The $1.8 Billion Quick Bite

Quibi was a smartphone app with shows and movies split into short episodes of five to ten minutes. The idea was to give people quick entertainment during commuting or waiting. One main feature was that users could switch between vertical and horizontal viewing, called the Turnstyle feature. At first, this seemed innovative.

Jeffrey Katzenberg, who used to lead Walt Disney Studios and co-founded DreamWorks, raised $1.75 billion in funding for Quibi from major Hollywood studios like Disney, Sony, and WarnerMedia. Even with this money and experienced leaders, Quibi shut down just six months after launching in 2020. At first glance without further information, this failure seems surprising. But from a Design Thinking view, the main problem is apparent.

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1. Problem Context

Quibi was built on the idea that people wanted high-quality, short videos for times like commuting or waiting. This idea mostly came from the top managers, especially Katzenberg and CEO Meg Whitman. Instead of checking if users really needed this, they focused on turning the idea into a business.

Quibi was only available on mobile and had a subscription price ($4.99 with ads or $7.99 without). Since the shows had to be short and work in both vertical and horizontal mode, Quibi spent a lot of money making original content before launch.

Looking back, the main mistake was not checking if the problem really existed. Just because something seems logical does not mean users actually want it.

2. Stakeholder & User Analysis

Quibi wanted to reach younger people between 18 and 34 who are busy and like short videos in their free moments. But these users did not switch to Quibi and stayed with Netflix, TikTok, or YouTube. Quibi hoped for about seven million users in the first year but only got around 500,000 after the 90-day free trial. The marketing was also not appropriate, for example, they advertised during the Super Bowl which must have been very expensive and during the Oscars, which is being watched by people in their 50s rather than in their 20s or early 30s.

One of the crucial mistakes was ignoring digital creators and influencers. TikTok and YouTube are popular because of people like MrBeast and David Dobrik, who have many fans. Quibi focused only on Hollywood stars like Reese Witherspoon and John Travolta. They even rejected an offer from MrBeast, who has more viewers than Quibi ever had. This showed that Quibi tried to use old media strategies in a new digital world and that the company’s idea about what users wanted was very different from what users actually did.

Katzenberg and Whitman, both in their 60s during the development stage, were not part of the target group and thought Hollywood stars would bring success. But this does not work for younger people anymore. Another problem was that Quibi’s offering did not match what users wanted. People today expect free content, sharing, and social features like comments. Quibi only had paid content and did not allow sharing or even screenshots. This made the app less attractive for many and did not attract more users.

3. Design Thinking Breakdown

An analysis of Quibi through the Stanford Design Thinking model reveals several critical points of failure.

Phase 1: Empathize

This was where Quibi’s core problems began. The company did not develop a deep understanding of its users. They saw that people use their phones in short breaks but did not look deeper into why or how they do it. As a result, Quibi failed to identify what their target customers truly value. This clearly contradicts the first Design Thinking phase.

There is not much proof that Quibi really studied how people use their phones in daily life. The leaders were also very different from the target users. Because of this, they missed important aspects like social features, free content, and how strong other platforms already were.

Phase 2: Define

Because Quibi did not really understand users, the organization defined the problem wrong. Instead of looking at how people watch content on their phones, they focused on selling premium short videos. This business-first approach gave users little reason to leave the platforms they already liked. Quibi failed to recognize that it could not compete with other streaming services if it produced a similar product and didn’t offer something truly different.

Phase 3: Ideate

Quibi did not try out many ideas. They quickly decided to make a premium, mobile-only platform with professional content. Most of the money went into making shows instead of testing different ideas. They thought that high-quality Hollywood content would be enough to get users. But traditional Hollywood actors are not appealing to the target audience. While they have high awareness, they lack a personal connection to the viewers.

Quibi launched with 51 shows available. They were buying movie and show ideas that were rejected by popular streaming services before. This should have already been a sign that the ideas may not have been the best to produce. The pitches were also not specifically made for short episodes (bites).

Phase 4: Prototype

A big mistake was skipping the prototype phase. Design Thinking encourages building a quick, cheap prototype at first, with failure being unproblematic. Quibi skipped the Minimum Viable Product (MVP) Phase, launched a finished product, and spent over $1 billion on content beforehand. Because of this, it was almost impossible to change things later.

Phase 5: Test

One could identify the 90-day free trial as the test phase for Quibi. However, because the first phases failed to identify the real needs and wants of the target user, the test results were poor. The subscription numbers after the trial showed that people were willing to watch “quickbites” for free, but few people saw enough value in the app and were also willing to pay for the service.

Quibi entered the market in April 2020, just as the COVID-19 pandemic started. People stopped commuting and instead watched content at home on TVs or laptops. Quibi was only on mobile and did not have a TV app at launch, so it did not fit the new situation. If they had tested earlier and changed things step by step, they may have been able to react better.

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4. Root Causes of Failure

Inside the company, Quibi trusted too much in the leaders’ experience and gut feeling instead of real data and user feedback. The large amount of money made them feel they had to succeed fast, so there was no time for slow growth or testing. Problems inside the company also made it hard to change direction.

Technically, making Quibi mobile-only limited the choice of devices where people could watch. The Turnstyle feature was new, but it did not add much value and made making content harder. There were also legal problems, like a lawsuit from Eko.

Quibi also misunderstood how people watch content today. They thought Hollywood-style shows were most important and did not see how much digital creators and user-generated content matter. This showed they were out of touch with what young users like nowadays. Most users did not want to pay for short videos, especially when free options were available. Also, the pandemic changed the daily lives of most people. This meant people were not on the go anymore. The intended usage space for Quibi disappeared. Other platforms adapted, but Quibi’s problems came from both outside and inside the company.

5. Redesign Proposal

How might Design Thinking have been applied more effectively in Quibi’s case?

If Quibi had used Design Thinking better, they would have started with real user research to see how people watch content every day. This would have shown if the idea added value to the viewers before spending so much money. Instead of launching a finished product, they should have made a small prototype to test their main ideas early and get feedback before growing bigger.

For the business model, Quibi could have offered both free (with ads) and paid options to match what users want. Adding social features like sharing, comments, and following creators would have made the app more engaging. Working with influencers and digital creators, not just Hollywood, could have helped reach more people and get more users. Quibi should have been available on more devices, like phones, computers, and TVs, to be more flexible. Getting feedback all the time and improving step by step would have helped the product fit what users really need.

6. Lessons Learned

Quibi shows that money and experience are not enough for success. The most important lesson is that user needs must come before business assumptions. If you do not really understand your customers, you might build something nobody wants. Launching a finished product without prototyping and thorough testing is very risky. Getting feedback and improving is key in Design Thinking. In the end, Quibi failed not just because of timing or COVID-19, but because their main ideas did not match real user behavior.