Members should be heard and not seen. The rise of Clubhouse and social audio?
I'm going to start this with a disclosure so I can get the fanboys and fangirls off my case from the beginning. I have turned down somewhere between 15-20 invites to Clubhouse. But about two weeks ago, I joined. Why? I want to see what the platform provides realistically and wanted to dispel the hype. I've spent a fair number of hours in it but not enough to be calling my wife a Clubhouse widow, so I am starting to get a good feel for what the potential value of Clubhouse and other social audio apps are. And what is so unutterably (though I am uttering it) ridiculous about the hype around it.
To be clear, I don't care whether or not you are in love with Clubhouse. I'm not looking for you to defend it or denigrate it.
The same way I don't care what Apple fan children love about Macs. They can't see the forest for the trees. I use Apple devices like the iPad Pro and the iPhone and will buy a 14" MacBook Pro with the M1x chip when it comes out. You know why I will? Because they are great devices that do what I want them to do so I can get what I want done. Not because it's the coolest brand in the world. I don't care about that. I care about their reliability and the trust I have in the efficacy of the machines. And I think Windows machines aka PCs even desktop ones have a lot of value and do a lot that even Macs can't do. Take THAT, Apple kiddies. But there is value in what Apple provides and does. And it isn't the sleekness of the looks. Though I believe that style does matter when it comes to the use value of a thing. That said, I don't believe having it actually makes you cool in any way. It's not the place that coolness comes from.
That brings me to Clubhouse. I'm trying to separate wheat from chaff as the Biblically originated saying goes. That's my purpose. I think we are dealing with a legitimate category, as ill-named as it is (though I have no better one). I also think Clubhouse has sustainable value potentially, though it is so WILDLY over-hyped that it's being seen more as a hot club in Vegas than a medium for communication with a potential to engage people. Like that hot club on the strip, people are spending their time trying to get into it because, well, they gotta.
I would love to tell you I hate Clubhouse and then you could dismiss me as a curmudgeonly, gnarly old dude who doesn't get it. First, if you did, you would literally prove my point. But, truthfully, much as I wanted to utterly hate it (but make no mistake about it, I can't stand the hype around it), I see the potential benefit of social audio. Clubhouse, likely to be the market maker for social audio, has the chance to be somewhat like Twitter as the "go to" in its category. (Note: PLEASE don't give me your cynical views on Twitter. It's meant to be a simile. Not a commentary on Twitter.)
What I really despise is the "coolest kid on the block" place-to-be hype around Clubhouse. It's gotten so bad that this may be the only audio-only "club" that people join to be seen. I honestly didn't think it was possible to be seen in something that can only be heard. I stand corrected.
To start blowing past the hype, let's talk first about what it is. The Guardian said:
"Part talkback radio, part conference call, part Houseparty, Clubhouse is a social networking app based on audio-chat. Users can listen in to conversations, interviews and discussions between interesting people on various topics – it is just like tuning in to a podcast but live and with an added layer of exclusivity."
That is a fair though slightly limiting characterization. There is also the opportunity for conversations with those who are following you and you are following back. But ultimately it's a community of lecture halls with people who are either experts in a field (some) or self-professed experts in a field (far too many). Plus, celebrities who are going there for their own "like a moth to a flame" purposes. The true value of Clubhouse will assert itself at the point that they leave. The likelihood of the success or failure of Clubhouse will be apparent sometime shortly after that happens.
Esteban Kolsky, Chief CX Evangelist at SAP and a long time industry analyst and influencer and true buddy likened what is happening at Clubhouse to what happened with Quora:
"Looking into clubhouse and its "exclusivity" these days had me going back in time to the first days in Quora. Back then, if you had asked a question about electric cars, batteries, or Tesla the great Elon Musk would've penned an answer. It was great at the time, the vast majority of the "untouchables" of Big Tech (even including Jobs and Gates at some point) came down Mount Olympus to answer questions. For the big guys this was coordinated by PR (mostly) and guided by the founders of Quora cashing in favors via VC and investors.
This in turn brought people by droves, once the "exclusive, by invitation only" velvet rope was down – and that made the "valuation" of Quora skyrocket as they "had found" the secret to bringing people in. Then the big names left (nobody goes there anymore, it's too crowded – as Yogi said) and the platform was populated by "other people" – some of whom had good content to publish and responded to interesting questions, but it was not Elon Musk or Bill Gates.
