The social audio app, Clubhouse, which was launched in the early days of the pandemic as an invite-only iPhone app, quickly became the talk of the town as everyone from Mark Zuckerberg to Oprah Winfrey to Elon Musk jumped on the bandwagon. Global monthly app downloads grew to an astounding 9.6 million in Feb 2021, and invites were selling for hundreds of dollars on eBay. But then downloads fell precipitously to around 2.7 million in Mar 2021 before briefly rising to 7.7 million in Jun 2021, and then they plateaued to around a million. What explains Clubhouse’s downfall? Who are Clubhouse’s competitors? Is this really the end of the road for Clubhouse?
To the moon
Founded by Paul Davison and Rohan Seth, the beta version of Clubhouse launched as an invite-only iPhone app on Mar 17th, 2020. The launch was perfectly timed as Clubhouse assured spontaneous conversations and chance meetings to people who longed for spoken human conversation.
The app was initially available only to the founders’ inner circle, consisting of tech entrepreneurs and investors. The app slowly gained traction as it brought more marginalised voices to the forefront and was embraced by Black Lives Matter writers and activists. Initially, Clubhouse didn’t have replays, so if you left abruptly, you might have missed out on life-altering advice or a special moment that could never be recreated again. Realising the potential of the app, investors started knocking on the door, forcing Seth and Davison to take their money. And the most enthusiastic investor among them was Andrew Chen, the Andreessen Horowitz partner who had written a 2019 memo predicting that the next huge social media trend would be audio. Soon, Clubhouse raised US$10 million as a part of its Series A round led by Andreessen Horowitz.
Driven by the legendary performance of The Lion King by black creators, global downloads increased by a whopping 1280% MoM, reaching a million downloads by Dec 2020. By the end of Jan 2021, Musk made an appearance on the app and sent it to the moon. Clubhouse blew up in China and hit the top spot in the app stores in Taiwan, Japan, and Hong Kong. Downloads increased by 130% MoM and reached 2.3 million; the number of users rose 10x, from around 200k to more than 2 million.
Soon February came along, and app downloads hit a fever pitch and came close to 10 million, and the number of users jumped to 4 million; meanwhile, the company was stretched to its limits as it still had only nine employees and some contractors who moderated content.
So, what are the underlying reasons for Clubhouse’s popularity and the sudden surge in new social media platforms?
The app’s rise to fame can be distilled into a few main factors:
- The aura of exclusivity offered by Clubhouse’s invite-only app.
- Zoom-fatigued audience looking for alternative entertainment.
- Once in a lifetime chance at having informal chats with the likes of cult icons like Musk.
The proliferation of new social media platforms has been driven by the following:
- The pandemic made people feel isolated and alone, forcing them to find new ways to connect with people.
- With regulators breathing down Facebook’s neck, it has slowed down the pace of acquisitions, giving social media startups time to develop on their own.
- After being mired in controversies for amplifying hate and misinformation and their absolute disregard for users’ privacy, social media giants, Facebook and Twitter have lost the trust of users. Hence, users are now more willing to try out new options.
- Users have welcomed new content formats with TikTok and Clubhouse fitting into niches unserved by Twitter and Facebook.
From their all-time high in February, downloads dropped to around 2.7 million in March and fell even further in April 2021. The steep drop coincided with the company’s Series C round, in which it was valued at US$4 billion.
According to app analytics firm App Annie, monthly active users in the UK reduced from 550k in February to 160k in September.
In May 2021, the app finally opened its doors to Android users and in July, users no longer needed invites to download the app. But the euphoria had already died down. What was once a novelty turned monotonous, and dozens of competitors had cropped up, so the crowd that was unsatisfied with the lack of monetization options and the slow introduction of key features, moved elsewhere.
Major social media websites from Discord to Reddit started announcing their Clubhouse clones, with Twitter leading the pack. After years of underperforming compared to its peers, Twitter desperately needed a feature that could help attract users and increase engagement. Realising the potential of Clubhouse, Twitter announced Spaces in Nov 2020 and even tried acquiring Clubhouse.
But Twitter might have just struck gold with Spaces. Compared to Clubhouse, those using Spaces can potentially reach 217 million people every day. Twitter’s acquisition of newsletter platform Revue also goes hand-in-hand with Spaces. So creators can launch their newsletter on Revue, use their Twitter following to gain subscribers and deepen their relationship with ardent subscribers on Spaces.
Other social media websites quickly followed, with most announcing or launching their Clubhouse-like feature between Mar-Apr 2021.
Notable startups in the social audio space include:
- Soundwave: Soundwave is a US-based short-form social audio app that makes it possible for everyone to speak their mind and find community through the authenticity and intimacy of their voice.
- Angle Audio: Founded in 2020, Angle is a Switzerland-based audio rooms as a service startup that allows users to add virtual audio spaces to their app or website.
Blooming in India
While the hype around the social audio app might’ve settled down in the west, uptake has increased in other global markets, with Clubhouse reporting an increase in the number of rooms created daily from 300k in May to 400k in June to 500k+ in July 2021.
In the first three weeks of Jun 2021, 5.2 million Indians downloaded Clubhouse, accounting for 80% of the global downloads.
From rooms on feminism to gaming to pop culture, Indians were spoilt for choice. But variety alone was not the reason for Clubhouse’s popularity:
- The app was language-agnostic; in a country with close to two dozen officially recognised languages and hundreds more, this was a virtue. Clubhouse allowed users to speak their minds in the language they preferred, and people could find rooms in any language.
- The app attracted the likes of CRED’s Kunal Shah and Unacademy’s Gaurav Munjal, both renowned Indian entrepreneurs heading billion-dollar startups.
- Clubhouse offered an uncensored and open platform to discuss politically sensitive topics and had not as yet come under the Government’s scrutiny.
Clubhouse’s journey roughly matches Gartner’s Hype Cycle, with it currently being in the trough of disillusionment phase. In order to move to the next phase-slope of enlightenment, Clubhouse has to focus all its efforts on adding more innovative features and languages, improving the user experience, listening to its users, and introducing more monetisation options for its creators. This way, Clubhouse can gain some of the users it lost and maybe add new ones too.
But if Clubhouse loses focus, then it risks ending up like FourSquare which became redundant once bigger apps folded location tagging into their features.
Despite the exodus, Clubhouse continues to live on millions of devices, and its most frequent users, many of whom are international, remain loyal.
We try our best to fact check and bring the best, well-researched and non-plagiarized content to you. Please let us know
-if there are any discrepancies in any of our published stories,
-how we can improve,
-what stories you would like us to cover and what information you are looking for, in the comments section below or through our contact form! We look forward to your feedback and thank you for stopping by!