Chatter in the technology and influencer space emerged in the early months of 2020 about a new social media platform: Clubhouse. Clubhouse is perfectly set up to be the audio component of a Twitter that you can lurk in on (which most social media options are not). Unfortunately, the age of Clubhouse was as fleeting as its time in the spotlight. This post will go over the signs of how that explosive growth happened and why I think it fragmented in a manner not followed by other industry cycles?
Hypersonic Rise of Clubhouse
Introduced in March 2020, it is a social audio app invented by Paul Davison and Rohan Seth. The App was a novel platform and had an experience where users could host or join audio chat rooms on various content areas. It did so for a few important reasons:
1. Exclusivity and FOMO: Clubhouse entered the year invite-only, hence it was literally a thing you wanted not to miss out on. It was similar to the style of social networks like Facebook when it just started.
2. Pandemic Effect: The introduction of COVID-19 restricting everyone to staying at home helped in increasing the usage of the new digital communication platforms. Clubhouse was viewed as a means to differentiate from pandemic lockdown-driven video calls and text-heavy social media with the format of audio conversations.
3. Celebrity Endorsements: Influential celebrities like Elon Musk and Oprah Winfrey came along; this created a lot of attention. These endorsements from the most notable celebs did help Clubhouse become more mainstream and reach broader, far-reaching audiences.
4. New User Experience: The application had a novel structure that allowed unplanned conversational exchanges to be created, as the way these happen face-to-face. The users found this originality more engaging than their regular curated content.
In February 2021, the height of Clubhouse’s popularity saw more than a million downloads and an evaluation at nearly $4 billion. The startup came out of stealth last month with an array of rooms – from tech talks to industry rumours and more fun spaces for casual hangs or entertainment. It seems folks appreciated that they could drop in and out of rooms to listen or join the conversations without a camera on their face, writing a post.
Downward Spiral
Clubhouse started strong, but sputtered in mid-2021 There were several reasons behind this drop, including:
1. Competition and Saturation: while the pandemic waned, users returned to their pre-pandemic IRL lives, leaving less room for them on audio chat platforms. In addition to that, even some of the social media behemoths like Twitter(Twitter Spaces) and Facebook(Live Audio Rooms) also forayed into this sector with their copycat features essentially removing Clubhouse’s unique selling point.
2. Failing at Scale: As Clubhouse expanded, it found itself unable to keep conversations clean and spam-free. Room overcrowding from new user growth and lack of pure exchange interactions watered down the incentive in their value prop.
3. Monetization Struggle: Clubhouse had struggled to produce a clear path towards monetization, unlike most other social media applications. It did bring in ticketed events and a creator fund, but these actions were not sufficient enough to maintain interest from users.
4. User Fatigue: Audio-only experiences are an interesting novelty but quickly become boring. They permanently reoriented their customers into battle-hardened sceptics reserved for intrusive cold calls that had absolutely no tie to any conversation, anywhere and were just plain confusing. It was an impediment to many as you had to be attentive and participate.
5. No Asynchronous Content: The most obvious handicap of Clubhouse was that every piece of content had to be consumed live. However, it did not resemble podcasts and recordings of webinars that are available for users at any time. This was quite restricting, as only persons who have so much time could run the app.
The Clubhouse Story: The Simplified Insights
Exclusivity and FOMO: its invite-only model piqued interest but also limited potential for further growth.
Pandemic Boost: the app rode high on a wave of global lockdowns, offering an opportunity to connect differently.
Celebrity Influence: endorsement by influential figures helped catapult it into the mainstream.
Competition: the big wigs behind existing social media platforms introduced similar features, eroding any unique selling points.
Scalability: quick adoption rates made maintaining quality interactions challenging.
Monetization: a lack of robust monetizing options impeded long-term feasibility.
User Fatigue: as novelty around real-time audio chatting began wearing out leading to diminishing engagement.
Market Adaptation: not in tune with evolving user needs or market dynamics sealer its fate.
Clubhouse should be another finger-pointing at broken social dynamics; from a successful app to one of many that fails due to repeat product problems. The attractiveness of Clubhouse was its appeal to being typical during the pandemic but it couldn’t change fast enough when market conditions changed.