A nasal voice is rambling on in a long monologue about how to best pitch a startup on Clubhouse when I log on sometime in March. It is early morning UK time, late at night in California and this room is mostly populated by technology entrepreneurs, people that work at the big tech companies, and venture capital investors from the West Coast of the US. Eventually, another Californian accent interrupts the first one:
“We hear these long stories, get these long emails, these long direct messages (DMs), about the product they are building, the solution, but we haven’t heard anything about the problem. When it comes to a pre-product startup we want to hear about the problem, get the founders to really explain that to us, right.”
“Hahaha a lot of claps coming in from here. Yeah, just tell me about it!”
A fourth male voice jumps in:
“I’m loving this conversation today – usually it’s dominated by the engineering folks, but today it’s all about selling your startup and I feel like the odd one out. Thanks, guys.”
“So, what I’m hearing from you guys is that people should not pay you for pitching to you, right?”
A lot of laughter in the room.
***
Clubhouse has become a wildly popular audio chat app since last year; Source: Flickr Creative Commons / Marco Verch.
Recently I’ve been unlocking my phone screen in the morning and checked into a new social media app called Clubhouse. It was started by two Silicon Valley veterans in 2019 and got 10 million investment on a 100 million valuation from venture capital (VC) firm a16z before even opening its doors to customers. It was lauded as ‘the new social app’ immediately – and is still in closed, invite-only Beta with by now around 10m users. The format is very simple indeed: once you made a short profile (and handed over your friends’ contact details to Clubhouse to connect with them…), you follow people, very similar to what happens on Instagram. From then on, however, things are different: you enter the so-called ‘hallway’ of rooms in the Clubhouse you can join with a simple touch; which rooms you see depends on your interests and the people you follow but any room is open for listeners. And listen is what you are here for: Clubhouse is a social network based on live audio chats only (you can’t even write direct messages, but have to switch to another app).
When I first joined earlier this year, I was excited to be among the early adopters to begin with but also about being close to the people I study. My recent research is concerned with investors into tech companies – like the ones that backed Clubhouse – and their relationship to entrepreneurs including the crucial pitch moments the group discussed in the opening vignette. And I was amazed indeed: not only was I able to ‘eavesdrop’ in conversation of people I couldn’t get to talk to me before, but the technology of Clubhouse also has a way of making you feel as if you are closer to the people in the room. You hear their voice live, possibly catch yourself imagining what they are doing right now. Unlike most interactions via social media, Clubhouse is synchronous; recordings are not allowed and you have to be right there in the room as the conversations unfold. When Mark Zuckerberg signed on or just the week before that Elon Musk, thousands of people spilled over into dozens of rooms (the maximum capacity per room is 5,000) to be as close to their ‘idols’ as possible. Like a really good live show – just online and audio-only.
The biggest difference people have been celebrating? How Clubhouse enables serendipity. The openness of the rooms and the hallway and also the ease of the user experience (widely lauded) foster a live randomness which has been missing mostly so far online. Following the big promises of tech – democratization, accessibility, authenticity, widening choice, and freedom – Clubhouse serves coincidence, the possibility of new relationships and connections and (internet) upward mobility. As a user in a room I attended in late January explained:
“This group is much closer to real-life, it allows us much more to build meaningful connections […] this is about ‘bringing people together in small groups and in real life and becoming really engaged. […] I know none of you are bots and your PA’s aren’t transcribing this conversation.”
And in fact, a wave of formerly less known moderators and organizers did get a chance to build up big followings during the early phases of the app. One of the most widely listened to moderators was quickly promoted to partner in the powerful VC-firm a16z (which also happens to be Clubhouse’s biggest investor). Many other younger tech bros and junior investors extended their influence (and brand) on the app, often by recruiting big-name guests onto their regular shows. While the stars – big names VCs, tech execs, and musicians for instance – avoided having to organize or administer anything themselves (e.g. set up a room, invite and market the event), they let their stardom shine for their mignons. There was space at least for a new kind of role: a fan group manager who makes it possible to have VIP experiences, but for everyone for free (so far).
