Why Multi Failed: A Case Study in AI Startup Pitfalls

Executive Summary

Multi, initially known as Remotion, offered Mac users a unique video collaboration experience, focusing on co-editing screens with AI-powered features. Launched in 2022, the tool aimed to streamline teamwork for small teams. However, its independent journey came to an end in June 2024 when OpenAI announced an acqui-hire of the Multi team. This acquisition led to the immediate shutdown of the Multi product, with the team transitioning to work on collaboration within ChatGPT.

Background: What Multi Was Trying to Do

Multi positioned itself as an innovative solution in the collaborative work space, specifically targeting Mac users. It wasn't just another video conferencing tool; its core strength lay in enabling real-time, co-editing of screens. The platform integrated rich AI-assisted features to enhance this experience, making it easier for small teams to work together effectively, even when physically apart. It fell under the "other" category, suggesting its unique feature set didn't neatly fit into existing classifications of collaboration software.

The Timeline of the Decline

Multi's operational timeline, though relatively short, included a significant pivot and an eventual acquisition.

• April 1, 2022: The company, then operating as Remotion, officially launched its product. This marked its entry into the competitive collaboration tool market.
• June 24, 2024: OpenAI publicly announced the acquisition of the Multi team. This was a pivotal moment, as it signaled the end of Multi as a standalone product. Multi's own blog shared the news: Multi is joining OpenAI.
• July 24, 2024: Exactly one month after the acquisition announcement, the Multi product was officially shut down. Users were met with an end-of-life notice, and the company's website, multi.app, now redirects to OpenAI's domain.

What Went Wrong

The narrative around Multi's cessation isn't one of failure in the traditional sense, but rather a strategic absorption. OpenAI's acqui-hire of the Multi team on June 24, 2024, directly led to the product's shutdown a month later. The reason provided was clear: the entire Multi team joined OpenAI to focus on developing collaboration features within ChatGPT. This suggests that Multi's technology and talent were deemed more valuable integrated into a larger ecosystem than as an independent offering. While the product itself ceased to exist, the underlying reason points to a successful talent acquisition for OpenAI and a new chapter for the Multi team.

Lessons for Founders

Multi's journey offers several insights for startup founders, particularly in the fast-evolving AI landscape.

• Cultivate Niche Expertise: Multi successfully carved out a niche with its AI-assisted Mac video collaboration. Developing specialized tools can attract attention from larger players seeking to expand their capabilities.
• Understand the Acquisition Landscape: For some startups, an acquisition by a larger entity like OpenAI can be a viable and even desirable outcome. Founders should be aware of the potential for their technology or team to be a valuable asset for bigger companies.
• Focus on Core Technology and Talent: Multi's specific focus on collaboration and AI-driven features likely made its team and intellectual property attractive to OpenAI. This highlights the importance of building strong, defensible technology and assembling a skilled team.
• Be Prepared for Rapid Change: The AI industry moves quickly. Founders must be adaptable and ready to pivot or respond to unexpected opportunities, such as an acquisition, which can fundamentally alter a company's trajectory.
• Consider "Acqui-hire" as an Exit Strategy: Not every startup aims for an IPO. For companies with specialized talent and technology, an acqui-hire can provide a positive outcome for both the founders and the acquiring company, even if it means discontinuing their standalone product.

The Aftermath

With Multi's shutdown on July 24, 2024, users who relied on its unique video collaboration features were left to find alternatives. While the Multi product itself is no longer operational, its technology and the talent behind it have found a new home within OpenAI. The multi.app website now redirects to OpenAI, a clear indication of the integration. Former Multi users looking for similar collaborative functionalities might explore tools like ChatGPT for AI-driven assistance, or other general collaboration platforms. While the specific blend of features Multi offered is no longer available as a standalone product, the spirit of innovation in AI-assisted collaboration continues within OpenAI's development of tools like OpenAI API and Claude, which provide sophisticated AI models that can be integrated into various workflow solutions.