Why Clubhouse early go-to-market strategy couldn’t have been better
As you probably know it, 2021 has seen the launch of the extremely US hyped app Clubhouse in France. After several weeks using it, I think it’s time to take a step back on their go-to-market strategy, which I found truly smart.
Like every social network, the first goal is to get a tremendous number of users onboard (ideally hundreds of thousands or even a million) and get high engagement / use rates (translating into ever-growing daily / monthly active users) before trying to monetize them somehow. The main reason is to achieve network effects. Basically, if you do not have enough users on the platform, it is very likely that the user experience will be pretty tasteless and will not give solid incentives to use the platform on a daily basis. That’s why social platforms usually burn a lot of cash acquiring new users even if those very users are not immediately bringing them money in return.
Clubhouse early go-to-market strategy enables the above, spending literally €0 on paid customer acquisition. In theory, what you will read below is nothing revolutionary from a marketing point of view. Actually, they are just leveraging psychological models we all know about, but I think the execution is close to perfection. And this is exactly what makes a successful start-up; executing fast and well.
Disclaimer: I am not explaining here what Clubhouse is as I am assuming that if you are reading this, you are already aware of it and you are particularly looking to know more.
(1) Expert Endorsement.
(2) Fake FOMO.
(3) Viral Loop.
(4) Product-led Growth.
(5) Timing.
(1) Expert Endorsement.
This is where it all begins. Clubhouse is a Silicon Valley-made start-up so no wonder that major part of the discussions on the app are about tech and entrepreneurship. Initial endorsement came from experts in those fields and this has definitely helped build trust in the platform. Imagine if random guys you do not know were talking about those topics, it probably would not get as hyped as it is today because why would you spend 1 hour of your time listening to people nobody knows? But the thing is that experts in tech and entrepreneurship are regularly speaking on the app. That’s why it contributes to hyping it a lot. For instance, if you could hear talks from Andrew Chen, Peter Thiel, Elon Musk or even Kanye West, you would probably like to join the platform and listen to what they have to say. In France, you could hear talks from people like Jean de la Rochebrochard or Xavier Niel. Yes, they are really talking on Clubhouse and they are not people you get a chance to hear talk live everyday. That’s why everyone originally wants to join Clubhouse.
(2) Fake FOMO.
Then comes the FOMO (fear of missing out) and that’s probably the biggest leverage they are using to drive user acquisition. Personally, I rather see it as “fake” FOMO than “real” FOMO and I’m explaining why (but it does not really matter to most people if it is fake or real as long as there is FOMO).
Exclusivity— For now, joining Clubhouse is based on an invitation-only system. The immediate consequence is that it creates in people’s minds an important FOMO effect and a sense of exclusivity. Indeed, this is what people naturally feel when they hear / read all day long about Clubhouse and the amazing discussions that seem to be booming on the app. From the outside, exclusivity goes with status and elitism. The truth is that I think it is purely fake FOMO. Just think about it for 2 sec; if Clubhouse was such exclusive, would it be 2M weekly active users on the app? No. Actually, it is super easy to get an invitation and get access to the app. Honestly, if you really wanted to, you could find an invite in a day; just DM any people you know (or not) who are on Clubhouse, you will probably get an invitation in the end. I’m saying that because we all know someone who knows someone who knows someone else, etc., and Clubhouse acquisition model is based on that very viral loop (that I will elaborate on in the next point).
iOS-only App — For now, the app is only available on iOS. This is pretty standard when putting an app on the market, but it leads to increasing that FOMO effect again. The truth is that distributing on iOS first is a great way to benefit from a stable and locked down ecosystem (actually, the iOS community is particularly close and connected). Then of course, when Clubhouse will get enough traction, they will undoubtedly release the app on Android. I really do not think it is specifically about including or excluding users based on their phone, but in the end, it naturally boosts FOMO.
Live Talks — Unlike podcasts, all Clubhouse discussions are done live. There is no possible recording, otherwise you could get banned from the platform. Then, it means that if you are not available at a certain time, you are missing out again. It is like “now or never” talks. And when you see the quality of the speakers and the depth of the talks, I promise you do not want to miss out sometimes.
Relevant notifications— The way they send notifications to your phone when a potential interesting discussion is happening is brilliant. Unlike meaningless notifications from other social media apps (e.g. Facebook or Instagram), notifications on Clubhouse definitely creates a sense of urgency and FOMO.
