Why I Think Clubhouse Will Fail

So everyone seems to think Clubhouse is the "next big thing" but I think it's going to fail.

Here's how I think it all goes down...

(Disclaimer: I don't *want* Clubhouse to fail. The world is more fun if it wins... but wanting something doesn't mean it's going to happen. If it did, then guac would be default included inside every bag of chips)

OK, let's pretend you are the CEO of Clubhouse.

First of all - f*ck yes.

You f*cking did it!!!

People like your app. No, no - they LOVE your app.

Holy shit. @sacca just sent a DM saying "congrats, clubhouse is kickass".

@naval just liked your last 3 tweets.

And @rabois is overheard saying that the app "isn't total garbage".

wowww11!!!

It feels like almost everyday, a new celebrity is using it.

It starts with minor tech celebs... then breaks out of tech to NBA players.

DeadMau5.

Neil Degrasse Tyson texts you asking to reset his password.

It keeps going. Logan Paul. Beeple.

Gary V sees that you've created a new place to yell, and immediately starts a room telling 24 year olds if they really want to make money, just move back in with their parents & sell their parents furniture on craigslist.

You're winning baby. A16Z gives you a term sheet. The valuation has 3 commas.

You're a unicorn.

You decide to sign the paperwork. They facetime Andre Iguodala during the signing. You're not sure why, but you say hi to Iggy.

You're getting calls from every news outlet. Forbes puts you on the "future billionaires" list. Tech Crunch declares "The Future is Audio".

Stephen Colbert mentions Clubhouse in his opening monologue. He's making fun of it, but hey - Colbert knows our name baby!

Emily Chang invites you on Bloomberg. You wear your visionary grey v-neck.

You dress simple, but you talk fancy.

This isn't just a chatroom app. It's a "serendipity network". It's "auditory escapism".

She asks where you came up with the idea...

Silly Emily.

It's not just "your idea"...

It's "OUR idea".

Humans have been talking since the dawn of time. You tell her that voice is powerful because it has tone & texture.

Talking around a campfire is as old as cavemen. But you catch yourself quickly & correct it to cave-persons.

Emily wants to know about the future.

Are the rumors true?

Will you add VIDEO to Clubhouse??

You pause dramatically.

"Video is a bug, not a feature".

Boom. F*cking Nailed It

After the media tour - you are itching to go back to work. You tell people you're "going heads down".

They agree. Wise move.

But you get back to your desk and check the dashboard.

Hm.. the chart isn't quite as "uppy and to the righty" as it's supposed to be.

Your daily active user numbers isn't growing as fast as it was a few months ago.

App downloads are slowing.

You refresh, in case the chart was buggy.

(it wasn't)

You look deeper. Retention is slipping. It's not terrible... but new users aren't sticking around the same way those early users were.

You call a team meeting with your inner circle.

The team looks at the charts. They are a little concerned, but still feeling good.

"We just have to talk to our users".

You do that, and find that Clubhouse really has two - totally different use cases:

1) Content

2) Chillin

Content is shows. Panels. Fireside Chats. Q&As. AMAs.

Sweet. You're the next YouTube.

Except that a lot of the content is "meh". So users aren't sticking around.

B..bu...but every platform has a bunch of junk content! Let's focus on the GOLD content!

Yes - some content is gold. Like the "Good Time Show" or "Shoot Your Shot - NYU Girls Roasting Tech Guys".

Or those magic moments where Elon pops in and grills the robinhood guy.

So you triple down on Content. You build features like scheduling, Q&A tools, and monetization.

Content creators are happy. But retention doesn't improve.

Why not?

You have a bad case of The Interesting-ness Problem.

When a user opens an app (IG, YouTube, TikTok) they need juicy content within 7 seconds (or they bounce).

This is the "Interesting-ness" problem.

Those other apps (IG, Tiktok etc.) have millions of pieces of content to choose from. So their algorithms get really really good at finding juicy content for you right away.

But clubhouse is LIVE.

So you need something INTERESTING that's ALSO happening RIGHT NOW.

You tell the team to focus on this "first time user experience".

Your engineers say OK, but they warn you:

...multiplying "content is interesting" and "content is live" doesn't just make the problem 2x harder...

It makes it 200x harder.

You rebuttle:

"Well, Twitch figured out how to do this! Twitch is live content - so clearly it's possible!"

The engineers offer you a chair and a box of tissues. You sit down, and they begin to explain...

1. Twitch creators are live ~40 hours a week. Games make content creation easier. Clubhouse's best creators do weekly shows ~3-4 hrs a week max.

2. Twitch is vertically focused (gaming). Clubhouse is horizontal. You need "great content" across EVERY category.

3. On Clubhouse, if you join a convo 45 minutes late, you've missed the best talking points and may not be able to catch up.

And with Twitch, the "game stores the context". No matter when I join, I look at the game and I know what the player is doing. So it's "live" but not "urgent".

Meting ends. Next meeting - biz devs. You tell Adam to "go get better content".

This is hard.

Creators with big audience (proven good content) don't want to switch platforms.

Spend an hour "live" on Clubhouse reaching 2,000 people... or do a podcast and reach 200,000?

So you offer podcasters a "recording" feature.

Do the show live on Clubhouse - & get a recording for your podcast!

EZ Peazy!

You tell the engineers to ship the recording feature "asap or sooner".

In their private Slack, they make fun of you because that phrase makes no sense.

Recording feature ships.

Sadly - it flops.

When creators care more about the recording, they stop inviting in random audience members. The fun of "live" is gone.

Listeners: what's the point of showing up live?

Why not just listen to the podcast later?

Emergency team meeting.

This "content" strategy isn't working.

We need to get back to our roots. What made Clubhouse magical to begin with?

Nobody says anything.

You scan the room. You point at Joe, the product manager.

"Joe - what got you hooked on Clubhouse?"

Joe's first night on the app, he was in a room with Marc Andreesen & the guy who invented the hashtag.

This app is legit.

Joe goes to a new room & ends up talking on Clubhouse till 1 AM & met more cool people. One guy made a kajillion dollars on NFTs. Sweet.

You dramatically erase the whiteboard. No more peacetime CEO. It's wartime.

Forget shows. Those were annoying anyways. Too many "experts" and "success coaches" anyways. What is this... Discord for Douchebags?

No no, you take the blue marker and write "CHILLING" on the board.

Yes - that's right. Chilling.

This is a "social network" not a "performance network".

The data backs it up. People who use the app to just chill/hangout (not creating shows) use Clubhouse WAYY more. We're talking 4+ hours a day on average.

Retention problem = solved.

But it turns out - chilling is a dead end too.

Retention & usage are great... but growth stays slow.

It makes sense: if I'm coming here to MAKE friends... then I'm not going to BRING friends.

Chilling = sticky, slow growth

Content = fast growth, not sticky

It worked in the tech bubble, because the hype cycle drove in so many tech people that you hit critical mass. You can't replicate that magic in every community.

The end of the story isn't so much fun. Growth slows. Users churn. You end up getting acquired for $90M by Facebook.

You spend a year as PM of Facebook Voice before quitting and traveling across Southeast Asia for a year.

It's not all bad. You had a hell of a ride & made some good money.

You vow to only work on enterprise SaaS for the rest of your career

The end.

PS I hope I'm wrong. I hope Clubhouse solves the content problem & becomes a $50B company - and people shove this thread in my face every year.

The world is more fun if I'm wrong, so here's to being wrong!

~ Shaan

PPS I made a few title & section edits & don't care about Valley hype in general. School & healthcare workers are the real unicorns.

~ Shay