[HN Gopher] Founders' Email to Clubhouse Employees
___________________________________________________________________
Founders' Email to Clubhouse Employees
Author : davidbarker
Score : 108 points
Date : 2023-04-27 18:07 UTC (4 hours ago)
(HTM) web link (blog.clubhouse.com)
(TXT) w3m dump (blog.clubhouse.com)
| nperez wrote:
| Saw this coming. Clubhouse was exciting at first when it was a
| place where you could pop in on random celebrity conversations,
| but now is mostly a place for bad bad business advice, bad
| relationship advice, and clout chasers trying to get rich quick
| 0xB31B1B wrote:
| Glad this isn't corporate mumbo jumbo but a real assessment of
| where they're at. Its impossible to make the changes that
| clubhouse needs to make, and iterate at the speed they need to
| iterate at with a large team, and the founders don't hide the
| ball. I don't use the product, and I don't think its going
| anywhere, but I appreciate the candor from the founding team.
| choppaface wrote:
| Soooo Clubhouse has raised over $100m .
|
| Is it unusually nice that such an early start-up is giving 4
| months, acceleration, and more? Yea! A lot of A- and B-stage
| layoffs have paid far less.
|
| But with so much funding, it's very very hard to see this move as
| anything other than massive C-level incompetence. Good job trying
| to make it look like accountability though.
| conductr wrote:
| Some times you hit the puck so hard the hockey stick cracks.
| Not sure it's fair to call it incompetence but they're being
| decent in the acknowledgment of it.
| rvz wrote:
| There is no reason or justification as to why Clubhouse was
| valued at $4B. A failure pump and dump scheme with a16z left
| holding this heavy bag. Still not making any money and burning
| through cash.
|
| I'd give them at least 5 years [0] to run out of money without
| funding and a maximum of 10 years of existence that they will
| either be shutdown or acquired.
|
| [0] https://news.ycombinator.com/item?id=32229956
| bkm wrote:
| Sad to hear. In an alternate timeline they would have accepted
| the $4B+ Twitter offer and had a nice exit along the way.
|
| https://techcrunch.com/2021/04/07/twitter-said-to-have-held-...
|
| The hard truth is software can't be patented and Twitter could
| copy the concept verbatim without paying them a penny.
| matthewdgreen wrote:
| Hard to believe that Twitter was willing to offer $4B for a
| service they managed to recreate themselves for (presumably) a
| tiny fraction of that cost. Makes you wonder if all the AI
| panic right now is going to end up going the same way.
| gkoberger wrote:
| They weren't buying the technology, they were buying the
| community + creators on the platform.
|
| This has nothing to do with AI at all. Clubhouse was a kinda
| cool social network that came out at exactly the right time
| during COVID. AI is something we've been working towards
| since the 50s, and over the next few years will change
| absolutely everything.
| gowld wrote:
| > Clubhouse was a kinda cool social network that came out
| at exactly the right time during COVID.
|
| Alternatively, is was a COVID-specific fad with a doomed
| user experience / network model that never expanded beyond
| the SV cultural bubble.
| Prbeek wrote:
| Their IOS first app and invite only launch alienated many
| potential users and gave an opening to Twitter to launch
| spaces with a huge audience.
| nikanj wrote:
| The invite-only launch was a selling point. "It's a
| exclusive service, but if you score an invite, you might
| have a casual chat with a bunch of billionaires and SV
| bigwigs."
| segasaturn wrote:
| This may be surprising to people in Palo Alto but 99.9%
| of regular working people have nothing to say to
| billionaires and SV influencers, outside of maybe some
| profanities. There's no way a product with that as the
| premise would have had a future outside of its ivory
| tower niche.
| rchaud wrote:
| No surprise then that it became a hotbed of hustlebros
| and MLM salespeople within months.
| matthewdgreen wrote:
| Twitter already had a large community and set of creators
| while Clubhouse really didn't. Moreover, most of the
| Clubhouse users already had Twitter accounts and just
| switched their audio conversations to Twitter Spaces once
| that product became available.
