Clubhouse: Innovation Diffusion & Product Adoption Analysis
How Clubhouse launched an audio-centric social networking app with 10 million users, 10 months after launch
This paper was originally completed on Feb 28, 2021, for my graduate studies in design management at SCAD and has been repurposed for public consumption.
Introduction
How do certain technology innovations achieve rapid, wide-spread adoption to millions of people?
In the winter of 2020â2021, millions of people encountered a new audio chat social networking app called Clubhouse, an iOS app where content is ephemeral and allows users to host or join rooms with several to many other users.
It is estimated that Clubhouse acquired 10 million users in 10 months of its existence (Balaji, 2021). For comparison, it roughly took Facebook 28 months and Twitter 26 months (Sawer, 2011).
Clubhouse as of writing this paper is still in public beta and registration is closed off to the public. Users can only join and access the app if they have an invite from an existing user, which is provisioned by Clubhouse in various increments (ie: I received 5 invites upon joining Clubhouse in February 2021).
Given Clubhouseâs rapid rate of adoption, it draws a comparison with other major social media apps that experienced exponential early growth.
How did Clubhouse achieve widespread product adoption in such a short amount of time?
Approach
From an innovation diffusion perspective, this paper aims to provide a research-informed analysis of Clubhouse in the context of its existence amongst other innovations. This includes any attempt to better understand what innovations Clubhouse seeks to supersede and outcompete as it matures from niche to mass-consumer technology used by different adopter groups (user segments).
This paper will be grounded in theories derived from academic innovation diffusion researcher Everett M. Rogers, secondary research sources available in institutional media, social media, personal references from working in the technology industry in San Francisco. I aim to utilize innovation diffusion theories, market data, and anecdotes to help provide a foundational understanding of Clubhouse as a successful innovation diffusion case study.
Qualifying Clubhouse as an innovation
It is useful to first define what an innovation is and whether Clubhouse satisfies such criteria.
Using Everett Rogerâs 2013 definition, âan innovation is an idea, practice, or object that is perceived as new by an individual or other unit of adoptionâ.
An important distinction in this definition is further elaborated by Rogers discerning that innovation does not need to be objectively new as measured by its lapse of time since its first use or discovery, but simply by the perception of newness.
If an idea seems new to an individual, it is an innovation.
Clubhouse satisfies this definition in being an innovation. Consumers and media at large are perceiving Clubhouse as a new entity in their mental model of social networking and content apps.
About Clubhouse
Clubhouse is an invitation-only audio social networking app available on iOS. It was launched in April 2020 by Paul Davison and Rohan Seth. Key features of Clubhouse include: live audio chat, synchronous participation, ephemeral content, social profiles, and networking.
While many of these features are available in other social networking and content apps, Clubhouse has assembled, redesigned, and recontextualized it in a way that leads to its innovative nature by prioritizing live audio, ephemeral content, and peer-to-peer interactivity.
Antecedents
To help readers understand the continuum of innovation surrounding Clubhouse, it is important to outline Clubhouse in the context of its predecessors and comparable technological innovations.
Clubhouse is like a live radio talk show where hosts bring together other hosts and guests, with podcast-like subjects where the content is only available on-air at the moment of streaming.
Unlike podcasts, Clubhouse does not allow users to listen to previously streamed content, download it, nor do hosts need to go through an institutional approval process (ie: Apple).
Unlike radio, users donât need cumbersome equipment, just an iPhone. They can launch a room, participate in any room, and can actively see other users who are active in the room. This includes interactive elements like raising your hand to speak similar to Zoom video conferencing and supporting content elements like a userâs photo and profile.
Unlike social media, Clubhouse delivers content via an audio-centric experience. It is best understood as if youâre âdialing intoâ a group conversation happening over a phone call. There are no images to post and curate, and no written text posts to frame your message. Your primary user experience is through the voice of others. Content is also ephemeral, existing only for the time it is life. A comparable example is Snapchat or Instagram Stories where the content disappears after a time duration or upon viewing.
Unlike talk shows, Clubhouse provides a digitized format where listeners can see precisely who the other people are in the room, and also view their profile information. This profiles users with heightened visibility into who is in the room and are able to follow them.
