What do you mean? They're only missing out on 70% of the global mobile market share. Obviously when the capture that market they'll achieve their true value of $12B /s
I actually installed the original Android app off the playstore really early on. I tried it, didn't really get it and uninstalled.
A few weeks later it kinda blew up and I heard it was iOS only. I was pretty sure I had installed the official version, so I downloaded my google data and found it in the JSON.
I installed clubhouse on Android, off the playstore, the official app. Not sure why it's not available any more.
Can't tell it there's sarcasm there or not =) But I guess note was more around execution and new competitors cropping up around them and filling that huge gap and market share.
Investors don't value their money, obviously. They just hope to hand over the hot potato and make a profit. And they don't even run on Android or the web.
Agreed - and it's LP money anyhow, a cut they take regardless of long-term success. If you can boost a brand to enough mind share, even if it costs you billions, then you have these golden eggs - even if they're hollow golden eggs - to show LPs what you're capable of; even though arguably a waste of money, it doesn't bother me if the LPs aren't large funds of the general population, the idea of such waste bothers me when it's people's investments that they're expecting or hoping to retire off of - there is such a delay and disconnect/misalignment between financial incentives though that the finance industrial complex has been able to get away with.
These are pretty vague and generic statements. None of those firms just arrived on the scenes. They all have long track records of delivering real value for their investors. By and large, the big pension funds aren't silly. They understand incentives aren't perfectly aligned. It doesn't mean people can't behave well and manage them.
Is it that hard to believe that they think there is a reasonable chance this ends up a giant, profitable business? Many things (twitter, airbnb are classic examples) looked trivial and stupid to many people (including me) at the outset. Jack Dorsey is a billionaire. So are the AirBnb guys. Chase Coleman is too. Andreessen and Horowitz. Uri Milner. These aren't dumb guys, and they aren't desperate.
He isn't - but Twitter is a $50 bill mkt cap company and Square is $100 bill. The point is, when smart investors invest in something which appears stupid, there is a decent chance it isn't stupid at all, that it just requires a different viewpoint. Or something. Anyone around long enough for the start of twitter and airbnb can tell you how stupid they seemed to a lot of people (myself included). They weren't stupid, we were.
Being a billionaire is more luck than skills. Also, not all people care about money. For example, I'm never been attracted to money, power, and fame, so, am I a loser as I work on nonprofit stuff? It is very simple - yes, Clubhouse got some traction due to the pandemic and people lacking social interactions and given how many Zoom calls end up being audio only, made sense. But Clubhouse is not something that will be attractive after the end of the pandemic. Also, the idea is so simple, and it's not even fully flushed out to be meaningful, and there are better clones already. The inertia helps, true, but do you guys remember the fate of Path.com? Because I do. I think Clubhouse will follow its fate, too.
Nothing wrong with having an opinion on how it will turn out. However I believe it's worth considering the following: people with a track record of creating or seeing a lot of value where others see stupidity are worth taking seriously. It doesn't mean they are right, but it probably means they shouldn't be dismissed out of hand.
this is great. The brand recognition alone is probably worth it. Most people havent even used the app, but know that it exists, that's got to be worth a few $B, right?
The most copyable idea ever. They are truly playing with fire here, and I’m curious how this ends. If they successfully dominate this space then it will be a case of people just ignoring their conquest.
Social networks have winner-takes-all effects and whoever comes first has a big advantage. Not saying it's a guaranteed win, but the advantage has value.
It has. The only people I ever hear talking about Clubhouse on Twitter are influence-mongers and clout-chaser types.
Clubhouse needs celebrities, otherwise it'll be inundated with marketing 'gurus', crypto scammers and 'channel your inner alpha male' types that the Internet is already filled to the brim with.
I actually had to add 'clubhouse' as one of my muted words on Twitter. It still kept popping up, but yes, since April I haven't heard anything about it outside of HN.
a16z and the investor hype crowd are fast realising that Twitter, Facebook, Instagram, Discord, and Telegram etc cloning the entire purpose of Clubhouse.
Without an Android app in sight, they know they are losing so they begin tossing more cash onto an iOS-only private invite-only members app and value it at $4B.
No wonder a16z is aggressively spamming notifications all over the place on there.
