How I Built This with Guy Raz - Live Episode! Clubhouse: Paul Davison and Rohan Seth

Episode Date: May 6, 2021

After selling both of their social app companies and rethinking their day jobs, Paul Davison and Rohan Seth knew they should not get into the volatile business of social media again. Despite exploring more practical ideas in other industries, they were found themselves drawn to the potential of live social audio, and decided they had to build another social app. What they didn't know was that, as they launched Clubhouse in March 2020, a global pandemic would create a new market of people looking for virtual spaces to connect. Today, despite issues with chat moderation, an invitation-only launch and increasing competition from established media companies, Clubhouse has continued to grow and now has over 10 million users. This interview was recorded live as part of a virtual event in April 2021.How I Built This Summit - information and tickets at:http://summit.npr.orgSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. So today we're releasing a special live episode of the show. It's my conversation with Paul Davison and Rohan Seth, co-founders of the social media app Clubhouse. I spoke with Paul and Rohan back in April for how I built this live event that we did on Clubhouse.

Now, if you don't know what Clubhouse is, that may be because you choose to ignore news, and that's okay, no judgment. But basically, it's a social media app, but in audio format. Clubhouse allows people to gather in audio chat rooms to discuss anything from sports to politics to networking. And currently, the app has over 10 million users. Clubhouse launched in March of 2020, just as the pandemic began shutting things down. The timing couldn't have been better since there was a newfound demand for people to connect virtually. Paul and Rohan officially started working on what would eventually become Clubhouse a year earlier in 2019. It was the first business they ever worked on together, which is surprising because before that, they kind of lived parallel lives.

both attended Stanford for undergrad and grad school, both spend time working at Google, and both started social media apps that were eventually acquired. The first place their paths could have crossed was at Stanford. Rohan came to the U.S. from India and was getting his undergraduate degree in computer science. And Paul was trying to break into the startup world while he was at Stanford's Graduate School of Business. And honestly, it's probably generous to claim that I, that I, that I, I knew what I was doing. You know, I was just really interested in getting involved in the startup world. And so I like the idea of going back to Stanford and just immersing myself in that.

So it was a great experience. I went back to school there and spent most of my time just working on independent research projects, working with local startups and entrepreneurs, doing small group dinners and faculty lunches and thinking about startup ideas and business school, I think, is kind of what you make of it. For me, personally, I really wanted to spend my time getting really involved in the startup world. It was great for that. I mean, I think Silicon Valley, it's still a special place, and it was a special place back then where there are so many interesting projects being built. And if you have some free time to explore, it can be, it was really great.

I got a lot out of it and really enjoyed it. But you never know what would have happened if you had taken a different path, but I really enjoyed my time there. And while you were there, I mean, you had no idea that eventually the guy that you would become your co-founder for this was also there. I mean, you were sort of kind of kind of idea. But I do think it's funny to imagine if we had just crossed paths there. I'm sure we did. I'm sure we did. Probably did.

Probably walked by each other. And at that time, sort of 2007, 2008, I mean, you're both at Stanford, Stanford. Paul, you got your MBA in 2007. That's right. But around this time, I mean, there was an explosion of, you know, new startups, right? I mean, a lot of the companies who talk about today were just getting started, Slack and Airbnb and, you know, these huge Uber. I mean, these Uber would come later, but these huge companies that we talk about now were really kind of beginning to kind of crystallize. The ideas are kind of crystallizing these founders.

We're finding each other as well. And were you guys, were you looking at that? Were you looking out and seeing that happen and starting to think to yourself, what could I do? What's an idea I could maybe bring out into the world? Rohan, were you thinking that way? Yeah, actually, it was. I think it was when the Facebook platform first came out. And I think that was the first time that I really, really started to think about,

what could I build on top of this platform? And I always wanted to start my own company. The reality was that I was still on an H-1B visa. And I couldn't. And so I just continued working at Google and just kept building stuff there, hoping that one day I would get a green card so that I could work in my own company. Meantime, Rohan, you're fully in at Google. I mean, you would end up staying with Google, I think, until something like 2012, right? Yeah, I think I left around February of 2012.

And Paul, what about you? While you were at business school, I mean, a lot of folks we've had on the show who have been to the GSP, like Andy Dunn, of Bonobos, and, and others. I mean, they met their co-founders at, you know, in business school, or they developed a network of people that they would eventually work with. Were you thinking, were you, like, constantly thinking, what is the thing I could do? I could start. Oh, yeah, all the time. I mean, and it's funny, I remember Brian Spaley, who's Andy Dunn's co-founder.

They were both classmates of mine, and I remember one day in class, Spaley was coming up and he was looking at my pain. from all different ankles. And I said, may I help you? And he said, I'm thinking of starting a pants company. And I wanted to ask you some questions about your pants. And I remember him selling the first pairs out of the trunk of his car and trying to convince Dunn to come in and start it with him. And, you know, another classmate of mine was working at Facebook at the time.

