Exploring the world of social apps
Anu Atluru, Clubhouse's 1st biz hire, angel investor, writer,
Today’s chat is with Anu Atluru, an angel investor and writer. Anu most recently spent two years at the social audio company Clubhouse. She was the first business hire and served as the first Head of Community.
She’s got an eclectic background and is one of the most interesting people I follow online.
Sar: I would never have guessed that you are an MD and used to work as a physician. You went from a highly deterministic career path to chaos and uncertainty in the consumer startup world. People who go down the medical path tend to have a strictly defined way of making an impact and doing good. At the risk of generalization, they tend not to be creative and risk-taking in ways you would assume an average startup person is.
Anu: Counterintuitively, I have found inherently creative, curious, and risk-tolerant people in medicine and tech. You can also find people who are not these things in both.
For example, in the tech world, enterprise SaaS startups and big tech jobs are viewed as the “safe” bet and consumer social as “risky.” Within medicine, specialties come with their own stereotypes and ascribed personal attributes too. Internal medicine, on average, might attract more “risk-averse” people, and emergency medicine (EM) is more “risk-tolerant.” EM physicians operate in a fast-paced environment, regularly face high-risk situations, and have to make decisions with imperfect information. I started med school interested in surgery and ultimately chose EM. In my experience, it also attracts multi-hyphenates that are action-oriented and highly adaptable – perhaps a natural corollary to the startup world.
My biggest gripe with medicine has always been the constraints and ceilings – on what you can do, how fast, with how much leverage or scale. I also learned that medicine isn’t the best place for people who want to play creative or competitive games at scale. Every ‘profession’ is suited for a particular set of games; it takes time to figure this out, then decide which you want to play repeatedly. So for me, stepping away from medicine and into tech wasn’t starting something entirely new; it was going back to something I always knew I enjoyed – creative production but at scale.
Sar: You wrote a fantastic blog post on learnings from your time at Clubhouse. I’m conflicted about how I feel about the advice culture in tech. On the one hand, it is amazing that people who have been part of the success stories share their learnings and become advisors to help others learn and grow faster. There are both micro and macro benefits. On the other hand, I think the people who get asked for advice and taken seriously have been part of extremely rare success stories. Most of what they say falls into either survivorship bias or a highly contextual one-upon-a-time idiosyncratic environment in our ever-changing world. So practically, most advice is useless, but they make for feel-good stories that inspire others! If you were to apply the clinical discipline of an MD to diagnose what’s going on, what would be your take on the advice culture?
Anu: Anything followed by “industrial complex” sounds bad, but I’ll go on a limb and say I support ‘advice.’ But there are points of failure:
First, the supply. Yes, people who get asked for advice and share it usually have rare success behind them. But I don’t think success is required to give good advice; experience usually is. Some of the best advice comes from people who have failed at something; to your point, we usually don’t hear from these people. So, I’d argue we need more honest discourse by experienced people, not just “winners.”
Second, the context. Either the person giving the advice doesn’t contextualize it correctly, or the person taking it doesn’t adapt it to their own context before acting on it. You might call the latter a failure of judgment. The best way I know to deal with this is to lead with first-principles thinking and seek out multiple viewpoints, which forces you to triangulate your position rather than copy-pasting.
Third, purpose. Is the purpose of the advice to provide emotional support, educate, instruct an action, or something else? Some of the best advice investors give to founders is just support. And if it’s actionable, pragmatically, there should be a higher bar than just supportive or educational. So, one point of failure is in advice-givers not specifying and advice-takers not discerning which is which.
If we’re leaning into the medical analogy, my diagnosis is that advice is a helpful drug when taken for the right symptom, in the right dose, etc. Some advice has a placebo effect, but even that can be helpful if it doesn’t come with side effects. There’s a “do no harm” principle from the Hippocratic Oath somewhere here. We can debate which part of the advice “industrial complex” follows this versus which doesn’t.
Sar: When you look at today’s consumer social landscape, what app mechanics do you think we are over-indexed on? What could use more experimentation?
Anu: We’re over-indexed on permutations of medium and format, but there’s still room to experiment with mechanics – either unlocking new ones or popularizing ones that haven’t gone mainstream yet. BeReal’s once-a-day, random notification is a mechanic on top of an already popularized medium and format. Locket’s use of the widget as a point of entry is another. Every platform upgrade, e.g., iOS 16, introduces the potential for new mechanics.
