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Clubhouse is growing. Now what?

Clubhouse wave emoji

Good morning! This Monday: Clubhouse is growing and changing, an explanation for tech's political spending and how not to steal important company documents.

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The Big Story

Join the club(house)

Clubhouse has all the early trappings of a hot social networking app: mostly populated by tech folks, half the talk on the platform is about the platform itself, Black users are responsible for its best and most creative uses, there's something genuinely new and kind of magical about the experience, lots of unanswered questions about moderation and user safety … oh, and it's a money-raising juggernaut.

  • It raised a new round of funding led by a16z's Andrew Chen, who wrote: "We believe Clubhouse will be a meaningful addition to the world, one that increases empathy and provides new ways for people to talk to each other (at a time when we need it more than ever)." Sums weren't disclosed.
  • Two million people used Clubhouse — which is still technically an invite-only product — in the past week, the company said. And I'm sure you've noticed the extent to which the app has dominated conversations on Twitter recently.

Clubhouse's plan is to grow fast and big. The team's immediate priorities sound like exactly where a 2021 social app should be headed, and where a lot of previous ones have had trouble:

  • "Creators are the lifeblood of Clubhouse," the team wrote, and it's looking into features like tickets and subscriptions to help those users make money. Clubhouse is as much an event space as a social network, so this seems likely to work.
  • Funny that "keeping the servers up" is such a crucial priority, isn't it? But it makes sense: We've seen, from Gab to Parler to Twitter, that social networks usually crumble under a lot of new users.
  • And here come the algorithms! "With this new round of funding we'll be investing heavily in discovery so that we can show you people, clubs, and rooms that are perfectly tailored to your interests — and help you discover new rooms you never would have thought to look for," the team wrote. In other words: "We'd like all of Facebook's engagement, please (even if we get all its problems too)."
  • The big thing missing here is Trust and Safety. Both Chen and the Clubhouse team mentioned building the T&S team, but there's not much here in the way of actual plans. The creator-first approach can help in terms of giving people control, but that goes sideways when creators realize what really sells. (See also: YouTube.)

I admit to being slow to understanding Clubhouse's appeal, but a screen-less, conversational, ephemeral social network really is a pretty great thing. Now the question is: Is Clubhouse a unique new space, or is it the new Stories, there to be co-opted and eaten by every other social app? Twitter Spaces is trying to prove the latter, and I'm sure there are audio social skunk works at Facebook, Snapchat and everywhere else. If Clubhouse wants to win, it's going to need to be one step ahead again by the time everyone else catches up.

Politics

Tech pays to play politics

Last week Brad Smith said one of those things that's obviously true but nobody ever says out loud: that Microsoft, like pretty much every other company, is in the business of buying influence in politics.

  • When employees asked why Microsoft gave money to some of the Republicans who tried to overturn the election, Smith answered honestly, per CNBC: "Politicians in the United States have events, they have weekend retreats. You have to write a check, and then you're invited, and you participate. So, if you work in the Government Affairs team in the United States, you spend your weekends going to these events. You spend your evenings going to these dinners, and the reason you go is because the PAC writes a check."
  • Smith said yes, relationships are important, and not everything is about money … but everything starts with money.

The only surprising thing about this is that it got out. Practically every big player in tech operates the same way, spending to gain favor and access across the political spectrum. It's like Michael Jordan said: Republicans buy sneakers too. They also buy Windows computers, Prime subscriptions and iPhones.

  • Facebook, Amazon, Comcast, AT&T and Charter were all top-10 lobbying spenders last year, per The Wall Street Journal, and Google and Apple just barely missed the list. Spending millions to open doors on Capitol Hill is as much a feature of the tech industry as fleece vests and free lunches.

But: Microsoft then announced it had halted all PAC donations, "while it reviews whether to suspend further donations to individuals who voted against certification of the Electoral College." And the company acknowledged that something felt different now, after the riot on Jan. 6 and the general attempt to overturn the election. But it doesn't know what to do yet. And I think that about sums up the tech industry right now.