And she was trying to decide whether to drop out of school. And we were thinking, I remember talking about it and saying, well, my space is a lot bigger, but Facebook is growing a lot faster. And then another friend of ours joined Facebook in 2006. And we said, oh, that's cool that he joined Facebook. Too bad he didn't join really early. And I mean, it's, you're constantly being inspired by people doing things like that. And you know what I really appreciated was how the culture really encouraged that. Like I actually interned at Google when I was in school and had a great experience. They're really, you know, interesting company, smart people. And I decided not to go back there full time because I wanted to go do

something earlier stage. And I remember talking to my classmates about it or to my professors. And without a single exception, every single one of them, their response was, that's awesome. Congratulations. And they all felt Google's a wonderful company, but the spirit really encouraged you to build and to start things. And, and maybe. Maybe it, you know, romanticized it or over glorified it. But for someone who's interested in that stuff naturally, it's just, it's really inspiring to be surrounded by people who are taking a swing and trying and trying and trying even if they're getting knocked down every time. And Paul, you went to go work for a company called Benchmark, the venture fund to work as an entrepreneur in residence. And basically, while you were at Benchmark, I guess you had like more than maybe 10, up to 10 different ideas that you were kind of noodling on.

Probably some were just, you know, notes on paper and others maybe you got a little bit deeper on. And I know you eventually landed on one called Highlight, which we'll talk about in a sec. But tell me what some of your ideas were while you were there. Oh, man, I probably had hundreds of different ideas and they were probably mostly bad ones. You know, I think a lot of them were looking at consumer products that I wanted to see exist in the world. You know, pain points that you have every day. Things like, I remember I was looking at receipts for a while. Like, it's pretty crazy that you go and buy something and they give you a slice of a tree.

And 99% of the time you don't want it. And the times when you do need it, you can't find it. And it's just, it's a really bad system. and that was a problem that I wanted to solve as a consumer. Or another one that I wanted to solve was classifieds in Craigslist. You looked at what was happening there. It was such a valuable business, but the interface was so lacking. And you had new pieces of infrastructure like Facebook and location services and other things emerging.

And then there were problems that I wanted to solve in the world like, you know, people was a theme that I kept going back to a lot. Right. This notion that the people in our lives, the people we become friends with, the people we marry, the people we do things with, the people we start companies with, they're the most important thing in the world. I mean, nothing affects our lives and our happiness more than the people around us. But the way that we learn about people and the way that we bring new people into our lives is just incredibly random and inefficient. And so I ended up working on highlight in that spirit, but I'd also looked at new ways to think

about dating services or friend matching services or other related products. Let's talk about highlight for a moment. Yeah, yeah. Because, and no judgment. I'm not judging you, but it sounds creepy. It just sounds creepy. It sounds a little creepy. You land on this idea called highlight, and you actually pursued it.

This was a real product, available, an app, available. And basically, it would use your phone's location, and then the app would tell you, based on your location, it would say, hey, this person who has, is a mutual friend of yours is around or this person shares your interests and they're around too and it would enable you to have serendipitous meetups, you know, in, you know, I don't know, you're walking around, let's just say part of San Francisco and you look at the app and you're like, oh, there's somebody who shares my interest and they're turning a corner and we might meet up right now. That's right. You know, it's an interesting concept.

And it was all opt in, so it only worked with other people who also had chosen to and install the app and wanted to be part of it. But as you were walking around town, it would occasionally buzz and say, you're friends in that cafe right there, or that guy over there knows your brother, or that person's from your hometown. And it was mind-blowing. Like, I know I'm biased, but it was so much fun to work on. Like, it was the type of thing where you just work on it until you fall asleep every night, and then you dream about it every night. And it's the only thing that you want to be doing. People used it for knowing when friends were around, for dating, for professional networking for recruiting. It was before Tinder, too, so there weren't really social norms around that.

And the last thing I'd say is I didn't realize, I had never put two and two together and realize how thematically similar highlight and Clubhouse were until someone pointed it out to me on the app here some months ago. But they're both about connecting people, right? And that's something that I've always really enjoyed working on, because I think if you can do, if you can help people do a better job of that. I don't know. So much good comes up that, right? I mean, it's, people are everything. They're the foundation of everything we do. And so it was just a problem space that I was really excited about. Around that time, I think you and Rohan first met. This is 2011. I want to go back to you, Rohan. What do you remember about meeting Paul? How did you

guys meet? What was your first impression of that guy? Yeah, let me think. We got connected through a mutual friend, Elad. And I think we met at a happy hour. And we just started talking about products. I don't remember exactly what, but I think it was one of those things where we both just loved playing with every new product and we started talking about it.

And because I had some experience in location and Paul was starting to think about highlight, I think we just kept talking, you know, about how I could be helpful there and, you know, just sharing some of my, you know, my knowledge around, I don't even remember at that time, maybe Android battery life or something. Yeah.

Pretty boring. I guarantee I was trying to recruit him to come work with me. Yeah, I'm trying to think what my first impression of Paul was. I think it was mostly just like, oh man, this guy just like exudes positivity and energy. Paul, you went to, you raised some money to build this app. And I think you started a company. You created a company called MathCamp. And through MathCamp, you built Highland.