Zooming out, a set of macro-decisions and micro-decisions can distinguish a social product. The more mature the space, the more micro the decisions generally become – until a new platform emerges and we start all over exploring macro decisions. So at the highest level, we think in platforms. Within a platform – let’s take web2 mobile apps – you decide the medium, e.g., text, audio, photo, or video. Then, you decide the format, e.g., short-form recorded video. The one-level deeper decision is about the mechanic.
Looking at the evolution of consumer social and media over the past decade, I expect we’ll see a pendulum swing away from 24/7 async engagement and content consumption on largely open networks. For new entrants, I expect the pendulum will swing towards more time-limited, participatory experiences in semi-permeable networks (i.e., what we like to label communities these days). Along these lines, I’m a strong believer in ritual social apps.
Sar: In May 2020, you wrote:
“Despite the hype around audio, only podcasting has gained traction; it still has complex production, gated distribution, and lacks meaningful social elements. New platforms need to drastically simplify content creation and distribution and pick a use case — e.g., TikTok for audio (simple yet powerful creator tools and easy 1: Infinity discovery) or Twitter for audio (strong 1: Many network creation). The much talked about new app Clubhouse has started as the latter but is still finding its place.”
You joined Clubhouse in May 2020 and left last year. How do you assess the progress of audio as a medium today?
Anu: We have more clarity on the best use cases for audio as a medium, but we’re still figuring out the true market size. On the content side, the use case is largely podcasts; on the social side, it’s conversations. The latter is the newer territory and harder to figure out (where Clubhouse and some features of Discord and Twitter play). I’m also more bullish on long-form audio, which I call an ambient or passive format (in a positive way), than short-form audio.
Zooming out, I think there’s a continuum of media “richness” that we’re moving forward on – from simple text to audio and images to video and immersive media like VR. As this happens, we learn which use cases are enhanced a lot by a more rich medium and which aren’t. I still believe any medium and format, with the right mechanic, can be a strong entry point in consumer social today (regarding binary success or failure, not necessarily market size). If you’re building in a less ‘rich’ medium, you have to do it for the appropriate use case and 10x better. Or you have to be open to adapting your format quickly as your product matures, your user base grows, and the landscape evolves.
Sar: The consumer apps world has the biggest winners and the largest number of failures. Unlike the enterprise world, it is much more volatile and prone to luck and timing. How would you make a case to convince more people to work on consumer apps in 2023?
Anu: Building consumer apps is one of the best ways to deliver creative contribution and cultural impact at scale. Another great way to do this, in my opinion, is to create art that’s either consumable (e.g., films) or interactive (e.g., games).
Consumer social is a more extreme microcosm of the broader consumer startup world. And many consumer social builders are more driven by cultural impact than money (though in an ideal world, the latter follows). I also often joke that consumer social startup builders are the starving artists of tech. They can be heavily driven by creative contribution and realizing an artistic vision. There’s a theory that “creatives” have an inverted Maslow’s hierarchy of needs – they seek self-actualization and creative fulfillment first, then esteem, relationships, and so on, as long as their primary pursuit isn’t hurt. It’s hard for me not to see merit in these generalizations – they often resonate with people deep in the space.
I don’t have an agenda to convince more people to build in consumer, because if it’s not a good fit for you, you’ll find yourself miserable. But, if it is a good fit for you, don’t get convinced out of it by the very people that it’s not a good fit for ;)
Sar: I’m biased in favor of ad-based apps that the vast majority of the world can use and the diversity of content you get from not restricting the app to people from certain groups and geographies. Make a case for paywalled social apps that should make me reevaluate my stance.
Anu: You don’t see ads in the early stages of most products because it’s clearly a worse experience for users than just not having ads. And at that stage, users aren’t sold enough on the product’s utility or locked in with switching costs to put up with them. That’s the simplistic argument against ads – they’re not aligned with user interests.
I’m biased in favor of freemium models since they can give you the best of both. Let anyone get the core experience for free but with ads. For users that value the product highly and are willing to pay, let them remove ads (or whatever tax you’re placing on free accounts) and give them access to additional value-add features. This way, products largely can still serve a broad and diverse user base and maintain the opportunity to have a massive cultural impact.
In the freemium model – whether the upsell is in-app payments, subscriptions, etc. – deciding which features to build and which to put behind a paywall is the hard part. And most social networks have never really explored willingness to pay, but everyone’s experimenting with it now after seeing plateauing user growth and pressure on the advertising business.