|
| I think at this point it's obvious that Clubhouse was not
| worth $4B (10% of Twitter's final sale price!), so no point
| in arguing about that. The interesting question is: what
| combination of bad judgement and groupthink made anyone
| think it was in the first place.
| adra wrote:
| In a world of fast and loose cash, people find
| justifications for spending fast and loose. I don't think
| it requires too much more than that. Crypto firms running
| on good will and hype managed to get billions of $ (in
| crypo-bucks) to dump their money, much of which is
| completely gone. You could argue overvalued, but in the
| world of pets.com, this is far from the worst example of
| outsized speculation.
| satvikpendem wrote:
| I saw the $100 million series B for Pinecone and thought
| something similar, since vector databases are becoming more
| easily commodified, with Postgres already getting pgvector
| and pgANN.
| rchaud wrote:
| That's $4b in Twitter stock though. What would that even have
| been worth now, assuming they remained public?
| HWR_14 wrote:
| It would have converted to approximately 3.3 billion USD
| when Elon bought Twitter. However, even if twitter wasn't
| purchased and no one sold while it sunk to $17/share (which
| is about the average of estimates people were making when
| Elon finalized buying it), it still would be over a billion
| dollars as an exit. Do you think Clubhouse is a unicorn
| now?
| stronglikedan wrote:
| More, since Twitter is better, more lean, and more popular
| than ever.
| samwillis wrote:
| It looks like the share price in April 2021 was on the nose
| the same price Elon paid.
|
| So the investors and founders would have converted $4B in
| Twitter stock to cash almost 1:1, that's not bad.
| nprateem wrote:
| Greed
| rvz wrote:
| There was no chance that Twitter (who already had periscope)
| would accept a $4B+ deal to buy Clubhouse.
|
| In fact, it was very predictable as I said here before the
| acquisition talks that Twitter would push on with using Spaces
| instead of buying Clubhouse. [0]
|
| The hard truth was that Clubhouse launched too slowly and even
| Twitter Spaces launched faster than Clubhouse to release their
| Android app. [1]
|
| The invite system, slow release of the Android app caused them
| to lose steam to Twitter and Discord during the social audio
| race of 2021 at the time. [2]
|
| [0] https://news.ycombinator.com/item?id=26044382
|
| [1] https://news.ycombinator.com/item?id=26705535
|
| [2] https://news.ycombinator.com/item?id=26659374
| Prbeek wrote:
| Who launches an IOS first app in 2023? You are telling
| android users that they are not important
| satvikpendem wrote:
| Everyone (who wants to make money from their app)? I own an
| Android and I'd still launch an iOS app first because the
| vast majority of mobile revenue comes from iOS, not
| Android. At the very most I'd use Flutter to launch on both
| platforms at once but I'd still prioritize the iOS side.
| asah wrote:
| counterpoint: you can outsource android i.e. pay a high
| quality dev shop to clone your iOS app and adapt it
| nicely for Android. I've done this several times, to
| great effect.
| mcsniff wrote:
| Additional counterpoint, I launched my app on both
| Android and iOS at the same time, didn't even own an
| iPhone when I released it.
|
| The with tooling available today, there is almost no
| technical reason not to. Most brands/apps can't afford to
| create some fake exclusivity.
| satvikpendem wrote:
| If you use a cross platform framework, sure, but if you
| only have resources for one platform (or where cross
| platform is not suitable for whatever reason), I'd pick
| launching on iOS first any day of the week.
| nikanj wrote:
| They are plenty important, but they're not _rich_. iPhones
| are not the majority of the market by any stretch, but they
| do form a majority of the phones well-off people use.
|
| I know you and your coder friends use Android despite
| having plenty of money, but the general public sees
| Androids as the budget option.
| travem wrote:
| > iPhones are not the majority of the market by any
| stretch
|
| It depends on which market you are looking at. In the US
| market Apple apparently has a 57% share according to
| https://www.statista.com/statistics/620805/smartphone-
| sales-....