You raised about $5.5 million in funding from different investors. And I think you kind of premiered the sort of coming out party for highlight was at South by Southwest in 2012, right? Yeah, that was in the early days of it. You know, we got a lot of attention at South by Southwest that year. That's right. That was during the era where every year at South by Southwest, people like talking about, what was the app everyone's using this year? and what's the big breakout.

And it was highlight. I mean, that was the app. That's right. That was the hottest app that year at South by Southwest. You had young people walking around Austin like wearing, I guess, white turtlenecks with the highlight logo on it. One promoting the app and meeting people. I mean, there was a lot of buzz around it. Did you go back to San Francisco thinking, I did it?

This is it. Like, this is going to be the thing I do. No. I mean, I would say far from it, but it was a really exciting time. It was the first time I had ever started a company. And it's, when you encounter your product in the wild and people come up to you and, you know, or you're talking with people and they ask what you work on and you tell them and they say, oh, wow, I love that product. You know, or I met my girlfriend on that. Or they come up and they tell you stories about all these amazing moments that it created. I, I love. I love. I love. I love. I love that. I love. I love. I love. I know. I. I. I know. I know. I love that. I love it. It's so satisfying for me. I think the potential of social products and communication products is so, it's so large, right? They can impact our relationships and they can impact society in such a big way, but they're really hard. And there's a lot of luck, and there's a lot of timing. And honestly, they're not rational things to work on because they almost always fail.

And Highlight certainly didn't get the escape velocity that we were hoping for. At the time, wrote an article for CNN.com. And I'm quoting just a line you wrote. Yeah. You wrote, knowing more about the world around you just makes life better. You're responding to people who are critical of this app saying this is like a privacy thing and it's a little weird. And you wrote, in another decade, we're going to look back and wonder how we ever got by without this kind of stuff. Now, some of your friends who I think really like you and admire you have been quoted in articles of saying, Paul is very optimistic almost to a fault. Which I think it's an attribute and entrepreneur has to have. But, I mean, you were really optimistic about the prospects for this app. Yeah, I think that's right. I think that's right. And I think you come to, you learn a lot as you build, right? And you come to appreciate the nuances and the hard parts.

I still believe that it's crazy that we walk around and don't know anything about the people around us. and that you run into an old friend and you forget their name, and there's literally no way for you to get that data. And so you just avoid eye contact and pretend you didn't see them. I do think that our grandchildren will think it's crazy, that that's the way the world used to work. Just like we can't imagine a world without the Internet and without instant access to information and phones.

And so I still believe that. But yeah, I think the timeframes and the, exact ways that you get there are hard to predict sometimes. Well, I think there's something to that, but it didn't work. Highlight didn't catch on it. I mean, let's just be clear. It failed. That's right.

That's right. Absolutely. And why do you think it did? Why do you think it didn't catch on? I think there are a number of reasons. I think there are technical challenges back then. Battery life was a big one. I think if you use the app for a full day, it ate two-thirds of your battery life, you know.

I think the location infrastructure, I think, was still pretty nascent back then. And the company was just two of us. It was my co-founder, Ben, and me. So I think there are technical challenges, but I also think there are social challenges, right? Like, I remember talking with a friend of mine about this idea that, you know, you could be standing in line at Starbucks, and the person next to you could know your name. And, you know, you could see the common connections you have. You could see if you both went to the same school or if they were from your hometown or they knew your sibling.

And she was saying, that's the last thing I want. We always approached it in a very opt-in way. And it was only the people who wanted to use the app that would have any information shared with anyone. But I think it's very hard to know exactly what information to share with exactly which people in exactly which context. All right. So you are, let's pause on highlight for a sec. And I know that I'm a little bit off the timeline here because I'm moving to 2014. Yeah. But Rohan, you've been patiently listening to Paul's story. No, it's great. I want to ask you about what you eventually left working at Google and you started your own, you founded your own company called Memory Labs. And I guess my sort of description of this and you can improve on it, is it was basically a journaling app, right?

It allowed people to take photos and journal entries and created an archive on their phone, basically. Yeah, I'd say it wasn't really just one app. We just tried a lot of different ideas. So the main hypothesis for us was, you know, I just like love recording everything about my life. I was one of those crazy people who would, at the end of the day, I would try to capture who I hung out with, the way did I hang out with them, what did we talk about, what was the most important thing that? happened to me that day. And I love journaling. And that's something that I wanted to build for other people. And so when I founded Memory Labs, I didn't know what form that was going to take. So, you know, that's why I kind of went with a labs metaphor. And the idea was, let's build a bunch of

different apps and see which one sticks. And the main thing that I tried to do is try to make it really, really easy for you to capture and share your memories with the idea that eventually you'll have this amazing journal that you'd keep for yourself. Rohan, meantime, memory labs, you're working on memory labs. And I think you worked on it for about three years. And then eventually in 2017, you sold it to a company called Open Doors. They acquired it. Yeah, actually, it was a talent acquisition, you know.

