Tom Conrad: evaluation

Transcript context

…I think I sort of misunderstood or misjudged companies sometimes by thinking about them really focused on the product execution. If you find an interesting problem that people care about and you solve that problem in a really beautiful, elegant, delightful way, that's 10 times better than anything else that they can get in that same space, they'll tell their friends and all the rest will take care of itself. And so that was always my ambition. Find a thing that I cared about building, do a great job building it in a delightful way, go really deep on listening to people and their feedback and iterate your way to success and breaking through that membrane that we all strive to get across, the really great word of mouth. But I think the thing I've come to better appreciate is that companies are also, they're kind of a math problem that describes how you take investment and pour them into the equation, and out the other side comes returns on some time horizon. And yes, there are variables in that equation that are influenced by the product that you build and all of the little details and decisions that you make about making that product great. But if the equation is fundamentally broken or a big swing in and of itself, no amount of iteration and execution can get you out of the failed outputs of the broken equation. And I think Quibi made a bet that you could build an entirely bespoke content library that was sufficiently scaled to get people to subscribe and retain for a couple billion dollars. It was a huge amount of money, but we made 70 shows in 18 months, which is more content than all of the major broadcast networks combined made in a single year. So it was a pretty major accomplishment. And we made a bet that we would augment those sort of episodic and serialized or Hollywood style shows with a bunch of daily content that we produce at the level of network television, nightly news, and so forth that would be an alternative to some of the sort of daily content that you might otherwise get on YouTube. And that was going to be about a third of the content spend. One super interesting thing that no one talks about is that all of that content was designed to be made day of or day before it aired. So there was no back catalog of it, and it was all designed to be shot in these professional studios that we built out, and it was really expensive. Like I said, it was a third of the investment we were going to make in content, almost half the investment we were going to be making content. And we launched two weeks into Covid, and we couldn't make any of that content except literally in the garages of the host's homes. And so we had this thing that was supposed to seem really set apart from YouTube that literally now was being made exactly YouTube content, which is sort of like self-produced at home with very little sort of the support infrastructure of Hollywood. m really set apart from YouTube that literally now was being made exactly YouTube content, which is sort of like self-produced at home with very little sort of the support infrastructure of Hollywood. Now you can argue, I think the content on YouTube is really, really exceptional in this category, and maybe we were never going to do better than that. But I think what was really fundamentally broken with Quibi was that the actual foundational equation of can you make enough premium content that's totally bespoke and made for the service and takes advantage of the nature of the phone, is that enough content to get people to sign up and retain, and can you do that for a couple billion dollars? And I think the answer is no. The library has to be much, much bigger and you have to have, like any company, you have to have sufficient time and energy to iterate on the content format itself. Our roadmap really wanted to innovate on the content format. And so I think part of what happened is pretty quickly it became clear that the math was just wrong. It wasn't going to take 2 billion, it was going to take six or eight or 10 billion. And the risk reward profile of betting 10 billion on the format was just more than anyone can stomach. Next up, we've got Sri Batchu, former head of growth at Ramp who shares something that I've thought about ever since we had this conversation, which is this idea that when you fail, make sure you fail conclusively to make this failure an actual learning that you can build off of versus just a waste of time. Here's Sri.…

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