What is Clubhouse, and why is it worth $4 billion?
It’s been making the rounds on the news for a while now, and last night there were reports it is looking to raise another round of cash at a valuation of USD $4 billion. So, what is Clubhouse?
An audio-only social media platform that lets you chat to people with common interests in real time. Key phrase, real time. It’s a big deal. It launched in April 2020, and its popularity surged during the pandemic as people became more isolated than ever.
The cool part (or not cool part depending on who you talk to) of the app is that it’s invitation only. In order to make an account, someone has to invite you. As you can imagine, this gives the app an element of exclusivity.
How people connect is through the Clubhouse ‘Rooms’ that are groups of people who can talk to each other. The Rooms are created with a common interest or topic (like politics, sport, food etc). Each room also generally has an admin/moderator/speaker who leads the room and speaks, while others join to simply listen. Think of it as being able to listen to people's conversations live, or like a live podcast.
Why does it make the news every week?
It has seen a surge in popularity over the last year, and more specifically, the last few months. Of course with any new platform comes new hype.
It also made news again this week as Clubhouse announced it was partnering with Stripe to integrate payment features into the app.
But here’s where it gets spicy. Bigger social media platforms (like Facebook and Twitter) liked the concept of Clubhouse, and have, or are attempting to adopt it to their own platforms.
Twitter has Spaces
Facebook is said to be building a Clubhouse rival
Slack is also said to be integrating Clubhouse-like features
ByteDance, who owns TikTok, is said to be building a Clubhouse-like app for Chinese users
LinkedIn has recently confirmed a Clubhouse rival too
Spotify is also bringing in similar features
Discord has Stage Channels
With all this copying, where does that leave Clubhouse?
A good comparison is the ‘Stories’ feature that originated on Snapchat. It became a widely popular feature on the app, and other social media platforms like Instagram (then followed by Facebook) decided to integrate that same feature after seeing the success it had.
Imagine that same situation, but instead of it being one specific feature of an app (like Stories), it’s the entire concept of the app (real time chat and audio from Clubhouse). Social media platforms (as listed above) are not taking a feature of an app, but this time round, taking the entire concept of the app and integrating into their own as a feature. That’s a big deal.
Tech commentators highlighted that while these platforms might not steal the entire Clubhouse audience, these other platforms might chip away at certain parts of Clubhouse’s audience. For example, if Spotify can get famous artists to lead a chat, there is a high chance that music lovers will make the switch. Another example is business-oriented content and conversation will likely shift to LinkedIn as users have already established audiences on that platform.
Despite this, Clubhouse grew from over 3.5 million global downloads as of February 1, 2021, to reach 8.1 million by February 16, 2021. Clubhouse still is the place to be, if you can get an invite. Until other platforms release their own Clubhouse-like features, it’s difficult to predict its future.