But this is also where things are getting more worrisome. Clubhouse is both fostering a fan and star cult (and not the democratic one, at all times) and by doing so creates possibly dangerous rabbit holes. Initially, the founders of the app (and arguably their investors) made a big point about being diverse and accessible; lots of Black creatives were brought on board early and attracted large followings. But people’s hallways are not automatically diversified at all – it all depends on who they follow. Creating their own echo chambers of people that have the same opinions as themselves is hence very easy – similar to many of the other social media apps and sites (e.g. earlier accusations against YouTube). As a result, the Clubhouse experience seems to be quite split and separate – between Black and music Clubhouse and technology Clubhouse, for instance, or between Silicon Valley Clubhouse and European Clubhouse (simply because of the time difference). But that is not everything: even within communities, power is unequally distributed.
For example, take the room with which I opened this post; I have been listening to it regularly since joining the app (it is the almost daily ‘Afterparty’ to the show that hosted Musk and Zuckerberg respectively) because it attracts high-ranking VCs and tech people. How rooms are structured is curious, however: there is a group of organizers who double up as moderators (equipped with a green badge) able to invite (and dis-invite) people to the stage, i.e. mute and unmute participants. Every time I have been in this room all the moderators were male, mostly of South-(East)-Asian or White descent. The people they invited to speak followed a similar pattern; there would be between 8 and 12 speakers per evening, mostly people from the broader Silicon Valley and technology ecosystem. Again, when I was in the rooms, 80 percent of them were men, mostly White and of South-East-Asian descent. Looking through the audience gives a very different impression; a much bigger mix of backgrounds seems to be keen to ‘learn from the stars’. Most of them will never be heard directly, however; they will – at least in this room where heavyweights of the tech scene gather – only listen. The technology not only allows this divide to happen, it actively encourages it: the stage is ‘open’ in theory, i.e. people can raise their hand to ask a question and might be allowed up to the stage to speak; this gives the impression of a democratic conversation and of people just all hanging out together. But what really happens is often curated and possibly even part of a group’s marketing and branding strategy. One example: moderators can not only invite people to speak – often this happens with pre-invited guests or people the moderators are familiar with already – they can also kick people out of the room altogether – or not let them in as the NYT’s Taylor Lorenz recently wrote about controversially. The result can become a dangerous cycle of self-enforcing echo-chamberism.
Teddy Schleifer, a reporter for tech-news outlet The Information complaining on Twitter about the inability for the press to report on Clubhouse rooms after Mark Zuckerberg went live on the app in early February.
***
So, what is this really all about then? Why are the entrepreneurs doing this – and why has Clubhouse been so hyped and fought about by investors? We mustn’t forget the bottom line, what entrepreneurship is at least also part of: profit-driven capitalism. When the rumors started about the next funding round for Clubhouse earlier this year, the conversation quickly shifted to this realization. Rumors valued the app which at the time had no revenue and under 5m users at $1bn. Two rooms were running simultaneously called ‘is clubhouse worth a $1bn dollar valuation’ (2.5k listeners) and ‘would clubhouse get $1bn valuation if they were POC?’ (200 listeners). The most telling answer I encountered came from what I believe to be a mid-tier VC investor in San Francisco: “Clubhouse is worth way more than a billion. The outcomes in social [media] are so massive that if this bet works out it makes financial sense […] if there is a small passionate group of users that could be multiplied […] the outcome can be in the 10s of billion.” Absolutely, entrepreneurs and also investors might be interested, at times event fascinated, by new technological opportunities and narratives of democratization and access. But at all times, they are also in it for the money, and Clubhouse looks like the right kind of “sandbox for a specific type of narcissist” (particularly the kind that doesn’t mind racialist and sexist conversations) to be very lucrative indeed.
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