I've always wondered how famous people interact in regular conversation with people. Clubhouse provides the opportunity to eavesdrop on them.
After weeks of seeing tweets about Clubhouse, a subscriber pal sent me an invite to join. I didn't expect much going in, but it's worth the hype.
Think of it as Omegle, but at scale to hundreds (or thousands) of people. You join into "rooms" of people talking as if they were hosts of a radio show.
You move between conversations (as a speaker or listener) covering a bunch of diverse topics. I left a room full of crypto experts and joined a group of people with insomnia.
Clubs That Are Meritocratic
Meritocracy is a set of rules, rewarding individuals based on dedication rather than status.
Like Twitter, you can easily dominate a Clubhouse room and build a following— as long as you're interesting and have something to say. It's a social media app in audio form.
The app allows users to share nuanced, detailed concepts in conversation. There's no bite-sized 1 minute TikTok-like content or any high-end production. It’s entirely raw and in real-time. You're rewarded entirely on discussions and authenticity.
Clubhouse's Network Effects are growing quick. The app is only available to iOS users and even then, it's through invite only. Despite this friction, the app has gone from a few hundred people to nearly two million weekly users. Entirely through word of mouth. Imagine what will happen once Android users join out of FOMO.
The app's high network effects are dependent on its users.
More users = more rooms = more speakers = more content = more users...
Clubhouse Is TikTok For Venture Capitalists
I now join Clubhouse rooms before looking for podcast episodes when bored. The app's algorithm curates conversations that would interest me rather than searching for endless podcast options myself. It’s the convenience that makes the app so sticky.
Clubhouse’s success is dependent on how refined their algorithm will be. That’s why it reminds me of TikTok.
At its core, the app provides power to creators through meritocracy. Honing their algorithm will give it the stickiness so people keep coming back for more (aka TikTok).
What's This Got To Do With Investing?
For starters, it's backed by one of the most successful Venture Capital firms in Silicon Valley: Andreessen Horowitz. They’ve partnered with the Clubhouse team to broaden its community, product, and business. Not to mention, it's already reached Unicorn status (private startup company valued at over $1 billion).
Don't take my word for it, take theirs:
"We’ve grown faster than expected over the past few months, causing too many people to see red error messages when our servers are struggling. A large portion of the new funding round will go to technology and infrastructure to scale the Clubhouse experience for everyone, so that it’s always fast and performant, regardless of how many people are joining."
Yes, it's a startup that will have many obstacles before arriving at the big boy table with Facebook, Twitter, and TikTok. Yet, Clubhouse's potential is high enough to get them a seat. Their journey within the next few years is worth looking out for.