Business Failures for the History Books
Apple, Amazon, Tesla… We like to prostrate ourselves to the altar of innovation. So much so, in fact, that we tend to forget that just one catastrophically bad strategic decision would bring these companies down. It’s happened before, and it will keep happening.
Following Elon Musk’s acquisition of Twitter, here’s a guide to the biggest strategic failure in the corporate world, and what we can learn from them. There won’t be any reference to Blockbuster in this article; at this point it’s like shooting fish in a barrel.
Quibi shut down in late 2020, a mere six months after launching its streaming service. It had raised $1.7B. That’s a short, expensive life for a company which had claimed it would revolutionize entertainment.
Its objective was simple : turn Youtube videos into high-end television. More specifically, creating 10-minute clips that would be watched on mobile, in portrait mode, during commutes.
What went wrong? First, pricing. Youtube and TikTok are free, and few customers were willing to pay for smartphone-only content.
Then, the pandemic. Right after the launch of the app, many people stopped commuting, and had much more time at home to watch content on a bigger screen. Not great for “transit entertainment”. The offer wasn’t even what mobile users wanted: it relied on A-listers instead of the Youtubers or TikTokers people were used to watching on the go. Bafflingly, viewers couldn’t take screenshots to post on social media, making it tougher to generate a buzz.
Finally, and perhaps most importantly, management was not up to par. Quibi’s CEO, Meg Whitman is not an entertainment start-up CEO, having led HP for 6 years. The founder, Jeffrey Katzenberg, is also a dinosaur from another era, and was said to be far too arrogant for the good of the company.