As Quibi Closes Down This Week, Here’s Some Key Lessons All Companies Can Learn From
1. You have to offer something better than others in the market or solve a problem. In other words, you must have a “competitive advantage” in some way.
2. Good execs hire people smarter than themselves. Quibi hired a lot of very smart people, on many fronts, but then didn’t listen to them.
3. Collecting the right consumer data will tell you how consumers want to engage with OTT services. We have plenty of this data in the video world but Quibi ignored it.
4. The power of any mobile content offering is sharing. By not allowing viewers to act as the marketing vehicle for Quibi’s content, Quibi threw away the biggest value of being on mobile.
5. Calling the service Quibi, a name many could not spell or pronounce, results in higher customer acquisition costs due to the education that is required.
6. Marketing the service, instead of specific shows is a mistake. Consumers don’t care about the “channel”, but rather the content. Don’t highlight the “length” of the show, highlight the content. We all know content is king.
7. You have to set the proper expectations with advertisers. 22 brands bought $150M in advertising, #Quibi sold them on the metric of “reach”, but didn’t have it.
Math doesn’t lie and no matter how you ran the numbers, from a P&L standpoint, it would not lead to a profitable outcome. The content costs were too high and the fee they could charge consumers would always be too low. 100% of their revenue was generated from one service, without any revenue diversification like other OTT services have. When you have a plan that is setting yourself up for failure from day one, with a business model that doesn’t work, why should they be congratulated for “trying”? You can’t spend well over $1B to get a service off the ground and then “learn on the way”.
Quibi wasn’t a “startup” with a few dozen people and they ignored their own employees feedback, many of whom were the exact demographic they were targeting. Whitman has said the role of Quibi was for use “waiting for a doctor’s appointment or standing in line at the bank.” In those instances, consumers were not lacking video viewing options. TikTok, Instagram, Facebook, sports highlights, YouTube or the pause button, on any streaming service, works just fine. Qubi was looking to solve a problem that does not exist in the real world.
In all industries change happens and you need to be ready to adjust, even if you don’t know what the change will be. Some employees say there was no “what if this doesn’t work scenario” discussed internally. It can’t be an “all or nothing” approach. Lack of communication kills companies and you have to put in place a strategy to pivot, when the time comes, hopefully proactively instead of reactively.