Clubhouse is certainly having a week. With people like Elon Musk, Mark Zuckerberg, Vlad Tenev having big public conversation. All thanks to @sriramk and moreso @aarthir . I have gotten a lot of questions about it’s $1B valuation and if it is really “worth it” so fast?

Firstly, the public audio room concept feels new fresh novel. But also like something we have always been circling and really natural. @pdavison @rohanseth and team have iterated fast and built something magical and yet simple.

Secondly, private audio rooms are a *lot* bigger than you think. I mean still a gajillion phone calls and people have finally figured out three way calling. Also @discord is probably a lot bigger than you think.

Thirdly, podcasts are having their moment too. Look at Joe Rogan, Bill Simmons, Anchor, Gimlet. All Spotify now for well north of half a billion dollars. People are listening at massive scale. Live adds a new dimension. Even if live isn’t sometimes as produced, it can surprise

And fourthly, just the pandemic. We are all having a lot more time to consume content, and craving the sense of being together even virtually. Lots of conversations that used to happen in person arent

So with all that, how can Clubhouse be worth $1B? Well of course it isn’t in the sense of cash flows. But it is an expected value.

Live radio generates over $20B per year globally. Spotify is a $57B company. Like if clubhouse wins and taps into some of the same business opportunities along creator payments, user payments, ads, it will be worth tens of billions

It feels like this new concept of audio rooms is already so natural it should become pervasive. Sure it might not, but I have seen a lot of social trends and this one feels like it has lasting power.

So if audio rooms does stick and wins it is likely worth tens of billions of dollars. So taking the bet on Clubhouse is partially a bet on the growth and value of audio rooms

But there is more to it. A lot of people wonder if FB or Twitter (Spaces) or Instagram or Youtube can just own audio rooms with copying. They have the audience, they have the creators.

The answer is of course yes, it is possible. Like audio rooms, stories was a massively important new invention led by Snap. It is now in every product. Snap is a $90B company today but still the value of stories is likely $200-300B and they didn’t get it all

So this is the big question for how clubhouse is worth $1B. A huge space in front of them. Incredible invention. The risk is the business opportunity doesn’t materialize (I personally am long on audio rooms) and the risk they don’t own most of the new market value (a real risk)