4 ms·

Serious question: Why is an app like Clubhouse using external services such as Agora and PubNub and relinquishing control over their core app functionality (aud

Serious question: Why is an app like Clubhouse using external services such as Agora and PubNub and relinquishing control over their core app functionality (audio rooms)? Wouldn't that be something they would want to engineer in-house?

pram 6y ago
Clubhouse atm is probably an MVP, and they most likely don't have the infrastructure talent to build/manage an audio and streaming backend.
- solosoyokaze 6y ago
  Seems like they shouldn't have a billion dollar valuation if that's the case.
  - zepto 6y ago
    Why not? If they have product-market fit, they can build the infrastructure they need.
    - solosoyokaze 6y ago
      I don't think they have product-market fit. It's not even public, you need an invite to use it. Regardless, you wouldn't do this as it introduces massive risk to the business and puts you 100% at the mercy of your technology providers (who I hope are currently raking Clubhouse over hot coals for all the cash they have).
      - zepto 6y ago
        > It's not even public, you need an invite to use it. It’s not clear what this has to do with anything, or whether it’s even realistic to say it’s not ‘public’. All existing users have invites to give out. Part of it is a strategy to manage scaling, but the other part is about building a coherent network. It’s not obvious that they ever need to change this. > Regardless, you wouldn't do this as it introduces massive risk to the business and puts you 100% at the mercy of your technology providers (who I hope are currently raking Clubhouse over hot coals for all the cash they have). I assume you don’t have a startup valued in the billions of dollars, so it seems like both they, and then investors know something about this that you don’t, but I could be wrong about this assumption! Feel free to correct me. As for being at the mercy of their providers - normally in business these problems are dealt with by using a contract that sets out what the costs will be and what the service will be for some time period. It’s also controlled by there bing more than one supplier, and supplier reputation. In short, business just doesn’t work the way you are implying it does. If their suppliers are able to ‘rake them over the coals’, that would be a huge failure of their lawyers, and it would be hugely damaging to their suppliers, who would not be trusted by new clients. Exposure to suppliers is also a normal risk which is checked during due diligence. That means their investors attorneys would also have failed.
        solosoyokaze 6y ago
        They have a small, private audience that they've extrapolated into a mass market audience. That does not justify a one billion dollar valuation. They do not have the usage to back that up. VCs make tons of awful bets, I would not say they have any particular insight into what will be big and what will not. They fail more than they succeed. Regarding vendors, you're definitely incorrect. Clubhouse has exposed themselves to great risk by relying on another platform. Just a reminder: https://newatlas.com/skype-joltid-litigation-shut-down/12390/ https://newatlas.com/skype-joltid-litigation-shut-down/12390...
        zepto 6y ago
        > They have a small, private audience that they've extrapolated into a mass market audience. That does not justify a one billion dollar valuation. They do not have the usage to back that up. How do you know? Have you seen their data? Again you say the audience is ‘private’ but that isn’t true. > Regarding vendors, you're definitely incorrect. I’ve explained my position. You have not explained how it’s wrong. I have to assume you can’t. > Clubhouse has exposed themselves to great risk by relying on another platform. You don’t know what risk they have exposed themselves to unless you have seen the contracts and know what the switching costs will be. You also don’t know anything about where in their timeline their own infrastructure development is. > Just a reminder: https://newatlas.com/skype-joltid-litigation-shut-down/12390 https://newatlas.com/skype-joltid-litigation-shut-down/12390... That link proves my point, and disproves yours. eBay didn’t do appropriate due diligence, and didn’t have an appropriate contract. That is a risk Clubhouse can easily avoid, and the eBay/Skype case is now a well known piece of business lore taught in business schools. I assume you don’t know anything about what contracts Clubhouse has with their suppliers. Again, correct me if I’m wrong about that.