Many of the available features on Clubhouse exist elsewhere, but they have not been assembled in a format Clubhouse has designed and recontextualized today. This is the heterogeneous engineering: the configuration of pieces of diverse technology.
Clubhouse builds upon existing user mental models of social media apps, such as social profile, community curation, and following others. Clubhouse distinguishes itself from other social media apps through the novel reassembly of key features. Clubhouse reinvented and recontextualized how users create and consume content in an audio-first medium that is interactive, synchronous, and in the moment.
Hype, exclusivity, and peer-to-peer social influencing
Comparable to an exclusive nightclub, Clubhouse deploys an invite-only model to generate exclusivity and artificially constrain the supply of invites.
Using a popular culture reference from Two and a Half Men, you can see in the video above how despite wanting to get into the club (and attempting to bribing the bouncer, which can be personified by the invite-only model), demonstrates that you can only get into the âexclusiveâ club if you are on the invite list. Clubhouse, like a nightclub, deploys this very same strategy, except it decentralizes the gatekeeping role of a single individual in a physical club, to its millions of early users in a digital club.
Charlie and Alan were only able to get in upon the invitation of the two ladies they were on a date with. Like Clubhouse, you can only join the app if you are invited by an existing member, which was most likely invited by other early adopters of the app.
By constraining supply, Clubhouse creates a higher degree of anticipation and observability of social proof and influence despite being a digital medium. This phenomenon constructs a quasi-social hierarchy in which users who are on Clubhouse have higher social influence from an access perspective to Clubhouse than to those who do not. This strategy works well in the earliest stages of access where demand greatly outweighs supply. Over time, the invite-only model will generate diminishing returns on-demand generation. With millions of new users joining the platform, this fundamentally alters the economics of the app. With more users, access is broadened and exclusivity is reduced. Clubhouse may transition into a mass-market consumer app similar to Instagram and Snapchat if its high rates of adoption and user engagement are sustained.
Whether Clubhouse will grow to become a new medium comparable to radio, podcast, or social media is uncertain, we can observe that Clubhouse has built upon existing infrastructure and antecedent that increases the familiarity and lower adoption demands on users.
Network effects
Understanding network effects are crucial to understanding the value of social networks Facebook and Clubhouse.
Two of these network laws include Reedâs law, which is the assertion of David P. Reed that the utility of large networks, particularly social networks, can scale exponentially with the size of the network. Metcalfeâs law is the assertion of Bob Metcalf, which characterizes many of the network effects made possible by modern communication technologies like the internet and social networks. Below, I will outline examples to help make this more tangible.
To put this into context, we will use three physical and digital examples.
The above examples demonstrate the impact of network effects that are amplified in internet-based products (Facebook, WeChat, Pokemon Go) where product adoption is not hindered by massive infrastructure requirements in analog examples. In software-based contexts like social media sites and consumer apps, technologies can be deployed and adopted rapidly and adopted by users.
This is further illustrated by the chart above that showcases the rapid adoption of modern era inventions that require fewer infrastructure requirements. Visually, we can identify that modern technologies tend to exhibit steeper adoption curves due to reduced barriers to entry and infrastructure requirements.
Rate of adoption
The rate of adoption is defined as the relative speed with which an innovation is adopted by members of a social system (Rogers, 2013).
Getting a new idea adopted, even when it has obvious advantages, is difficult. Many innovations require a lengthy period of many years from the time when they become available to the time when they are widely adopted. Therefore, a common problem for many individuals and organizations is how to speed up the rate of adoption of an innovation.
â Everett Rogers
The rate of adoption is measured as the number of individuals who adopt new innovation in a specific period, such as a year; it is a numerical indicator of the steepness of the adoption curve of innovation.
To calculate the rate of adoption, this paper will use this formula: new users / total users x 100. This doesnât account for churn.
In the above chart, we can identify the rate of adoption based on a given time period. In this example, I have used month over month comparisons over the last three months where Clubhouse saw significant user growth. From the vantage point of rate of adoption, Clubhouse has a steep adoption curve that is comparable to the major social media networks.
To better understand why Clubhouse saw such rapid adoption, we will utilize Everett Rogerâs diffusion of innovation theory, which identifies variables that determine the rate of adoption (Rogers, 2003).
