Why did Edge Gravity and Quibi Fail and Tips on How to Avoid it

From a basics perspective, the companies that succeed and thrive are executing on the fundamentals: “Solving a problem that consumers are willing to pay for”. It does not have to be a premium product or offering, so long as there is demand (want/need) and the firm is addressing it (supply).

Beyond basics, even with a supply/demand in place, startups/firms fail. Let’s discuss two examples that have everything going for them, yet success eludes them and what we can learn from them.

Ericsson’s Edge Gravity:

Jeff recently wrote a piece on Edge Gravity, “What went wrong at Edge Gravity?”, with a lot of great insights. Edge Gravity – a content delivery platform, had its genesis via an internal incubation process at Ericsson. It was an extension to an existing product line and addressed a customer need. As a startup, it checked all the boxes moving through different phases of funding and became a successfully funded venture – so why did it fail? Jeff highlights two primary reasons:

  1. Entering a market that was very much saturated by incumbents and niche players.
  2. Under the guise of a startup, it was entrenched in the parent companies processes (more like an incumbent).

If I had to offer up a few nuggets - Entering a saturated market is not necessarily a bad thing, and it comes down to creating value via a differentiated product/offering. Going from 1 to 1 (as Peter Thiel stated) i.e like for like, the incumbents will always win. For the 2nd part, there is no easy way out – to expect different results doing the same thing,  is myopic to say the least. This is where the founders need make a stand.


Brendan Gahan in his piece, “What Can Marketers Learn From Quibi's Failure?”, highlights the story of Quibi. It may be too early to call them a failure, so let's focus on their current state. With almost a $2B in war chest, Meg Whitman at the helm, backed by a slew of investors, yet it attracted only 2 million subs (in 2 months of service). In contrast Disney+ & Netflix, doubled and added 16 millions respectively. So why the failure?

  1. Brendan suggests its due to lack of understanding the target segment (18-34) consumption behavior.
  2. In addition to Brendan’s insight, I’d add  that not pivoting the strategy knowing the industry dynamics have changed (COVID-19).

Since, Quibi is still  in early phase, it still has an opportunity to assess the demand of its consumer base and pivot. This is critical for all firms sizes!

Statistically, 90% of the startups fail before their second birthday, those that survive push through by continuously evaluating their strategy & execution. While this statement is painted with broad brush strokes, you can read more about business strategy here.

Till next time...”Stay Safe & reach for the stars!"

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