In April 2020, a new app called Quibi launched with one of the biggest war chests in startup history[1]. Hollywood producer Jeffrey Katzenberg and former eBay and Hewlett-Packard boss Meg Whitman had raised about $1.75 billion from investors before a single customer signed up. The bet: people would pay for premium, big-budget shows cut into 10-minute "quick bites" made for watching on your phone. Then reality showed up. People stuck at home during 2020 wanted to watch on their big TVs, not squint at their phones. Quibi couldn't add the subscribers it had projected. By the time it announced it was closing, about 6 months after launch, it had around 500,000 subscribers against a goal in the millions. The app went dark that December, and Quibi sold its produced shows to Roku.[2] Two of the most experienced executives in business, $1.75 billion in funding, and the product still didn't find its customers.
Sources
- Quibi launched April 6, 2020 and announced on October 21, 2020 that it would wind down, about six months after launch. Data as of October 21, 2020. Source: CNBC, "Quibi to shut down after just 6 months." cnbc.com/2020/10/21/quibi-to-shut-down-after-just-6-months.html
- Roku acquired exclusive global distribution rights to Quibi's content library. Financial terms were not disclosed by Roku. Data as of January 8, 2021. Source: Roku Newsroom. newsroom.roku.com/news/2021/01/roku-acquires-quibi-s-global-content-distribution-rights
Quibi had $1.75 billion in funding to build its app, produce shows, and market the launch before it was certain whether customers would pay. What does this show about the risk of bringing a new product to market?