(3) Viral Loop.
Viral Loop— As I told you before, Clubhouse is based on an invitation-only system. What’s interesting is that when you get invited on the platform, you immediately receive an invite to give out. Thus, it helps create a viral loop and consistently acquire new users for free. More to the point, the more actions you take on the app (participating in rooms, speaking in rooms, hosting rooms, etc.), the more invites you get to give out. This is assuredly a smart way to increase engagement on the platform.
Network effects— I was talking about this in the intro; network effects happen when the more people and usage there are on a platform, the better and more valuable the product / service becomes. Basically, understand more active users = more value. Imagine if dating apps had only hundreds of people signed-up. Of course, you might have a small to chance to meet someone but that’s all. The more people you have on dating apps, the better and more interesting is the user experience as you increase your chances to meet someone and minimize the odds of rapidly being told “you’ve seen all the profiles around”. If you go back to our Clubhouse case, how network effects concretely translate? As you generally want to invite relevant people on Clubhouse (because you have a limited number of invites), it brings ever more interesting people on the platform. First, the more users there are on Clubhouse, the more potential interesting talks and speakers there are as anyone can host a room. Second, the more rooms are hosted, the more choices of rooms you have as a listener.
(4) Product-led Growth.
Here is more an analysis from a product angle but I find it interesting. Product-led growth (PLG) defines a user acquisition (but also conversion and retention) which is primarily driven by the product itself. It happens when the product experience is stellar and delivers so much value to people, so that they naturally use your product (e.g. Slack). A stupendous product experience is not about having lots of features; what makes a difference is how much meaningful value the product keeps bringing to the users. In my opinion, Clubhouse is not perfect at all, but it has that combo thing (extremely easy to use + a lot of value delivered) which helps achieve PLG to some extent.
Turnkey Creation Tool — Everyone on Clubhouse can become a creator overnight. Users create content just by clicking on the “+ Start a room” button and talking. Nothing else. You do not need any preparation beforehand or technical set up, just an iPhone. The product experience on Clubhouse is really smooth as there are not any unnecessary features. That’s why people keep hosting, sharing and participating in rooms as it proved to be effortless.
Insightful Talks — The core of the product is about talks and the value you get from these talks is quite impressive. You might think it is a fad but, I have not participated in a room and told myself “Well, that was boring” so far. And this naturally drives engagement and retention on the platform.
Personification — On Clubhouse, you are told to enter your right personal information (i.e. your name and profile picture). One of the main challenge on these kind of social platforms is moderation. “Personifying” people instantly make them responsible for their actions on the platform. When you are attending a room, your real name and profile picture are displayed and shown to the other participants, so of course you do not want to misbehave. The second thing is that people know who you have invited on the app. Indeed, when you invite someone, your name will be displayed on their personal profile as the referrer. The underlying consequence is that if the person you have invited is doing wrong on the platform, you are implicitly associated with him at some point. This very fact helps maintain a standard of well-behaved people on the app and reduce the moderation burden to some extent. It is like acquiring users for free but, on top of that, “quality users”.
(5) Timing.
The last point is obviously about having launched Clubhouse in a suitable context. That’s perfect timing to launch an audio experience and benefit from 3 main tailwinds.
The need for personal interactions — We are pretty much all quarantined or experimenting a curfew all around the world. We have never been as much at home as right now. Thus, there is a strong natural will to reconnect with other people somehow.
The rise of the creator economy — Today, a lot of creators are earning income from making and distributing online content. For instance, think about paid newsletters, live streaming on Twitch or TikTokers. In the long run, one potential business model for Clubhouse could be making people paid to access rooms (even if I do not think it will be the case).
A booming podcast market — Clubhouse direct competitors are instinctively podcasts. Both are on a mission to provide value based on audio and people are already educated to that. Today, you are listening to podcasts while commuting or cooking but tomorrow you might listen to talks on Clubhouse instead.
That’s all for my humble analysis about Clubhouse go-to-market strategy. Honestly, I do not know if Clubhouse benefits from a hype thing or cash in on a long run trend, but I deeply believe it turns to be an effective free acquisition channel you should definitely investigate and quickly jump on while you can. It evens out the odds for everyone and is a blue ocean for creators!
Please feel free to comment and give me feedbacks if you disagree or think pivotal steps in their go-to-market strategy are missing above :)
