Everyone knew a streaming platform that emphasized short-form video and viewing on mobile wouldn’t work — except the Quibi founders.
As an entrepreneur and investor, I know how much courage and effort it takes to start a company, let alone make it successful. So I root for every startup I encounter, knowing full well that the majority of them will fail. Such is the reality of startup life.
But every once in a while there is a startup failure so colossal — a company that is so comically overhyped and whose vision is so off-base — that it’s hard to not engage in a little light-hearted schadenfreude.
That company is Quibi, the streaming video service that may go down as the biggest startup failure in recent memory.
Only 10 percent of the people who signed up for the heavily anticipated streaming service in April renewed their Quibi subscriptions in July, when their three-month trial periods came to an end. Every subscription service experiences a little bit of churn, but a 90 percent attrition rate is cause for alarm.
Normally, I’d encourage a struggling young company to re-examine its value proposition, identify its strengths and weaknesses and pivot accordingly. The reason I feel comfortable clowning on Quibi, however, is that it wasn’t started by a group of plucky young upstarts — it’s the brainchild of two long-time corporate executives who are woefully out of touch with the culture, and who arrogantly thought raising a bunch of money is the key to success on the internet.
Quibi was started by Hollywood hotshot Jeffrey Katzenberg and former Hewlett Packard CEO Meg Whitman. At launch, the platform had two defining features:
- Medium-length videos: All episodes of Quibi shows are between seven and 10 minutes in length.
- Mobile only: Quibi content was available only on mobile devices.
Turns out consumers don’t care about arbitrary episode lengths or unnecessary restrictions on how and where they can view content.
Quibi’s central hypothesis was flawed. Consumers love highly-produced digital series, they just want to watch them on their TVs, not their phones. And when consumers do watch mobile video, it tends to be user-generated content. The success of TikTok is a testament to that.
Quibi managed to go against both of those trends simultaneously.
The funny part is everyone seemed to realize this approach was misguided except for Quibi’s senior management team. People were openly questioning Quibi’s viability in the run up to its launch.
Quibi is really trying hard to be a thing with all these ads. It’ll fail within a year.
— jimmy (@jimmyeppley) March 23, 2020
An optimist might say it’s still early, and that Quibi has a big enough warchest to build a customer base (he company raised a staggering $1.75 billion pre-launch).
On the other hand, the streaming video industry gets more competitive by the day. Just last week, NBC launched its owned and operated streaming service Peacock, and consumers are already flocking to it. That comes on the heels of TimeWarner and Disney launching streaming services of their own over the past several months. Meanwhile, Quibi squandered a splashy, celebrity-laden launch, and it’s hard to imagine they’re going to steal momentum away from their competitors.
If this were a group of inspiring young entrepreneurs exploring a daring idea, I’d feel for them. But with Quibi, I can’t help but chuckle. Its demise is more entertaining than any of the content it has produced.