4 Reasons Why Clubhouse Will Lose its Luster

by Dave Michels

I have participated in several Clubhouse sessions, and (with @EvanKirstel) hosted four. My current conclusion is: It’s a brilliant, but dumb service.

Let’s start with why it’s brilliant. Clubhouse filled a gaping void for connection. I agree with many others that a big part of Clubhouse is its exclusivity, but the pandemic is a factor too. The exclusivity is done in two ways, it’s invitation only and iOS only. The invitations don’t seem hard to get. After I was invited and created my account, I was given five invitations (evidently it used to be two). Then I was given more invites without even requesting them.

The iOS-only thing is clever as it simultaneously creates an exclusive situation while reducing costs on development and support. It hasn’t hurt them much as iOS holds over 60% of US mobile share and more than 30% of the world’s mobile share. At this point of its success, an Android app is justified but they know what we know – that the downsides (lost coolness) may be greater than the benefit of a bigger TAM.

I was curious enough about Clubhouse to buy my first iPad. I like it – I like it more than my Samsung tablet, and I like it more than Clubhouse. Apple is potentially benefitting more from Clubhouse than Clubhouse.

The pandemic is also a major contributor to its success. We are bored and lonely, and Clubhouse brilliantly provides chat rooms filled with real conversation. We are social creatures, and we’re missing the interaction of hanging out in clubs, bars, pubs, restaurants, bowling alleys, or [fill-in-the-blank]. Even the iconic Cheers bar in Boston closed – we are all longing for a place where ‘everyone knows your name.’ The best time to be on Clubhouse seems to be the evening hours. That may prove to be problematic when activities outside the home make a comeback.

Here are 4 Reasons Why Clubhouse Will Lose its Luster

#1 Obsolete

Clubhouse is a mashup of radio, an audio-conference, a party-line, and a podcast. Four very old technologies. Radio dates back to the 19th century, but its golden years were in the early 20th century prior to the widespread adoption of television in the 50s. Audio-conferences are probably close to 100 years old, certainly the party line is that old too. Realistically the modern conference call probably dates back to the 70s or 80s when DSPs improved speakerphones. Podcasts are as old as the iPod which was launched twenty years ago (iPods evolved into iPhones and iPads, Apple discontinued the iPod in 2014).

My point is that the Clubhouse experience is largely based on primitive concepts. I do still enjoy radio and podcasts – but Clubhouse doesn’t replace those. I listen to the radio when I am driving (although less and less), when I brush my teeth in the morning, and while doing something boring (cleaning the garage comes to mind). I don’t actually listen to the radio as a primary activity.

Podcasts are compelling, and as a podcast creator, I encourage everyone to listen to them as a primary means of infotainment – however, what’s key to a podcast is time-shifting. I listen to a podcast on my terms. For example, during a dog walk, a long flight, and sometimes in lieu of radio. The key is that I determine the time, place, and content. Clubhouse doesn’t fit that mold either.

Currently, Clubhouse only offers a real-time experience. It means I can’t delegate it or catch up in batch-mode later. Social networks, streaming services, even newspapers and television allow what’s known as time-shifting. While the Clubhouse fan would say that’s bad, it’s not exactly a coincidence that everything evolved to support time-shifting. Scheduling conflicts are real. Time-shifted content has several compelling advantages beyond scheduling, such as rewind, pause, and fast-forward. Even content that’s traditionally consumed live, such as news and sports, are frequently time-shifted (“don’t tell me who won, I intend to watch the game tonight”).

A final point about Clubhouse obsolescence is it’s a single-channel experience. It would be nice, for example, to share an agenda in a Clubhouse conversation. I can’t help but notice that most video meetings have an active chat channel. People love chat! People love video too.

#2 Existing Alternatives

I’ve been asked a few times if there’s an enterprise version of Clubhouse. Yes! The simplest alternative is ANY enterprise conferencing app with 80% of its features turned off.

If you want an enterprise version of Clubhouse, try Cisco Webex, Google Meet, MS Teams, Zoom, or any other enterprise meeting app. Tell everyone they can only use iOS 13+ devices (don’t even think about allowing participation from any of your Android, Windows, Mac, Linux, Chromebook, Xbox, meeting room, or browser-based systems). Also, disable PSTN dial-up access. Obviously no cameras, and also no screen sharing, e-whiteboards, or in-meeting chat. You need to disable the alert sounds whenever someone joins or exits. No recording, transcription or translation services either. Tada! Enterprise Clubhouse. Well, almost – the enterprise versions will likely have better audio quality and higher reliability.

Though to be fair not all of those enterprise features can be turned off. Most conferencing apps can restrict content sharing and recording now. Some apps can disable in-meeting chat. You may need to downgrade from a paid to free service to disable cameras and PSTN access.  You can restrict users that are allowed to attend, but I’ve never seen a way to disable certain clients.

Disabling existing features is counter-intuitive though there is a case to be made that Clubhouse’s simplicity is a feature. A scientific or financial calculator can be clumsy to someone that only requires a four-function calculator. It will be interesting to watch if Clubhouse enables features faster than enterprise apps make them switchable.

The real-time conversational aspect is only half of Clubhouse. The other half is the social networking element. You need to be sure that people can discover interesting content. As a social network, Clubhouse is pretty weak. You can follow people, but it has very limited engagement tools. Regarding attracting an audience, the best option (the one every Clubhouse user seems to do) is to promote on external public social networks. Fortunately, the enterprise has tools for enterprise communications (as does Cisco Webex, Google Meet, MS Teams, Zoom, and every other enterprise meeting app). An enterprise might have relevant chat groups, an enterprise social service, or even email distribution lists (bonus: enterprises also have calendars).