They had a pop-culture bump a few months ago, but are down since then.
A $4B valuation with 'speculation / risk built in' means they really think it's worth $20-50B.
FYI to those commenting that Twitter/FB will have the same features, I don't believe that this is the threat, as the specific nature of the experience matters as well as even the brand etc.. The 'risk' for Clubhouse is merely that the experience doesn't scale and is not interesting to most people, which I think will be the case.
The number of this-is-how-I-got-rich-you-can-too rooms is just far too much.
The most important limitation I see is that the ephemeral nature of the content means we can't 'let the good stuff come to the top' meaning - you have to sit and slog through the audio yourself to get to the nuggets. TikTok 'works' because they quickly move the uninteresting stuff to the background. And of course, without serious monetization, the big names who draw crowds will stay away, although that could change.
> A $4B valuation with 'speculation / risk built in' means they really think it's worth $20-50B.
I may be out of the loop, but that's not* how I learned to valuate startups. On the contrary, the VC valuation I learned to calculate was usually a bit higher than expected market value.
Yes, the 'market value' would also include the risk profile. Crudely, if there's a 75% chance something goes bust, then the value is only 25% of what it would be if it was going to be 100% successful.
For growth companies, the likelihood of failure tends to be lower, but this company is in many ways still at 'seed stage' dynamics with no established base, business plan, revenue, still in a closed beta etc. etc. and a high likelihood of failing.
The rationale goes in the opposite direction. If investors led a funding round at a valuation of 4 Bn, that's already how much they think it's worth it and, in most cases, its market value is a bit less.
Yes, obviously 'they think it's worth that' in present terms because that's why they are investing in it at that amount.
They're not going to invest at some number largely different from 'what they believe it's worth'.
But your statement misses my implication that the risk profile is 'out of sync' for this kind of investment, at this stage.
Normally, when companies get into the 'multibillion dollar range' - they have established business operations and they can make crude, ballpark assessments with respect to outcomes. Companies with multi-billion dollar valuation tend not to fail - so the 'valuation' process would be a calculation of 'present value of cash flows' for the giant market the company is in, what the market will bear etc.. It's a giant guess, but an informed one.
Clubhouse is at 'seed stage' in terms of operations - this means, that unlike regular B-round companies with $4B valuations - they're still a total crapshoot. Stripe, when it was at $4B had a growing business. Clubhouse has mostly just a lot of hype, no revenues, no business model, no celebrity backing, and I'm going to imagine not much of a daily-active user base. (Obviously AZ has access to internal metrics and we don't know what those are).
So when you consider Stripe at $4B valuation has a 90% chance of surviving as a business, and Clubhouse at $4B probably a 33% chance of surviving as a business - that says a lot. It effectively means that before the failure risk adjustment, the belief is that Clubhouse would be substantially bigger business.
At these giant valuations AZ is putting in quite a lot of money, they actually cannot afford to take risks that big, there's some weird dynamics going on with this. There's definitely a 'new game' being played with monster valuations that's a crazy poker hand with a lot of chips in the pile.
I understand your viewpoint, I'm just saying that's not how VCs take valuations. It's a 4 bn business, its chance of survival taken into account - which at this point, a16z thinks is pretty high, not <50%. This confidence is probably what rose it from its previous 1 bn valuation.
This is just VCs trying to corner the market on promising startups. If A16Z takes 20%+ ownership in all reasonable startups even at high prices they may still come out ahead when one of those is the next FB. They are blocking smaller VCs out of the market, rather than thinking clubhouse will specifically become profitable.
As a counterpoint, quite often when there's an algorithm that lets the uninteresting stuff fade to the background, the really interesting stuff that's incomprehensible to most people but at the edge of a few interested people's cognitive ability gets caught up in the filter.
I have no firsthand experience of Clubhouse, but what I understand is that it's a 'follower' model, in which you have to decide how willing you are to miss out on what Celebrity X has to say. That would make for a pretty good approimation of a bayesian algorithm in which everyone decides for themselves how important everyone else's opinion is, which could actually work better than a lot of the competing algos.