Same as with clubhouse these days, Quora was "going to change the world" by making everything accessible to everyone – brain to brain connection, as it was called in one instance. This brain to brain connection, however, has infinite more value to the masses than it does to the "higher brains" and quickly loses appeal when questions (and connections requests) flood into the inboxes of the untouchables. Whom, in turn, proceed to leave it behind to find their next exclusive club. In their trail, middle level names who figured the gig early on remain and find a way to monetize their new found fame – usually for a short time, before they move to the next new thing. Twitter, incidentally, started the same way but evolved quicker than expected, thus losing the "exclusivity" label (and big minds) quickly.
Quora, and clubhouse now, are perpetual reminders that two things are true: we need big names to bring the masses to social media and large groups are not exclusive."
The Chaff: The Unbearable Coolness of Being
If you read the extant literature on the Clubhouse phenomenon, there seems to be two reasons that create much of the hype and thus the attraction. First, celebrities are making their appearances on Clubhouse. Second, that it's invite only. If you follow at least the linear path here, put that together and you are a member of an invite-only club frequented by Elon Musk, DJ Khaled, soon-to-be-single Kanye West, Tiffany Haddish, and Jared Leto. And you (think you) are hanging with them.
How COOL is THAT?
It's not cool in the slightest, sorry.
I literally saw a tweet that said, "Hanging with Elon Musk in Clubhouse!" Really? That's literally like being at a speech by Elon Musk at a conference with 30,000 people listening and, as my CRM Playaz co-host and industry influencer Brent Leary says, "taking a selfie with Elon Musk in the background on the stage" and calling THAT "hanging with Elon Musk." My delusional tweeter non-friend, you are NOT hanging with Elon Musk. I'm so sorry.
Do I really have to explain what is not great about thinking that hanging out with celebrities is in the vaguest sense either important in one's life – and how peculiar it is that you honestly think you are cool because you are in the same invite only venue as these big names? Not only is that sad but its silly. It's audio. At best you are hanging out with a podcast. But as much as I denigrate it, there are lots of folks who think that this is the best thing ever for that kind of reason. And I'm not one to want to take away their sense of enjoyment in that. Just leave me out of it which because of social media I'm not.
To make the celebrity worship worse, the actions of the celebrities are downright bizarre. For example, Elon Musk announced that he is going to do a Clubhouse session with Kanye West. I honestly don't know what more can be said.
A significant amount of the buzz around Clubhouse beyond the celebrity participation is the exclusivity. You can only be invited by a member. Newer members have only a very few invites. The desire for memberships is so hot that there are submarkets for trafficking in Clubhouse invites. Back to the Guardian here:
"Reuters reports that demand for membership is now so hot that a market for them has grown on platforms like Reddit, eBay, and Craigslist. In China, invitations are being sold on Alibaba's second-hand market place Idle Fish."
I went and took a look at the eBay offerings and here is a small sampling of the 1,950 (!!!) Clubhouse invite "offerings":
I even saw one crook setting his starting bid price for the invite at $3,500.
The problem with the exclusivity, other than the general problem that makes exclusivity seem to be important for ones ego and standing, is that the exclusivity that Clubhouse offers is ephemeral. On the Clubhouse blog, the founders of the app/community say themselves:
"Our focus now is on opening up Clubhouse to the whole world."
The first task in opening it up to the whole world is making the iOS exclusive app available on Android devices. Exclusivity is already a myth – two million members and four million downloads already belay that claim. This silly reason "joining because I am special and exclusive" will be a marketing artifact probably by the end of 2021.
The other side is, like most early apps in a young medium, the amount of detritus is heavy. Touring Clubhouse, you see an enormous number of self-important people selling their wares via their pontification in a room. Think of a meat market where all beef is touted as wagyu, but a lot of it is actually chuck. But you don't know it's chuck until you "buy" it. There is one person who I followed because they seemed to show up a lot and that person is a self-professed expert in at least 20 subjects if the amount of rooms they are leading (with lectures and "panels" – not really conversations) is any indicator. I like to think I'm a pretty well rounded and worldly guy, but I would never nor would anyone I know ever make the claim of expertise in 20 subjects. Unless this person is some sort of savant which I don't think they are, they are providing a lot of self-aggrandizing "information" to a lot of hungry for whatever-you-can-put-in-their-mouths people.
