Quibi, Reebok, and Failures We Don't Have To Repeat

How a failure at Reebok twenty years ago is on the ballot again right now.

I was planning to get into the future of sneakers in this week’s email but I’m going to sidetrack that until next week because there is something I think is more important to speak on, and that is: failure.

Failure is a part of becoming better at what you do, no matter what it is that you do. We’ve all heard famous quotes from people who have found great success. A few that are burned into my mind include…

"Failure isn't fatal, but failure to change might be" - John Wooden

“There is only one thing that makes a dream impossible to achieve: the fear of failure.” - Paulo Coelho

“Success is most often achieved by those who don't know that failure is inevitable.” - Coco Chanel

Or as many of you might recall, Michael Jordan said, "I've missed more than 9,000 shots in my career. I've lost almost 300 games. Twenty-six times, I've been trusted to take the game-winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed."

That said, what happens when people don’t improve? What happens when they simply fail, move on, fail again, and continually fail those around them and those that support them?

One of the reasons I started this newsletter is because I feel like the current state of news and media in the sneaker business is failing to bring light to topics I believe are important and closely connected to the footwear industry. We’ve gotten too comfortable posting and consuming viral TikToks and memes when there are much bigger things at stake that should be pointed out. As someone who has lost touch with family and friends over the current political climate, I can understand the hesitancy of people not wanting to deal with the bots and trolls on the internet.

For example, I recently talked to The Guardian about Kamala Harris’ affection for Converse Chuck Taylors, and when I tweeted about it, I was attacked by an onslaught of people in the replies and retweets assuming all sorts of things about me but failing to realize that I use my voice to speak about things from a sneaker state of mind. Despite not being able to use Twitter for a while, and being exhausted by the “stick to sneakers” and “why do you have to talk politics” comments, I feel inclined to hopefully open some minds with my thoughts.

While there might be some blindingly obvious examples of failure in the current state of the world, I want to talk about two specific business failures that are poignant to me and my journey in the footwear business.

If you’re reading this, I’m going to assume that you are well-versed enough in the art of interneting (I know that’s not a word, but I think it should be). Which means over the past 7 months or so you were likely bombarded with Quibi ads. For those that somehow weren’t, Quibi was a video platform founded by Jeffrey Katzenberg and run by CEO, Meg Whitman.

Quibi failed. Horribly.

In 2018, the company had secured nearly $2 billion dollars. Fast forward two years, and it took just 6 months after launching for Quibi to shutter. There was a lot of chatter on social media, both in the negative sense and in the “have some sympathy, why should you care if a company fails” nature. The latter of which, I can explain.

With Meg Whitman’s wavering moral compass and track record of failure— she once spent more money on her campaign than anyone in the history of American politics, only to lose by 13+ points— it’s not hard to understand why many people expected Quibi to fail. If you were an eBay seller in the early years of the platform, I don’t need to remind you how badly things went while Whitman was CEO. That might sound harsh but I believe plenty of people will relate. Although in her defense, my experience at StockX as employee #9, and a contractor even earlier, gave me much more understanding as to what CEOs have to go through at fast-moving, rapid-growth startups. It’s virtually impossible for them to make everyone happy but I believe that integrity is a telltale sign of someone’s ability to be a good leader and inspire employees. When you hire someone who is too focused on financial gain and self-preservation like Whitman, who has made abundantly clear where her priorities lie over the years, you are bound to fail in the most important role of leadership, inspiring your team. Subsequently, the people those types of businesspeople step on throughout the years, inevitably end up celebrating the failure. In the end, both Whitman and Katzenberg took responsibility for the failure, which is admirable, to say the least.

So how does this relate to sneakers?

Quibi is a modern example, relatable to a younger generation than those that might remember my second example.

As you may know, my favorite athlete is unapologetically Allen Iverson. He will forever be the G.O.A.T. to me for many reasons that I will get into another time. His first signature sneaker released in 1996, the Reebok Question. Unlike today’s signature basketball sneakers that have a shelf life of about a year before being replaced with a new model, the Question was sold almost continuously from its first release through 2002, in various colorways. The Question is one of the best-selling Reebok sneakers of all time and when it comes to cultural credibility, like AI himself, it’s undoubtedly near the top of the list no matter what brand you are talking about. And if you’re talking about those first 4-5 years of the Iverson and Reebok partnership, you wouldn’t have a hard time finding people that would argue it was bigger than any other shoe of the era.

