What Entrepreneurs Can Learn From The Quibi Failure
Every big, new app that’s fomented together with substantial funding and clever marketing spins up this momentous charge that engages prospective consumers by telling them “this will be a part of your life” – just six months before the recent announcement of the Quibi failure, this is exactly what they did.
The idea behind Quibi was to provide a unique streaming service, backed by recognizable figures that served up original content in easily digestible chunks of 10 minutes or less for each program. Quibi content offered a new spin on entertainment by partnering with well-known news platforms like The Dodo, Vox, and many others such that these publications could use Quibi as an extension of themselves. They also offered a slew of shows broken down into short segments for consumption that featured talents such as Adam Devine from Workaholics, singer and actress, Jennifer Lopez, Chance the Rapper, and many other recognizable names.
Through a compelling marketing endeavor that was featured on many high-authority publications like The Verge, it seemed as though this new media app designed for micro-consumption was going to carve out its niche among streaming services and even compete with other streaming apps like Tik-Tok.
On paper, it seemed like the perfect recipe. They could offer a unique streaming solution in a format that other providers had only dabbled with up to this point. The service was officially launched in April of 2020 where it was met with a less than enthusiastic audience which is a little baffling as content streaming surged during the lockdown.
Ultimately, the attention anticipated for the platform never came to fruition, despite offering original content with high-profile names. In the last week, the platform has sheepishly announced that it’s shutting down having not churned a profit with only $350 million left of the $1.8 billion in financing it raised to get the ball rolling.
How all hell broke loose before the Quibi failure
Realistically, Quibi’s shortcomings started manifesting well before the platform got off the ground. As the brainchild of producer Jeffery Katzenberg and business executive Meg Whitman, the platform aimed to be more “Hollywood” than other platforms on the market.
The pair went full bore into collecting as much capital as possible by brandishing their app idea as a kind of way to help “revitalize” a Hollywood that isn’t actually suffering. Preceding the pandemic where theatres had to shut down, the movie industry cried wolf as it has done many times in the past, this time (as well as in recent years) blaming companies like Netflix for their state of perceived decline.
Even though that wasn’t the case – box offices surged last year – this is one of several ideas Katzenberg and Whitman used as leverage to help them instill the notion that the world needed more exclusive content with recognizable stars.
Truly, everything about Quibi seemed to cater to the modern consumer. People love streaming services plus, high-profile celebrities tend to get attention even when they produce lackluster material. Pricing was competitive too, as their service ran $7.99 a month for ad-free delivery.
The problem, as with any launch, is that it typically takes time to amass a dedicated base of users. As much as they banked on the idea that their service would go viral, it just never happened. Yet, they pitched investors and waved flags as though Quibi would have the marketability to compete with other streaming service providers without doing much more than toss around their initial advertising campaign.
Had they started with a true MVP (minimum viable product); a little less content; and not operated in an absurd “stealth-mode” fashion in fear that someone would steal their idea that cost into the billions to create, they might have made it.
By sharing the idea more broadly and engaging in thorough user testing, they could have pivoted their concept to create something users actually cared to use – instead, they acted like someone was going to pull a hot billion out of thin air and build their own spin on the Quibi concept. So by not having an MVP-approach and being hush-hush about their idea, Katzenburn and Whitman blew over a billion dollars developing a platform that most of us will never know.
What we can learn from the Quibi failure
The idea behind any major release is to build hype, which Quibi certainly accomplished. The next step, which is the biggest, is to engage your audience such that they not only stick around but sing praises of your platform.
This is where they fell short – the content that was supposed to attract new users and keep existing users engaged simply didn’t get attention or shared as anticipated. They hoped that people would be drawn to their brand because of their initial advertising then organically grow to love content. The expectation was that people would share and discuss content which essentially became their sole marketing strategy after launch.
Shortly after Quibi officially launched, it fell back off its horse that was fueled solely on hype.
It’s like when you build an app of any other flavor – you can put all kinds of valuable features into your app but you’re not going to accumulate or retain users if no one knows they exist. A popular brand can get by throwing their logo around but the brand needs to “mean something” before that can happen.
The Quibi failure occurred because they spread themselves too thin by making content that no one would ever know about and only marketing the platform during the initial drive. After putting an enormous amount of money into their original programs, nothing took off because of the lack of marketing for the content.
In addition, another step they should have taken was a user testing initiative. Not only would this have revealed opportunities to enhance the operational aspect, but it would also have given them insight into how users felt about the unique structure and style of their content. When building an app, user testing and feedback is what allows a business to refine a product and get over any lingering hubris (and confirmation bias) that often limits good ideas.
Had they taken the time to first promote their content on other channels like YouTube and make it known that said featured programs would be available in full on the Quibi platform, they might have succeeded. Instead, they were secretive about everything, basically only marketing their logo early in the product’s lifecycle. Moving forward, Quibi will serve as a reminder that business needs to promote their products early, with detail, and not let their arrogance get the best of them.
Don’t be like Quibi
Blue Label Labs appreciates thinking big but also realizes that marketing needs more substance than just hype. Our services afford customers insight into lifecycle phases such as the critical points after a product launch thus allowing our customers to succeed without relying on the slim chance that they go viral. Get in touch with Blue Label Labs to discuss your idea.