The below five outlined attributes have been most extensively investigated and have been found to explain about half of the variance in innovations rate of adoptions (Rogers, p.22, 2003). While this does not explain the entire story behind Clubhouseâs rate of adoption, it yields visibility into key attributes through a theoretically grounded framework used to study the rate of adoption.
For the scope of this paper, I will utilize Perceived Attributes of Innovation to frame my analysis.
Perceived attributions of innovation:
Relative advantage
Relative advantage: is the degree to which an innovation is perceived as being better than the idea it supersedes.
Rating: Medium relative advantage.
Economic: Clubhouse provides users with unique access to opinion leaders, influencers, and creators who choose to use Clubhouse as their platform of choice to exchange information and ideas. This can range from business to entertainment. The app is free to download and join, as most users already have an existing iOS device that can download Clubhouse, the cost of joining is low. The primary barrier is the invite model, and that users have an iOS device, as Android is not supported. This advantage is consistently under competition from established channels that offer information that users are looking for. Clubhouseâs ability to engage users rests on the ability to motivate hosts to be engaged in creating content and generating interest from users and non-users. As such, the advantage here has high-risk factors and reduces the rating.
Social: A key motivator for many individuals to adopt an innovation is the desire to gain social status (Roger, p.230, 2013). Status seeking is an observed primary trait for imitating the innovation behaviors of others, such as new clothing fashions. Prestige in its own right can be the sole benefit for early adopters of apps like Clubhouse. Clubhouseâs utilization of an invite-only model with limited supply and increasing demand, coupled with the above economic advantage, created an environment of hype surrounding the app. Clubhouse users âflauntâ their invites and have even monetized them by selling them on platforms like eBay and Etsy for $20 â $125 (McGarigle, 2021). In social media, being able to claim your desired username is a status symbol, such as namesake usernames (ie: @gordon, @gordonching), and having consistent usernames across platforms to enhance branding, marketing, and searchability of user profile.
Compatability
Compatibility is the degree to which an innovation is perceived as consistent with the existing values, past experiences, and needs of potential adopters.
Rating: High compatibility
Existing values and mental models: Clubhouse utilizes builds upon existing values and mental models of existing social media and mobile phone users. Social media platforms globally are now used by 1 in 3 people (Ortiz-Ospina, 2019) and 55% of Americans have listened to a podcast in 2020 (Watson, 2020). Clubhouseâs primary audio chat and social networking functionality mirrors familiar interaction and design patterns of comparable apps like Facebook, Instagram, Snapchat, etc.
Existing infrastructure: Clubhouse is downloaded via Appleâs App Store, which enables frictionless adoption for existing iOS users who seek out Clubhouse. The existing infrastructure and user demands that are necessary to use Clubhouse already exist.
Complexity
Complexity is the degree to which an innovation is perceived as relatively difficult to understand and use.
Rating: Low Complexity.
Proficient early users: Given a limited invite-model, Clubhouseâs earliest adopters are users who were personally invited and are connected at a 1st degree level to the founders, team, and investors of Clubhouse. Through this carefully constructed approach, perceived complexity for earliest users are minimal, if any.
Low perceived complexity: Clubhouse utilizes design patterns that are familiar to active users of other social media apps. As a result, the learning curve is minimal to navigate and use the app. Coupled with early adopter profiles who exhibit higher-tech proficiency, the learning curve is low.
Trialability
Trialability is the degree to which an innovation may be experimented with on a limited basis.
Rating: Low Trialability.
Near zero acquisition cost: Clubhouse is bolstered by the near-zero acquisition cost for users, and the no-cost basis for using the app. For early adopters who have zero to low precedent available for usage, being able to test-run and try out the app to their liking is important.
No monetary cost basis for usage: Given the no-cost basis for hosting a room, or inviting others, early adopters are able to test out the functionality of the app and evaluate. In addition, early adopters of Clubhouse are also enrolled as beta testers, who have the direct opportunity to influence product development and provide feedback, and influence the app in the desired direction.
Invite-only model: The barriers to entry for users who wish to try Clubhouse out are high. People considering Clubhouse are disadvantaged from being able to try out the platform, which hurts its trialability score. If Clubhouse was to remove the invite-only barrier, its trialability score will increase, but this may come at the detriment of social buzz to help sustain P2P-generated demand.
