When attacked, we should retreat to do the core better
Reed Hastings, founder of Netflix:
In 2005, BlockBuster attacks…
BlockBuster and us had the same content offering (because it’s non-exclusive licensing to get DVDs). And they discounted massively, so we were losing share.
We thought we were very clever: we came up with four ways to counter-attack. We added “Netflix Friends”; ad sales (banners); used DVD sales [$4/each]; a group to buy films out of Sundance (and similar festivals) to then publish them on DVDs…
None of those four efforts made any contribution [to beating BlockBuster].
In hindsight, we realised:
When attacked, we should retreat to do the core better, and not try to broaden the “surface of attack”.
It was a great lesson for us on FOCUS.
We’re much less prone to going off to chase the shiny object, to try to have “something on a checklist” to differentiate.
If we had just gone from 98% perfect to 99.9%, we would have done a lot more for the business.
We would have beaten BlockBuster sooner than we did.
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