1 year old app is worth $4 billion.. is it really going to live up to its hype in the long run? They don’t even have a monetization strategy right now other than sending money to creators for free.. I must be one of those grandpas these kids talk about.
a16z had such a big win with Coinbase that maybe they can afford to take a flyer on Clubhouse? Doesn't make sense to me, but I'm sure the partners at a16z are much smarter and more tuned in than I am.
Imagine if this money was put towards something useful, like basic research or the arts, instead of finding ever more ways to jam advertisements into as many sensory organs as possible as often as possible.
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[ 2.7 ms ] story [ 99.9 ms ] threadA few weeks later it kinda blew up and I heard it was iOS only. I was pretty sure I had installed the official version, so I downloaded my google data and found it in the JSON.
I installed clubhouse on Android, off the playstore, the official app. Not sure why it's not available any more.
Those same people: OMG Social Audio is where it's at!
Not unlike Slack.
Every single investor is going to be writing this off in 2 years when every other social network copies them more successfully and faster.
Clubhouse needs celebrities, otherwise it'll be inundated with marketing 'gurus', crypto scammers and 'channel your inner alpha male' types that the Internet is already filled to the brim with.
Without an Android app in sight, they know they are losing so they begin tossing more cash onto an iOS-only private invite-only members app and value it at $4B.
No wonder a16z is aggressively spamming notifications all over the place on there.
They had a pop-culture bump a few months ago, but are down since then.
A $4B valuation with 'speculation / risk built in' means they really think it's worth $20-50B.
FYI to those commenting that Twitter/FB will have the same features, I don't believe that this is the threat, as the specific nature of the experience matters as well as even the brand etc.. The 'risk' for Clubhouse is merely that the experience doesn't scale and is not interesting to most people, which I think will be the case.
The number of this-is-how-I-got-rich-you-can-too rooms is just far too much.
The most important limitation I see is that the ephemeral nature of the content means we can't 'let the good stuff come to the top' meaning - you have to sit and slog through the audio yourself to get to the nuggets. TikTok 'works' because they quickly move the uninteresting stuff to the background. And of course, without serious monetization, the big names who draw crowds will stay away, although that could change.
This is short term but worth a look [1]
[1] https://trends.google.com/trends/explore?geo=US&q=clubhouse
I may be out of the loop, but that's not* how I learned to valuate startups. On the contrary, the VC valuation I learned to calculate was usually a bit higher than expected market value.
For growth companies, the likelihood of failure tends to be lower, but this company is in many ways still at 'seed stage' dynamics with no established base, business plan, revenue, still in a closed beta etc. etc. and a high likelihood of failing.
They're not going to invest at some number largely different from 'what they believe it's worth'.
But your statement misses my implication that the risk profile is 'out of sync' for this kind of investment, at this stage.
Normally, when companies get into the 'multibillion dollar range' - they have established business operations and they can make crude, ballpark assessments with respect to outcomes. Companies with multi-billion dollar valuation tend not to fail - so the 'valuation' process would be a calculation of 'present value of cash flows' for the giant market the company is in, what the market will bear etc.. It's a giant guess, but an informed one.
Clubhouse is at 'seed stage' in terms of operations - this means, that unlike regular B-round companies with $4B valuations - they're still a total crapshoot. Stripe, when it was at $4B had a growing business. Clubhouse has mostly just a lot of hype, no revenues, no business model, no celebrity backing, and I'm going to imagine not much of a daily-active user base. (Obviously AZ has access to internal metrics and we don't know what those are).
So when you consider Stripe at $4B valuation has a 90% chance of surviving as a business, and Clubhouse at $4B probably a 33% chance of surviving as a business - that says a lot. It effectively means that before the failure risk adjustment, the belief is that Clubhouse would be substantially bigger business.
At these giant valuations AZ is putting in quite a lot of money, they actually cannot afford to take risks that big, there's some weird dynamics going on with this. There's definitely a 'new game' being played with monster valuations that's a crazy poker hand with a lot of chips in the pile.
I have no firsthand experience of Clubhouse, but what I understand is that it's a 'follower' model, in which you have to decide how willing you are to miss out on what Celebrity X has to say. That would make for a pretty good approimation of a bayesian algorithm in which everyone decides for themselves how important everyone else's opinion is, which could actually work better than a lot of the competing algos.