Clubhouse as a business tool

Ana Mendonça Morais – Marketing & Communication Strategist – Is it worth it or not? We can safely assume everyone has heard of Clubhouse by now, right? This app, which is essentially an emerging social network, is built around chat rooms covering all sorts of topics. It grew exponentially for several months and now it seems to be heading into decline. Or is it just slowing down strategically? Whatever the answer, Clubhouse can be a good growth opportunity for businesses. To make that happen, you just need to understand exactly what it is, how it works and what the app's threats and advantages are. Then, yes, you'll know how to use it to drive your own business growth.

Ana Mendonça Morais – Marketing & Communication Strategist – Is it worth it or not? We can safely assume everyone has heard of Clubhouse by now, right? This app, which is essentially an emerging social network, is built around chat rooms covering all sorts of topics. It grew exponentially for several months and now it seems to be heading into decline. Or is it just slowing down strategically? Whatever the answer, Clubhouse can be a good growth opportunity for businesses. To make that happen, you just need to understand exactly what it is, how it works and what the app's threats and advantages are. Then, yes, you'll know how to use it to drive your own business growth. What Clubhouse is

Clubhouse is an app that uses audio exclusively as its form of communication.

There are no messages, no videos, nothing – just voice. Every user has a profile, and that profile's description is the only place where text communication exists. Apart from the room titles themselves, of course.

Essentially, the concept behind Clubhouse is the creation of virtual chat rooms. But, again, the only way to communicate is through audio. You could think of it as a cross between a forum and a podcast (another trend we've already covered here). How Clubhouse works

The app itself is fairly simple to use. One of the sign-up steps is picking your interests across various areas, such as marketing, photography, design, travel, parenting, sport, health, religion, psychology, cities, languages… in short, there are dozens of interests to choose from. Based on that, the app then suggests rooms to follow and people to follow.

Anyone can create a room, which can be open or closed, and may or may not have fixed days and times. Users can simply join rooms and listen in, or even ask to take part and share their opinion, position or business perspective.

The most interesting thing about the app is that there are millions of people using it, and you can be in constant contact (even if indirectly) with people you would otherwise never reach. In fact, one of the app's early champions was Elon Musk, founder of Tesla and Neuralink. Who wouldn't want to listen to Elon Musk in an informal conversation about technology, for instance? So on Clubhouse there are no classes and no elitism. Or are there? Attractive exclusivity

Although Clubhouse's founders say they're working to make the app accessible to everyone, the truth is there are limitations. A year after it was created, during which it was only available on iOS, it finally opened its doors to Android users. That version launched in the US only, though users in other countries can pre-register and be notified when it launches.

Even so, sign-up is still restricted to people with an invitation from a Clubhouse contact. If that doesn't show exclusivity and a certain elitism, I don't know what does.

I think we're all drawn to whatever is rare or hard to get. After all, the grass is always greener on the other side. And if you put Elon Musk within reach of a free app, but make access to that app not quite so easy… the desire grows. Which means that, at the first opportunity, we'll all take up that invitation to join the internet's most exclusive popular club. The absurd growth

The Clubhouse app was founded in April 2020 by two American entrepreneurs, Paul Davison and Rohan Seth.

Still in 2020, it was valued at 100 million dollars. In 2021 it got a rather friendlier valuation thanks to a large funding round. At the end of January 2021, Clubhouse was valued at 1 billion dollars! That made it a unicorn. And just so there's no doubt: a unicorn is a startup valued at more than 1 billion dollars (market price).

In terms of users, in May 2020 Clubhouse had around 1,500 users. At the end of February 2021, CEO Paul Davison revealed a new figure: 10 million users.

So Clubhouse is a one-year-old app that has already reached a huge market value and a user base equivalent to the population of Portugal.

Clubhouse's dizzying decline

According to Business Insider, in February 2021 there were around 9.6 million downloads of the Clubhouse app. In March that number dropped to 2.7 million. In April it didn't even reach 1 million. That's a 66% fall in the app's monthly downloads. After explosive growth, it seems the fall has arrived. Did Icarus fly too close to the sun, with his wings now starting to melt?

Analogies aside, two months clearly aren't enough to predict the future. In fact, nothing predicts anything, we can only assume. But saying with any certainty that Clubhouse is in freefall could be misleading. It's seeing a significant drop, no doubt about it – but nothing says it can't bounce back.

If Clubhouse drops the invitation requirement for signing up, it could see significant new growth in downloads and active users. On the other hand, it could lose some of the mystique that makes it appealing and, after a new spike in downloads driven by curiosity, it could face another drop. Clubhouse as a business tool: is it worth it or not?

Let me get the magic word out of the way: it depends. Yes, same old broken record, I know. It's just that nothing in Digital Marketing is an absolute truth. It's all a matter of testing, experimenting and adapting. What works for some businesses may not work for others. For example, Clubhouse can be an incredible tool for anyone working in personal branding and a waste of time for someone running a corner shop. You always need to assess it case by case and weigh up the pros and cons.

So let's get to a practical, concise look at the advantages and disadvantages of Clubhouse as a business tool!

Advantages

• It's an app in development and, although it's a year old, it's still at a relatively early stage. It can be a good way to position your business as one of the first to be present on the app.
• It encourages sharing and participation. For a brand with plenty to share, whether in a social or a business context, it can be a great tool.
• It can be a good opportunity for positioning and professional growth, especially for anyone working in fields where personal expertise takes centre stage. For a digital marketing consultant, for instance, taking part in rooms on the subject can be a great way to establish yourself as a professional in the field.
• The keywords are knowledge, interactivity and networking. If those are part of your business model, perhaps Clubhouse should be too.

Disadvantages

• It's only available to a limited number of users, since you can only join by invitation.
• It can be hard to find the right rooms, or even harder to take part in the conversations.
• If the idea is to create your own room, getting people to join in and take part can be a challenge at first.
• Since the app works only through “live” voice, you need to make sure the right message gets across in the best possible way.
• It takes time and availability to build a good positioning strategy, along with time spent on the app.
• You can only create personal accounts, not business ones. That means someone has to speak on behalf of the brand, rather than the brand itself doing the communicating.

My experience with Clubhouse

From my own experience with the app, and depending on your areas of interest and the rooms it suggests as a result, you often hear the same old conversation. There are a lot of people frequently saying how amazing what they do is without actually saying anything interesting – especially in marketing.

It's also far too easy to simply waste time on the app. In my case, I found the first few days phenomenal and the ones that followed simply boring and pointless. I got to the point of opening the app several times over the course of a few hours and realising the same room had been having the same conversation for 4 hours. What was being said in the first hour was the same as what was said in the second, the third and the fourth.

Of course, all of this comes down to filtering and finding the right room at the right time. But that takes effort, dedication and availability. So if the advantages seem to outweigh the disadvantages for your business model, go for it. There's nothing like trying it out.

In my case, my enthusiasm for Clubhouse mirrored the drop in downloads from February to March and April. Until I stopped using it, because I realised it wasn't really worth it after all. Ultimately, the time I'd have to invest in Clubhouse to use it as a potential growth tool could be invested in something far more relevant to me.

But for you, it could be a diamond in the rough.

Treat the app as an option, not an obligation. See whether it fits your business model and test it out little by little. Given time, it might fit nicely into your routine. Or it might be an app you delete in a few weeks.