Zeeshan Sheikh runs a tiny startup from his Lexington basement. But he has some bigger competitors you might know: Twitter, Facebook, LinkedIn, Spotify, Slack, and Clubhouse, a buzzy mobile app that raised $100 million in venture capital in January.
Sheikh quit his job in September to focus full time on an idea he’d been prototyping on the side: an app that would enable groups of people to have live audio conversations.
Yes, sort of like a conference call, but with added features that make it easier for people to join — like no dialing — and to see information about who else is participating. They can even raise a virtual hand to jump into the conversation. He called the product Space and gave it a light-purple logo featuring a ringed planet.
By that time, the Clubhouse app had already started building momentum. It was founded by two veterans of Google and Pinterest and had been released in April. By the end of 2020, word was out that Twitter was testing its own live-audio product with a small group of users. The name chosen by the San Francisco social media company? Twitter Spaces. Uh-oh.
And last week, the music streaming service Spotify paid a reported $50 million to acquire a Los Angeles startup that created Locker Room, an audio app focused entirely on sports conversations. It was launched in October.
The world of “social audio” — talking to friends and strangers using an app — is having a Bay-of-Fundy-esque rising tide moment, and Sheikh’s startup is still but a dinghy. Can a six-person company that has raised about $750,000 from investors find a way to differentiate its product, survive, and win?
If you’re still a fan of dialing 10 digits to talk to friends and family the old-fashioned way, let me explain what makes apps like Clubhouse and Space fun.
Yes, you can have a private “audio room” with friends or co-workers. You don’t have your camera on, because it’s just audio, which tends to make conversations less stilted and give participants more patience with meandering conversations that may last an hour or more. It’s easy to send a quick “ping” to other friends or co-workers who use the app to see if they can join a room in progress. (There’s no awkward wait while you say “Hang on, let me see if I can conference in Shelly.”)
And with Clubhouse, you can join public audio rooms hosted by others to listen to authors, entrepreneurs, and billionaires share what’s on their minds, and perhaps ask them questions. Bill Gates and Elon Musk have both been on the app, as have newscaster Gayle King and comedian Tiffany Haddish.
The big downside? Platforms like Clubhouse ask for lots of access to your contact list, so that you can be alerted as friends and family members join the app. And they record conversations as they happen, in case there are reports of harassment or hate speech; Clubhouse says it discards these recordings immediately afterward if no one reports any misbehavior.
“Audio is very humanizing, and helps create deeper connections than just text,” observes Wayne Kurtzman, a research director who focuses on social media at the technology research firm IDC. He says it reminds him of the early days of Twitter, launched almost 15 years ago. “Companies large and small are trying to hone their features to match a fast-evolving social audio market,” Kurtzman says.
For Sheikh, it has been a wild ride. Sheikh says he tried to start a company called JumpOn in 2018, to bring to market an audio app focused on helping sales teams collaborate better. That evolved into an app that would be like a “live podcast,” Sheikh says; you’d have to be there to hear what transpired. At that point, Space was still a side project, and Sheikh was working as a director of engineering for Everbridge, a Burlington software company.
The side project, Space, caught he attention of Jason Calacanis, a San Francisco angel investor who also put some early money into Uber. Sheikh explained that he didn’t want to create yet another social-media platform like Clubhouse, which would need to attract millions of users and start selling ads to succeed. Clubhouse was, as he saw it, “elusive, FOMO, and ego-driven,” referring to “fear of missing out.”
Instead, he wanted to explore ways to integrate spur-of-the-moment audio conversations into companies’ mobile apps, internal websites, or other digital products. Calacanis “loved the idea, he had 1,000 percent conviction, and he was ready” to wire money, Sheikh says — though he hadn’t yet set up a corporation.
Calacanis says he isn’t worried about social audio being a “winner take all” market. “I think there will be 20-plus winners in this space, just like there are 20-plus winners in social media today, like Twitter, Facebook, Instagram, Snap, LinkedIn, etc.,” he writes via e-mail. Calacanis says he invested because of Sheikh’s approach to selling social audio to businesses, rather than hustling to get consumers to embrace it, as Clubhouse, Spotify, and others are likely to do.
Some companies, Sheikh says, may want to embed Space on their websites so that there’s an easy way for visitors to talk to a sales or customer support specialist. Others may want it on an internal site, so there’s an “always open” room where employees spread around the world can talk about a specific project — or just shoot the breeze.
And a company like Nike may want to host a “live shoe drop,” when a celebrity such as Serena Williams is present to talk about a shoe she has helped to design. “Imagine I’m going to have a special edition shoe drop at 9 p.m., but only people in the audio room on Nike’s site will be able to view the link to buy it,” Sheikh says.
Nike isn’t a customer — yet. But Sheikh says he wanted to make sure that businesses were willing to pay for what Space is building, so he started to charge them a $100 deposit to participate in pilot testing of Space; that money can be applied later to a broader license for the product. So far, the company has a mere $700 in revenue.
Sheikh acknowledges $700 “is not a lot of money, but it does validate that at least seven people will pay for the product.” And, he observes, it may be more than Clubhouse has collected, as that startup doesn’t yet have anything that consumers or businesses can pay for.
During the pandemic, Sheikh worked as a senior director of engineering for a big publicly traded company from his basement; now he runs his own startup, without having so much as moved his desk.
“This is the best time to quit your job, if you can, and see if you can make anything,” he says. “I played it safe long enough.”