How did Clubhouse emerge, and where would it go?

1. Clubhouse
A utopia in the social
networking sphere
Yuanzhe Fu
mail@yuanzhe.vc

2. Clubhouse Explored
- Day in the life of a Clubhouse user
- KOLs’ statements and questions
Clubhouse Emerged
- Continued the conviction of people discovery
- Filled the gap in social networking
- Leveraged online-isation of social networking
Clubhouse Explained
- Pyramid social structure based on info-attention exchange
- Self-sustaining network with steady-state % market served
- Ideal sharing economy case if idle minds are utilized at times
Executive
Summary
Clubhouse Expected
- Heated imitation and overvaluation
- Content-intensity & lean operation conflict
- Potential monetization models for Clubhouse

3. While 📖
I listen 🎵 as BGM
11:00 15:00
While 🏃
I listen to the ideas
of my favorite writer
Sunday
17:00
I co-host on urgent &
important matters with a BCG
consultant
i.e. financial freedom, choice of
profession, personal branding,
refusing people...
02:00
Before 🥱😪
I listen to stocks, pitches,
career, love stories… anything
that fulfils my idle time,
and occasionally echoes
others
Source: Screenshots of Clubhouse App
Day in the life of a Clubhouse user
Clubhouse Explored

4. Pioneer in Social Media, investor
Gary Vaynerchuk
It replicates real life.
People like lack of friction, that
is, convenience
Is this a feature or a platform?
What if others test it?
Like facebook did to tiktok? With
installed base in Facebook and
Instagram, there is a chance
Founder of NASDAQ: LIZI
Lai Yilong
Is Clubhouse a social networking
or social content platform?
The former is built on the
distribution of social relationship
through the connection of people.
The latter emphasizes on anything
other than the connection itself, i.e.
algorithm, content, activity.
Entrepreneur invested by Sequoia
Li Ziran
It replicates online Silicon Valley.
Audio market, though smaller than
its video counterpart, has potential
to be unleashed.
Video is entertainment, while audio
is company.
Monetization remains difficult.
Social networking giants talk about Clubhouse
Clubhouse Explored
Source: YouTube

5. A location-based service that
helps find people nearby
Camera roll sharing tool for
close friends to keep in touch
A space for casual, drop in,
audio conversations
“People in our lives are the most important thing in the world.
The way people connect is incredibly random and inefficient.
The world will be better off if technology empowers connection in a serendipitous manner.”1
Paul
Davison
Highlight, 2012 Roll, 2015 Clubhouse, 2020
Clubhouse continued the founder’s conviction of ‘people discovery’
Clubhouse Emerged
Source: 1
“A conversation with Highlight’s Paul Davison”, available at gigaom.com/2012/07/20/highlight/

6. Clubhouse filled the gap in social networking, while figures lagging behind
Acquaintances
Word
Picture
Audio Stream
Video
Friction of
production
Connectivity1
Strangers
2000
↑
1600
1300
↑
1300
500
↑
400
1213
↑
1151
1200
↑
800
1074
↑
1000 0 → 10
160
↑
140
MAU2
as of
Jan 2021
↑
MAU as of
Jan 2020
WAU3
as of
Mar 2021
↑
WAU as of
Mar 2020
User
Statistics
(in million)
Clubhouse Emerged
Source: Statista, Business of Apps
Note: 1
Connectivity that motivates the user to stay on certain platform, 2
MAU: monthly active users, 3
WAU: weekly active users

7. Clubhouse leveraged the ‘online-isation’ of social networking
Apr May Feb
Dec Jan 2021
2020
Daily new confirmed Covid-19 cases per million people
1.5K testers
MVP1
with 3.5K
early adopters
600K WAU2
2M WAU2
6M WAU2
Clubhouse chronology
Silicon Valley people’s
alternative ‘meetups’
Invitation-based user expansion
× Disastrous pandemic
Clubhouse Emerged
Feb Mar
10M WAU2
Source: ourworldindata.org, Johns Hopkins University CSSE Covid-19 data, Statista, Business of Apps
Note: 1
minimum viable product, 2
weekly active users

8. THE PROBLEM
Pyramid social structure based on the exchange of info and attention
Clubhouse Explained
Followed by the speakers
Others in the room
Speakers
More hierarchical social structure Speaker-listener sole-direction content value chain
Attention
Info
Attention
Consumer
Producer
Credit
enhancer
Source: Envolve Group, Clubhouse App simplified