  - pjc50 6y ago
    Reminder that valuations are a measure of what investors think you might exit for, not an assessment of whether your technology is any good. Even in "tech" startups, the marketing, growth strategy, investor marketing, and userbase are incredibly important. If all those are amazing enough you can IPO before you even launch a product.
    - solosoyokaze 6y ago
      > If all those are amazing enough you can IPO before you even launch a product. No, you actually cannot. For a one billion dollar valuation, it should be expected that the company owns the technology stack used to power the product. If I were Clubhouse's vendor I would be absolutely holding them over a barrel right now. I would have jacked up my costs 10X the second they closed the round.
      - lhnz 6y ago
        That would surely cause all of your other customers to freak out that if they became successful you'd do the same thing to them. Your reputation for fair prices would be ruined and all of your customers would now be building their own versions of your platform. Effectively your startup would be over, since nobody would ever trust you again. And, presumably your investors wouldn't be very pleased with you, so I guess you'd be looking for a new line of work, too... (That's not say that vendors won't increase their prices, but they will have to do so slowly. Meanwhile the founders of Clubhouse will be aware of this and no doubt building the replacement platform that has everything they will need...)
        solosoyokaze 6y ago
        I don't think anyone would fault a vendor for charging a startup that built a billion dollar valuation off of their tech stack more money. In fact, I'd question the business acumen of a vendor who didn't do that. Of course, most people know better than to use someone else's technology to build their business.
  - adrr 6y ago
    The demand and growth for the social network is what the valuation is based off. Marketing/Growth is really expensive and more expensive than actual infrastructure spend for most companies. Users of the social network don't care what the infrastructure is based off of.
yorwba 6y ago
Because it's the social network that's generating hockey-stick growth, not whatever boring technology enables it. The alternate universe Clubhouse whose developers decided to build their own audio stream multiplexing technology first is still working on it while the actual Clubhouse is rapidly grabbing market share and securing their position. It might make sense for them to acquire their infrastructure providers or clone their technology in-house, but only later when they have the money to actually do that.
dathinab 6y ago
> would want to engineer in-house? It's quite expensive to do so so why not buy a reasonable working solution until you become big enough? Clubhouse is in the end a life style app which from the get to go uses the snake oil of pseudo elitism and exclusiveness to create a flair of it being a high quality serious product independent of weather or not it actually is one. So they do a clever slow grow strategy: - start with invites to grow slowly and with this only have slowly increasing costs of operation - only start with one platform to keep initial cost down - buy in/rent all the tech know-how to reduce initial costs and bring initial products out faster even if it has some quality or security issues - (maybe) hype highly to grow investments fast - later expand to other platforms - later replace bad dependencies with custom solutions
ErikAugust 6y ago
Engineers engineer, product creators create products. Therefore, product creators are running Clubhouse.
djitz 6y ago
Interestingly enough, I believe you inadvertently highlighted a major reason why many projects never manage to see the light of day.
spamizbad 6y ago
They probably realized it's not worth the engineering effort to bootstrap an in-house audio/voice backend until they know if their idea is viable. Also: For all we know they've already hired engineers who are diligently working on this right now.

