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I think a lot of people are reacting to perceived wastefulness. Could Quibi’s investment dollars have been distributed to 1000 hypothetical startups instead? What would these teams have built and how much impact could those products have on the world?
Surely as someone in the venture business you must realize that this is an illusion, and that not just in startup investing but in any form of high-risk investing it's almost a mathematical certainty that a huge amount of capital will inevitably be "wasted."
Surely as someone in the venture business you realize the benefit of taking more shots on goal?
I personally have reacted to trying to scale before you proved product market fit. It is both a very amateur and arrogant at the same time.
Portfolio 1: $1.75M into 1,000 companies (w/the ability to invest more if successful) Portfolio 2: $1.75B into 1 company Surely the former is automatically preferable, no? I think it’s reasonable to be frustrated by the funding of #2 instead of #1
Of course it's not automatically preferable. It depends which companies they are. If it was automatically preferable, late-stage investing wouldn't exist.
Wouldn’t you say it’s only “wasted” if we don’t learn anything from it
I think it’s the combination of wastefulness and hubris of the founders. The core innovation(short episodes) could have been tested with significantly less money and much earlier on. Thus it felt like a wasteful pet project of some old execs
If they didn’t raise SO much money could they have tested some core hypotheses (content, consumption method) for less? Maybe they would have shut it down earlier with less money spent or pivoted and found product / market fit.
Most intelligent people in the startup community (including myself) are not critiquing the venture model. They are critiquing how Quibi choose to spend their venture investment dollars. I think that is not only fair but important lessons can be learned.
Is it really a startup when your friends and family round to start the company raises $1B? I think that’s the source of a lot of the schadenfreude
I think the critique (consciously or subconsciously, deserved or undeserved) is the perceived hubris associated with the sheer amount of capital raised pre launch or any market validation.
Rarely has there been so much money raised pre-launch of a product followed by such a fast failure. Katzenberg & Whitman are also incredibly wealthy and neither are central figures in the “startup community” and thus there’s less empathy.
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