| saddd wrote:
| I don't have links to back this up, but I believe the
| following two statements are true in US markets, based on
| my anecdotal industry experiences:
|
| - The majority of mobile apps that only launch on one
| native platform (but are eventually available on both
| Android and iOS) launch on iOS first.
|
| - The majority of mobile apps that are only available on
| one native platform are only available on iOS.
| sosodev wrote:
| The owners would have gotten a nice exit. The employees would
| have probably ended up laid off anyway, right?
|
| edit: actually looking at some posted salaries it seems some
| employees were given quite a lot of equity
| dylan604 wrote:
| Definitely under the new management team
| gkoberger wrote:
| At that time, I don't think so. It was an incredibly small
| team back then, and the CEO of Twitter at the time was Jack.
| It likely would have remained (somewhat) independent, at
| least in the short term, similar to Vine and Instagram. And
| given equity, I assume almost all employees would have become
| millionaires.
| yellowapple wrote:
| > It likely would have remained (somewhat) independent, at
| least in the short term, similar to Vine and Instagram.
|
| And then get shut down a few years later in the medium-
| term, similar to Vine.
| trilobyte wrote:
| That may have been better than what inevitably happens
| anyway.
| nemo44x wrote:
| Never say no to your first billion. It's the hardest billion to
| make.
| xwdv wrote:
| Every time I hear of another founder passing on a multi-billion
| dollar offer, I think back to Tom from MySpace and how he sold
| MySpace off for a lot of money and went on to live happily ever
| after. Smartest guy in the social media game.
| benzible wrote:
| This is a viral "feelgood" story that keeps circulating but
| MySpace was a project within an existing company, eUniverse,
| later InterMix. Tom and Chris DeWolfe were employees of
| InterMix, not founders. Intermix was acquired by News Corp.
| for $580M. Not sure how much equity Tom ended up with. It
| certainly could have been enough to allow for a "normal"
| early retirement but I'm not even sure about that. I had some
| dealings with Brad Greenspan, the CEO of Intermix, after the
| MySpace sale. Presumably he had far more equity than Tom or
| Chris, and let's just say that he did not behave like someone
| who was financially secure.
| nemetroid wrote:
| According to a complaint about the sell price made by
| Greenspan at the time [1], he owned about 10% of Intermix.
| If he's not financially secure, I think that speaks mostly
| about his actions after the sale.
|
| https://web.archive.org/web/20051004080642/http://www.freem
| y...
| xwdv wrote:
| The happiness isn't from the money, it's from all the
| friends he made along the way.
| sixQuarks wrote:
| Mark Cuban did even better with broadcast.com. sold it for
| billions right at the beginning of the dotcom boom, bought a
| basketball team.
|
| there was also a guy who sold a browser to Apple for over
| $100 million.
| boeingUH60 wrote:
| Wait till you hear about Jan Koum, who took over $10 billion
| from selling WhatsApp to Facebook and has become a prominent
| collector of mansions, superyachts, and rare Porsches [3].
|
| 1- https://www.dirt.com/gallery/moguls/tech/jan-koum-house-
| beve...
|
| 2- https://www.superyachtfan.com/yacht/moonrise/owner/
|
| 3- https://www.thedrive.com/news/26322/these-are-
| the-10-drool-w...
| nprateem wrote:
| You can get bored of anything.
| jonny_eh wrote:
| Those are some pricey dopamine hits.
| skinkestek wrote:
| He has to live the rest of his life as someone who sold of
| millions of enthusiastic users to exactly the company we
| paid them not to become.
|
| Well. I guess he is happy with it. What's worse is I guess
| most people would take that deal at some point.
| jonny_eh wrote:
| Clubhouse should make a Twitter clone already, it'd be great
| justice.
| b0sk wrote:
| > The world needs what Clubhouse is building
|
| No
| misssocrates wrote:
| Is there a template these companies are working from?
|
| > If you are among those impacted, you will receive a calendar
| invite to a 1:1 meeting with a manager in your department within
| the next 10 minutes.
