Clubhouse co-founder opens up on growing pains: ‘It’s been quite an 18 months’

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  • Clubhouse, which was initially only available on the iPhone, allows users to find and listen to conversations between groups of people.
  • Launched in March 2020, the app went semi-viral before falling dramatically in Apple’s App Store rankings earlier this year.

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Despite it being 8 a.m. in California, Clubhouse co-founder Paul Davison is a bundle of energy when he joins the Microsoft Teams call.

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Their high spirits contrast with the popularity of their audio-only chat app. Launched in March 2020, the app went semi-viral before falling dramatically in Apple’s App Store rankings earlier this year.

“It’s been quite 18 months,” Davison told Businesshala.

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Clubhouse, which was initially only available on the iPhone, enables users to find and listen to conversations between people. Users join “rooms” where friends and strangers discuss everything from cryptocurrency and politics to diet and video games. Hosts can “pass the mic” to others in the room and the audience can raise their hand when they want to speak.

The revenue-free consumer app was quickly adopted by Silicon Valley types. Its main supporter is the well-known venture capital firm Andreessen Horowitz, whose co-founder periodically speaks on stage.

It was set up in the middle of the coronavirus pandemic as people were looking for new ways to occupy themselves, but there is less hype around the app now than before.

“It seems to be fading,” venture capitalist Hussein Kanzi told Businesshala in reference to Clubhouse.

Its monthly active users in the UK, for example, dropped from 550,000 in February to 160,000 in September, according to data from app analysis firm App Annie.

keeping in mind the demand

Despite initially being invitation-only (invitation codes were selling for $400 at one time on eBay), the company struggled to cope with initial demand.

Clubhouse said its weekly user base reached more than 10 million people within a year of its launch., According to app analysis firm SensorTower, the app has been downloaded more than 34 million times.

“It really started to grow a lot faster than we ever anticipated or planned, or clearly expected,” Davison said.

“I think in December [2020] Alone we grew 10 times,” he said. “It just went on. When all this was happening, we had eight people on our team and it really stressed the system.”

The former Google intern said he was forced to focus all his attention on scaling up the technical infrastructure and increasing the size of his team, as opposed to launching new features and refining the app.

“We have grown from eight people at that time to about 85 people today,” he said, adding that the workforce will increase to between 100 and 200 next year.

Elon and Mark show

Clubhouse’s popularity got a boost earlier this year when several big names took part in on-stage talks.

In February, Tesla CEO Elon Musk and Meta CEO Mark Zuckerberg both appeared at the clubhouse within days of each other. Musk even asked Russian President Vladimir Putin if he wanted to join him for on-stage talks.

According to App Annie, clubhouse downloads peaked in February with an influx of big names.

But the hype started around April, which is ironic when the company announced a Series C funding round. round It is reportedly valued at $4 billion. Was, but it’s not clear what the value of today’s startups is.

When asked about the drop in downloads, Davison said, “Start-ups are generally not a completely linear path.”

In an effort to expand the clubhouse to more people, Davison App launched on Android in May. He added that 10 million new people joined in the six weeks immediately following the Android launch.

In July, as an effort to reach even more people, Clubhouse Ditches the Invite-Only Rule And opened the app to everyone.

“We have a few months this year where we see traffic really increased,” Davison said, noting that this happened in February, June and July. “The goal is to move away from the peaks and valleys and towards a steady path.”

While downloads have fallen, Davison said the number of “rooms” being created on the app each day has fallen from 300,000 earlier this summer to nearly 700,000.

For technical reasons, rooms are currently limited to 8,000 listeners, up from 5,000 a few months ago. Davison said he expects to expand the number to 10,000, 15,000 and beyond in the coming months. To overcome the limit, users set up “overflow” rooms and stream sessions on YouTube.

Tough competition

Several social media giants have launched similar audio-only products after seeing the initial success of the app. Twitter now has Spaces, Facebook has Hotlines and Spotify has Greenrooms. Amazon is also working on a Clubhouse competitor, according to The Verge.

“I’m not surprised that other platforms are launching audio in the same way they launched photos and then video and other features,” Davison said.

He continued: “We believe that the company that is going to move forward in social audio will be completely focused on social audio.”

To differentiate itself from the competition, Clubhouse on Monday launched two new features. The first, Replay, allows creators to record their “rooms” and share them on their profiles and elsewhere. The second tells creators how many people are in the room at any one time, as opposed to the total number of people who have joined their room.

Other, perhaps more notable, features have been introduced this year. In April, Clubhouse made it possible for users to send money to other people on the platform through a partnership with Stripe.

Davison cited musicians as a beneficiary of this, with some guitarists making around $200 in 20 minutes. He declined to comment on how much users have sent each other overall so far.

Clubhouse hasn’t made any serious money yet and is currently operating entirely on an undisclosed amount of investor funding. However, it plans to start charging users for access to certain things in the near future.

“Some of the things we’re excited about are subscriptions for creators, paid events for creators, real in-room tipping for creators, brand partnerships for creators,” Davison said. “When I say in the future, I mean probably in the next few months.”


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