Media mogul Jeffrey Katzenberg formed startup NewTV early in 2017, landed Meg Whitman as CEO in March 2018, announced $1 billion in funding in August of that year, and two months later renamed the business Quibi. The service officially launched in April of this year and now, two years after its naming and six months after its launch, the service is being shut down.
I’m guessing the main problem is a simple, and unfortunately common one.
They simply forgot to ask if anyone needed a Quibi.
The really sad thing is that Katzenberg, Whitman, and their investors probably didn’t need to spend money on research or spend time in customer discovery. Their concept had already been disproven. In September 2015 Verizon launched go90, a mobile-centric video streaming service with studio-quality content. The service failed to attract subscribers and was shut down in July 2018 (a month before Quibi’s funding).
Katzenberg and Whitman don’t understand how to launch a startup. They tried to run Quibi like a big corporate initiative. Verizon can afford to lose $1 billion on a bad big bet. No startup can afford to lose $1 billion.
Smart startups realize that their concept is merely a collection of hypotheses. Those hypotheses need to be tested, proved, and improved. Smart startups spend as little money as possible until their experiments have shown that they provide a solution that the market really needs, wants, and is willing to pay for. And when they truly know that, they scale like crazy.
Quibi did everything backwards. They spent tons of money without testing any hypotheses. And when their hypotheses were wrong, it was too late. The money was spent. The goodwill with the industry, investors, and the public was gone. There was nothing left to do but close the doors.
If you have an idea for a startup, learn this lesson.
Don’t be a Quibi.