The Rise and Fall of Social Media Empires: Clubhouse Podcast Transcript

This episode, we explore the most recent meteoric rise and record-breaking crash: Clubhouse.  But what actually went wrong, and will it have a second act?

Taryn Ward  Hi, I'm Taryn Ward, and this is Breaking the Feed, Social Media: Beyond the Headlines.

TW.  We're taking a closer look at the core issues around social media, including the rise and fall of social media empires, to better understand the role social media plays in our everyday lives and society.

TW.  Today, we'll take a look at the most recent meteoric rise and record breaking crash Clubhouse. I say most recent, despite what's been happening over it Threads, because although remarkable and relevant, in its own way, it is part of a larger Meta context that we'll address separately.

TW.  We'll start today, as always with the question, Why did Clubhouse fail the first time around, and what are its chances that are coming back? It's a good time to ask, especially in the second part of the question, because there are massive efforts underway to sort of add some new features, which we'll talk about at the end.

TW.  So, what is Clubhouse? For those of you who don't know or who tell, remember, because you used it. So, briefly. Clubhouse was a social media network in the form of a social audio platform that became really popular during COVID-19, launched in early 2020, really just before COVID, and as COVID was starting to become an issue in the States. It was an invite only social network and was only available on iPhones, this is really important to understand, because exclusivity was a main selling point early on; and when that went away, they stumbled a little bit. I would describe Clubhouse, the experience as something between a casual conference call, and a radio show or podcast, you could join rooms where you could listen and participate in different conversations.

TW.  So, it's not quite a closed conference call because anyone could listen, sort of like a radio show or podcast. But also you could participate in different ways.  Usually, not always, sometimes you're just there and silent.  Early popularity was really tied to this exclusivity element, and as I said, and some very big names helped to make that happen.  So, people like Elon Musk and Ashton Kutcher, and even Oprah Winfrey, would use the platform, and it was framed really as an updated version of what Twitter promised in the early days, this idea that everyday people or not really everyday people, because it was exclusive in the beginning, but if you were maybe in the top 3%, but not the top 0.1% or even the top 1%, but not the point 0.1% of your field, you could get on Clubhouse and directly access people who were at the very tippy, tippy top, and you could listen to their conversations that were sort of private, but also not private, and you could engage and maybe even impress them in some way with your brilliant comment. And there was a lot of hype about Clubhouse and a lot of that hype actually took place on Twitter.

TW.  So, it makes sense for various reasons to sort of think about these things is linked in different ways. Early on, Clubhouse got a lot of really good press. And there were reasons for that good press, they had some really important big investors, including Andreessen Horowitz, one of those investors went on the record as saying that they viewed Clubhouse, and this is a quote, a meaningful addition to the world, one that increases empathy, and provides new ways for people to talk to each other at a time when we need it more than ever, this is not just standard investor talk for you know, we have this great product and I'm hyping it, to bring empathy into it and to say that this is new way for people to talk. And, you know, we need that more than ever, there was a really significant statement, and I think it happened during a time when people really did feel a need for that, especially in the US. There's a lot happening around COVID-19 and Donald Trump and a lot of stress and uncertainty. And this idea that we're going to have this new way to talk to each other, then this opportunity for empathy to thrive, was really powerful.

TW.  Unfortunately, it remains unclear to me how any person could have actually believed this, even without actually using the platform. If you think about it for a minute, how is it going to be the case that by listening to experts talk to each other, and, you know, maybe having the ability to jump in, that's going to increase empathy there? The dots don't necessarily connect., and even if you want to give it the benefit of the doubt, I certainly did because I signed up and was ready to try it. Five minutes in, you realise very quickly that that's just not the direction this is going.

TW.  So, let's get into it. Where did things go wrong? There's some pretty damning theories about where things went wrong, and there's a harshness to some of these analyses that you just don't see with platforms like AOL Instant Messenger or MySpace.  Maybe some of this is because of the recency of Clubhouse, and you know a lot more time has passed since AIM or MySpace were relevant or competitive.  But there also seems to be a real and genuine sense of anger about how this all came together in a sense that people were cheated or fooled into doing something that really wasn't as promised.

TW.  Once valued at a staggering $4 billion, I believe it was Twitter who offered to buy Clubhouse at this price.  By April of this year, Clubhouse announced they would lay off half of their staff to reset. That's a pretty big drop-off.  So, the question is, how did we get here?  Internally and externally, Clubhouse largely blames complications arising from the pandemic and remote work. This is despite the fact of course, the COVID-19 was arguably one of the main drivers of its initial success.  I'm not really sure how successful they've been at selling the idea that COVID-19 is to blame. But certainly, it's a popular thing for companies to say, I would propose that there are some other possibilities.