pram 6y ago

Clubhouse atm is probably an MVP, and they most likely don't have the infrastructure talent to build/manage an audio and streaming backend.

solosoyokaze 6y ago
Seems like they shouldn't have a billion dollar valuation if that's the case.
- zepto 6y ago
  Why not? If they have product-market fit, they can build the infrastructure they need.
  - solosoyokaze 6y ago
    I don't think they have product-market fit. It's not even public, you need an invite to use it. Regardless, you wouldn't do this as it introduces massive risk to the business and puts you 100% at the mercy of your technology providers (who I hope are currently raking Clubhouse over hot coals for all the cash they have).
    - zepto 6y ago
      > It's not even public, you need an invite to use it. It’s not clear what this has to do with anything, or whether it’s even realistic to say it’s not ‘public’. All existing users have invites to give out. Part of it is a strategy to manage scaling, but the other part is about building a coherent network. It’s not obvious that they ever need to change this. > Regardless, you wouldn't do this as it introduces massive risk to the business and puts you 100% at the mercy of your technology providers (who I hope are currently raking Clubhouse over hot coals for all the cash they have). I assume you don’t have a startup valued in the billions of dollars, so it seems like both they, and then investors know something about this that you don’t, but I could be wrong about this assumption! Feel free to correct me. As for being at the mercy of their providers - normally in business these problems are dealt with by using a contract that sets out what the costs will be and what the service will be for some time period. It’s also controlled by there bing more than one supplier, and supplier reputation. In short, business just doesn’t work the way you are implying it does. If their suppliers are able to ‘rake them over the coals’, that would be a huge failure of their lawyers, and it would be hugely damaging to their suppliers, who would not be trusted by new clients. Exposure to suppliers is also a normal risk which is checked during due diligence. That means their investors attorneys would also have failed.
      - solosoyokaze 6y ago
        They have a small, private audience that they've extrapolated into a mass market audience. That does not justify a one billion dollar valuation. They do not have the usage to back that up. VCs make tons of awful bets, I would not say they have any particular insight into what will be big and what will not. They fail more than they succeed. Regarding vendors, you're definitely incorrect. Clubhouse has exposed themselves to great risk by relying on another platform. Just a reminder: https://newatlas.com/skype-joltid-litigation-shut-down/12390/ https://newatlas.com/skype-joltid-litigation-shut-down/12390...
        zepto 6y ago
        > They have a small, private audience that they've extrapolated into a mass market audience. That does not justify a one billion dollar valuation. They do not have the usage to back that up. How do you know? Have you seen their data? Again you say the audience is ‘private’ but that isn’t true. > Regarding vendors, you're definitely incorrect. I’ve explained my position. You have not explained how it’s wrong. I have to assume you can’t. > Clubhouse has exposed themselves to great risk by relying on another platform. You don’t know what risk they have exposed themselves to unless you have seen the contracts and know what the switching costs will be. You also don’t know anything about where in their timeline their own infrastructure development is. > Just a reminder: https://newatlas.com/skype-joltid-litigation-shut-down/12390 https://newatlas.com/skype-joltid-litigation-shut-down/12390... That link proves my point, and disproves yours. eBay didn’t do appropriate due diligence, and didn’t have an appropriate contract. That is a risk Clubhouse can easily avoid, and the eBay/Skype case is now a well known piece of business lore taught in business schools. I assume you don’t know anything about what contracts Clubhouse has with their suppliers. Again, correct me if I’m wrong about that.
- pjc50 6y ago
  Reminder that valuations are a measure of what investors think you might exit for, not an assessment of whether your technology is any good. Even in "tech" startups, the marketing, growth strategy, investor marketing, and userbase are incredibly important. If all those are amazing enough you can IPO before you even launch a product.
  - solosoyokaze 6y ago
    > If all those are amazing enough you can IPO before you even launch a product. No, you actually cannot. For a one billion dollar valuation, it should be expected that the company owns the technology stack used to power the product. If I were Clubhouse's vendor I would be absolutely holding them over a barrel right now. I would have jacked up my costs 10X the second they closed the round.
    - lhnz 6y ago
      That would surely cause all of your other customers to freak out that if they became successful you'd do the same thing to them. Your reputation for fair prices would be ruined and all of your customers would now be building their own versions of your platform. Effectively your startup would be over, since nobody would ever trust you again. And, presumably your investors wouldn't be very pleased with you, so I guess you'd be looking for a new line of work, too... (That's not say that vendors won't increase their prices, but they will have to do so slowly. Meanwhile the founders of Clubhouse will be aware of this and no doubt building the replacement platform that has everything they will need...)
      - solosoyokaze 6y ago
        I don't think anyone would fault a vendor for charging a startup that built a billion dollar valuation off of their tech stack more money. In fact, I'd question the business acumen of a vendor who didn't do that. Of course, most people know better than to use someone else's technology to build their business.
- adrr 6y ago
  The demand and growth for the social network is what the valuation is based off. Marketing/Growth is really expensive and more expensive than actual infrastructure spend for most companies. Users of the social network don't care what the infrastructure is based off of.

yorwba 6y ago

Because it's the social network that's generating hockey-stick growth, not whatever boring technology enables it. The alternate universe Clubhouse whose developers decided to build their own audio stream multiplexing technology first is still working on it while the actual Clubhouse is rapidly grabbing market share and securing their position. It might make sense for them to acquire their infrastructure providers or clone their technology in-house, but only later when they have the money to actually do that.

dathinab 6y ago

> would want to engineer in-house? It's quite expensive to do so so why not buy a reasonable working solution until you become big enough? Clubhouse is in the end a life style app which from the get to go uses the snake oil of pseudo elitism and exclusiveness to create a flair of it being a high quality serious product independent of weather or not it actually is one. So they do a clever slow grow strategy: - start with invites to grow slowly and with this only have slowly increasing costs of operation - only start with one platform to keep initial cost down - buy in/rent all the tech know-how to reduce initial costs and bring initial products out faster even if it has some quality or security issues - (maybe) hype highly to grow investments fast - later expand to other platforms - later replace bad dependencies with custom solutions

ErikAugust 6y ago

Engineers engineer, product creators create products. Therefore, product creators are running Clubhouse.

djitz 6y ago

Interestingly enough, I believe you inadvertently highlighted a major reason why many projects never manage to see the light of day.

spamizbad 6y ago

They probably realized it's not worth the engineering effort to bootstrap an in-house audio/voice backend until they know if their idea is viable. Also: For all we know they've already hired engineers who are diligently working on this right now.