|
| Dropbox also today:
|
| > If you've been impacted, you'll be sent a calendar invitation
| within the next 30 minutes for a 1:1 with a leader on your team
| https://blog.dropbox.com/topics/company/a-message-from-drew
| celim307 wrote:
| Layoff ops are pretty standardized so I would be surprised if
| there wasn't a template that has been commonly agreed upon to
| be as neutral in tone as possible
| kernal wrote:
| 4 months severance and they get to keep their laptop. Very
| generous for a small startup.
| manv1 wrote:
| IMO the real problem with Clubhouse was it was for the
| intelligentsia and their hangers-on. That's not a profitable
| market.
|
| Advertising dollars chase the masses, and what the masses want
| is, well, celebrities, the good looking, the attractive, and the
| funny. The public is chasing dopamine hits, and advertisers chase
| the public.
| vxNsr wrote:
| Yea it's not clear how you collect money on the product aside
| from charging a subscription fee. Random ad interludes don't
| work that well in a live setting, and most people aren't
| looking at the app for most of the time they're using to make
| visual ads work.
| mxxx wrote:
| > The world needs what Clubhouse is building
|
| Really?
| DANmode wrote:
| Suppose that's about as well as such a note can be done, with
| exception of not guaranteeing against future layoff(s), only
| alluding to it ("strength").
| Laaas wrote:
| I had completely forgotten Clubhouse even existed. Surprised it's
| not more than 50% laid off.
| vxNsr wrote:
| Yup. I expected this to be a "we're shutting down, thanks for
| all the fish" type message. And it sounds like if not for the
| astronomical raises they did in the good times that's what it
| would be. They've been hemorrhaging users since Dec 2020.
| tedivm wrote:
| I was really expecting this to be an announcement that they
| were closing down.
| stevehawk wrote:
| wouldn't suppose you could tell me what it's for? I see someone
| saying that Twitter recreated it.. but that doesn't mean
| anything to me.. their website is so arrogant as to basically
| only offer a link to download the app.. because I should just..
| "know" what they do?
| [deleted]
| ryanSrich wrote:
| It's essentially a conference call app. You create a room or
| space or whatever and you can participate or listen in on
| audio. Some have called it live podcasting. But it's a
| conference call in the most basic sense. Twitter copied it
| with Spaces, which feels like a more natural fit. The reason
| Clubhouse is so popular, or was so popular is that a16z
| funded it at the peak of zero interest rates. Clubhouse is a
| ZIP and will likely either get acquired or go out of business
| as it seems many have stopped using it.
| singleshot_ wrote:
| What's a zip? (Aside from being a pretty hard thing to
| search for...)
| jazzyjackson wrote:
| zip, zilch, zero, nada, null, ngmi
| ryanSrich wrote:
| Zero Interest rate Phenomena
| minimaxir wrote:
| Clubhouse was a product that had the most perfect launch
| timing in the past decade: a social gathering app right as
| the COVID pandemic started.
|
| That was it.
| UncleOxidant wrote:
| Seems like it was really popular for about 3 months. And
| then it was just annoying.
| nikanj wrote:
| It was very briefly billed to be the FB killer.
| gnicholas wrote:
| We don't know the upper bound on how many were laid off, just
| that it was < 50%.
|
| > _we're scaling back our org by over 50%_
| cloudking wrote:
| It's a shame, the idea is good, just not defensible against copy
| cats.
|
| I think they missed an opportunity to pivot into voice chat for
| websites/apps as a service. I see big value in how Discord does
| ambient voice chat as a feature of a server, and I think that
| could translate well into smaller communities that live outside
| Discord in websites/apps. Provide the service in an easy to use
| slick API/SDK, and handle all the heavy lifting of voice data/p2p
| etc.
| hellomyguys wrote:
| There's already a handful of well known companies providing
| that. It wouldn't surprise me if Clubhouse was built off of one
| of these APIs already.
