5 Hip Companies That Crashed Spectacularly
It's worrying when things go wrong with big companies, because maybe the disaster will spiral outward, and it will eventually affect the rest of us. But sometimes, these brands are just so full of themselves and confident in their coolness that their downfall brings us nothing but delight. So join us in mocking these companies who flew too close to the Sun, and couldn't see the danger through their Dolce and Gabbana shades.
Google Quickly Gave Up On Its Attempt To Make Video Games
A couple years ago, video game companies realized something. People had started streaming movies through subscription services instead of buying them, and it was working pretty well. Meanwhile, people still had to buy games, even though running the things requires special hardware and sometimes cold fusion reactors. What if game companies instead started running the games on their own servers and then let people play remotely, charging a flat subscription fee? And so we got services like GeForce NOW, PS Now, and xCloud.
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Then Google said, "We'll do you one better. How about we do that, but we also make people pay full-price for each game? No, they never get a copy of the game. We'll keep that for them."
Gamers weren't so tempted by Google Stadia. And yeah, in time, Stadia had options where you needn't pay for individual games or where you needn't pay for the service at all, but with the simplicity of subscribe-once-no-worries off the table, people had a chance to really get thinking about whether cloud gaming is so great after all. Turns out that even with Google owning supercomputers cooled with unicorn tears, streaming a game from them looks worse than running it yourself on a good PC, unless your internet is really good. And if you're lucky enough to have internet that good, you're probably in the market for owning your own expensive computer gear, making you the person who needs Stadia the least.
It was clear that Google needed a little something extra to attract the old men yelling at the cloud, and it was the same thing companies use to market specific consoles or digital stores: games. Exclusive games, games you could play nowhere else, games Google itself would create using their Stadia Games and Entertainment division. Stadia opened multiple studios, led by former studio heads from Ubisoft and Sony. Then two years later, Google shut them down, without their having created a single game.
We don't have an official explanation beyond a bunch of PR speak, but the reason seems to be that making games is really, really hard, and it doesn't actually get much easier when you scale up operations and pour swimming pools of money at it. Consider how that other tech leviathan Amazon has also been trying to make games and has also found no success, since Amazon is no good at making anything. When you buy a product manufactured by Amazon, it's because they copied the design exactly from a competitor then blocked the competitor from selling. You probably can't get away with doing that for games.
Given Google's famed history of completely shutting their services down at the slightest provocation, plenty of people expect Stadia overall will soon die. Google swears it won't, but a careful reading of their statement about ending game development reveals that they talk again and again about their industry "partners" and very little about the people who play games. Maybe their ultimate goal is to market Stadia to companies to get demos into players' hands, instead of marketing it to players. Because with Google, you're rarely the customer. You're the product.
The Giant Ice Cream Factory That Couldn't
If your job is boring, perhaps you fantasize about abandoning it and becoming a screenwriter. Brian Smith did not have that option because he already was a screenwriter. He needed an even more ridiculous and whimsical fantasy: He'd quit his job and make ice cream for a living. He and partner Jackie Cuscuna went and did exactly that, opening Ample Hills Creamery in Brooklyn. Then just four days into operations, they ran out of ice cream and had to shut down. And so ended that dream from the mind of a child.
--Tommy Jenkins, age 7
Wait, no. Running out of ice cream isn't a problem when you're an ice cream maker, it's just a sign that you're popular. So Ample Hills reopened a week later, better prepared, and they were soon cranking out the sweet stuff at a crazy rate, serving two customers a minute with just seven employees. Oprah endorsed the brand in 2015, leading to an instant further surge in success. Disney had them making special Star Wars ice cream and later a Spider-Man flavor, a real version of the tie-in that was just a joke in Endgame.
Even as Ample Hills opened new branches across the country, they couldn't keep up with how much product they wanted to churn out -- especially as they wanted to attract investors with promises of becoming the next Ben & Jerry's. They figured they had start making their bespoke ice cream on an industrial scale. And so came the final stage of the ice cream fever dream: opening a 15,000-square-foot ice cream factory. For no good reason, they set up this station in a pricey section of Brooklyn, instead of, say, Fort Smith, Arkansas.
