virality, it’s influencer marketing. They strategically onboarded influencers right from inception to from the initial user base so these influencers could act like a magnetic attraction for their serviceable obtainable market. This significant growth in popularity occurred after celebrities such as Elon Musk and Mark Zuckerberg made appearances on the app. In January 2021, the app became widely used in Germany when German podcast hosts Philipp Klöckner and Philipp Gloeckler started an invite-chain over a Telegram group, bringing German influencers, journalists and politicians to the platform. In fact, the app is becoming popular in the Black entertainment community, in particular. Haddish was the first person to break 1 million followers on Clubhouse. Clubhouse is big with celebrities. Float around the app and you might hear folks like Oprah, Kevin Hart, Drake, Chris Rock, or Ashton Kutcher. They might even host chats. In some ways, that’s part of Clubhouse’s appeal. You get the chance to hear, and even participate in, unvarnished conversations with famous and powerful people. Clubhouse values their influencers and through this they have secured their existing user base and ensured long term growth similar to what tik tok and youtube did. They prioritised monetisation of their influencers. Further they are using funding to expand globally while ensuring a smooth functioning of their creator program. Their creator program is a way to compensate influencers in the form of subscriptions for bringing in traffic.

Industry experts do believe that Clubhouse has plateaued before its peak. As people are meeting in real life, there is very little social conversation for which they need Clubhouse. Only time will tell what the future of Clubhouse entails. Whatever the future holds, Clubhouse will always be remembered as an app that took the world by storm.

– Janvi Gupta

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