The acquiring company took care of our investors, and we just got regular jobs. And we were just happy to work there. You know, we had been working in the startup for three years. and it was your identity is attached to this thing, and it's hard to let go of it. But in fact, it was far from being in the money. We had worked on memory labs for a few years, taking very low salaries. So it was just nice to work for a company that could pay us a regular wage. Yeah.

How did you know, Paul, how did you know when it was time to just pack it in with highlight, that it was just not worth spending another month or two months or trying something else? It was really hard for me. I mean, I was so emotionally attached to it and it was such a part of my identity. And it's really hard to give up on it. And so I think when we decided to work on other apps, we, there wasn't a single point where we just sort of said, this isn't working. But it was a lot of conversations between my co-founder and me. And, um, You know, we we then spent another couple of years just really working on other products that were related tangentially, but different products. And ended up selling the company and what was basically a talent acquisition in 2016. And Paul, you sold your company to Pinterest. And again, it was a talent, you described as a talent acquisition. So this was not like all of a sudden Paul Davison, I'm assuming, gets a huge payout from,

Pinterest and is set for life and goes and works for them for a year or so, right? This was not the case. Yeah, no, far from it. No, you try and do right by your investors and your team as much as you can, but it's certainly nothing in that camp. Yeah, and, and Rahan, you went and worked for open doors, I think, for about two years as well. And both of you kind of separately kind of, you know, left. I mean, around that time, you would have a life-changing experience. You and your wife had a baby, Lydia, and I guess she was born with a rare genetic mutation that causes impairments. And a mutation, I guess there were no clear treatments at the time for. Yeah. So tell me what you did and what happened. Yeah, so Lydia was born December of 2018.

And I think I remember my plan was, you know, I was going to go on my path leave. And then after that I was going to start a company. I was going to think about stuff. And, you know, 24 hours after she was born, she started having seizures. And, you know, a few weeks later, we found what the root cause was, which was basically this random mutation. And, you know, it was devastating. We, we, but we did what we had to, and we tried to educate ourselves the best we could. You know, we, we dived into the research.

And we just decided that we were going to do whatever it took to try to improve her quality of life. She was supposed to have never sit up, crawl, walk, talk. You know, this was, this was going to be a pretty devastating reality for her. for us. And one of the things that I learned while we were diving into the research was there was a class of technology that could be used to silence certain kinds of genetic mutations. And they were just not being used for mutations like Lydia's because they were considered too rare. And that just did not make sense to us, like calling them rare and not treating them. You know, we have, you know, my wife and I are both computer scientists. And the way we looked at it was

we have six billion characters of code in our DNA. A mutation in a single character can cause a disease. And statistically, it's unlikely for too many patients to have the same mutation. So this was a classic long-tail problem where you have a lot of these one-off mutations, but they collectively affect millions of kids like Lydia. And it was anything but rare. And so we kind of spent a lot of our 2019 trying to understand what we could do, who we could partner with to fix these kind of mutations.

And what we learned was really where science needs to move towards this idea of personalized treatments. So you target an individual mutation rather than try to find a drug that can treat many, many mutations at once. And so we had learned about a scientist who had done this once before. And that's the hope that we needed. You know, we started an organization, One of our limiting factors were, you know, we weren't independently wealthy.

So we raised funds for Lydia's treatment and then try to come up with a plan so we could help scale this technology for other kids. You found of the group called Lidion Accelerator. What a story. I guess this is around the time when the two of you reconnect. Yeah. So, I mean, it's funny because when I started Lidding Accelerator, that was around June of 2019, I just reached out to folks in my community. And I just wanted to, you know, brainstorm how we could raise money for this, but also how do we scale this? And Paul was, you know, one of the first people that I could think of.

He's just so creative. He's, you know, somebody that I've always admired. And Paul was kind enough to offer his time. So we met in a coffee shop and Soma. I think Paul, you ran over from the Presidio, which I still found pretty impressive. That's pretty far, yeah. Wow. And we just spent the next few hours just brainstorming how we could help Lydia and children like her. And I think we did that several times over the next few weeks.

And I was very, very grateful for Paul's time and he was just so creative. And we were able to get to a really good place with regards to the fundraising. It's, I have three kids myself. And I just, I think it's really inspiring what Rohan did. Like he, he doesn't talk about it much, right? But, but I mean, really, he spoke with hundreds of people. And I mean, you can just see from like a father to a father, just the love that he has for his kid. And he figured out that there was a way to make a cure for her.

And he said, I'm going to go figure out how to do this. and figure out how to fund it and raise the money for it. And I mean, I was his friend, but I was also, like, hugely inspired by what he was doing. So I don't think I did that much for it, but I was really grateful that I could try and help him think through it a little bit. As you guys started to talk through those ideas, how did you start to talk about maybe working together on a project? Yeah, I think it was just one of those things where we just spent a lot of time together and we were both starting to think about, you know, what do we do with our day jobs? And I think after many sessions, we just said, like, let's just work together. We don't know what we want to do, but we want to work together.

And I think initially we said, let's not do anything in social. We're just too old. We have families and it's hard and unpredictable. and so we just said like let's work on something more boring and just a little bit more predictable. I think we were thinking about areas like productivity and education and marketplaces. And when you when you started to talk about collaborating on something, I mean, presumably both of you guys have, you're both engineers. So the two of you alone had the skills to potentially build something, right? Is it right? I am a pretend engineer.