I know that this sounds harsh and that it isn't an entirely fair characterization. Due to volume of activity alone, and the frontier nature of the venue, there will be a lot of this noise as long as it remains a place to be seen (the irony keeps getting to me) and it's really up to those who are members to decide that they aren't or are going to listen to the junk or make believe they are expert in something they aren't. On the more positive side, when the subjects are not discussed for self-aggrandizement and are being presented by people leading a conversation about something of interest to them and others attending, the conversation could be quite valuable. As long as the pretense isn't there, these can be fun and valuable and even bracing. Also, there are speeches, lectures, workshops, conversations from the people who have the experience and the knowledge to give them. The issue is that as a wild and wooly frontier the con-people and carny barkers -- i.e., those who are looking to be influencers and pushing their "brand" without substance or with ether in the form of a brick -- are problematic and numerous. The communications medium startup problem. Soooo much junk to be separated from the good that is there. But, in sum, despite the just sheer ridiculousness of the frenzy around it, there is potential actual value in the Clubhouse and its category's future.
The Chaff: Is That Really Wheat
While there is so much more I can say about the commentary on 21st century celebrity culture and self-aggrandizing "brand influencers" who look to be famous rather than valuable, I will stop talking about that.
I do want to have someone else speak to it because he has an intriguing analysis of "Why Clubhouse" though I can't say I totally buy into it. His name is Sam Lessin and he wrote a piece for The Information called "Clubhouse and the Future of Cult Driven Social Platforms".
To be clear, I don't think that Clubhouse is a "digital cult." Lessin's theorem is interesting in that he sees that social media models seem to be moving away from digital communities to digital cults. The way he defines the difference:
"Communities are places where people value the viewpoints and stories of other group members and care about their standing in the minds of those others."
"Cults, on the other hand, are places where people want to hear from a powerful leader and care about their standing in the eyes of the leader but not necessarily other cult members."
He goes on to say…"Abundant content is available. Nearly everyone on earth has access. Search and social media functions have removed any barriers to discovery. And, of course, you can now garner real-world money and power as a digital leader." He then says that the dilution of content in communities – meaning the low caliber of a lot of it, provides incentive for leaders (influencers) to step forward and asset themselves and provide superior content. There is money in it. Finally, he posits that "Communities and cults are both valid and reasonable ways to organize social structures….Hierarchical cults work better today, when the internet has a plethora of content and people and all those barriers have fallen away."
I don't think that the "cult model" is a better one. I do think that influencers and thus those who follow influencers are here to stay and people should get with the program. There is nothing inherently wrong about the idea of an influencer. People should be able to earn the respect and trust of other people who then can justifiably rely on those influencers for a true north kind of direction, valid, well thought out information, honesty, and a moral/intellectual/ethical compass. They have a place as educators and as trusted sources to support people in their various quests for answers.
The Chaff: Obscuring the Wheat
That said, I do want to address one more aspect of the buzz that I think is more important than even the promise of exclusivity and celebrity sightings, which seems to be the justification for the category. I think that the category, despite the awful name social audio, is a legitimate medium of communication that will hopefully be sustainable – even though at this point the entities associated with it don't have sustainable business models. But it is very early for that. But I think that what is being trumpeted by its advocates as the reason for the success of Clubhouse if not social audio (at this point) is obscuring the actual value of the medium.
The reasoning goes something like this.
We have video aka Zoom fatigue. Text is not emotional enough and Clubhouse manages to find the sweet spot between those two problems.
This reasoning is just dead wrong. The comparison to video and text is the equivalent of saying "The value of the banana is that on the one hand it isn't eaten as frequently chocolate and it tastes much stronger than water does."
