Categories
Uncategorized

The Netflix and Pool Co. Contrast

Marc Andreessen once noted that it’s important to learn the right lessons from our experiences. As the expression goes, you never step in the same river twice.

One lesson from Reed Hastings’ No Rules Rules book about Netflix is the idea of cadence. To survive in their system, Netflix must tack from explore to exploit at a faster pace than the local pool construction company.

In the book Hastings writes that the Netflix expense policy (‘Act in the best interest of Netflix’) probably costs 10% more than a more strict policy but that it allows the employees to make faster decisions in an industry where the cadence has to be quick.

Co-Author Erin Meyer points out up front that Netflix has succeeded at four inflection points: DVD by mail to streaming, streaming licensed content to original, licensings original content from external studios to internal, from USA only to global.

That’s a lot of change in a short amount of time.

Pool Co. by contrast will probably stay in the exploit region for a longtime, in the right geographic region forever.

The filter from Hastings is this: the internal cadence should reflect the system’s cadence.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.