Graph Neural Networks (GNNs) have achieved state-of-the-art results on many graph analysis tasks such as node classification and link prediction. However, important unsupervised problems on graphs, such as graph clustering, have proved more resistant to advances in GNNs. In this paper, we study unsupervised training of GNN pooling in terms of their clustering capabilities. We draw a connection between graph clustering and graph pooling: intuitively, a good graph clustering is what one would expect from a GNN pooling layer. Counterintuitively, we show that this is not true for state-of-the-art pooling methods, such as MinCut pooling. To address these deficiencies, we introduce Deep Modularity Networks (DMoN), an unsupervised pooling method inspired by the modularity measure of clustering quality, and show how it tackles recovery of the challenging clustering structure of graphs. In order to clarify the regimes where existing methods fail, we carefully design a set of experiments on synthetic data which show that DMoN is able to jointly leverage the signal from the graph structure and node features. Similarly, on real-world data, we show that DMoN produces high quality clusters which correlate strongly with ground truth labels, achieving state-of-the-art results.