Meaning not an either useful or valid comparison at all. Text isn't used for deeper emotional interactions so identifying its lack of that as not satisfying the need for a deeper human connection is a non sequitur. The value in text messaging – and it goes for business and personal use – is in the ability to consume a message quickly and respond in your own time. What makes text compelling is that all studies done pretty much universally show that a text message is opened and responded to within 1-5 minutes of its reception (58.7% of respondents in a typical study). The same study showed that the value to business was fast delivery (62%) and the fostering of customer engagement (47%). I doubt anyone is, has been or was thinking "oh, text just isn't enough. I need…I need…more." It has its place and purpose and carries it out well and doesn't drive the desire for something else – and won't be replaced by that something else either. I seriously doubt there is going to be a provable correlation between social audio usage going up and text messaging declining.
Also, it is a misstatement to claim that we have Zoom or video fatigue. The fatigue has to do with the sheer volume of meetings and content-less online discussions. Not the impact of the actual medium. We aren't tired of video; we are tired of endless meetings. Its Zoom MEETING fatigue not Zoom fatigue. Brent Leary rightfully pointed this out on the February 18 episode of CRM Playaz. The irony is that I'm sure (and this is just me saying this with a crooked smile) that the fatigue manifests itself in this way often enough: "Damn, I'm sick of endless Zoom/Teams meetings. I just want to be able to have some dinner, chill with a glass of wine and watch Netflix." Watch Netflix. I hope you get the not-too-subtle implication.
There is no doubt that social audio is fulfilling a need, or it wouldn't exist. But its currently at the new and shiny level and has no real business model and is yet to be an integrated media channel with any major property. Clubhouse (along with the other social audio apps) is sitting by itself in a city that is about 100 miles from any other city. But its Las Vegas in the desert again. Glitzy, glamorous, what happens in Clubhouse stays in Clubhouse because its wiped out after a short time. Its later that it matters.
The "video is too much, text not enough voila Clubhouse" is a reiteration of the reasoning that we heard back in the early days of social media. "Social is going to replace email as the main medium for communications." Or before that , digital print will mean a paperless society. For centuries, the latest and the greatest medium always was replaced the tired or overused media of the past and present. It was usually voiced by the folks who wanted to be "in the room where it happened" (Shout out to Hamilton) . You know them. The ones wearing Google glasses.
As far as I can tell we are still meeting in person, talking on the phone, emailing, texting, and increasing our use of video and dropping a huge amount of paper into the recycle bins. We have more podcasts, more live streaming and more vlogging than ever before. Social audio isn't filling some imaginary gap that exists between emotion and overuse. It is another and potentially valuable medium of communication that will be in addition to not in place of email, Zoom/video, text, human direct conversations, phones, and printed documents. And that's a good thing. It's just not the best thing ever. That accolade goes to chocolate. Which is eaten more frequently than bananas.
Social audio is not a revolutionary new category. It's a community within a university. The environment in Clubhouse feels like you are wandering the halls of either academia built around a loosely constructed unconference to listen to things that you want to hear. Teaching that is anyone who wants to. Otherwise, you can speak with your friends if they are available. A richer audio version of what Wonder is trying to do with video conversations –in a virtual hallway environment. Wonder is nowhere as hefty or rich as Clubhouse but the informality that both aspire to is similar in nature.
Hopefully, you can wash out your eyes, or more appropriately, clean out the wax from your ears and now join me here in looking at a hype-free version of the value of Clubhouse and social audio. Because to their credit, the founders seem to be crafting a sustainable framework around the product that could potentially give it some legs. Or ears. Or…enough with the hearing-related references.
The Wheat: Privacy, Security, Safety, Community
I'm addressing this first because not only does this normally seem to be missing from the newer unicorn prospects (most of whom aren't really that) but it is also an indication that the founders are thinking about frameworks and standards. Privacy, security, safety, and community seem to be where the founders put their stake in the ground – and they comprise at this point the provisional skeletal framework for what Clubhouse has. However, they still have a long way to go. While they have community standards, there are no ways to prevent carny barkers from setting up their tents and starting their shows – and that only diminishes the value. At some point, without impinging on the freedoms that define it, they are going to have to define standards that will not only keep the hate groups out (they have had some issues with that) but also qualify the experts. Perhaps through a certification program of some kind. One doesn't have to participate but if you are Clubhouse certified then you are a genuine influencer/thought leader/subject matter expert. I'm riffing here.
