Quibi: A $2 Billion Lesson From Hollywood to Corporate Innovators
In the last couple of weeks, the main buzz going around the tech and innovation scene was the shutdown of Hollywood’s hyped entertainment/tech company Quibi. As I read through all the news and articles talking about what seems to be the innovation flop of the pandemic era, I couldn't help but notice so many patterns and similarities with the 2000s dot-com bubble.
To be fair, the last thing I want to do in this article is to sound like a nasty critic/hater, pointing out what went wrong in hindsight. That is very easy to do when you don't have skin in the game. I know from experience the hardship of having to make critical business decisions, knowing the impact it could have on the lives and money of other people, and lived the consequences of many not so great outcomes that came from them. So I respect and honor the boldness of going out there and trying to make it happen, no matter what. But I believe there were evident signs of previous, well-known, mistakes happening that could have been avoided. And I will try my best to bring here as much of a technical, critical, and, hopefully, thought-provoking analysis on them as I possibly can.
An Act of God
In Jeffrey Katzenberg and Meg Whitman's open letter to the employees, investors, and partners, they state that the failure of Quibi is “likely for one of two reasons: the idea itself was not strong enough to justify a standalone streaming service" — which throws the blame simplistically into a 'dumb idea nobody wanted' — "or because of timing”, as they refer to launching a short-video streaming service, aimed mostly at commuters, during a pandemic lockdown where no one was really commuting.
They say it was a combination of both. I don't believe it was either. Well, maybe the former, if I had to pick one. But for sure this story is a lot more about a mix of product overconfidence and unvalidated assumptions, than a result of uncontrollable acts of God.