TW.  I would say: 

• one, that COVID was actually the reason Clubhouse worked at all, and when locked down, started to ease, and people worked from home less, and were going out more, and they could talk to people that actually liked and found interesting Clubhouse lost some of that initial appeal;
• opening a Clubhouse to Android users and the general public, even without an invitation, also veered way too far from the initial exclusivity offering. That was such a core component of what they were promising. When that went away, they couldn't even pretend anymore that there was an element of exclusivity. 

So, its earliest and most enthusiastic users' last incentive and motivation to engage in the appeal was sort of wearing off anyway. So, these factors together really sort of sort of snowballed the effect and I think increased the rapidity of the downfall.

TW.  Normally, and you'll know this to be the case if you've listened to previous episodes on the rise and fall of other social media empires, I find it relatively easy to find something positive to say about each platform, something valuable, something we can learn and almost always something we can take with us from these experiences with social media companies, even if they got things really wrong. It's harder with Clubhouse, and I'm sorely tempted to conclude that it failed because it was a terrible concept that was terribly executed. And any success that it had was only because of its admittedly incredible hype machine. I know that's really harsh.  Bear with me.

TW.  My first experience on the platform was a Saturday morning in the UK, where I found a few others from my region, but also a lot of people who had stayed up late in the US and who were still going strong. I remember that first day clicking through and sort of bouncing around between some of the rooms, which were largely made up of tech bros who love the sound of their own voice. I honestly get enough of that in my day job that I was not looking to go to a place where I would have more of it. So, some of that is maybe my own bias. But more than that, they were having conversations about things that weren't relevant to me at all and, in my opinion, were really meaningless conversations more generally, it couldn't have possibly occurred to some of these people that literally no one else had any interest in hearing all of this because it had had no relevance to their lives.

TW.  One critic described Clubhouse as; this is another quote, "like a late-night talk show where celebrities come together and speak about their family achievements, passions and plans", and while there are certainly some appeal to this, as we know from reality television and Instagram, maybe this was to real hearing celebrities or people we respect, but mostly experienced through highly curated media, with scripts and a lot of polish, talk about things off the cuff, maybe just wasn't what we thought or hoped it would be, and there were other issues.

TW.  Rooms advertised themselves as being one thing and turned out to be another completely, so, definitely not as advertised. Some claim to be hosting celebrities or big names in various fields, but you would turn up, and they would be scams, sometimes even impersonating the big names that they claim to be hosting. One issue for startups, in particular, were the rooms that claimed to be places to exchange information and ideas and, of course, support, but which turned out to be complete scams. So, you would turn up and talk about these ideas and sort of tariffs and things around and then you turn around, and somebody would have bought up the associated domain name to drive up the price and make a profit. So, this is really a dangerous place to share too much information and then started to have the reputation of being that way. All of that said it's worth noting now that Clubhouse is trying to make a comeback. They're launching a new format called chats, which is described in Clubhouse as a blog as if you're group texts and Instagram Stories, met at the park, talked for hours, became best friends and fell in love.

TW.  Okay, for me, this very description tells me they've learned precious little about the problems they had the first time around words, words, words, great. What? What does that mean that really mean? How will it actually work? According to TechCrunch, it'll work something like this: you and your friends can join an async group, where you send voice messages that appear like part of an Instagram story instead of an individual text, and live audio rooms will continue, great. But apparently, the hope is that these chats will encourage people to use the app more frequently than that will start to change the trajectory of engagement.

TW.  But the original problems remain. This new feature doesn't address the core issues that we've sort of talked about throughout the rest of this episode. Clubhouse has never bothered to build an actual community. Early on, it was celebrities talking to other celebrities and appreciating the sound of their own voice so that when slightly less well-known people joined, that was already the vibe that was the community standard. So, they joined in as more and more people joined, some of whom had less experience in saying nothing. With a smaller audience, people willing to listen to them say nothing, things started to unravel, but the atmosphere was already largely locked in. Maybe chats will do something to reset this. But it's really hard to change how the community works, certainly harder than creating a healthy community, to begin with. And there's no evidence to date that this is a priority any more than it was initially.

TW.  It is possible, I will grant, given the money at stake, that more money will come in, and the sheer amount of dollars thrown at the problem will move the needle. But if that were enough, in today's world, surely Twitter and Threads would be in different shape. It remains to be seen.

TW.  If you enjoyed hearing about the rise and fall of Clubhouse, look out for upcoming episodes on the rise and potential fall of Meta and Twitter. We'll look at some of the great things that they did, the best features, and their growth, and also start to think about where things may have gone differently.

TW.  In the meantime, we'll post a transcript of this episode with references on our website. You can find this and more information about us at TheBrightApp.com.

TW.  Until next time, I'm Taryn Ward. Thank you for joining us for Breaking the Feed, Social Media: Beyond the Headlines