From the beginning, Clubhouse wisely paid attention to security and privacy. They spent a substantial amount of time developing guidelines, rules, frameworks and the technological support for safety, privacy, and community standards.
What do I mean? Here's a paragraph from the Clubhouse privacy policy that I got from a pretty straightforward fair post on Clubhouse done by Christopher Budd on the Avast blog:
"Solely for the purpose of supporting incident investigations, we temporarily record the audio in a room while the room is live. If a user reports a Trust and Safety violation while the room is active, we retain the audio for the purposes of investigating the incident, and then delete it when the investigation is complete. If no incident is reported in a room, we delete the temporary audio recording when the room ends. Audio from (i) muted speakers and (ii) audience members is never captured, and all temporary audio recordings are encrypted."
They also adhere to the California Consumer Privacy Act (CCPA) but seem to get around the General Data Protection Regulation (GDPR) with the following statement to international users(again, thank you, Christopher Budd):
"By using our Service, you understand and acknowledge that your Personal Data will be transferred from your location to our facilities and servers in the United States, and where applicable, to the servers of the technology partners we use to provide our Service."
Whether or not that is sufficient, I don't know, but they at least address the issues - a good sign.
The Wheat: The Medium
Let's start this section with the ideas of Martin Schneider, Chief Evangelist at SugarCRM and a long time industry analyst before his stint at Sugar:
"When you take a more rational view of what Clubhouse and similar concepts have to offer, it is simply a new channel and additive to existing institutions, business, and communications models, etc. I do not see Clubhouse as a radical new idea that will displace existing media, but rather creates new wrinkles in how some things are done in our world.
But Clubhouse does tap into what I think is a very "now" zeitgeist fueled by the pandemic and other aspects of our immediate reality. Consumers of content who are looking for ideas, guidance, or simply how to do something - are fatigued in general. Life is simply more burdensome under lockdowns, quarantines, and with less access to face-to-face opportunities to network, learn, etc. Clubhouse gives these eager consumers of content an easy, fluid and more importantly interactive channel on which to engage and learn.
On the flip side, Clubhouse offers yet another channel for creators of content - especially self-help and other educators, coaches etc. - to engage and reach new and existing audiences. It is faster and effortless in comparison to old models: no video production, text/book editing and publishing processes, promotion, distribution, etc. Creators can simply talk out their ideas, and ideally find a willing audience. This democratization of learning has vast potential - opening up the gates for mass education tools that can help bring virtual classrooms and knowledge into remote or otherwise resource constrained areas. The test run with remote schooling during COVID has proven the efficacy of the model.
Of course, this is the idealized version of Clubhouse's potential and appeal. Until a far more cultivated and curated approach is available, and the luster of the exclusivity and cult of personality lure fades - hopefully, some improvements in navigation and quality control (I dare say regulation) can expand on the early promise Clubhouse has shown."
While social audio is a terrible name on par with "omnichannel" it represents a communications medium that has potential for social discourse on the one hand and interactivity with others on a one to one as well as group basis – a communications medium that parrots a university environment. And at scale. The key to a good communications medium is the ability to foster not so much education as conversation. The rest of what it does will follow. Social audio is already popular for its informality combined with the application's awareness of connectivity – who you are connected to via your iPhone (and future devices and media – and for its ability to foster discussion and some levels of engagement in a more or less natural way. It's actually highly structured which is why I say more or less natural. But by their notifications of the activities of those you follow or who follow you and the ability to see who's available to chat with if you don't want to go to a room and to at least seemingly go in and out of the rooms as unobtrusively as you want and the security, safety, privacy and community frameworks in place, there will be some potential for getting this in order once the famous get tired and the wannabees go and be wannabees in the next hot club…err digital domain.
But to reiterate so that it is crystal clear: There is no basis to say that the rise of social media is due to the deficiencies of other media. Frankly, each of them serves a different purpose with a different set of use cases and a different set of actions/activities to support participation in each.
The Wheat: The Model?