People Are Talking

Tesla is suing Alex Khatilov, over a ... pretty unsophisticated alleged scheme:

  • "Within three days of being hired by Tesla, Defendant brazenly stole thousands of trade secret computer scripts that took Tesla years to develop. Then, he lied about it and tried to delete the evidence of his theft when quickly confronted by Tesla's security team, forcing Tesla to bring this complaint."

Speaking of Tesla: Waymo CEO John Krafcik said Elon's company isn't really competition:

  • "It is a misconception that you can just keep developing a driver assistance system until one day you can magically leap to a fully autonomous driving system. In terms of robustness and accuracy, for example, our sensors are orders of magnitude better than what we see on the road from other manufacturers."

Sutter Hill's Mike Speiser has an investment prediction for 2021:

  • "There hasn't been a $100 billion company in security, and we think that's about to change."

A MESSAGE FROM NASDAQ

Nasdaq

From commerce to content and from Big Tech to Big Government, leading technology analyst Benedict Evans has a knack for seeing the future. At this event, he'll debut and discuss his 2021 trends and predictions for a tech industry — and a world — in the middle of huge change. Join us for this event on Wednesday, Jan. 27 at 11 a.m. ET.

RSVP today.

Coming Up This Week

It's earnings season! AMD, Apple, Facebook, Microsoft, SAP and Tesla all report this week, among plenty of others.

Will the Facebook Oversight Board rule on Trump's account? I'd bet against it. But will Trump comment publicly? Will we learn more about what the Board cares about? We'll be watching every aspect of that saga.

President Biden will continue making appointments, signing orders and pushing his agenda. So far tech hasn't been a big part of things, but that should change soon.

In Other News

  • The European Parliament invited Jeff Bezos, Mark Zuckerberg, Sundar Pichai and Tim Cook to a Feb. 1 hearing to discuss upcoming regulation. Reuters reported that the CEOs are unlikely to accept the invitation, though Pichai will have a call with Margrethe Vestager today.
  • Amazon wants workers to have an in-person union vote in an Alabama warehouse on whether they will organize, despite a COVID-19 positive test rate of 20% in the state. The company objected to the current vote-by-mail plan.
  • Uber laid off over 180 Postmates employees, reportedly including founder and CEO Bastian Lehmann.
  • Italy told TikTok to block all users of unverified age after a 10-year-old girl died of asphyxiation. Her parents said she had been participating in a "blackout" challenge on the app.
  • Governments are getting involved in the auto chip shortage. Germany and Japan joined the U.S. and EU in asking Taiwan to help pressure TSMC to prioritize auto chip production. Taiwan said it had asked, and TSMC said it would.
  • Kuaishou's IPO is extremely hot. The institutional portion of the $5.4 billion raise was reportedly oversubscribed within hours, with Fidelity and BlackRock taking large stakes in the company.
  • An ADT technician admitted to spying on customers having sex via home security cameras he installed. Time to check what your cameras can see.

One More Thing

Bitcoin's power struggle

Bitcoin will either save us or destroy us, depending on who you ask. Place the Iranian government in the latter category: It has closed more than 1,600 Bitcoin mining centers, the AP reported, blaming their energy consumption for causing weeks of rolling blackouts all over the country. But many suspect that blaming Bitcoin is just cover for bigger government failures. No matter what's going wrong in the world, you can always blame Bitcoin!

A MESSAGE FROM NASDAQ

Nasdaq

From commerce to content and from Big Tech to Big Government, leading technology analyst Benedict Evans has a knack for seeing the future. At this event, he'll debut and discuss his 2021 trends and predictions for a tech industry — and a world — in the middle of huge change. Join us for this event on Wednesday, Jan. 27 at 11 a.m. ET.

RSVP today.

Today's Source Code was written by David Pierce, with help from Anna Kramer and Shakeel Hashim. Thoughts, questions, tips? Send them to david@protocol.com, or our tips line, tips@protocol.com. Enjoy your day; see you tomorrow.

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