9. THE PROBLEM
Self-sustaining network with quasi steady-state % market served
Clubhouse Explained
Source: Economics of Platforms, screenshots of Clubhouse App
Note: 1
marginal user’s utility function: mV=P, where V=[0,1] as value to use, active users = 1-V, 2
in the field of social network, user’s
attention and presence are their willingness to pay
0 1
market
served (m)
P=m(1-m)
Demand function of network effect1
Maximum price
Clubhouse could set
Price2
Invitation-based network-leveraged expansion
Former potential user
now active user
Potential users
Active user who acquires and
retains new active users
m

10. Network Element
Provider
Network
Operators
Applications provider
End Users &
content provider
A socioeconomic ecosystem leveraging IT infrastructure to connect different stakeholders ...
Online accessibility Trust + shared value
… as excessive capacity of underutilized assets that involves collaborative consumption
Casual
Drop-in
Audio
Stand-alone
idle-time
idle-minds
Virtual reunion
Exploited time
Enlightened minds
What’s been improved? ✅ Return on Intelligence Employed3
✅ Opportunity window2
✅ Value for Time1
THE PROBLEM
Ideal sharing economy case if idle minds are utilized in their idle time
Clubhouse Explained
Source: Fransman (2007): “Innovation in the new ICT ecosystem”, course slide from Prof. Corrocher
Note: 1
improved operational efficiency, 2
explorational net externality, 3
Return on Capital Employed” in terms of intelligence

11. THE PROBLEM
Heated imitation and valuation will disadvantage the future of Clubhouse
Clubhouse Expected
Source:, Capital IQ, Twitter, Facebook, Statista
Note: 1
monthly data, 2
Clubhouse’s MAU undisclosed, yet higher than WAU,10M as a prudent figure, 3
Twitter’s latest-twelve-months
stock performance (latest-month before the takeover news in green) favors a stock acquisition.
Apr May Dec 2021 Jan Feb Apr Summer
✅ Series A $10M
✅ Series B $70M
Post-money valuation: $1B
Twitter tests Spaces
Kuaishou tests Spaceship
3
Twitter’s potential takeover
of Clubhouse at $4B
✅ Series C $200M
Post-money valuation: $4B
Facebook’s audio
products line-up
Price MAU Price/MAU
Instagram $715M 30M $30
WhatsApp $22B 520M $42
Clubhouse $4B 10M2
$400
Mar
1M
2M
9M
3M
1M
App downloads1
plummeted as valuation quadrupled
Clubhouse as an overvalued and less favorable target

12. THE PROBLEM
Content-intensity conflicts with lean operation, self-sustainability needed
Clubhouse Expected
Active
users2
Employee
numbers1
40 200 1000 5000
40
200
1000
5000
(153, 160)
(298, 500)
(1353, 1213)
(330, 5500)
(1074, 5275)
(1200, 2500)
(2000, ~750)
(10, 9)
Instant
messaging
Social networks
with strong
content features
T1-KOL
T2-KOL
Follower
Occasional
appearance
Regular
appearance
T1-KOL
T2-KOL
Follower
Grow
through
Clubhouse
&
with
Clubhouse
Content as tactic & networking as strategy
Users & Clubhouse thrive via people discovery
Content complexity brings with
disproportional operational efforts
Source:, Statista, Owler
Note: 1
as of Dec 2020, 2
in million, as of Jan 2021 (Mar 2021 for Clubhouse); weekly for Clubhouse, monthly for others

13. THE PROBLEM
Potential monetization models for the two-sided market of Clubhouse
Clubhouse Expected
1. User data monetization free model
Data
I listen to whom I follow for free
I convert targeted
ads into sales
Quality content
Matched people
I pay for more targeted
users/followers
Follower
Business1 Influencer
Subsidize
Monetize
TO-BE
2. Ads-free subscription model
Data
I support who I follow and listen to
Quality content
Matched people
I intermediate & focus
on improving product
Follower
Influencer
Rewards to content
creators based on
percentage of
listener’s attention
Note: 1
Sponsored external links, rooms & influencers
I exchange content for
attention & reputation
I exchange content for
attention & reputation

14. Yuanzhe Fu
mail@yuanzhe.vc