Social Media App is not an easy game

Remember Clubhouse?

Oh, what euphoria it had at the start of the year between Dec to March 2021 when it was invite-only on iOS.

If we look at the downloads trajectory, it picked up in February post which the downloads slowed down until it was launched for Android in Jun but after that again the similar story of decline.

Okay, so what happened here? Let's understand the specifics

First of all, how did they reach 10MM downloads in February?

The company relied on the buzz and effectiveness of the same.

The first thing they did was keep an app invite-only - this creates FOMO in consumers' minds, which drives discussion on various social media platforms.

The second thing is to capitalise on the FOMO - this was done by inviting important and known faces from various industries. Example - Elon Musk or Bill Gates. When they become a part of the discussion and are not on the app, you are missing much information.

What is the model here?

All these while none of the social media focused on audio as a medium.

Clubhouse allowed people to experiment with audio as a format (I still believe there is merit in an audio-only social media platform). Yes, it is still an experiment only.

I am sure you have this question already - in the audio format, we already have Podcast and Radio - so what is the difference here?

People attach the medium with some notion.

With Radio, it is more of an entertainment. At times, you will hear some discussion and entertainment with advertisements in between.

Also, Radio is a mass-market product. And the debate or entertainment which happens over Radio is very generic. (It is unlikely that you will hear a talk on "How to Raise Funds" on Radio).

Moving on to Podcast - it is primarily a recording on a specific topic(s). All entities involved in podcasts know their discussion is recorded and available to listen to in the future for the audience.?

With Clubhouse - the experience is live, plus in some discussion, you get a chance to talk (like live shows - on Radio).

Clubhouse provides live discussion + on-demand discussion + authenticity + engagement.

• Live discussion - you can enter any room and listen to the discussion as it is happening.
• On-demand discussion - anyone can start the discussion room at their convenience.
• Authenticity - it's more like a blue ticked person is talking live :)
• Engagement - this is true for any social media app

That sounds like a deal :)

But the big question is, will it work?

The clubhouse is valued at $4 Bn. (a16z on investment in Clubhouse)

When we compare that to other social media apps, this figure seems so tiny. But others have so many users, which Clubhouse, at this point - do not have.

At one end, we are just consuming recorded content - Netflix, Prime etc.

Think of this - how many are watching live events like the Academy Awards?

And amidst this, Clubhouse is trying to play with live discussion format? Why?

So as per me, they just wanted to do something new, but this trend will die. However, VCs are pouring money because they have the people on their platform, and they have the first-mover advantage with data, and if this picks up, then they do not want to lose the investment opportunity :)

And finally, the scale comparison

If you look at the scale

Monthly Active Users on Clubhouse ~ 10 MM

Monthly Active Users on Facebook ~ 2,900 MM

Think how much time it will take for Clubhouse to reach that level unless they offer something that the masses can use - and in the absence of that unlikely, it will go to the next level.