🕶e8: Quibi Tried, But Not Enough! Apple Making Some Serious Moves! Kanye Here To Save The Day!
👋 Good Morning and Happy Sunday! Welcome to the e8 newsletter, a hand-picked collection of business and start-up news, resources for entrepreneurs, job/internship postings, and noteworthy trends that are happening this week! I hope you find this weekly newsletter informative and engaging!
~This week’s edition is a bit longer than usual, so grab a cup of ☕️, sit back, and enjoy~
📺 Quibi Tried, But Not Enough! Have you ever used Quibi? My guess...probably not. Quibi is a subscription-based streaming platform designed to showcase short-form content (7-10 mins per episode) via your cell phone. Quibi (“Quick” + “Bites”) was launched on April 6, 2020 in Los Angeles, CA, and although many initially hyped up the mobile native storytelling app, the company hasn’t been gaining the traction it hoped to achieve. Currently, Quibi is on pace to have 2 million users (keep in mind that most of these users are on free trials), far below their targeted 7.2 million. Furthermore, according to a Wall Street Journal report, “daily downloads peaked at 379,000 on its April 6 launch day but didn’t exceed 20,000 on any day in the first week of June.”
So What Went Wrong?
Miscalculating the Risk of Launching During COVID-19
Quibi decided to proceed with the launch amidst the lockdown despite the main premise of the app being an on-the-go entertainment platform for when viewers are not at home
Quibi spent $100 million on advertising without any ability to cancel (that’s why you probably see it everywhere: Super Bowl ad)
Solution: Instead of launching during COVID, they should have delayed the launch until schedules returned to some level of normalcy, and repurposed the non-refundable ad money to instead promote registration for a launch in the near-term future.
Lack of Interactivity
Nothing differentiates Quibi’s content from the rest of the SVOD (Subscription Video On Demand) market, begging the following question: how might that even be possible, especially considering most of their content is consumed passively
Solution: In order to retain users, companies must find a compelling yet interactive way to showcase the storytelling. Personally, I get antsy if I am just staring at my phone. I prefer the use of gestures and such to make navigation of the platform more sophisticated and engaging.
Quibi, You Are Not A Movie Service
When looking at most startups, you’ll find that most employ what is known as the “latter strategy”. Quibi, however, put all their eggs in one basket, launching with a $470 million marketing campaign and $1 billion in spending on content, leaving no room for the company to make meaningful adjustments or iterations based on user feedback to help improve the initial experience
Solution: Quibi should have directed more focus on creating a native interactive format, so that they wouldn’t have to justify their price when compared to others like Netflix and more. Another possible improvement could’ve been made by investing more into existing IP (Intellectual Property) so that users could experience familiar content while adjusting to a new format.
Well, who really knows what’s next for this company? All I can say is that having a majority of users still on a “free trial” is not conducive to growth. While some believe that Quibi could make a speedy comeback as countries emerge from lockdown, I really think they have a long road ahead, especially as the company has been unwisely investing its funds. As mentioned previously, perhaps instead of pouring money into advertising, Quibi should have invested in a broader array of library and content. This would’ve been ideal for testing what works best for mobile-native story formats. I think Quibi needs to enter into a phase of experimentation over these next few months, trying new solutions and tactics to try to engage users and increase retention by focusing on interactivity and premiere content.
📱 Apple Making Some Serious Moves! For the first time ever, Apple hosted their WWDC keynote online! The fast-paced presentation consisted of twenty presenters, a tour around the Apple Park, and countless updates. You can watch it all here for FREE! I have to say, the video production was nothing short of superb! Let’s take a look at some of my favorite features they announced this past week.
What They Announced
Big Sur was announced which includes a complete macOS redesign and reimagining of the software
Improved Safari (might have to give this a try for once): Apple designed a new customizable start page, finally introduced Safari extensions in the App Store, an improved tap design, translation features, and increased performance with longer battery life. Not bad at all!
iMessage gave us the update we need: First off, users can now pin any conversation and keep it at the top of the conversation list. Second, Apple introduced direct replies to specific messages in any conversation (you can even press on the message to see a chain of all the people who replied to that message). Third, you can now mention others in the groups, and create your own group image
Apple introduced Widgets on the Home Screen with different customizable features (e.g. size) and changed the App Library so that it automatically organizes all of your apps into one simple view
Cool feature called Smart Stack: this allows your widgets to intelligently be curated based on the apps you use most. Plus, they appear at the at the time of day when you most utilize them!
App Clips: I thought this was interesting - leveraging NFC capabilities for users to make purchases without having to download the app
Automatic switching between devices was announced for all AirPods, but for those who are all boujee and have the Pros, expect that price tag to be worth it as the AirPods Pro will support “Spatial Audio Compatibility”
Manufacturers will soon have the ability to unlock their cars purely with iOS. The first to do so? BMW’s 2021 5 series
Last but not least, probably the most important announcement: Apple will be developing its own processor for their computers in the near future
While I could go on and on about Apple’s new features announced, ain’t nobody got time for dat! But with the ones highlighted above, I truly believe Apple is finally making a great leap in software and UI developments. I just switched back from my PC to OS and I am excited to see what’s to come. I think Apple has finally listened to consumers about the lack of customization Mac software and iOS offer its users, and although it took longer than expected, Apple is known for their minute attention to detail. And, personally, the wait for extraordinary software is a far greater reward than immediately having anything subpar. While Apple is not the first to enter the space of wireless key operations (think: Tesla the Goat), I do think with the technology Apple offers, more partnerships between car manufacturers and Apple will be a standard moving forward.
👕 Kanye Here To Save The Day! While The Gap brand has been failing to grow over the last few years, the retailer recently announced that it would be teaming with Kanye West’s fashion brand Yeezy to create a new clothing line called “Yeezy Gap” (unfortunately, no shoes - could be a good thing as I couldn’t imagine what Gap Yeezys would look like 🤣). The announcement Friday morning translated to a 36% soar in the stock. Gap had already been struggling to determine its identity, and the advent of coronavirus has only caused further detriment with sales plummeting by 43% in Gap’s Q1, and the temporary closure of roughly 90% of their stores. Let’s take a look at what is going down with this deal and what this could mean for Gap!
What We Know
The launch is set for the first half of 2021, the company announced Friday
The deal was set for 10 years with the option to renew after five years, according to a source familiar with the deal
Gap is set to pay royalties and potential equity to Yeezy based on sales performance
At the five-year point, Gap is hoping that Yeezy Gap will be generating $1 billion in annual sales. For context, Gap’s brand brought in $4.6 billion in global revenue last year
Kanye has dreamed of creating a clothing line for the masses since his early days of working at Gap
*Did you know the sneaker side of Yeezy was valued at as much as $3 billion last year? This was reported by Bloomberg in April, citing a document from Bank of America.
This is an interesting deal and something I personally would have never expected. The deal could bring the financial and creative boost that Gap really needs. Gap has had a rocky past few years with significant executive turnover, including three CEOs in six years. Gap is taking a leap of faith betting on Yeezys’ celebrity/creative entrepreneurial spirit, rather than a typical designer.
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What's up, my name is Evan Hiltunen! I am a recent finance grad from Indiana University and financial analyst @ Goldman Sachs. I have a strong passion for start-ups, finance, and technology, and I hope you find this newsletter informative!
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