That factory cost millions more than planned, and it ultimately spelled doom for the company. The same techniques that make ice cream in a shop can't make ice cream in a factory, and as Ample Hills kept experimenting with how to get it right, they had to then throw out floors of equipment, and dump thousands of gallons of melted product that, honestly, we would have been happy to take off their hands, no charge. Ample Hills declared bankruptcy on March 15, 2020. Then New York shut down for COVID. Smith and Cuscuna had to sell the company, with the two founders totally cut out of operations.
The factory hadn't been the only problem, though. Aside from that, they'd been opening more and more branches, and even when the branches they had were failing, they opened new ones, at a loss, to convince investors they were growing. Plus, there were the squints. Squints are pints packaged in square containers, which Ample Hills chose for the sake of unique branding, but they later realized squints melt more than round packaging, take more damage, and need special equipment that's prone to breaking down.
"No squints!" demanded staff at one meeting. Which was awkward because the word "squints" sounds vaguely dirty when you say it several times. Then again, so does "Ample Hills." Yeah, we too have the mind of a child.
Quibi Sold Off Its Programming For Pennies On The Dollar
According to a recently released report containing confidential information, some people actually did sign up for streaming service Quibi. Crazy, we know. Because though we were just telling you about video streaming being a success, Quibi was an exception. It failed at every level, to the point that reading about Quibi mishaps became a major form of entertainment, one much more satisfying than watching anything on Quibi.
For example, imagine someone puts together a TV show about the behind-the-scenes world of a fictional network. We see Gal Gadot walk into the office and speak about how she wants to bring to air a new line of female-focused programming. Then her face falls when the Jeffrey Katzenberg exec character, in front of her, suggests that Gal could maybe do a '70s-style aerobics video for them. That happened at Quibi. In a TV show, this scene would win an Emmy. (It would be less popular with viewers, who'd roll their eyes at such an on-the-nose, unrealistic take on sexism, clrearly written just to attack men.)
Or, picture a scene just pitching Quibi on its most basic level. "We take the format that viewers associate with free content," says our pitchman, "short videos, maybe ten minutes each. But then we charge for it. And we sink premium levels of money into every episode. It's a sure moneymaker!" Much dialogue would cover how each program will have to be shot in portrait and landscape modes, since kids today like vertical videos. This scene too would earn award praise, but only in the comedy category, and the pitchman has to be Jack Donaghy.
when you say it several times."
"Lemon, are you seven?"
Quibi shut down last December. They cited the pandemic when rationalizing their failure, since their business model assumed people on the go would watch short videos, but considering how much streaming services and free short videos gained viewers during the lockdowns, maybe they would have done even worse without COVID. Quibi sold all their shows to Roku for under $100 million. Though that number might still sound like a lot to us, investors had poured $1.75 billion into Quibi before it went bust. Also, the exact amount is undisclosed but is said to "significantly less than 100 million," so we choose to believe it sold for $16.99.
It would make sense for Roku to string Quibi's 10-minute episodes together to make longer videos, since that's the sort of TV people like to watch. But they aren't allowed to do that. Airing them together would change the format of the programs under union rules, which would entitle the crew to the union wages that keeping videos 10 minutes let Quibi avoid paying. Now there's a revelation worthy of a drama and comedy Emmy.
Crystals And Moon Magic Couldn't Save Alex And Ani
Imagine you're watching Shark Tank or Dragons' Den. A woman comes on and says, "Hi, I learned about jewelry from my father's factory, and now I'm making my own. I'd like $100,000 in exchange for 10 percent of my new company. I'm naming it after my two daughters. I have a patent on a type of bangle with a knot in it." Do you think the investors would jump at the opportunity? They should, because that company's Alex and Ani, and 10 years after Carolyn Rafaelian founded it in 2004, it was worth $1 billion. The secret? Witchcraft.