This is, of course, the big question. Is there a sustainable business model in this. As of now, it's a mystery how Clubhouse supports itself. The creators/founders seem to be pretty well grounded folks so I'm sure they will come up with something. To go through this, I want to summarize what I think is the best work on the category so far. That's a paper written by Jeremiah Owyang, Founding partner at Kaleido insights, a well-known innovation centered thought leader and industry analyst formerly of Altimeter Group and Forrester Group. In late January this year, he penned "The Future of Social Audio: Startups, Roadmap, Business Models and a Forecast".
One of the reasons I suggest you pay attention to this document is because it was written by Jeremiah. I am not by any means being sycophantish here. He is a visionary and has had a bit of a history in identifying or at least making the case for emergent categories in the technology world.
I'll tell you a story. Back in the days when Brent Leary, Esteban Kolsky Denis Pombriant and I (among a very small handful of others at the time) were identifying Social CRM and distinguishing it from traditional CRM – temporarily – the category was not well formed. Jeremiah (with the help of Ray Wang) in 2010 for Altimeter Group wrote a paper entitled The 18 Use Cases of Social CRM, The New Rules of Relationship Management that I think solidified the category. The value or at least potential value of Social CRM became evident with the publication of this document. While he didn't create the category, I think he is responsible for justifying what became ultimately part of every CRM technology, system, strategy, operational requirement, and value assessment.
He's doing the same thing here. Social audio is new and still shiny enough to interest a magpie. There is no real business model yet, but Jeremiah is establishing, as he did with Social CRM, the groundwork for the business models for social audio. He identifies 15 possible models. Some of the more interesting:
- Premium audio/rooms/analytic
- Branded clubs/Promoted rooms
- Sponsored audience influencers
- Ecommerce (PG Note: This one could be really interesting, but it wouldn't be easy)
I've combined several per bullet point. I think the most interesting one to me in the sense that it reflects the Clubhouse environment is branded clubs. There is a Hakkasan vibe to the environment in Clubhouse. In fact, one thing that occurred to me is that this is with a few modifications also a place where a DJ and a band could get together and play to audiences. Not as an open air concert but as a jazz or blues club environment. Remember, you saw it here first. And again, I'm riffing.
I'm not going to spend too much time on the individual models, but Jeremiah is identifying the monetization possibilities for social audio and a large number of them are doable in the relatively near future – a good sign for its viability.
But to make the category case stronger he also identifies what he calls product categories around analytics, management systems, apps, services, and talent focused brokerage firms with marketplaces to sell their "wares."
Again, I'm shortening what Jeremiah is offering. He's also providing a forecast, but I decided to stop doing forecasting years ago since I see it as speculative guessing with little or no foundation. So, make your own judgements. I don't disagree with any of his forecasts; I just don't know.
That said, I don't fully agree with everything in this paper (I'll let you figure out what I don't. You'll know as soon as you read it what I disagree with. I've talked about it here.), but I do think that this is by far the most significant paper on social audio and deserves the front row.
I have little to add to what he says. Download his paper and read it, please. Then judge.
Conclusion:
What do I think all in all?
- There is some real viability in the category despite a bad name and a misconception of its raison d'etre.
- For the category to be viable use cases and business models are a near future must have. Clubhouse is using the freemium, exclusivity thing to catapult itself to frenzied mega fame but by its own admission, exclusivity is going by the wayside. The bigger it gets the more it will cost to maintain. As of now, Andreesen Horowitz is how it is being funded. At some point in the not too distant future Andreesen Horowitz won't be happy about that. They are not altruists.
- So, what we have here is effectively a category with an aspirational business model. And until the wannabees, sycophants, self-promoting influencers etc clear out, how well Clubhouse and by anointment, the category succeeds remains to be seen.
- Would I bet on it? I would say that the likelihood is good because it's a digital representation of a legitimate way that people communicate. And because we are in a new/next normal that is likely in its maturity to be a combination of a concentrated in person and a digitally distributed lifestyle, this category is a strong enough option to survive its early days.
Admittedly, I'm not entirely clear on the direction or sure about the outcome. Which of course qualifies me as an expert/influencer/thought leader who should be running meetings in Clubhouse.
Okay, gotta run now. Just got notified that 18 experts I never heard of are doing a seminar on the psychoacoustics of commercial real estate selection. Did I tell you that Elon Musk is going to be there? We're going to hang out with Kanye West, now that he's single again. So cool. And you aren't invited.
Bye.