I haven't coded since college. But yes, like the way we ended up collaborating is that we'd work together a lot on the product side of things. And then Rohan was doing all of the engineering and I was doing all of the pixels and screens. So it was a pretty good partnership. Yeah, we always joke about it. Like Paul wasn't great at design and I wasn't great at engineering. I hadn't coded in three and a half years or something. We were looking like Rohan was saying, we were looking at education and marketplaces and productivity,

all products that we wanted to have exist in the world. but nothing is high beta and unpredictable as straight up consumer social. Because it's just at the time when we were talking about doing it, I was 40 and had three kids. Like I shouldn't be building a social app, right? That's not a smart thing to do. When we come back in just a moment, how Paul and Rohan created Clubhouse, even though they knew how complicated social media platforms can be. and why they knew there was something special about live group audio conversations.

Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR. Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So Paul and Rohan have now reconnected, and they know they want to work together. But they're not entirely sure how. How did you guys get on the idea of audio, of social audio? Oh man, I think we both just had such an independent interest in audio. The very last thing that I worked on at Memory Labs,

when I finally felt like, okay, this memory thing isn't going to work. Nobody cares about journaling was an audio app. The AirPods had just come out. And I just felt it was so exciting if we were all going to be walking around with these AirPods. Like, what could you build on top of that? And so I built this app called with my co-founder,

also another Rohan, I built this app called Phone a Friend. And the way it would work was you would open the app, you would press a button, and it would notify all of your friends on the app that you were free to talk. And the very first person who said accept would get connected to you. And it was an audio conversation. And as more friends were free, they would join in the same conversation. So as you can imagine, it's not very dissimilar from Clubhouse,

but the key difference was that it was only for your close friends. So you would press a button And it would only notify four people And most of the time it wouldn't work Because your four friends weren't free But when it did work, it was just magic It was just one of those things that you were free You had a couple of minutes to kill

You know, I remember this anecdote Where an episode of Game of Thrones ended And I wanted to talk to my friends I pressed a button And then we were just, you know, discussing theories For hours after that So you guys are talking about audio Start talking about audio

start talking about audio and Paul I mean you're sort of were you like a podcast listener was that Yeah so my interest in audio was It was more on the personal side Like I think when I was working on highlight

I remember I had this realization one day That I'd stopped reading books And it made me sad Because I love reading books But I was just working all the time And if anything I was skimming headlines And I decided to give audio books a try

And it was amazing You could speak them up. You could listen while you were running or driving or in bed at night. And suddenly I started reading all these books again. And then I got into podcasts. And that was great too. And I kind of never looked back. I went all audio all the time. But I had always found it a little frustrating that it was so hard to find good spoken audio content. Because there's no reason it should be. There's no reason it should be. Like if you're a smart person and form person, a funny person, you have domain expertise, you can just talk. And, and, and, you know, and, you know,

And people would love to listen to you, right? Like, I'm sure you've had the experience where you've caught up with a friend for coffee and left feeling really energized because it was a great conversation and you learned a ton. You know, it's not hard to create good spoken audio content. The challenge is that it's hard to produce it and to distribute it, as I'm sure you know, Guy, right, given the constraints of the RSS-based ecosystem. Like, for most people, it's really, really hard. Like if you think about it, for most mediums that have emerged, you can just pick a username and press a button and create content, right?

For text, you have Twitter, for photos, you have Instagram, for video, you had YouTube, not TikTok, and they have things like hashtags and app mentions to help you get distribution. And it just works. But for spoken audio, think about how it works. First off, you have to say to everyone, hey, I'm going to start a podcast. And you have to give it a name that's different from your own and commit to doing it at this regular cadence. and then you have to reach out to friends and ask them to be a guest

on your podcast which doesn't have any distribution and then you have to schedule time with them which takes another week or two and then you have to learn about microphones and studios and then you'd record it then you have to do post production

and have intro music and cover art and then you set up RSS feeds like you shouldn't have to know what RSS is in order to talk and then you put it out there and oftentimes you don't know how many subscribers you have people comment on it

and you can't even respond as the creator because those comments live across 10 or 20 different apps. You don't know how well you're doing. It's hard to monetize. It's really difficult. And on top of that, we forget that the foundation of terrestrial radio is the fact that these conversations can be live or near live and interactive. You think about the most popular formats on terrestrial radio.

You have live sports, breaking news, listener call-in shows, morning and evening commute shows where you talk about the events of the day. and because podcasts have this delay between when you record them and when people can listen to them, you can't do any of that. And so we kept coming back to that and saying, oh, man, how do you fix that? And after talking about it a lot and thinking about all these different incarnations, we eventually said, ah, damn it, we have to build a social app again. Wow. And I mean, I can understand the problem that you were trying to solve for, right?