We're not totally joking. Rafaelian believed in witchcraft, said uncomfortable employees. She had shamans bless the products as they got made, subjected workers to mandatory tarot readings, and placed names of enemies in the freezer to keep them from controlling her. One employee, suing the company, complained about how everyone had to meet with the in-house psychic, who'd divine secrets and then share them with management.
If you don't believe in witchcraft, you might more readily attribute the company's success to stuff like "strategy" and "marketing," thanks to CEO Giovanni Feroce and a bunch of other people at the top. But in 2014, Rafaelian and Feroce fought over some undisclosed matter (maybe company expansion, maybe what kind of purifying sage to burn), and she forced him out. Lots of others high up at the company got so mad over this that they left too, and things started to go bad. The company took on too much debt, and by 2019, a suspicious Bank of America pulled the plug on their credit line and claimed that the company was now worth just $20 million.
Alex and Ani sued Bank of America -- for $1.2 billion, over gender bias, claiming the bank was mad the new CEO was a woman. As you can see if you read the complaint, the arguments seemed to somewhat lack legal muster ...
... and the lawyer authoring the complaint would go on to sue California over its Coronavirus restrictions and advise the Trump campaign in pursuing voter fraud claims. The company ended up withdrawing the suit within a month, and it turned out the board had never authorized it: It had just been Rafaelian's wild idea. So when investors later agreed to put in new capital, part of the agreement was that Rafaelian had to leave the company.
That wasn't Alex and Ani's only gender bias lawsuit. Onetime exec David Medeiros sued them, saying the largely female company fired him because they didn't want a male COO. Not all men in the company minded the gender ratio, though. "There were 1,000 employees, and like 900 of them looked like runway models," said one guy at the company, who also happens to be Rafaelian's ex. "It was like a freaking frat house. A free for all."
Screw These Hipsters And Their Hipster Chocolate
These are the Mast Brothers, Richard and Michael:
The picture tells you everything you need to know about the Mast chocolate business. Either you look at that photo and say, "Ooh, those are Brooklyn hipsters! I bet they sell something artisanal. That's the sort of chocolate I want to buy." Or you look at the photo and say, "Ooh, those are Brooklyn hipsters. I bet they sell something artisanal. Screw them and the beards they rode in on."
That second point-of-view goes both for those of you who are perfectly happy eating just Hershey's chocolate, which is a trash product made primarily of weasel curds and bat tears (we kid, but only slightly), and also for the real chocolate connoisseurs, who turn their noses up at hipster posers. See, the Mast Brothers opened shop in Brooklyn promising "bean to bar" chocolate bars, high-quality stuff made from raw cacao beans. And their image -- the beards, chiefly -- brought them success. But chocolate specialty stores refused to stock Mast bars.
Experts called the chocolate "chalky," "moldy," "in the bottom 5 percentile of" all chocolate, and just plain "bad." "This somehow feels like I'm eating Quibi," said one critic we just made up, while another fictitious critic simply said, "That shit's Masty." Then came a report saying that the stuff wasn't bean-to-bar after all. The brothers bought big chunks of industrial chocolate and remelted it to make their own product.
In reality, the remelting was just some minor experimentation with no consequence on the current chocolate's quality (chocolatiers prefer the word "couverture" to "industrial chocolate" and take no shame in playing around with it), but the news shocked people. Even more shocking: Photos showed that, underneath their beards, these two men look entirely different (rather than having identical, hidden, reserve beards):
Sales dropped. The Mast Bros closed their stores in London, L.A., and finally Brooklyn. And a former manager came forward to reveal even more insider details. Like the time the brothers demanded that the factory be painted white (because Steve Jobs liked white), setting back production a month. Or how the company's list of goals placed "create chocolate beer" and "explore music festival" ahead of "increase sales."
Or how one time, to make a point, the brothers came to the factory on a Sunday and tried operating the equipment themselves. This resulted in a complete disaster, with a bunch of spilled unusable chocolate the rest of the team had to throw out. Huh. A pair of buddies trying in vain to deal with the chocolates speedily spat out by a machine. Seems real funny. Surprising no classic sitcom has tried making a scene out of that.
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