Observability
Observability is the degree to which the results of an innovation are visible to others.
Rating: Medium observability.
Word of mouth and self-promotion: People who are interested to observe content on Clubhouse are unable to unless they are registered users, which hurts its observability score. But, it is important to note that many early adopters are keen on building their social following on the app, and thus, have become self-appointed promoters of Clubhouse to generate interest and attention. As a result, I have observed a flood of social posts on popular networks like LinkedIn, Twitter, and Instagram to drive Clubhouse engagement. From an observability perspective, non-users are exposed to Clubhouse through familiar social networks. Despite not being able to view the live content directly, they are able to glance at the content subject through screenshots and URLs that Clubhouse users post about on their social networks. Though, it is important to caveat that my ability to observe these posts is a result of my own personal networks, which exhibit high early adopter characteristics (ie: digital natives, workers in technology/design).
Black celebrities/creators, Silicon Valley venture capitalists, and influencer marketing: 7 out of 10 of the most-followed people on Clubhouse are black (Hogan, 2021), each with a minimum of 1 million followers. This group includes Marc Andreessen and Ben Horowitz (an early investor in Clubhouse), Tiffany Haddish (actress), and Van Jones (TV personality). Clubhouse leveraged their early investors and adopters, including key influencers from Silicon Valley, and black influencers in entertainment, which culminated in the Lion King musical that was hosted live on Clubhouse that amassed 5,000 listeners, and helped introduce Clubhouse to users beyond the tech community (McGaughey, 2020). The clubhouse has also hosted icons in technology, such as Elon Musk and Mark Zuckerberg who brought heightened attention to millions of their followers.
Press/Media: Clubhouse has also been covered by major news publications including New York Times, Washington Post, Vogue, TechCrunch, Forbes, and more. Clubhouse has also caught political headwinds, including their recent ban in China due to the open forum nature of Clubhouse chat rooms, which were not initially monitored by the governmentâs firewall (Chien, Qin, 2021).
Attributes of innovation summary
While the scope of this paper will not cover the remainder variables of the evaluation framework, it is important to note how these variables work in tandem with one another to produce a compelling value proposition for users to adopt the innovation.
Contrary to recent coverage that Clubhouse was popular because of Elon Musk and Mark Zuckerberg's appearance on the platform, there is evidence available to suggest that many of these viral network effects began ahead of their appearance. In the chart above, we see how the invite-only model, coupled with Clubhouseâs network resources (investors, creators, users, etc.) helped drive the increase in the rate of adoption across November 2020 to February 2021 (Balaji, 2021).
In closing
Clubhouse from a rate of adoption and innovation diffusion perspective provides a unique case study to analyze an emergent innovation that has achieved exponential growth in a short span of time.
Its invite-only model combined with novel assembly, heterogeneous engineering, and recontextualization of audio chat content and social media features have enabled it to distinguish itself from competitors. Clubhouse has created a product by design that leverages embedded network effects, hype, and organic word-of-mouth growth through its users, which in turn, lowers its user acquisition costs, accelerates the rate of adoption, while amplifying and building its social proof and credibility amongst later stage consumers.
From my perspective as a designer and innovation researcher, Clubhouse strategies align the theories behind innovation diffusion by maximizing variables that contribute to the rate of adoption (relative advantage, compatibility, observability), while minimizing variables (complexity) that drag on the rate of adoption. Despite low trialability, Clubhouseâs deployment of exclusivity to generate broad word-of-mouth marketing outweighs the loss of trialability factors. With key institutional, industry, and market forces working in favor of Clubhouse, the app possesses key innovation variables that contribute positively to their rate of adoption. As such, Clubhouse is a formidable new player in the market which should be monitored and analyzed as a competitor to established players in the audio content, social networking, and influencer monetization space.
In my personal opinion, I am uncertain whether Clubhouse will displace existing social media networks or traditional content applications (ie: Podcasts) in the way Facebook did to Myspace. The question of whether Clubhouse can sustain this growth, and sustain the attention and longevity of users is of interest to me. Closer to the end of 2021, I would be keen to follow up on this paper to review my analysis and see how Clubhouse has matured since then.