Because you're right. I mean, there are challenges with the RSS feed and podcasting is complex. I don't want to go too deep down this rabbit hole, but I think this is an important idea that I want to just noodle on for a minute here, which is I don't think making good. audio content is easy. It's very hard. The best audio podcasts, those are shows that are really hard to make. And so I think it's true that you can have an interesting conversation between two people at a coffee shop, but I don't actually think that that's common. Like, I have had lots of interesting conversations in my life where I thought, huh, that was a great conversation. But in hindsight, I'm not really sure if I recorded it and put it out into the world, other people would find it interesting. But to your point, I understand. I agree that there's a lot of friction in, you know, for somebody who doesn't have a platform like I do to get out into the world in audio, it's hard. It's tough.

Yeah. And one thing I've come, I think we've come to appreciate through building this product is when you listen to a conversation, it's a different set of things that you're optimizing for. Like when I listen to a podcast, I'm optimizing for insights per minute. And I want well-produced, short, punchy podcast where I'm learning a lot. If I miss 10 seconds of it, I'll rewind and make sure that I heard it. but when I'm in Clubhouse, it's a different feeling. I'm optimizing for a different thing. It's almost like being in a room with friends or getting to listen in on other conversations. There's something comforting and human about it,

and it's more about that connection rather than just getting content that's as high quality, you know, as can be. So it's, I agree with everything, that you're saying. And, you know, we're learning a lot about the medium through building this. Rohan, did you think that what we're doing here now, this is what it would be? No, not at all, actually. I mean, maybe we had a rough idea of what kind of things we wanted to enable. But, you know, the very first thing that we built was something called talk show.

And that was a couple of months before Clubhouse. And the way talk show worked was you'd press a button and you would select the person, select the guest that you wanted to go live with. And you would post a link on Twitter. People could listen in and submit questions. You know, you could bring somebody up from the audience to speak with you. But it very much felt like this rehearsed thing where you were scheduling time with someone and you were interviewing someone. And that was the very first thing that we built. And we did a couple of hundred shows.

And we realized very, very quickly that while the life portion of that was really, really exciting. And for all the reasons that Paul mentioned, you know, you don't have to post-produce it. You can have real-time interaction with the audience. the reason why it didn't work was it was still really, really heavyweight. So a typical creator on talk show had to be pretty motivated to schedule time with the guests and prepare for the show. And because it was recorded, the end show would actually end up sounding a lot more like a podcast. And it wasn't that exciting. And I think we got better at saying, okay, this doesn't work.

We don't believe that this is durable. And so we shut it down. And we moved the pieces around and ended up launching. the first version of Clubhouse in March of last year. And the very first version of the app, the whole app was a single room. There was no follow graph. Everyone followed everyone. There was no concept of the audience.

Everyone was a speaker. And we had a Slack integration set up. So anytime a new person would join, Rohana and I would be on the phone working. And I would just hear like the little notification. And I would hang up. Say, I got to go, got to go. Someone's joining. Someone's joining.

And I jump into the room. We'd always joke like Paul was the clipy of Clubhouse. He would be every single. It looks like you're trying to use Clubhouse. How may I help you? Half the time they would just leave because they didn't know who this guy was. But the other half of the time they would stay and someone else would join and someone else would join. You know, the way it was described to me about a year ago who was a friend of mine in the Bay Area who was on it.

And he said, oh, you got to join this thing. It's like a small group of people talking about really interesting things. And they just sort of describes like the TED conference, the kind of like side conversations. And to be honest, you know, that kind of turned me off of the time because I thought, you know, it's like that Groucho Marx line. You know, I never joined a club that actually wants me as a member. Like I was sort of turned off by that exclusivity idea. But I guess, I mean, it sounds like that invite only strategy was what, like designed to generate buzz around it. I mean, is that the idea behind it, Paul? You know, the whole notion that it was an exclusive space was never something that we had intended. Really, for the first four or five months of the company, it was just the two of us. And we were on the app 12, 14 hours a day just talking with people while we were building it, getting feedback. And we didn't have a website.

We weren't in the app store. We didn't have any social media accounts. We weren't doing press or anything like that. And it wasn't because we wanted to be secretive or build anything exclusive. It was just because you don't expect products to work. And we didn't want to go try and generate hype because this thing probably wasn't going to work. We just wanted to stay focused on the product and on the community. And I would say, you know, we started to hear from people that it was some secret exclusive thing that was never our intention.

Right. We always wanted to build it for everyone and to open it up as fast as we can. we just wanted to get the product right first. You, I mean, again, it's an overnight success story that took 20 years, right, because of previous failures. But you very quickly attracted big investors. Andres and Horowitz, you know, 10 million now they've put in, I think, more than 100 million. and a lot of other, several other big investors in Silicon Valley, it seems like that happened very quickly. Like you almost didn't have to pitch people to do that, that people were kind of banging down your door to get inside of this thing.

