Clubhouse: Revolutionizing Social Networking
The first social media platform launched a couple of decades ago. Today, life without social media is unimaginable.
In addition, the platforms are influencing our thoughts, feelings, and actions. But this is only the beginning—we have yet to witness their further growth and transformation.
One company at the forefront of the future of social networking is Clubhouse—a San Francisco-based tech company that flipped virtual networking on its head. It aims to provide more authentic and humane connections, using audio as a primary tool.
Clubhouse allows you to enter live audio chats and interact with other listeners and speakers. It’s like a global podcast where you can actively engage in conversations, ask questions, and shed more light on topics.
The company wouldn’t be anything without its born-leader founders—Paul Davison and Rohan Seth. Learn how their startup took the world by storm.
The Unstoppable Duo Behind Clubhouse
Paul Davison, a San Diego native, was always goal-oriented and a go-getter. In high school, he was a high achiever, where he partook in a club for emerging leaders and entrepreneurs. In 2002 he graduated Industrial engineering at Stanford University, where he also obtained his Master's Degree in Business in 2007.
Paul wasted no time after graduating. He was the VC at Metaweb and worked for Google before establishing his own company, Math Camp. Math Camp was his base for launching several apps that tried reinventing social networking. The company was successful and soon acquired by Pinterest.
However, the corporate atmosphere at Pinterest was too tight for Davison’s entrepreneurial spirit. He left and reconnected with his old buddy Rohan Seth in 2019.
Rohan is also a Stanford alumnus with a Bachelor's in Computer Science and a Master's in Management Science & Engineering. Like Paul, he was also a high achiever and left a trail of success wherever he went.
He also worked at Google, where he met Jen, the love of his life. Unfortunately, their daughter was ultimately diagnosed with a rare genetic disease. Since then, Rohan and Jen have dedicated all their time and energy to honing research on rare genetic disorders in children.
The Road To Success
When Rohan and Paul started working together in 2019, they brainstormed a simple yet enticing idea. They wanted to create the first audio-based social media platform. Users could connect based on similar interests and enter live discussions on a range of topics such as health and wellness, tech innovation, crypto, politics, or art and culture.
The goal was to connect users with strangers, friends and family, and even celebrities. All the conversations were live, not recorded, and without any censorship. Each conversation room was to be moderated by the creator, who chose the topic of discussion, and the people who could participate.
The entrepreneurs didn’t want to rush things and decided to scale the platform as slowly as possible. The first call of acting was making the platform invite-only. They tried to capture the public’s attention by inviting important figures like tech titans and celebrities to be the first users.
The initial name for the app was Talkshow, but they quickly rebranded to Clubhouse and launched the app on iOS in March 2020. Things were going slow at first, but the app became the talk of the town when people like Elon Musk, Mark Zuckerberg, Reese Witherspoon, Tiffany Haddish, and Oprah joined in.
It took no more than five months and barely 5,000 users for the app to get a $100 million valuation. Hosting live panels and Q&As and inviting important public figures made Clubhouse a corporate success.
However, users also consider the platform wholesome as it allows open dialogue without barriers. Everybody can join the conversation room and actively participate in debates by raising their hand.
Exceeding Expectations With the Clubhouse App
The invite-only system at Clubhouse proved beneficial. It allowed Paul and Rohan to scale the technology and avoid significant issues. Most importantly – it stirred the pot and garnered massive public interest. People were even selling their Clubhouse invitation codes online for $400.
The app started as a safe place for successful and famous people, but in April 2021, it opened its doors to the public. Millions of people got the chance to interact with crucial contemporary figures more intimately and meaningfully.
Clubhouse soon became a success and was compared to Instagram, rapidly catching people's attention worldwide and blurring the lines between celebrities and your next-door neighbors.
The pandemic lockdowns also played a part in the app’s success. Millions of people craved socializing in 2021, and the app helped them push through the hard times.
TED and Stripe partnered with the app, Twitter wanted to buy it, and it had 10 million users on a waitlist. It’s no wonder why Clubhouse reached an estimated value of $4 billion, becoming a Unicorn company.
Fortifying the Finances
Clubhouse is a late-funding company. In the beginning, there was only Paul and Rohan, working relentlessly to make their dreams come true. They managed to get a series A funding of $10 million only a year after launching. It involved six investors, with Andreessen Horowitz taking the lead.
Horowitz continued supporting the company in the next funding rounds, but other big-time investors like 10X Capital and TQ Ventures soon chipped in. Today, Clubhouse had total funding of $110 million. However, it closed its rounds in 2021.
A Bump in the Road for Clubhouse
Every successful company has faced a few bumps in the road, and Clubhouse is no exception.
The app bloomed in its invitation-only phase when everyone looked for a way to get invited and boast about it later. However, quickly after it opened its doors to the entire public, the app encountered the issues all social media platforms face.
Many new users were only looking for clout and didn’t care for the wholesome concept of the company. Some became aggressive and started attacking public figures, while others even breached privacy rules by recording the audio conversation through other outlets.
In addition, the app's popularity attracted scammers and violent content. So, sooner than later, a bright idea became tainted with negativity, and everyone predicted the company’s downfall.
However, Clubhouse bounced back just fine. It tightened regulations and started coaching room creators to be better moderators. Most importantly, the app positioned itself as a place to learn from experts, exchange ideas, and connect with like-minded individuals.
Where To Next, for Clubhouse?
Clubhouse’s idea is revolutionary, so it’s no surprise why many similar apps arose after its launch. Today, you can participate in live audio chats on Cappuccino, Leher, and even Reddit Talks. However, what makes Clubhouse special is the vision behind it.
Allowing private chats and live panels with experts, Clubhouse opens up the world to new possibilities and breaks the invisible borders between people of different statures. The company has been laser-focused on diversity from the start and is the go-to platform for many socially relevant conversations.
Despite its sudden surge in 2021, it’s still active, with a 4.5 app rating, over 34 million downloads, 2 million weekly users, and live events with industry giants like David Fincher. The company also started to focus more on creators, allowing them to earn from in-room tipping, brand partnerships, and paid events.
Paul Davison and Rohan Seth are still co-founders and active Clubhouse users. Paul is also an advisor for Coin List, while Rohan is running Lydian Accelerator—a non-profit research accelerator for genetic diseases in children.
So far, the future looks bright for Clubhouse. It’s only a matter of time until the founders develop novel ideas and further build up the platform.