| cloudking wrote:
| Such as? I haven't found any plug n play solutions, just APIs
| like Twilio.
| paxys wrote:
| Layoffs always suck, but one thing that's encouraging to see is
| that every single tech company is offering a lot of support and
| very generous severance packages to affected employees, wayyy
| beyond what is required by law. In other industries in most
| states the norm is to be escorted out of the building with your
| last paycheck, that's it.
| bratao wrote:
| It's good to see tech companies offering generous support to
| laid-off employees, but veterans of past downturns warn that
| this generosity may only last during the initial wave of
| layoffs.
| say_it_as_it_is wrote:
| > Laptops. We will allow everyone who is impacted to keep their
| company-issued laptops, to help them research and apply for new
| roles.
|
| Is this common?
| dangerwill wrote:
| If their employees all have macbooks that can be wiped remotely
| then yeah that isn't uncommon at this stage. My company allowed
| laid off folks to keep their laptops after the wipe. Probably
| just avoids a logistical headache getting the machines back
| from remote employees.
| CharlieDigital wrote:
| Big time logistical headache. Not only the cost of shipping
| itself, but then also reimbursing all of the employees for
| that expense. Then receiving hundreds of units and then
| having to check them. What are you going to do with these
| machines? Now spend time to sell them? Store them? By the
| time you're ramping up hiring, the machines are outdated.
| Then you need to pay IT to clean them up and refurbish them.
| And your new employees don't get the dopamine hit from
| opening a new MacBook and latest hardware.
| codemac wrote:
| Back in the day, NetApp did something similar. It's sad it's
| not more common, it really helps folks apply for jobs if they
| don't have a pile of laptops at home.
|
| Though, as the price of computers have come down, it's less
| common for folks to not have a computer at home - it's still a
| wonderful gesture that's very low cost.
| bastawhiz wrote:
| No. Most companies don't want you keeping a machine filled with
| proprietary information and credentials, even if your access
| gets rolled after you're terminated. But if the company is
| about to hard pivot and they're laying off half of the people
| who know proprietary information, I suppose it doesn't make
| much sense to care much.
| paxys wrote:
| I think every company acknowledges that there's next to zero
| value in the hardware itself. Large companies have policies to
| collect them due to data/IP protection policies. Smaller ones
| probably don't care as much.
| nkotov wrote:
| I liked the way this was written. No BS, just straight up, "We
| need to reset". It's refreshing to hear.
|
| I stopped using Clubhouse after being an early user for a couple
| of months. Some conversations were good, but most weren't quality
| conversations and over time I stopped paying attention to the
| app. I think the final blow was Twitter spaces which I don't pay
| attention to either.
| reducesuffering wrote:
| Anyone still unconvinced a16z is just throwing darts at the wall?
| danpalmer wrote:
| That's kinda the point of VC maths though. If you throw 100
| darts and get 1 hit that grows by 1000x, you're up 10x which is
| a nice return.
|
| I agree that a16z has a lot of hubris, and their more recent
| investments seem to be going off the rails a bit (entirely
| personal opinion), but I don't think they would argue at all
| over the idea that most of their investments _won't work_.
| bastawhiz wrote:
| The point is to be good at throwing darts and knowing what to
| throw darts at. One in 100 random companies doesn't become a
| unicorn. The whole point of being good at investing is to be
| able to create a positive feedback loop that allows you to
| both continue throwing darts (well) and pay yourself
| handsomely. Not to spray darts at fads and hoping you're
| barking up the right tree.
| JumpCrisscross wrote:
| > _If you throw 100 darts and get 1 hit that grows by 1000x,
| you 're up 10x which is a nice return_
|
| This math breaks down when you're unilaterally pushing up
| valuations and writing massive cheques. That your
| concentration _and_ downside. It's why Andreessen lags its
| peers on returns. If you're a founder, take their cash
| (obviously), but understand you're closing doors (so take a
| lot of it).
| rchaud wrote:
| This kind of math can be pretty damaging because for every
| failure, the VC needs the one hit to be bigger and bigger.
