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Why Did Clubhouse And Other Social Audio Apps Fail?
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Clubhouse is a famous example of a giant success that can quickly take a turn for the worse. It is a social app on Android and iOS that specializes in real-time virtual rooms hosted in an audio-only format. It’s an interesting concept but slightly dated. When Clubhouse was at its all-time peak, the app didn’t feature text or video; it was primarily used for networking.
Moreover, it also competes with other social media apps and VoIP services. But when did the craze begin, and when did it see its downfall? We examine the trend behind Clubhouse and other similar social audio apps to see where it went wrong. If you want to download Clubhouse on your trendy smartphone, you might be surprised to see what it has become.
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What is Clubhouse, and when did it emerge?
The idea behind Clubhouse is to be a place where you can drop in a random conversation, listen, learn, and network. It could be about any topic, and these virtual chat rooms were invite-only. So, there was a level of exclusivity in being a part of Clubhouse and its inner discussions. If you were lucky, Clubhouse would let you engage with influencers, celebrities, and important public figures (Elon Musk and Mark Zuckerberg appeared in Clubhouse).
Clubhouse launched in March 2020. Paul Davison and Rohan Seth created the app from a startup project. Originally designed as a “Talkshow” app, it was later distributed as a social audio app on iOS (2020) and Android in 2021. The app grew popular at the start of COVID-19, peaking at up to 4 million users in February 2021, but later plummeted to less than a million in November.
According to CNBC, the team faced many challenges in handling this sudden popularity:
“I think in December [2020] alone we grew 10x.” [he added] It just kept going and going. When all of that was happening, our team was eight people and it really stressed the system.”
Unfortunately, the once-viral social audio app could not recover from its declining popularity in 2021. Many factors contributed to the app’s decline, which we discuss.
The developers weren’t ready for Clubhouse’s sudden popularity
The Clubhouse app was initially a startup project created by only two people. The team expanded to eight, but that wasn’t enough to handle millions of users who wanted in on the social-audio app. The platform had technical limitations, and the developers had no plans for long-term features.
Clubhouse’s rapid growth was difficult to handle and introduced scarcity during its beta. Many wanted to participate but could only do so if they were invited or were already members. The exclusivity of being part of Clubhouse was so attractive that invite codes for Clubhouse’s virtual rooms would sell for a premium on eBay and Chinese e-commerce sites. It also generated FOMO (fear of missing out) when users couldn’t access and engage in the ongoing discussions.
Combining these factors is how it kept seeing an influx in numbers. Eventually, it got to the point that it was difficult for the team to keep up. Even so, Clubhouse was not managed well; no moderation or structure was ever put in place, so it eventually posed challenges that weren’t addressed or rectified on time.
Clubhouse couldn’t profit from its platform
Clubhouse implemented strict policies, but those policies ended up backfiring. It had a weak business model because it lacked monetization. Clubhouse doesn’t share user, creator, or room analytics. Social networking apps are notorious for collecting data, which is important for advertising and feature innovation. Clubhouse just never had what it took to make a profit. The team was initially small but eventually grew in size. In 2023, Clubhouse laid off more than half of its staff.
In 2021, Clubhouse released a C series funding round revealing the company’s value was over $4 billion. But even at a high valuation, it failed to sustain itself.
Clubhouse was the right app released at the right time
Many believed that Clubhouse shot up in popularity due to the unique situation produced by COVID-19. Simply put, people had limited in-person social interactions, and many thrived to still connect with people socially. It was normal to see people playing games on Zoom calls and dabbling with TikTok (TikTok ranked top as the highest number of downloads on Android during this period, according to Liquidbubble).
Clubhouse brought another flavor of connecting with others. To most, it was a place for drop-in discussions and a chance to meet and talk to people you otherwise wouldn’t. It removed the social barriers and never forced intimate face-to-face video calls. However, eventually, other companies wanted to replicate Clubhouse’s success. We saw this on Twitter Spaces, Spotify Live, and Amazon’s Amp. Sadly, most of these social audio apps have bit the dust, or in Amazon’s case, never got off the ground.
No proper moderation and lack of quality control
As you’d expect with most social media platforms (especially ones that use them as an outlet for freedom of speech), things can get dramatic quickly. Eventually, people lose interest when discussions become too murky or attract the wrong kinds of people. This happened with Clubhouse. It became a toxic environment, one filled with hate speeches and inappropriate discussions.
Once a social app’s reputation tanks, it becomes harder to retain the user base and bring back the high-profile socialites who helped make it popular and known in the first place. Unfortunately for Clubhouse, there is nearly a dime of a dozen social apps out there that are far more feature-rich and moderated.
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Will Clubhouse 1.0 ever make a comeback?
The original Clubhouse app is as good as dead. In April, the company announced that it laid off more than half of its workers. The company has been slow to release new features, and most users have moved on from the social audio app and others like it. Only time will tell if the app resurfaces, but the future isn’t looking favorable right now. You can still download Clubhouse on the App Store and Google Play Store, but it is far from the app it used to be.
Clubhouse is a messy example as so went wrong for it. It might have been a fad during its release, but to see a sudden drop in numbers that caused the team to cut by half is alarming. The limited scope for what it wanted to be didn’t do it any favors when people eventually wanted more. Plus, people will flock back to social media platforms. Once a reputation has been damaged, it isn’t easy to bring it back unless you’re TikTok — somehow staying popular despite its controversy.
