The hot new thing in Silicon Valley? An app called Clubhouse
San Francisco - Marc Andreessen, a Silicon Valley investor, published a rallying cry last month that quickly ricocheted around the tech industry. In it, he blamed America’s dismal response to the coronavirus on “smug complacency, this satisfaction with the status quo and the unwillingness to build".
He proposed a solution that fit squarely into Silicon Valley’s ethos of ingenuity. It was time to build things, he said, like universities, hospitals, skyscrapers, zero-emission nuclear reactors, delivery drones, hyperloops and even Elon Musk’s “alien dreadnoughts.”
“Building is how we reboot the American dream,” Andreessen wrote in his post, which he titled “Time to Build.”
It was an inspirational call to arms. But one of the first things Andreessen and other Silicon Valley venture capitalists have since rushed to help build was something else entirely: an app called Clubhouse.
Clubhouse is a social media app where venture capitalists have gathered to mingle with each other while they are quarantined in their homes. The app is, for now, invite-only, and buzzy: seemingly everyone who has been allowed to join the early test version, from celebrities like MC Hammer to activists like DeRay Mckesson, has tweeted about it. And it has recently been one of the hottest deals on Sand Hill Road, Silicon Valley’s venture capital nexus.
Last week, Andreessen’s venture firm, Andreessen Horowitz, won the deal to invest in Clubhouse. Andreessen Horowitz agreed to put in $10 million, plus pay another $2 million to buy shares from Clubhouse’s existing shareholders, said a person with knowledge of the funding, who declined to be named because the details were confidential.
The financing valued Clubhouse, which started this year and has two employees, at nearly $100 million. The deal was earlier reported by Forbes.
Andrew Chen, a partner at Andreessen Horowitz, said on Twitter that he interpreted Andreessen’s “Time to Build” as building more of everything, including “new gaming cos, social apps, fitness and more!”
The rush to invest in Clubhouse reflects the way Silicon Valley works. While cutting-edge technology and a change-the-world mission are paramount, much of the big money in recent decades has ultimately been made from addictive social media apps. So when it comes to building new things, Silicon Valley often turns to what it knows - and that is more social networks.
Paul Davison, who founded Clubhouse with Rohan Seth, a former Google engineer, declined to comment. Davison is a well-known Silicon Valley entrepreneur, having made the social media app Highlight in 2012. That app, which allowed people to share their location with others to create serendipitous in-person connections, shut down in 2016.
A screenshot of Clubhouse a social media app where venture capitalists have gathered to mingle with one another while they are quarantined in their homes. Picture: Handout via The New York Times
With just a few thousand people using Clubhouse as part of an early test, the app is far from a hit and has not been publicly released. But many of those who have it are already addicted. One woman recently discussed spending more than 40 hours a week on it; others have tweeted similar statistics.
Clubhouse works by letting people join pop-up audio chat rooms that disappear when they end. Once in the rooms, users are segmented into tiers determined by moderators. Users can join any chat room, see who is speaking or listening, click into a profile page and follow others.
Some said Clubhouse has brought back the spontaneity of real-life interactions, which vanished with the coronavirus. Gillian Morris, founder of Hitlist, a flight booking app, said that logging into the app felt like bumping into people and striking up a conversation at a coffee shop.
“It’s like walking into a party where you know people are ready to mingle,” said Sonia Baschez, 33, a digital marketing consultant in San Francisco who was invited to use Clubhouse.
Since joining the app a week and a half ago, Baschez said she has spent three to five hours a day on it. “Sure, you could be talking to people on the phone, but that just seems so weird,” she said. “You’re not forced to be part of the conversation the entire time on Clubhouse. You can just listen to other people talking about interesting subjects and jump in when you want.”
Last weekend, author Shaka Senghor and activist Mckesson each spent hours on the app discussing prison reform, police brutality and other topics related to their interests. Former FBI hostage negotiator Chris Voss recently held an open Q&A on Clubhouse. Jared Leto and Ashton Kutcher are users; Kevin Hart also showed up one time.
Leo Polovets, an investor at Susa Ventures, a venture capital firm, said Clubhouse sometimes felt like a tech conference, with discussions on tech-related topics and appearances from prominent techies. “It’s almost like a podcast with audience participation,” he said.
That’s during the day. After hours, Clubhouse is more like a rowdy dive bar. At around 10 nearly every night, a group of 30 to 50 people form a room on the app where everyone is a host, moderator privileges are given freely, microphones are mostly unmuted and users swap their profile pictures in real time to memes and images related to the conversation.
They call themselves the “Back of the Bus.” Ryan Dawidjan, 28, an account executive at a tech company, holds court and ensures everyone in the room follows the rules: no boring tech talk and no talking about Clubhouse. He playfully boots people from host roles for violating these sacred terms.
The format of “Back of the Bus” is fluid. Sometimes there is a tarot card reader critiquing a member’s Instagram account; sometimes it is a dating advice show; sometimes bored people sound off about anything that pops into their mind.
Clubhouse has already minted its first influencer: Sheel Mohnot, 38, founder of Better Tomorrow Ventures, another venture firm. Mohnot, a staple in “Back of the Bus,” has been a contestant on the Zoom Bachelorette, a pop-up online dating event for which fans hosted a live discussion party on Clubhouse. After connecting through the app with Scooter Braun, an entrepreneur and record executive, Mohnot was featured in a recent Justin Bieber and Ariana Grande music video.
Clubhouse is “like a mystery box every night. You don’t know what you’re going to get, but it’s always good,” Dawidjan said.
Alex Taub, 32, a co-founder of Upstream, a professional networking platform, who is on the app, said, “You don’t want to leave Clubhouse because you feel like when you leave, something crazy is going to happen.”
All of that has whetted the appetite of venture capitalists. Apart from the Andreessen Horowitz investors, others from top Silicon Valley firms like Benchmark and Greylock Partners are also in the app. Many have offered product feedback in Clubhouse and declared that it is the future of audio. Some have wrangled celebrity connections to try it.
Yet even before Clubhouse launches, it has encountered issues that larger social media companies struggle with. On Sunday, entrepreneur Sriram Krishnan changed his name on the app to Tim Cook, Apple’s chief executive, as a prank. More than 100 people immediately joined the room.
Hours later, someone impersonated Elon Musk, the Tesla chief. That led MC Hammer to publicly call on the company to institute a real name policy. “Real identity !!! Be accountable for your words and opinions,” he tweeted.
Clubhouse also faces competition. Over the weekend, an app that mimics the Clubhouse interface called Watercooler was released. It even used a photo of Davison in its promotional images.