Jeffrey Katzenberg’s $1.7B Quibi Fail: A Case Study in Egotistical Leadership
Leadership is many things to many people.
However, the common consensus amongst most credible thinkers and practitioners is that effective leadership is characterized by attributes such as humility, effective decision-making, facilitation of outcomes, transparent communication, effective delegation, empowering others to succeed, and taking ownership for one’s actions.
Jeffrey Katzenberg is best known for co-founding Dreamworks animation, serving as chairman at Walt Disney Studios for ten years, and producing timeless hits such as The Little Mermaid, Beauty and the Beast, Aladdin, The Lion King, Shrek, Madagascar, Monsters Inc and Kung Fu Panda.
Quibi — Quick Bites
Buoyed on by his earlier successes, Katzenberg, now 69, more recently led the charge to raising US$1.75B in capital to fund a new company, Quibi — a mobile app focused on producing ‘quality’, short-form content.
Their mantra is big stories, quick bites.
Recode Media Interview
Speaking with Peter Kafka on the Recode Media podcast, Katzenberg’s language and attitude was diametrically opposed to what you’d expect from somebody with a lifetime of experience at the highest level.
He was defensive.
He was arrogant.
He offered up absolute statements.
“Very, very good actually always works!”
“You’ve seen the content…there’s nothing like it!”
When his arguments on why Quibi would succeed were struggling to move the already pessimistic Kafka, Katzenberg played the ego and experience card…“Here’s my experience from 45 years of being in storytelling…”.
Henry Ford was right. He was once quoted as saying “None of our men are ‘experts. We have most unfortunately found it necessary to get rid of a man as soon as he thinks himself an expert because no one ever considers himself expert if he really knows his job. As soon as a man considers himself an expert, he stops learning.”
Katzenberg didn’t get Ford’s memo.
I usually turn to podcasts to learn or escape, but I found myself doing neither.
While I admire confidence, and concede that success in most creative pursuits requires a healthy dose of reality distortion, I found myself cringing throughout the entire conversation instead.
Almost everything Katzenberg said flied in the face of leadership wisdom we’ve garnered from business luminaries such as Ray Dalio, Reed Hastings, Jeff Bezos, Eric Schmidt or Bill Campbell. It also defied what we‘ve learned from military leaders and leadership thinkers such as General Stanley McChrystal or John Maxwell respectively.
That’s not to say that there is one way to do things. There isn’t. But there are principles which tend to hold true.
Former World Series of Poker champion, and author of Thinking In Bets, Annie Duke, put it best on my podcast, Future Squared. “Take two managers. Manager A is 100% confident about their decision — just because. Manager B is 70% confident and explains why they’re at 70% and what they’re unsure about. Who do you believe? Most people trust Manager B.”
When you demonstrate that you don’t have all the answers — almost nobody does — it signals high emotional intelligence, and it opens you up to better mitigating against the unknowns, and making better decisions.
The Launch of Quibi
While I was surprised by Katzenberg’s behaviour on this podcast, I was not surprised by the eventual performance of Quibi.
Launching in early April, amidst the coronavirus, the Quibi app received an initial shot in the arm of 1.7 million downloads. However, anybody can buy downloads — engagement and retention are different matters. By May, Quibi had fallen off the top 100 free iPhone apps, and the platform was quickly being heralded as a failure by the tech and media communities.
It was a case of hockey-stick growth…in reverse.
Blaming Coronavirus for Quibi’s Failure
This would have been the ideal time for Katzenberg to make like a leader, and take ownership.
But of course, he didn’t.
He blamed coronavirus. He told the New York Times that “I attribute everything that has gone wrong to coronavirus” .
More absolutist language that leaves no room for greys and taking corrective action.
Funny though, because just several weeks earlier, he told Kafka that coronavirus would have a positive impact on Quibi…
“Consumption of video-content on the phone is through the roof! It’s up way, way more than television consumption. People are watching much more content on their phone, in their in-between moments. You don’t have less in-between times now, you have more, they’re just different.”
To blame coronavirus exclusively is a sad case of outsourcing accountability and not taking ownership for one’s decisions.
Why Quibi Has Been a Failure
Here’s just some reasons why Quibi has struggled:
- You can’t stream it to your TV, it’s exclusively mobile
- You have to pay for it, despite the internet being flush with free and engaging short-form content on YouTube, TikTok, IGTV and other platforms.
- The quality of the content has been heralded by many as mediocre, off-cuts and B-sides that studios rejected
- You can’t screen-shot it
Coronavirus might have played a part, but so did poor decision-making.
What Leaders Can Learn From This
It would be wise to channel George Costanza and do the opposite of what Jeffrey Katzenberg has done.
- Instead of ego, lead with humility.
- Instead of big bets ($1.7B or otherwise) and chest-beating bravado, run experiments —YouTube started with a $3.5M Series A, about one five-hundredth that of Quibi.
- Instead of making excuses, take ownership and look for solutions.
- Don’t let past successes cloud your judgment about the future.
- Avoid absolute language, and concede that the world is grey… not black and white.
- And watch out for the optimism bias.
A Tarnished Legacy?
Despite all of his successes, Katzenberg’s $1.7B Quibi experiment might go down as a case study in the perils of egotistical leadership, and a black mark on an otherwise stellar career.
Hopefully for his sake, given all of his amazing contributions to the world of entertainment, it’s not one that he is best remembered for.