Gone in a Quibi
Building businesses is hard. And the media industry is no exception. Last year, two tech titans came together to create a new streaming service. This seemed like a great idea when Disney+ and NBC’s Peacock were launching their new video products too.
Why Did Quibi fail?
Quibi had no experienced venture capitalists with no backing them. This is a common theme with big failures. Theranos had the same problem with no experienced VCs on board.
Startup investing is hard. Startup due diligence is very different from general business investments. VCs bet big on timing with the right execution model.
Breaking down the cap table, you will find no reputable investors in Quibi. $1.75 billion raised with nothing to show for it. Plus, the two co-founders, Meg Whitman and Jeffrey Katzenberg, only invested $16 million. They had no skin in the game.
The Lessons We Learned
In 2020, $1.9 billion in venture capital backed female founders. Quibi raised its second round of $750 million in 2020 and has a female founder. This is a notable shift in the investment landscape.
It is great to see investors take a chance on new ideas although they couldn’t make it profitable. The +$5 subscription model hurt this company the most to compete with likes of Netflix. Also without the ability to cast videos to the TV screen, consumers were unlikely to switch over to Quibi.
But mobile video is a very successful channel. Tik Tok had hyper growth during the pandemic with its video-first platform. The average watch time on Tik Tok is 52 minutes per day. These bite-size clips are easy to consume and addicting. Quibi failed to capture the audience’s attention, even with high-quality content.
Quibi shut down to return its remaining cash to investors. A difficult but right decision for the investors.
P.S. I must admit, six months ago, I was on the wrong side of this trade. Quibi's high-quality content impressed me more than the app. We all live and learn from our mistakes. I had the right idea, wrong platform.
TiE Tech CEO Series
On November 18th, TiE NJ will be hosting its next Tech CEO event.
This time we will have two tech titans discuss the multi-billion IT services industry. My friend and fellow CM, Anjan Lahiri, will be interviewing Samir Dhir, President of Virtusa. If you want to learn how to build a vision or how to market for growth, this event is for you.
Learn what steps leaders need to take to keep employees motivated & engaged. Register for this event today.
Fundraising for the Homeless
Winter is coming. And the homeless don't have ability to go virtual like we do. For the second time, I will be participating in a virtual sleep out for the homeless youth in Newark, NJ.
With a soft launch on Monday, I’ve raised $1,500 in 36 hours. All of the teams have raised +$100k this week alone. A $20 donation from you today will make all the difference for one child this winter. Please donate to my fundraiser here.
When Breath Becomes Air [New Book Recommendation]
An unusual recommendation for unusual times. This book was a wake up call for me about how short life is.
+14,000 Amazon Reviews
This short biography* is about a 36-year old neurosurgeon’s battle with lung cancer. An emotional roller coaster about a hardworking man fighting for his life. Heartbreaking and beautiful are the best words to describe this book. Dr. Paul Kalanithi is an award-winning writer. He discusses in detail the health challenges faced by people, as patient and doctor.
Who would I recommend this to?
The 32-year old starting their first company. The college graduate searching for the perfect first job. Or the 52-year old who needs a reason to take one more chance. This book is about minimizing regret and maximizing happiness. Remembering that we are mortal is what makes us human.
Google's Antitrust Case
The Justice Department is after Google’s Search Monopoly. All I can say is ‘good luck’ to the department.
Outdate Antitrust Laws
The internet is a free market. It costs nothing to do business online. Google may be predatory with vendors but consumers have the option to use any browser they like. No one is forced to use Google.
So the attempt to breakup Google will be futile. One of the arguments is why Google is the default search engine on devices like Android. I’ve always owned an Android. I don’t want to use any other search engine. In fact, competitors like Apple have more pricing power with hardware than software.
No Harm, No Foul
The lawsuit appears to contain no specific allegations of consumers being harmed. Google's official blog posted "The bigger point is that people don't use Google because they have to, they use it because they choose to." This lawsuit will prove that old laws need to an update from real tech experts. Not politicians.
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