Can Clubhouse Keep the Conversation Going?

Investment firm Andreessen Horowitz has supplied much of the capital that helped spark the sudden rise of Clubhouse, the audio-based social network that’s become one of the hottest things in Silicon Valley and has drawn in megacelebrities including Oprah and Drake. In a twist on the standard venture capital model, it also provides a good deal of the talent responsible for the content.

Clubhouse is an invite-only app, structured as a series of “rooms,” where speakers lead discussions in front of audiences who can also be called on to participate. Marc Andreessen and Ben Horowitz, the founders of the firm, which is often referred to as A16Z—a play on the letters in its name—host their own show on Clubhouse. They also regularly show up in other rooms, and A16Z’s other partners encourage people from their wide range of contacts to hold court. The entire thing can resemble a smartphone-based version of the conferences and salons that venture capitalists rely on to burnish their thought-leader credentials and build hype for projects. (Bloomberg LP, which owns Bloomberg Businessweek, has invested in Andreessen Horowitz.)

In perhaps the app’s biggest coup to date, Tesla Inc. co-founder Elon Musk appeared in January on Good Time, the Clubhouse show A16Z partner Sriram Krishnan hosts with his wife, Aarthi Ramamurthy, Facebook Inc.’s director of product. The audience quickly ballooned to the 5,000-person capacity Clubhouse has set for rooms, and Musk’s conversation with Robinhood Markets Inc. Chief Executive Officer Vlad Tenev about GameStop Corp.’s stock trading drew national press coverage.

A few days later, Mark Zuckerberg, CEO of Facebook—on whose board Andreessen sits—showed up on Good Time to discuss the company’s work on augmented reality. Bloomberg and others have since reported that Facebook is working on a Clubhouse competitor, and Twitter Inc. is doing the same. It’s a clear sign that Silicon Valley thinks Alpha Exploration Co., the startup responsible for Clubhouse, has hit on something big.

New forms of smartphone-based media consumption that suddenly take off among early adopters don’t always translate well to the wider world. For every Twitter, which first gained prominence as the must-have app of the 2007 South by Southwest conference, there’s a Highlight, a location-based social networking service that was SXSW’s top app in 2012 but was promptly forgotten after everyone went home. That cautionary tale holds special relevance for Clubhouse given that its co-founder and CEO, Paul Davison, created Highlight.

“The things that excite us in Silicon Valley are not the things that excite a kid,” says Sarah Lacy, the founder of news startup Pando Daily, which Marc Andreessen has invested in personally. “That’s why a lot of people in the Valley missed the rise of TikTok.” Lacy, who now runs a network for women called Chairman Mom, says Clubhouse will reach escape velocity, too. “It has just captured something,” she says.

Via a spokeswoman, Davison declined to comment for this article. A representative for A16Z also declined to comment.

A16Z has worked to get people from beyond the industry onto Clubhouse. Actor Jared Leto, Chinese artist Ai Weiwei, and television personality Gayle King have used the app. Clubhouse had 6.8 million active users for the week ended Feb. 20, according to market data firm App Annie. (The company’s own data show significantly more users.)

A16Z is unabashedly enthusiastic about Clubhouse—this January it led a $100 million funding round. In February the firm posted a job listing for a producer focused on creating its content for the app. But it’s also said it plans to build its own media outlet that will provide an optimistic look at tech issues.

Clubhouse could become more vulnerable the longer it relies on a powerful investor for both money and content, especially when that investor has competing ambitions in media. But Horowitz has framed the firm’s investment in media startups, which also include blogging service A Medium Corp. and newsletter company Substack Inc., as complementary. “The ideas you can get across all are very, very different,” he said recently on his own Clubhouse show. The longer, often thoughtful conversation that happens on Clubhouse “is not something that happens on the other social networks, at least for me.”

An increasing proportion of what’s happening on Clubhouse has nothing to do with its famous investors. While Silicon Valley types log on to keep up with Musk and Zuckerberg, most users head to more humdrum discussion rooms such as “The Brain Care Club” or “Living Your Best Life Post Breakup.” At any given moment, thousands of conversations are taking place, most with nary a celebrity in earshot.

That’s a good sign for the app, says Supernode Ventures managing partner and Mediabistro founder Laurel Touby, who isn’t an investor but has been urging her professional contacts to tune in to her Clubhouse appearances. The app can still feel like a niche fixation for tech insiders, and even if it moves to broader audiences, some people may continue to remember it as A16Z’s own little plaything, she says. “Is that so bad?”
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