The Social Audio Revolution:
Investors Are Betting Big on the Clubhouse App

Thirty years ago, social media (as we think of it today) didn't exist. Now, it is a dominant and inescapable part of the culture, a tool used by people of all ages from all over the world.

Emerging social-media apps that feature voice conversations are gaining users and drawing multimillion-dollar investments, while the biggest platforms are exploring their own foray into audio chat features. The Clubhouse app, an audio-only social app featuring conversations with big names in Hollywood, politics and tech, is creating the biggest stir.

Social media startup, Clubhouse, is a provider of invitation-only audio chat rooms that center on a variety of topics. The company was launched last March by founders Paul Davison and former Google engineer Rohan Seth. Since then, it has exploded in popularity among venture capitalists and celebrities alike.

Clubhouse has raised new funding led by existing investor Andreessen Horowitz. The $100 million round values the company at $1 billion, Axios reported. Andreessen Horowitz also led Clubhouse's $10 million Series A last May.

Clubhouse, which boasts more than 180 investors to date, plans to use the funding in part to improve accessibility and "support emerging Clubhouse creators" by paying conversation hosts via subscriptions, tickets and tips.

Zoom Fatigue - Audio apps have become more appealing in part because of the popularity of podcasts and users’ Zoom fatigue. Jeremiah Owyang, a tech-industry analyst, adviser and startup investor, called audio the “Goldilocks” medium, neither as impersonal as text nor as invasive as video. Owyang, an active Clubhouse member, said audio apps grew rapidly during the pandemic as people sought social connection, and live conversation seemed to foster more empathy than text chats.

Exclusivity - One of the central appeals of Clubhouse is right there in the name—it’s invite-only, so people feel like simply joining the app is entering an exclusive club. When people see their friends or contacts joining a live discussion with someone like Musk, they immediately want to join the conversation, without even needing to fully understand what the app is.

A Facebook spokesman said that it is exploring social-audio features, but that the company isn’t close to launching a competing product to Clubhouse. Meanwhile, Twitter Inc. has added a voice feature for tweeting and is testing a separate audio chat-room product called Spaces, a spokeswoman said. Entrepreneur and investor Mark Cuban said he is involved with building an audio-focused social platform, called Fireside, which will compete with Clubhouse. A person familiar with the project said it would launch this year. Owyang is tracking new social-audio companies and has a list of a couple dozen, including Chalk Inc.’s secure audio-chat app and Locker Room, for live-audio conversations among sports fans.

Audio messaging has been available for years; voice memos on WhatsApp are especially big in India, and WeChat audio messages are popular in China. And during the pandemic, these features have become an easy way for people to stay in touch while bypassing Zoom fatigue. But now a new wave of hip apps is baking the immediacy and rawness of audio into the core experience, making voice the way people can connect again. From phone calls to messaging and back to audio—the way we use our phones may be coming full circle.

Discord: Gaming chat app Discord, meanwhile, has exploded in popularity. The service uses voice-over-IP software to translate spoken chat into text (an idea that came from video gamers who found typing while playing impossible). In June, to tap into people’s need for connection during the pandemic, Discord announced a new slogan — “Your place to talk ” — and began trying to make the service appear less gamer-centric. The marketing push seems to have worked: by October, Discord estimated 6.7 million users—up from 1.4 million in February, just before the pandemic hit.

Checkmate: The intimacy of voice makes audio social media that much more appealing in the age of social distancing and isolation. Jimi Tele, the CEO of Checkmate, a “text-free” dating app that connects users through voice and video, says he wanted to launch an app that would be “catfish-proof,” referring to the practice of deceiving others online with fake profiles.

Cappuccino: Immediacy and authenticity is the reason Gilles Poupardin created Cappuccino. He wondered why there wasn’t already a product that gathered voice memos together into a single downloadable file. “Everyone has a group chat with friends,” he says. “But what if you could hear your friends? That’s really powerful.”

Content moderation in audio is far more difficult than it is in text. Searchable text and auto-moderators have been used with some success, but human moderators seem to be the most effective way to block people who don’t abide by community rules—which puts human beings at risk. For platforms where people can jump in at any time and chat, the very democratization that makes audio attractive creates a nightmare in moderation.

Clubhouse and Twitter both provide moderation tools that allow users and room moderators to block or report bad actors. Both have community guidelines, which include a zero-tolerance policy for racism, hate speech, abuse and more. The issue, as with all other platforms, is enforcement.

Twitter has held back the public release until it has the right moderation tools in place, says Dantley Davis, the company’s chief design officer. He says some new moderation features are due in an upcoming release. Twitter doesn’t plan to permit private spaces until it has better moderation tools, as private groups can lead to more toxicity, he added. (The Clubhouse app allows private rooms.)