How Hollywood app Quibi collapsed after raising $1.75 billion in one of the biggest business flops ever

GettyImages 1192559743 — Quibi CEO Meg Whitman.
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With just a few weeks to go until one of the biggest product launches in their careers, Jeffrey Katzenberg and Meg Whitman met alone for several hours.

The two veteran business executives, representing the top echelons of Hollywood and Silicon Valley, were suddenly forced to discuss the future of the project they'd worked on — and promoted — almost constantly for the past two years.

Their vision for a game-changing streaming video service called Quibi had raised a stunning $1.75 billion in capital. But their plans never foresaw a pandemic, and when Katzenberg and Whitman sat down in mid-March, the novel coronavirus was beginning to show that it was not a blip. Hospitalizations across the US were increasing; restaurants and schools were closing.

Seth Doane — a CBS news correspondent helming a special version of the "60 Minutes" news program being created exclusively for Quibi — fell ill with COVID-19 that month, and 16 members of the show's team tested positive. The virus was affecting everything.

Should Katzenberg and Whitman delay the launch of Quibi, slated for April 6? Did the idea, conceived as a way for on-the-go millennials to consume "quick bites" of Hollywood-quality video on their phones, even make sense any more? And even with Quibi's roster of A-list talent like Steven Spielberg and Kevin Hart, would anyone pay $5 to $8 a month during an economic crisis?

The two execs, whose relationship had reportedly become strained during the multi-year collaboration, went through all the aspects of their carefully crafted business plan together. In the end, Katzenberg later told the Recode Media podcast, they decided to gamble:

"Pedal to the metal, "Katzenberg said. "Let's actually go do this."

The gamble, we now know, did not pay off. And, in what is destined to go down among the most high-profile and expensive business flops, it took only six months to unravel.

Whether Quibi's demise was the result of uncontrollable acts of god or the inevitable product of overconfidence and bad assumptions is sure to be debated for years to come. But an up-close look at Quibi's short lifespan shows unheeded warning signs and costly missteps at key moments that hinted at the debacle to come.

This account of Quibi's six-month failure to launch is based on Business Insider's own reporting, as well as reporting from The Wall Street Journal, The New York Times, Deadline, The Information, and other news outlets.