My prediction is that Clubhouse is more likely to carve out an entirely new niche in a category of its own, rather than displace existing platforms at large. Established platforms will be keenly observing Clubhouseâs growth and finding offensive and defensive plays to absorb consumer interest in ephemeral audio content, similar to how Instagram readapted Snapchatâs key feature into Instagram Stories. One of the uphill challenges for a niche app like Clubhouse is to determine how it crosses the chasm from early adopters to mainstream users, and transition from a hyped-up product to something more reliable and trustworthy.
Looking forward
Apr 3 Update
Itâs been a month since I wrote this paper and weâve already begun to see decelerating rates of adoption for Clubhouse. A 73% decline underscores my earlier point on whether Clubhouse will be able to sustain a rapid rate of adoption, and also retain users and engage them.
I also opened my email to see this in my Techcrunch newsletter:
Twitter has long been publicly testing its Clubhouse competitor â Twitter Spaces â but who else is looking at this space? Turns out, pretty much everyone. Facebook, LinkedIn, Discord, Spotify and Slack all have initiative in the works. Itâs a lesson that the tech industry et large seems to have learned from Instagram and Snap, itâs not the idea that matters, itâs the execution. Furthermore, itâs not who was first, itâs who kept the growth going.
As we have seen with Snapchat and Instagram Stories, ideas are not the end game. Being first matters less as to who can not only win but sustain marketshare. In technology, an industry where popular feature adaptation is common practice to defend existing platforms against emergent trends, itâs all about the execution of the idea.
References
Balaji, V. (2021, February 27). Charting the Growth of Clubhouse Audio App. Retrieved from https://bvajresh.medium.com/charting-the-growth-of-clubhouse-audio-app-9672aaa82f80
Chien, A. C., & Qin, A. (2021, February 08). In China, an App Offered Space for Debate. Then the Censors Came. Retrieved March 1, 2021, from https://www.nytimes.com/2021/02/08/world/asia/china-clubhouse-blocked.html
Dediu, H. (n.d.). Technology adoption in US households. Retrieved February 28, 2021, from https://ourworldindata.org/grapher/technology-adoption-by-households-in-the-united-states
Desjardins, J. (2019, March 10). The Rising Speed of Technological Adoption. Retrieved February 28, 2021, from https://www.visualcapitalist.com/rising-speed-technological-adoption/
Griffith, E., & Lorenz, T. (2021, February 15). Clubhouse, a Tiny Audio Chat App, Breaks Through. Retrieved February 28, 2021, from https://www.nytimes.com/2021/02/15/business/clubhouse.html
Hogan, B. (2021, February 20). Clubhouse Statistics. Retrieved March 1, 2021, from https://www.softwarepundit.com/social-media/clubhouse-statistics
McGarrigle, L. (2021, February 10). Clubhouse Invites Are the Hottest Thing to Resell. Retrieved March 1, 2021, from https://www.highsnobiety.com/p/clubhouse-invites-sell/
McGaughey, A. (2020, December 27). 5,000 Listen To âThe Lion Kingâ Clubhouse Live Production. Retrieved March 1, 2021, from https://www.blackfilm.com/read/2020/12/5000-listen-to-the-lion-king-clubhouse-live-production/
Ortiz-Ospina, E. (2019, September 19). The rise of social media. Retrieved February 28, 2021, from https://ourworldindata.org/rise-of-social-media
Rogers, E. M. (2003). Diffusion of innovations: 5th ed. New York: Free Press.
Sawers, P. (2011, July 22). Google reached 10m users in 16 days. Want to know how long it took Facebook and Twitter? Retrieved March 1, 2021, from https://thenextweb.com/google/2011/07/22/google-reached-10m-users-in-16-days-want-to-know-how-long-it-took-facebook-and-twitter/
Tankovska, H. (2021, February 24). Clubhouse: Number of weekly active users 2021. Retrieved February 28, 2021, from https://www.statista.com/statistics/1199871/number-of-clubhouse-users/
Watson, A. (2020, June 8). Topic: Podcasting Industry. Retrieved March 1, 2021, from https://www.statista.com/topics/3170/podcasting/
