Tweet

Lesson #2: “Be big and fast and flexible”

Article Overview: “We named the company Netflix, not DVDs by Mail because we knew that eventually we would deliver movies directly over the Internet,” says Hastings. “DVDs will be around a long time, but we’re building for the day when they’re not.”

Lesson #2: “Be big and fast and flexible”

"We named the company Netflix, not DVDs by Mail because we knew that eventually we would deliver movies directly over the Internet," says Hastings. "DVDs will be around a long time, but we're building for the day when they're not."

Throughout his years at the helm of Netflix, Hastings has learned one important lesson: that building a company is all about tomorrow, rather than today. What will be happening tomorrow? Who will the big players be tomorrow? What will people want tomorrow? It is only in asking these questions that Hastings has been able to stay ahead of the curve.

But asking those questions is only one part of the game. The other part is responding to those questions. And how does a company do that? "Stay flexible," says Hastings. "An example: AOL failed to adapt to the broadband world and clung to its narrowband dial-up specialty."

"I was a Peace Corps volunteer right out of college in rural Africa, in Swaziland," says Hastings. "Either that developed my risk tolerance or it was symptomatic of it." Either way, Hastings has been able to build a company that is flexible enough to respond to the rapidly changing industry in which he finds himself.

One example is the response of Netflix to the advent of Blu-ray technology. Hastings implemented a Blu-ray rental option, which approximately 10 percent of his subscribers have opted for.

"We're very happy with the Blu-ray adoption," says Hastings. "This fall, we hope to see some very low-priced Blu-ray players with increased adoption. The biggest factor would be how low they can get the player prices. Walmart had an offering at $99 last week. It would be great if that spread." Hastings responded ahead of time, and must now accept the risk that comes with waiting for the market to catch up with him. But that flexibility often comes at a price, he says.

"In 2004, we were entering the U.K," he recalls. "We'd moved people over, hired others, but ended up closing just before we launched." The reason? The competition back at home was too aggressive. "With Blockbuster attacking, we needed to concentrate on the home market. That decision turned out very well but was heartbreaking."

Despite the significant amount of time and resources Hastings and his team had deployed in order to enter the U.K. market, as soon as he realized that he needed those resources back at home, he did not hesitate for a second to close down shop and focus on the U.S. market.

Still, the U.K. episode demonstrated the often high cost of flexibility. How do you avoid those high costs? Watch the growth paths of others' companies and see where there is room to move. "With failures, you learn one of 99 things to avoid," he says. "So they are not that useful. I think it is more useful to learn from others' failures."

Related Articles
  The Pursuit of Fast and Easy money – A road to disaster
  The Gravity of Failure
  Vendor Improvements
  Fast and Feast - Sales and Marketing Tactics
  Who Is Your Proud Family?

Article Tags: adoption, advent, africa, blu ray players, blu ray technology, broadband world, curve, flexibility, game, hastings, helm, long time, mail, netflix, peace corps volunteer, rental option, risk tolerance, subscribers, swaziland, walmart



Related Forum Posts
Re: Free Twitter Resources & Apps - Hi Mary, The beauty of Twitter is that it is fast. You can build up a good sized following without spending much time on it. I use it to tweet blog posts and articles - just a fast way to get some extra publicity. Between those tweets I talk about whatever I like. There are some useful applications that take very little time to use as well. So, in short, I agree with GT that it is worth a small amount of time to at least set up a page and do some tweeting.
Re: Blog sells for up to $15 million - Why did we ever move from having a regular website with what ever you want on it, to blogging? Couldn't we have done the same things with websites? Even the free ones are really flexible and you can easily ad picts and links, etc.
Re: Unusual Business Idea - Hi Yinka, Thanks for the link, it's great to have a niche that you are comfortable with and a product that you know or use but in this business we should always remember to be flexible and be on the lookout for all avenues of income, regards, Mal.
Dan Kennedy Marketing Methods - We haven't sent out the physical letter yet as the person owning the list wanted to make modifications to the letter that we knew would work well but the List owner had a point - it didn't reflect her personality so her clients would know it didn't come from her. Lesson learned for me. We're back to the drawing board with the list owner more involved in the development of the letter and emails. I should have known better being a Business Analyst in my day job that you never leave the end-user out. So Evan we haven't had the opportunity to test any of it yet but it's been a fun process for me to stand back and look at.
Re: Art of Marketing - Differences, at some basic level, will always level the playing field - for the better. Take a look at the franchise fast food industry. Yes, the top concepts are there year after year, but if you take a step back, smaller concepts are always gaining market share. People love fast food. But people also love variety. Apply this to the Art of Marketing, there is a customer base everytime - however, its more how much of an artist you are in your customers eyes, not yours keep in mind.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Life is a Balancing Act!

10 Steps to a Great Support Team

What should your free giveaway be?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.