Netflix didn’t always do what it does now. As of writing, Netflix is the world’s largest entertainment platform, excluding user generated content platforms like YouTube. Without revealing my age, I remember when Netflix mailed DVDs through one’s letterbox - yes, that means I am old enough to remember DVDs, and mail, and letterboxes (hardly any of my Amazon packages can fit through one these days). Netflix is a constant reminder that one can change completely, ride out the ridicule of the haters and emerge the other side victorious, and so successful that you can buy out your competitors, as well as enjoying the schadenfreude of watching your old competitors go out of business. In the startup world, it is a concept called ‘pivoting’, and it mostly applies to startups because much like Blockbuster, a lot of big companies are like oil tankers, taking forever to change direction. Netflix is the exception that proves the rule, but it provides lessons that we should all take to heart and attempt to apply to our own lives.
It teaches us to take a risk on the future. Famously, when Netflix first launched its streaming service, internet connections were so poor that the idea of streaming TV seemed insane. These were the days of dial up internet, when you had to make a choice between a good internet connection and a functioning phone line. Broadband was available, but much like colour televisions, it hadn’t become mainstream enough to build a business around online streaming yet. To this day, good internet connection is not exactly universal, but it is very common. That was the risk Reed Hastings and his team had to take, to move in the direction of online streaming before the technology was even available. Today, adopting new technological infrastructure had become so common that there is a general backlash against tech companies overpromising and under-delivering. It’s the inevitable over-correction in light of the success of all these companies that succeeded by making a bet on future infrastructure, like homes and airports that are built before there are even roads and people to justify the investment.
5G has been the core of much overpromising, with a long list of companies making the bet but the timing not being quite right. Tech journalists mock these companies and the smartphones that are providing a limited connection to the future. In a way, we could read the bet that these companies are making as the same one that Netflix made, which eventually proved the doubters wrong. It could be that 5G is just not that useful to everyone - after all, some people are still looking for reliable 4G. The direction does trend towards 5G becoming the infrastructure of the future, and companies would be smart to start pivoting. More importantly, companies need to be able to hold their nerve, because the naysayers are right up until the moment they’re not, and when they are proven wrong, it’s not like they could be reprimanded for their doubt, so there’s actually very little satisfaction for them to be proven wrong. Instead, all the satisfaction of betting on the future and changing one’s direction is in being successful in the end, rather than being right.
Life is the same, make the change and take the risk and you’re going to get your fair share of backlash, but as long as things are trending in your favour, the bet will pay off as some point and you will never look back - others certainly won’t. History is written by the victors, after all. No one thinks of Netflix as a video rental company, as it once was, and those who remember Blockbuster will remember it’s failure with a heavy dose of rose-tinted nostalgia, if it is remembered at all, but in the end, only the operating system of our television sets remain, and that is Netflix: the streaming platform, the largest entertainment company in the world, and the only thing keeping us sane during this lockdown.