Picture Reebok 20 years ago, with Allen Iverson becoming one of the greatest players the NBA has ever seen, in the midst of his 4 NBA scoring titles (only MJ and Wilt have more), just a year or so from an MVP season, and an NBA Finals appearance. Now picture the addition of tennis superstar Venus Williams, who is fresh off her first of five Wimbledon titles, a gold medal win at the Olympics in Sydney, on her way to becoming the top-ranked player in the world, who is signed to a multi-year deal. Then add in partnerships with Jay Z, 50 Cent, and Pharrell Williams, three of the biggest hip hop artists of all time. Plus, a partnership with the NFL that is set to last for 10 years. No matter what perspective you looked at it from, Reebok was poised to be the most successful brand in sneakers in the early 2000s but instead, nearly catastrophic failure followed.

So what happened?

Much like the situation with Quibi, Reebok’s failure came from its choice in leadership.

In September of 1998, Reebok hired a man by the name of David Perdue as Senior Vice President. Prior to the role, he worked for Haggar— you know, the khaki pants that every suburban dad wore in the mid-’90s— as well as the Sara Lee brand (more commonly known as Hanes nowadays). Perdue quickly navigated the politics of Reebok, becoming Executive Vice President in late 1999 and eventually CEO in January of 2001. While at the time Reebok was the third-largest athletic footwear brand in the United States, there was still a lot of opportunities to come in the years that followed, especially as the sneaker business boom was truly just beginning.

In hindsight, it’s apparent that choosing a CEO that was so experienced in and overly focused on the apparel business, was clearly a poor choice for Reebok. As most overzealous executives do, Perdue jumped ship before Reebok had the chance to even set sail into the newly blossoming relationships the company had forged. Perdue became the CEO of Dollar General in April of 2003. While I have a disdain for these types of stores and the inevitable oppressive nature of how and where they do business, I’ll just say that leaving Reebok at a time in which a true leader would eagerly and enthusiastically lead the company into battle with Nike and adidas, says a lot about Perdue’s priorities.

Although his supporters (at least in the politically motivated sense) would claim he brought back the sneaker business for Reebok, anyone who’s remotely connected to the footwear business can see that despite partnerships with prominent NBA athletes, tennis superstars, hip hop moguls, and the NFL, Perdue did nothing more than fumble the bag, as the kids would say. I would go a step further and argue that his actions (or inactions) forced the hands of the board of executives at Reebok into selling the company to adidas just two years later.

If it sounds like I take these examples of failure personally, it’s because I do. I want the absolute best for people, especially those friends, family, and communities that I really care for.

When I think about my first entrepreneurial adventures and the countless number of friends that have turned sneakers into a business of their own, eBay is the platform that helped launch those opportunities. Despite the challenges, frustrations, and drastic changes of the platform over the years, I’m still a fan but I can’t help but wonder what might have been with leadership that was more in touch with the community.

As for Reebok, it’s a double-edged sword that cuts me every time I think of the company being put on the chopping block again as adidas looks to tighten up its expenditures. On one hand, I’d love to be a part of the team that embraces the rich, deep history of Reebok and brings it back to prominence. On the other, every time I see Reebok’s business mentioned in the news, I can’t help but think of what might have been for Allen Iverson’s sneaker line, or what the partnerships with Jay Z, Pharrell, and others, might have been if the company would have chosen better leadership than David Perdue.

In short, becoming rich doesn’t make you successful, neither does having your friends write about you while ignoring your failures. Nor does walking away from the problems you created. None of those things qualifies you as a leader. No matter how many times you are given the chance to fail.

In my experience, leaders are people who are a part of the community, they walk alongside you, they speak with you and not at you. They listen. They use their voices to speak for the community, they fight for the underdogs and disadvantaged, and most importantly, they inspire the people.

But enough about my feelings, it’s come to a point once again that the connection between sneakers and politics are inseparable. With the upcoming senate runoffs, Georgia has the chance to look at Reebok’s failure in the sneaker business during the mid-2000s, led by now Senator David Perdue, and learn from its failures.

If you consider yourself a sneakerhead, or sneaker enthusiast for those sensitive to labels, I think it’s long past time that you started paying attention to the bigger picture. We as a community can start trends that impact the entire footwear industry, but we could have a lot more influence on even more important things like politics. We just need to come together, elevate the crucial conversations, and lift up the leaders that can help us be part of making the world a better place.