Is that accurate? No, I don't think so. I mean, we're hugely grateful that anyone would want to use this product. invest in the product. But it goes back to what I was saying before. We just wanted to stay focused on the product in the community. So over the first few months after we launched, one thing that we notice is that people kept coming back. And we've been doing this stuff long enough to know that doesn't usually happen. But there was something about it that was resonating with people. And it was really the other people on the app. Like, you know, eventually we had some people

ask us about investing. And we just sort of said, well, thanks so much. We don't need to be. We don't need money right now because we had raised a small seed round earlier in the year, but we'll let you know if we decide to raise money. And internally, we just sort of said, well, you know, if it continues to work, then we should still be able to raise money. If we get new data that makes us think it's not going to work, which is the most likely outcome, then we don't want to have a bunch of money. And we're not capital constrained because there's two of us. So let's just stay heads down and keep building. And so So that's what we did for a long time until we felt that we needed to raise some money and then we raise some money. 2020, I mean, your timing could not have been more impeccable, right?

I mean, you launched this in like March of 2020 and the whole country, the whole world shuts down. And every, I mean, so many tech companies saw huge growth because people were at home and they were, you know, chained to their computers now. You guys saw this explosive demand in 2020. And with that came and began the inevitable challenges of any social media platform, you know, rooms where there was, you know, anti-Jewish and racist and misogynistic conspiratorial. I mean, this happens. It comes to the territory. I mean, I want to kind of drill down on this a little bit because you guys are in a slightly strong position to tackle this now. How do you deal with that?

I mean, you're now – you've got a country here. You are the prime ministers and presidents of the country. Yeah, I mean, I think you're right. You know, moderating social communication is complex. And moderating group audio has its own set of sets of challenges, right? one of the things that we realize it's not just audio, it's live group audio. And each of those terms, live, group, and audio have their challenges. So with live, you end up in the situation where it's a living thing.

It can evolve in any direction. It's ephemeral. But that makes it very, very different from other forms of social media. And because there's not a recording, sometimes things get misrepresented. And there's a little bit of a game of telephone. There's complexity to the group part. You know, and Clubhouse groups form dynamically. People you know, people you don't know.

That creates a really, really different dynamic as well. It's not just one person posting something. And that's unique to Clubhouse where people create content together. But you end up in these situations where different members of a group may have different preferences. So if in this conversation, you know, you want to block someone, but I don't, what should happen? should they only be able to hear audio from the person who hasn't blocked them, or do we just not let them into the room at all? And so we spend a lot of our time trying to think about these group behaviors and scenarios

and design for them. And then finally, you know, audio has its own things that we're learning about. So it's just such a powerful medium, but, you know, we've also learned to appreciate the challenges. How do you moderate tone? How do you moderate when someone is not calling on someone? How do you moderate when someone interrupts someone constantly? And, you know, we have a set of principles that have helped us make some product decisions. Maybe Paul, you could start talking about that.

Yeah, yeah. We decided early on that if you can keep the creator in control and give her the ability to decide who is in the room and who is on stage and to make those decisions, then it's a much better experience in the, end for everyone. And so we tried to design the network structure with that philosophy in mind. So when you start a room, no one can join unless you let them. No one can come up on stage unless you choose to let them come on stage. We've also tried to do a lot of other things with the product to make you feel like you can have an authentic conversation. So that's why there aren't any hearts flying in the

air and you don't have like an applause meter that you have to monitor every time you say everything. we designed it to be hands-free as a speaker and as a consumer so that you can just multitask. You can have all this found time. You can relax when you're speaking. And that's really powerful. Like with audio, you have all of the intonation and an inflection and fidelity and tone and bids and asks, but you don't have any of the anxiety of video. You don't have to worry about what you look like or how messy your house is. So people lie down on their couches, on their beds, and they stare at the ceiling and they just talk for hours and hours and hours.

But do you just accept as a fact that there just will be racist and misogynists and anti-Semites? Just people who are cruel. There's just a fact of life. And it's like whackamol. You just will not be able to control every instance of that. Do you just, I mean, I'm curious. Do you just accept that as a fact? We have clear user guidelines against any form of racism, anti-Semitism, hate speech, abuse,

bullying. But when you're building a product for the whole world, you have to know that there are bad actors in the world. And so you have to do your best to build a product that is durable to those forms of abuse. And you're never going to catch everyone. But you have to always make it a priority. That's the most important thing. And a core part of our mission is to create a space where people with different opinions, with different lived experiences, with different views on the world, can come together and have conversations that are important and that can be difficult. And they can sit in a room with someone and hear them talk for hours and challenge them and leave that room changed with if nothing else, an appreciation, a better appreciation for where that

person comes from. I think there's not enough of that in the world. And I think because of because of the fact that we often live in places with people that look a lot like us that have the same background as us, we work in places. That's true also. You don't often get a chance in the real world to be in a room with people that have lived a totally different life from you. And that's a core part of our mission. So we don't, we want to allow liberals and conservatives and people with all different opinions to find a home here. And we think that's really important. I want to move on and ask you about valuation. There's an article that came out has just happened to come out today. that says that Clubhouse, you and Rohan, are potentially raising around or having conversations with folks to raise around at a $4 billion valuation. And you may or may not want to confirm that. But, I mean, right now, Paul, this app is really hot.