| And with investments like Airbnb that are only "disruptive"
| due to breaking the law, A16z is incentivized to leverage
| lobbyists and other tools to simply change the laws to favour
| their pet investments.
| ericzawo wrote:
| There was a period in late 2020 where I was convinced Clubhouse
| would leapfrog Twitter as the place where valuable industry-
| facing conversation and information would be housed.
| vkou wrote:
| The problem is that valuable industry conversation and
| information isn't all that valuable.
|
| A billion monkeys slinging shit at each other is.
| lotsofpulp wrote:
| If it was valuable, you would be selling it or making trades
| or business decisions with it, not giving it away for free.
| JumpCrisscross wrote:
| Are there reliable estimates of Clubhouse's runway?
| MrDunham wrote:
| in the article they state "still hav[ing] years of runway"--
| before the layoffs. seems like they've extended it to around a
| half a decade?
| highwayman47 wrote:
| I never understood the hype around this app and I was surprised
| they still exist. This is a prime example of a low interest rate
| phenomenon.
| satvikpendem wrote:
| What are they pivoting to?
| uptownfunk wrote:
| Very generous severance. The writing was on the wall and if I am
| an investor this is the right call to make. The company needs to
| pivot, you need a lean focused team to have a chance at surviving
| the pivot.
|
| Probably the expensive lesson learned here is don't bet your
| company on short-term trends (like COVID lock downs) that can be
| disrupted by a twitter hackathon.
|
| One minor nit: don't use phrases like "people who are departing"
| in letters like this it just feels off. If you want to act like
| you're owning it then you need to own it.
|
| > "we work hard to support the people who are departing"
|
| Anyways wish those who are being axed the best of luck (it's a
| tough market right now) and hope the company is able to realign
| on a trajectory for success.
| volkk wrote:
| > that can be disrupted by a twitter hackathon.
|
| hindsight is 20/20. you shouldn't necessarily be deterred by
| building something that a large company can also build. there
| have been plenty of examples that contradict this point.
|
| BUT there's nuance here. i think in this case, the venn diagram
| of the userbase at Twitter & the users on clubhouse is
| basically a circle: the type that love to ingest information,
| stay on top of bleeding edge trends, be on top of what "thought
| leaders" have to say, information influencers, brand builders,
| etc. This demographic of people that would immediately get a
| lot of use out of a clubhouse clone built directly into
| Twitter. Clubhouse messed up royally here by not selling
| uptownfunk wrote:
| Fair but any reasonable business leader will assess the risks
| and at least have a plan to get around them, and who knows
| they may be working towards that and hence the layoffs.
|
| It seems they tried to go after the golden goose (build a
| platform) but instead existing platforms basically ate their
| lunch. That coupled with the changing social dynamics from
| reopening were too strong headwinds to weather with their
| current business model.
|
| What this means is they are basically back to square one, and
| need to build a new product and pray they get to PMF. If they
| are lucky they will have some reusable components.
|
| It will be interesting to see what happens to them and what
| they choose to go after in the next stage of their journey.
| nemo44x wrote:
| As Twitter proved, Clubhouse was a feature and not a product.
| dopeboy wrote:
| For a brief moment, it looked like they were bringing in a new
| demographic that wasn't active on twitter. So I could've seen a
| moat there. Agreed on pure tech - never saw it a pure moat in
| itself.
| desireco42 wrote:
| Dang, I would love to be fired at Clubhouse :). Honestly!
| clpm4j wrote:
| Salary through the end of August is a pretty nice severance.
| Still unfortunate for those laid off, but this might be the most
| generous package I've seen so far.
| gkoberger wrote:
| Airbnb's was 3.5 months + 1 week for every year you've been at
| the company, along with a full year of COBRA.
|
| https://www.businessinsider.com/airbnb-layoffs-generous-seve...
| alfalfasprout wrote:
| Yeah but Airbnb is one of the few profitable tech companies.
| highwayman47 wrote:
| I would WANT to get laid off if I could get that deal
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