Quibi and CNN’s Great Big Story share a common trait: taking a startup and making it act like an established business never works.
This may hurt, but I think the pandemic is the convenient excuse many decision-makers will lean on to make painful and undesirable decisions. CNN’s decision to shut down Great Big Story may be a prime example:
“Great Big Story lived how it died: with very little thought or planning. The product was good. The people were talented. There was no planning. There was no leadership. That’s why Great Big Story died. As of September 2020, Great Big Story had only reached 25% of its sales goal for the year, according to some former employees. However, its business struggles predated the pandemic. In its five-year history, Great Big Story had never turned an annual profit. As one former employee said, “The demise of the company started before corona.”
The unit launched in October 2015 at a time when Buzzfeed, VICE, VOX were commanding nosebleed valuations. But once the house of cards known as PE-fueled valuations tumbled, I think the lustre of underwriting Great Big Story’s losses lost some of its shine. Of course, then CNN’s parent Time Warner got acquired by AT&T. Under the burden of $100B in debt, naturally Great Big Story got lost in a sea of cost-cutting.
Startups succeed and fail for many reasons. Despite being housed in “an office near New York City’s Union Square while CNN remained uptown at the Time Warner Center,” that doesn’t change the reality that being flush with a $70M budget, it’s nearly impossible for a newbie to navigate those critical early days when you need to find platform/format fit. I saw this years ago when so many of our larger, well-funded competitors just threw money at problems but failed to find sustainable solutions, let alone business models. When News Corp. launched The Daily, a product geared for Apple’s iPad, it threw a huge budget at it and before long it realized its forecasts were too rosy. So it cut back on expenses, which hurt morale, which in turn sent the project into a tailspin. Corporations can certainly make these projects work, but not if they operate them like established businesses.