It's been written about in the Times and everywhere. I mean, it's Wall Street Journal. There have been articles everywhere. We're doing an episode of How I Built This about it, right? And we generally don't do episodes of how I built this on companies that are a year old. We like to have five to ten years, you know, something to talk about. But, you know, you started, I mean, you had this app highlight, which was the hottest app at South by Southwest. And I wonder, I don't, and I'm not trying to pour water.

I think this is an amazing medium, an app that you've built. But is there part of you that's like, ooh, I've kind of been here before where I was the bell of the ball kind of thing? I mean, does any part of you worry about that? I don't think about it in that way. I think that Highlight received a lot of media attention, but the product, the community of the metrics were very different from what we see with Clubhouse. And I think that I've got a lot of humility and a lot of gratitude from having built a lot of products that don't work. And I think Rohan and I both have approached things differently this time around.

and we've tried to focus on the things that we think matter. We try to ruthlessly prioritize the features and move really quickly and not be fooled into thinking something's working when it's not. And we don't talk about funding because we don't think that's an important milestone. There are sharks circling the water. And I shouldn't say sharks. But, you know, this is a competitive environment. You guys are the first out of the gate. You've got 13 or 14 million users now on a lot of demand.

But Twitter's got this thing. You got an audio social app. Facebook, everybody knows they're working on. Discord has something going. I mean, Instagram's got something. LinkedIn's working on something. Slack's working on something. They're all seeing the success of Clubhouse and they're saying,

we got to go after this. So how do you stay ahead of the curve? I mean, you know, Vine, Periscope. I mean, we've seen other, there have been other stories like that before. So how do you stay ahead of the curve and make sure that you don't end up that way? I think that audio is a durable medium. Like I was saying before, it's relatively new in the world of social networking, but it is the oldest medium. We've been gathering with other people and talking since the beginning of civilization.

I think it's the foundation of civilization. And, you know, this idea that you could open your phone and be sitting in a room with five or ten interesting people that you can learn from and you can laugh and pass along knowledge and be educated and make friends and close the app at the end of the session feeling better than you did when you've opened it. I think that that is durable.

And I believe that many other networks will incorporate audio into their experiences and we just try and focus on what we're doing. I think if we stay focused on the product and if we stay focused on the community, that that's going to to give us the best chance of building something

something that we're really proud of. Before we go, a quick question for you. I mean, you've got a long way to go. And obviously the valuation is one metric and it's a number. People are focused on and I know that is not something you want to talk too much about.

It might make you squirm a little bit. But you do have a long way to go. You've got to prove this out. But you've achieved a lot already. I mean, it's been, it's certainly the sort of hottest app of, so the hottest social media app, probably since TikTok, which is saying a lot. And particularly popular among like Gen Xers, I find. How much of what you've achieved so far with this app and this company do you attribute to your hard work and your experience and how much do you think has to do with luck? I think there's a whole lot of luck.

and a huge amount of luck and a huge amount of timing and a huge amount of, I mean, just those two things, I guess. The one thing I would say that is heartening is that, you know, like I was saying before, you do feel like you get better at pattern matching and avoiding the mistakes that you've made before. And I feel really grateful that I get to work with Rohan and with our team. you know, to be able to work with people that make you better and can push back on on bad ideas that you have. So I do feel like we've gotten better over the past, you know, 10, 15 plus years of being in the batting cage working on these things. But there's so much luck and there's so much timing. And we, like the thing that you said, Guy, we have so much

more work to do and so many more things to figure out. And we don't, that's not lost on us for a second. And we're just grateful we got to give it a swing. I would say like when we set out to build Clubhouse, we were, you were asking about this earlier guy. Like I think in a lot of ways for me, this is what we had hoped it could be. You'd never expect it to work. You go back to all the times you've tried to build stuff and the years and years you spent work. on things and they generally just don't work. And the way we look at it right now, we don't know what the future holds. But when we think about the potential, boy, that's like asking, what can you do with voice? There's a lot you can do with voice. What can you do with text?

What can you do with video? You talked about the good things and the bad things. It's voice, you know, someone was saying to us the other day, it's the first thing you hear when you come out of the womb is someone's voice, right? It's how you deepen friendships. It's how you learn. It's how you establish new relationships. You think about politicians talking to their constituents and musicians, putting their phone on the kitchen countertop at 930 on a Thursday

and just singing for 15 minutes. And you can feel like you're with them in their kitchen, listening to their dog bark. And people talking about the games and the markets and scientists. and academic sharing research and people learning new languages. And the thing that I get most excited about is the idea that no matter where you live, no matter what your economic situation is, no matter what small town you're in or who you have access to,

you can open up the phone and you can be in the room. You can suddenly be in the room. That's Paul Davison and Rohan Seth, co-founders of the social media app, Clubhouse. This conversation took place at a virtual live event on Clubhouse in April to find out more about NPR's virtual live events. Visit NPRPresents.org. This episode was produced by Liz Metzger with music composed by Ramtin Arablui. Thanks also to Farah Safari, Janet Ujong Lee, John Isabella, Julia Carney, Neva Grant, and Jeff Rogers. I'm Guy Raz, and you've been listening to How I Built This from NPR.