Why Clubhouse Failed & Why Meta's Threads Will Not Kill Twitter

First, selling live-audio as a Unique Selling Proposition assumed people's willingness and availability for continuous talk. That is contrary to realities of post-industrial revolution World. People talked for so long during the lockdown because they were locked away in their homes and had all the time. Post lockdown, how many can have time for constant live talk?

First, Clubhouse 

 In the middle of the COVID-19 Worldwide lockdown, a new social app was born. The app promised to change the way-of-social-media by introducing audio features which would take the place of text- common with famous social media platforms. That App was Clubhouse- a live-audio social platform. Backed and hyped by a16z and Marc Andreessen, Clubhouse became the hype of the day. Everyone wanted in on the new app, except, of course, the laggards who come so late to the show. I joined in early on. I attended the famous talk sessions with Mark Zuckerberg and Elon Musk. I also attended many other sessions with a little less famous people. In the middle of the craze for the Clubhouse, I analyzed the app's potential to stick vis-à-vis incumbents and it came to my realization that the new app was missing something quite central to human interactions- text. I disclosed my findings to colleagues who strongly dismissed them. But as it turned out, I was right. Clubhouse is struggling today because of the exact reasons. These were my observations about Clubhouse; First, selling live-audio as a Unique Selling Proposition assumed people's willingness and availability for continuous talk. That is contrary to realities of post-industrial revolution World. People talked for so long during the lockdown because they were locked away in their homes and had all the time. Post lockdown, how many can have time for constant live talk?

 Second, live audio is contrary to the 80/20 rule- the Pareto principle. Those who have read some economics have, possibly, come across a theory developed by Vilfredo Pareto. Pareto's theory provides that for most of the outcomes, 80% of consequences come from 20% of causes. 

This same theory applies to content creation on social media platforms. 80% of the content is produced by 20% of the platforms' users. Even more surprising for content creation on social media, of the 20%, 10% are original content creators while the other 10% are curators of the content created by the first 10%. Andrew Chen explains this concept more broadly in The Cold Start Problem: How to Start and Scale Network Effects. 

For Clubhouse, people had to be present to consume content since it was live and audio. Text solves the need for constant presence to enjoy content. One can read through their Feed at any time in any place and interact with text-based content. 

 The same couldn't be said of Clubhouse which, if something happened in one's absence, they would only hear tales of it. Absence of text reduced Clubhouse's retention (repeated use) significantly as the pandemic receded and people went back to normal ways of life. Third, it was easier for incumbents to snatch away Clubhouse's userbase from the newcomer given that they- incumbents- already had network effects to leverage. This meant that Clubhouse would perform better as a feature than a standalone product. This observation became a reality when Twitter's Spaces took away a huge Clubhouse userbase challenging the newcomer's potential for capturing and retaining its own users. 

 Forth, Clubhouse pretended to be a bridge between the high and low profiles of society, which it, unfortunately, never was. Instead, it was a platform where those on the highest of the social pyramid interacted with their equals or with those in the middle of the pyramid while the rest listened in. If it had succeeded in becoming the bridge, Clubhouse might have enjoyed the benefits of ostentation. It didn't. With those weaknesses, what could have made Clubhouse a sticking alternative to incumbent social media platforms was hard to determine. The hype around Clubhouse was not driven by obsessed product testers- whom Seth Godin calls sneezers in Purple Cow: Transform Your Business by being Remarkable- instead, it was driven by Venture Capitalists. You understand what the difference between what motivates sneezers and what motivates venture capitalists is. The former are motivated by their love for products (for great features and any other thing relevant to the products' use case) while the latter are motivated by returns on investment. The Venture Capital model is unique in that it benefits, not from the product/startup's long-term success but, from the ability to push the product/startup to the next funding stage where early investors cash out leaving new investors to deal with the product/startup's fate thereafter. 

  Now, Threads

As people, in droves, are joining Meta's recently released Twitter copycat- Threads- I am compelled to look back at Clubhouse when, as is Threads today, people were losing their mind scrambling to join the platform. I am reminded that we- humans- are driven by groupthink, even if we tend to shrug this idea off (in the name of rational choices) whenever someone reminds us of our tendency to take the path most travelled. 

 Today, there are many arguments against Twitter which seek to provide an undeniable rationale for why Threads will steal away a good chunk of Twitter's users. Arguments like Twitter's current unreliability, Advertiser's inclination to an advertisement-centric social platform as well as Zuckerberg's experience building social platforms. A friend even argues that the Twitter Vs Threads battle is one of ideology- Left against Right. 

 Somehow, I am tempted to agree that Zuckerberg's experience building social platforms- measured against Elon's building Space Craft and, electric and autonomous vehicles- might work in favor of Zuckerberg. However, I am not blind to the fact that Meta and Twitter exist in two distinct World's, even if in the same Universe. And this distinctiveness is what makes me believe that Meta's Threads will not oust Twitter. Twitter's core reason for unkillability is just plain and simple: Twitter remains the most trusted social platform to date. With Meta's history of violation of user privacy and censorship, Threads will challenge Twitter only to the extent it can prove trustable to maintain a high degree of user freedom and protect user privacy. So far, Threads is integral to Instagram and the decision to leave Threads entails leaving Instagram altogether. This user experience means trapping people who no longer want to use Threads into the product or losing them on both Threads and Instagram. Twitter does not compel anyone to stay by playing underhand. The advertiser-friendly platform argument advances the notion of a social network sustained by ad-revenue. Fortunately for Twitter, Musk seems to be moving into a less-ads-revenue direction. If Elon succeeds at creating new avenues for revenue reducing Twitter's reliance on advertisement, Twitter will be the only place where sanity prevails over ad-content. Zuckerberg is less likely to ditch ad-revenue unless compelled by existential threats. Also, the question of metrics-of-reach on social media. People who already have big follower counts on Twitter will have to start from scratch to build similar following on Threads, a Twitter-with-a-different-name platform. Considering that following is regarded as a distribution enabler, how many users are willing to lose what they already have in pursuit of the similar-new just for the sake of it? Follower counts are also associated with status where status correlates with follower numbers- that is, many followers signal a higher status, and vice versa. It is unlikely that a new Twitter will have people striving to join and stay even without the status enjoyed on old Twitter.

In brief, Threads will have some Twitter users and non-users for itself, but nothing compelling, thus far, indicates that Threads can oust Twitter.