The buzz of the clubhouse is already fading, but Andreessen Horowitz is not delayed

The Clubhouse audio app was in vogue earlier this year, but there are signs that the buzz around it is starting to dissipate.

In February, Tesla CEO Elon Musk and Facebook CEO Mark Zuckerberg took to the Clubhouse in a matter of days as the social chat application began to take off.

Musk even asked Russian President Vladimir Putin if he wanted to join him for a conversation on the platform. However, we are advancing rapidly to this day and some of the hype seems to have disappeared.

The iPhone guest app, which celebrated its first anniversary last month, allows users to find and listen to conversations between groups of people. He was quickly embraced by Silicon Valley guys and was backed by well-known venture capital firm Andreessen Horowitz (whose co-founder speaks from the app from time to time) in a January funding round, which he reportedly assessed at $ 1 billion.

On Sunday, Clubhouse confirmed that Andreessen led a new round of C-series funding after The Information broke the news on Friday. The latest round of investment, which includes new supporters of DST Global and Tiger Global Management, estimates the company at $ 4 billion. But investors seem to be more uplifting than many of the app’s users.

While some people were desperate to receive an invitation to the Clubhouse, some users who are already on the platform are unable to see the long-term call. Clubhouse, which was founded in April 2020 by Paul Davison and Rohan Seth, did not immediately respond to a request for CNBC comment.

“I think the initial FOMO on getting an invitation to the Clubhouse and its attempt has failed,” social media analyst Matt Navarra told CNBC.

One of the main problems with Clubhouse is that there is a lack of relevant discussions or cameras, which users see when they open the application.

“I tried to get into it a little bit, but the only rooms he showed me were run by the kind of people who ironically call themselves ‘growth hackers,'” a CNBC user said, adding that he felt the managers had arrived. of social media in front of everyone.

Navarra said that Clubhouse’s challenge “is to make sure that when you open the app, you discover a lot of great cameras and speakers, every time”.

He added: “The issue of content quality will get tougher as more users are added and quality content is diluted. Just like when Meerkat users started seeing endless boring live streams, the Clubhouse is full of spam, scams and snake oil sellers. “

Timothy Armoo, chief executive of Fanbytes, a company that helps brands advertise on social media, told CNBC that “showing the right people the right things at the right time” is a “difficult problem” and they can’t scale.

“The elites have left the building. Marc Andreessen is no longer doing things. The allure of the Clubhouse was that you could almost hear interesting convoys from interesting people. As the interesting people left, what’s the point?”

Armoo ​​mentioned that the buzz around the Clubhouse is also dissipating because people can go out now, because Covid restrictions are eased in countries like the UK and the US.

Despite the initial fanfare, Clubhouse was downloaded only 14.2 million times by April 14, according to data shared with CNBC by app tracking company Annie. Meanwhile, social platforms such as Facebook, Instagram, YouTube and Twitter boast billions of users.

Club downloads have stabilized, according to an App spokeswoman Annie. “As with most app launches, there’s always a huge download in the first few weeks that diminishes,” she said.

By comparison, TikTok has been downloaded 500 million times in the five months to April 2020, bringing total downloads to 2 billion, according to application analytics firm Sensor Tower. Elsewhere, the augmented reality mobile game Pokemon Go has been downloaded more than 500 million times in the months since its launch, according to research firm Statista.

Some Clubhouse users who organize in-app events have started looking for alternative options.

Sara Essa, the creator of Sustainability Hub, which hosts several events on the Clubhouse for 41,400 members a week, told CNBC that she is considering another platform.

“I’m trying to get the community off the platform and host our discussions elsewhere,” said Essa, who says the Sustainability Hub is the largest climate community in the Clubhouse.

She said “people are leaving” quickly because Clubhouse changed its algorithm and accused the company of not listening to user feedback.

Finding a new platform is “Essa’s biggest hurdle right now,” but he is considering the $ 5.65 billion Hopin online events app, despite being less than two years old. She is less willing to use her Twitter rival Clubhouse, Twitter Spaces.

“Twitter Spaces wouldn’t work,” she said, adding that she’s not a big fan of it. “A lot of people don’t use Twitter, so it’s going to alienate a lot of people.”

Meanwhile, Mike Butcher, editor-in-chief of tech news site TechCrunch and host of The Tech Media Weekly Wrap, dropped out of Clubhouse in favor of Twitter Spaces last month. However, the raid was short-lived.

“People – I think we need to go back to our old haunted clubhouse,” Butcher told spokesmen he invited to the show via Twitter after hosting just two events on Twitter Spaces. “I’m totally ready to go back to Twitter Spaces at a later stage, when they removed the bugs and added Android, but there are a number of issues.”

Twitter Spaces not only crashed for Butcher’s speakers, but also crashed for him, causing the entire show to fall off the air. – He ended the room! Butcher told the speakers during a live event. “We had to restart the whole room! Lost audience!”

He also criticized Twitter Spaces for having poor audio quality; the inability to “pre-reserve” or schedule a space, which makes it difficult to promote; and a small audience compared to Clubhouse. He got around 40-50 on Twitter Spaces vs 150 plus on Clubhouse. Twitter did not immediately respond to a request for comment from CNBC.

“It’s clear that the ‘shiny new work effect’ has disappeared after a while with Clubhouse,” Butcher told CNBC. “There are only so many random discussions, poorly prepared by people that I can take. So I moved my regular show to Twitter Spaces to go for “coverage” in terms of novelty, given how popular Twitter is. , I think we’ll be back. To succeed, Clubhouse will have to get out of its clichéd culture. “

Earlier this month, Bloomberg reported that Twitter was also looking at buying Clubhouse for about $ 4 billion. It came days after Bloomberg reported that Clubhouse was discussing raising funding from investors in a round that would value the business at about $ 4 billion.

And there could be more competition along the way.

Reports suggest that Facebook is working on its own competitor Clubhouse. The screenshots released by TechCrunch in March suggest that the Facebook audio product will be an extension of Facebook’s existing Messenger Rooms, as opposed to a standalone app.

Meanwhile, LinkedIn, Slack and Spotify are also working on rival products, according to reports.

Technical analyst Benedict Evans, a former partner at venture firm Andreessen Horowitz, told CNBC that “drop-in audio chat” could end up being used everywhere in the same way that “stories” have become ubiquitous. on social platforms.

“But the network you add to the issues is not interchangeable, and the mechanics of connecting them could matter more than the format – that’s why TikTok works,” he said via email.

Facebook could add “stories” to all, but I can’t add “TikToks” (AKA Reels) to all, because the point is the consumption model and the network, not the “short portrait video”. The same (true) for audio chat – the point is how you do it and what network you connect to, not just adding live audio. It’s like saying “Facebook will add status updates so Twitter is dead” – the point is the network. ”