This week, the streaming service Quibi announced that it will cease operations in early December, just six months after its official launch.

Despite raising an impressive $1.75 billion over two funding rounds—$1 billion in August 2018 led by Madrone Capital Partners, followed by a $750 million extension earlier this year—Quibi's short-form video streaming service has failed to gain traction. The startup, founded by Jeffrey Katzenberg, a former chairman of Walt Disney Studio, seemed destined to success.

So, what went wrong?

In reflecting on Quibi’s failure, the founders pointed to two possible reasons: either the idea itself wasn’t strong enough to justify a standalone streaming service, or the timing was simply off. As they noted, “Unfortunately, we will never know, but we suspect it’s been a combination of the two.”

Following the founders' reflections, it's important to consider some broader implications of what this journey teaches us.

1. No amount of funding can replace a stable customer base

The downfall of Quibi underscores a fundamental truth in business: no matter how much capital you raise, your company’s long-term viability depends on your ability to attract and retain customers. Quibi’s massive fundraising seems to haven't been enough to overcome the challenge to establish a solid customer base. At the end of the day, a business is sustainable through the customers who support it.

2. Sometimes, talents and experience are not enough

Quibi’s leadership team was composed of some of the most experienced and successful individuals in the entertainment and tech industries. Jeffrey Katzenberg, a co-founder of DreamWorks and former chairman of Walt Disney Studios, brought decades of media expertise. Meg Whitman is a renowned tech leader, with an extensive background in leading several tech companies (like eBay and Hewlett-Packard & hasbro).

This seems to be the perfect fit and talent requirement to succeed in this project (media streaming service). Yet, despite this formidable talent and expertise, the company failed to find its customers and audience. This underscores the reality that even the best talent cannot guarantee the success of a new venture. The right product, executed well (multiple iterations with the users), is what ultimately matters.

3. Focus on execution and speed

While raising capital is crucial, particularly for a startup, it should not overshadow the importance of execution. The company failure highlights the need for startups to prioritize speed, agility and finding product market-fit. The company had ample resources, but it seems to struggled to quickly adapt to market demands and failed to deliver a product that generated the necessary traction. Building a product that customers love, and pay for should be the primary focus of any new business.

Conclusion

It’s worth acknowledging the courage of the leadership to make the tough decision to shut down and return the remaining funds to investors.

This story brings to mind the earlier rise and fall of Vine, another platform built around short-form video content. Like Quibi, Vine captured the public’s attention but ultimately struggled to find a sustainable business model. Despite its popularity, Vine couldn’t find effective ways to monetize its user base.

This also serve as a powerful reminder that in the world of startups, success is never guaranteed, no matter how much money or talent is involved. The story of Quibi is a cautionary tale about the importance of focusing on the fundamentals — delivering value to customers, executing with speed and agility, and have a as soon as possible a high gross margin product to fuel your growth.