Published in Insights

By Narration Box team

Mar 1, 2023

So what happened to Clubhouse?

In March 2020, a new social networking app named Clubhouse was launched for iOS users. The app offered a unique concept that allowed users to participate in live audio conversations in virtual rooms with other users. The app gained immense popularity, attracting millions of users and generating buzz among investors and celebrities.

 

 

Clubhouse was considered a game-changer in the social media industry, offering a new way for people to connect and communicate with each other. It was particularly popular during the COVID-19 pandemic as people sought new ways to connect with others while in lockdown.

 

The app quickly became a hotbed for discussion and debate on a wide range of topics, from politics and current events to pop culture and lifestyle. Users could join rooms on subjects that interest them, participate in discussions, and even start their own chat rooms.

 

It rapidly gained traction among tech-savvy audiences, and its growth was fueled by the invite-only policy that created a sense of exclusivity around the app. The app was only available for download through an invitation from an existing user, making it difficult to access for many users.

 

The scarcity factor helped to generate a frenzy among users, and it also contributed to the app's virality. The app's unique concept and exclusivity quickly attracted the attention of investors, and Clubhouse raised $12 million in funding from venture capital firms in May 2020. The app's growth continued to skyrocket, and by December 2020, it had amassed 600,000 registered users.

 

Mr. Musk has entered the room

 

In January 2021, Clubhouse hit a major milestone when Tesla CEO Elon Musk made an appearance in one of the rooms. Musk's appearance was a major boost to the app's popularity, and it attracted more celebrities and influential figures to the platform. Clubhouse became a hub for high-profile discussions, and it quickly became a go-to platform for influencers and celebrities to connect with their fans.

 

The app's growth also attracted the attention of other social media giants, who quickly took notice of the potential threat posed by Clubhouse. Twitter was the first to launch a competitor to Clubhouse, a feature called Spaces, which allowed users to participate in live audio conversations within the Twitter app. Discord also launched a similar feature, called Stage Channels.

 

Despite the increasing competition, Clubhouse continued to grow, and it reached a valuation of $1 billion in July 2021 after raising $100 million in funding. The app had established itself as a major player in the social media industry, and its future looked bright.

 

The downfall

 

However, the app's rapid rise also led to concerns about its security and privacy. Clubhouse faced criticism over its handling of user data and its content moderation policies. The app was also accused of being a breeding ground for hate speech and misinformation. The most important of all though was that vaccination programs led to an easing of the Covid lockdowns. People who were no longer having to work from home were out and about again, talking to friends and colleagues in person. But other factors were at work too. For example, the decision to open the app to Android users in May 2021 somewhat dented the iPhone “exclusivity” that drove growth in 2020.

 

And, as always happens when user-generated content balloons online, abusive and unpleasant conversations proliferated. Many of the virtual rooms turned out not to be about discourse but celebrity-puffing or scamming. In response to the growing concerns, Clubhouse announced a series of updates to its security and privacy policies. The app also introduced new features to make it easier for users to report abuse and hate speech.

 

Despite the updates, Clubhouse's growth began to slow down. The app faced increasing competition from other social media platforms, and it was no longer the only player in the live audio space. Twitter's Spaces and Discord's Stage Channels gained popularity, and users began to explore other options.

 

Did the house fall apart?

 

Clubhouse also faced internal challenges, including the departure of key executives and a lawsuit filed against the company over its handling of user data. These challenges further dampened the app's growth prospects, and it struggled to maintain its momentum.

 

As of February 2023, Clubhouse is still active, but it is not as popular as it was during its peak. The app continues to attract a dedicated user base, but it has lost much of its exclusivity and virality. The app has also been subject to criticism over its handling. Overall, clubhouse fell into decline because it rode the wave of pandemic lockdowns and suffered when people resumed their normal routines. The decision to remove the invite-only feature also caused a rapid influx of new members and removed any exclusivity, more importantly, Clubhouse management also failed to define a profitable or scalable business model and was unaware of the components of a successful social media site.