Netflix is synonymous with quality entertainment that is also highly convenient. This has of course given rise to the “Netflix and chill” phenomenon, which is one of the more persistent trends of our time. Starting off as a modest service for selling and renting DVDs to homes via mail, the company has grown rapidly to become the tenth largest Internet company in the world regarding revenue, with a total of 130 million subscribers worldwide.
What are the secrets to this immense level of success? What can other startups aspire to transform themselves into global behemoths learn from Netflix? Let us take a look at the key points of Netflix’s success.
Netflix is intent on catering to a specific segment of the market, which is customizable subscription-based entertainment for the ordinary man. They have not made any attempts to diversify or expand into a wider market because that would be ineffective.
For instance, if they decide to broadcast the Presidential debates one day, that would not give them any significant edge, because news networks like CNN already do that. Similarly, if it attempted to hire translators and try to get into the translation agencies market, they’d be doomed to failure.
Instead, they have chosen to focus on one thing, and that has worked out well for them. That is because they know themselves, they know their mission, and they know what they stand for in the grand scheme of things.
Timing is everything
There is nothing more powerful than an idea whose time has come. Netflix clearly understood this and decided to start out by mailing DVDs instead of ambitiously streaming movies over a 56k connection.
They realized that the future would bring epic Internet connections and machine learning algorithms with it, which could then be leveraged to formulate a personalized model that delivers quick and easy entertainment.
This strategy of sticking with a certain model, while having a completely different one in the works for a better time in the future, is critical for the success of any venture.
Test and iterate
It is unrealistic to harbor expectations of unloading a perfect product from the very beginning. You will have to continuously test it and refine it based on customer feedback or current technological trends. Netflix certainly believes in the power of testing, as evidenced by its penchant for testing various new products on 10,000 users at a time.
Again, this is easy because they have a specific market niche. If you deal in transcription services, you don’t have to become a translator agency as well. That is a surefire way to lose focus.
Get your pricing right
This tends to be the trickiest thing to pull off for many businesses because customers are fickle after all. Netflix knew from the get-go that they would have to focus on their customers and ensure above all else that their customer base was a loyal one.
By setting a price of $8 per month, the streaming service ensures that users will gauge its value and determine whether it is something that they should stick with for the long run, without having to spend an awful lot of money.
Having a culture of creativity
The CEO of Netflix, Reed Hastings, has emphasized that the company fosters a culture of creativity and ingenuity where new ideas, no matter how absurd, are encouraged and promoted. This is what enables a startup to survive and thrive in an increasingly competitive age.