#3 Security

Clubhouse immediately requested access to my contacts. Normally I’m hesitant about this, but this was my first iOS device, and it didn’t have any contacts on it. It didn’t take long to figure out that I could only invite new users to Clubhouse by first adding them to my contacts. Obviously, that shouldn’t be necessary, but Clubhouse uses Contacts in several ways. As I added (individual) contacts to the iPad, Clubhouse encouraged me to invite them, and it also wants me to follow people I know that are already on Clubhouse.

In other words, Clubhouse is building a social graph. It knows, tracks, and measures who I know and who knows me. Even if I refuse to give permission to my Contacts (thus forgoing my coveted bank of invitations), it still builds its graph using the mobile numbers it requires during account creation. A relationship can be assumed if anyone has my cell number in their contacts. 

Clubhouse also collects Twitter and Instagram account details presumably to allow them to further enhance its social graph with more interactions and topics. It wouldn’t be a social network if it didn’t collect contacts and social information. I suppose this is all reasonable, and important for whatever monetization strategy they have in mind. However, there’s more security concerns.

Researchers at Stanford Internet Observatory discovered that  Clubhouse depends on a Agora Inc. to handle back-end operations. Agora is a Chinese company, so it’s legally required to assist the Chinese government should it asked. That means Clubhouse is a threat to national security – at least as much as TikTok is/was. Arguably more dangerous as conversations on Clubhouse are more likely to have insightful information than a dancing teen.

The researchers also learned that Clubhouse actually records the meetings (records what can’t be recorded) for troubleshooting, and the recordings are promptly deleted. That suggests there’s no end-to-end encryption!

Clubhouse currently does not allow its user to record conversations (in-app or external). On one hand, I wish they embraced recording as a feature for time-shifting. On the other hand, I know the lack of recording creates less guarded conversations. However, recording without disclosure is the worst of both hands. What can possibly go wrong? This past weekend, Bloomberg reported that a user successfully hacked Clubhouse and streamed audio feeds into a third-party website. Alex Stamos, director of the SIO and Facebook’s former security chief, said “Clubhouse cannot provide any privacy promises for conversations held anywhere around the world.”

Like every company that’s been caught for weak security practices, Clubhouse says it intends to tighten things up. I wonder which of its 12 employees is working on it.

#4 New Alternatives

I do like Clubhouse. It’s fun to be part of something new. It’s fun to be in the cool kids club. But it’s not going to last. In the not-so-distant future Clubhouse’s shine will lose its luster. It won’t be invitation only, and won’t be iOS only. User expectations will increase when it exits “beta.” As  Clubhouse inevitably loses its cool, Facebook, Twitter, and who knows who else will release competitive services. There’s certainly reason to expect Facebook and/or Twitter will fail at copying the concept, but I expect they will succeed. It’s just too easy.

The audio-only tech of Clubhouse is understood. Its more compelling or valuable component is the social aspects such as followers and discovery systems. These are things that Facebook and Twitter understand well. Not to mention Facebook and Twitter already have a global user base, support for all major operating systems, advanced content algorithms, global brands, and (this is important) revenue. I also expect emerging alternatives will enable time-shifting – because that’s what everyone wants. As far as I can tell, the vast majority of Clubhouse users already have Twitter and/or Instagram accounts.

For those that don’t value the social networking aspect and are happy to discuss things among known circles (or promote externally), then meeting apps can and will be used like Clubhouse. There is no need to turn off all of the features (maybe the cameras), and they will offer a better (and more secure) experience. Clubhouse currently supports up to 5000 users in a room. Larger Clubhouse events have been created by combining multiple rooms together. Last December, Cisco announced that a single Webex event will support up to 100k users.

The Case for Clubhouse

My points above are based on the current Clubhouse app that I’ve been using in February 2021. I haven’t seen any noticeable changes in the past few weeks, but improvements are undoubtedly coming. For all I know Clubhouse will announce major updates tomorrow. Maybe even recording. I would love to see Clubhouse succeed. We certainly need more social networks, and it’s nice when the innovator wins (I’m a sucker for an underdog).

I appreciate that the company has already defied the odds. It discovered a new nerve in social, and it reached the upper echelon of apps (usage, celebrity endorsements, branding, etc.) in just a few months. It is reasonable to assume that the company’s momentum will continue as it leverages its first-mover advantages. Competitors are known to fail even when they are well funded and bigger.

Enjoy Clubhouse While it Lasts

I doubt clubhouse will completely fail, but I don’t expect it to win. I am suspicious of an audio-only app in an era of video, a real-time app in an era of time-shifting, a single-channel app in an era of multi-channel communications, and an iOS-only app in 2021.

Admittedly, pendulums have a nasty habit of changing directions. My position is Clubhouse-like audio chat rooms are here to stay, but Clubhouse won’t be a category leader. Clubhouse provides a retro (primitive) experience with no (or few) moats protecting it. Its momentum is largely based on its uniqueness and exclusivity, both of which I expect to end this year.  Also, the app is brand-less. Common nouns as a brand name makes marketing harder. Even the app icon is common, and it changed in the few weeks I’ve been using it  – a black and white headshot replaced the prior black and white headshot. JoinClubhouse is a terrible domain.

I will continue to participate on Clubhouse, but I’m more excited about the format than the service. I expect to see some audio-only events on existing enterprise apps, and I’ll be watching for new emerging applications too.

I have said many times that comms don’t die, they morph and adapt. It took a hundred years, but the party line is back, and it sounds great.