Reframe the Competitive Set
"I was obsessed with not getting trapped by DVDs the way AOL got trapped, the way Kodak did, the way Blockbuster did…"
- Reed Hastings, Founder & CEO of Netflix
Does that paranoia sound familiar? When I heard this quote, I was immediately reminded of Steve Jobs' obsession with disrupting himself, rather than being disrupted.
Netflix's business has evolved again and again and again in the shadow of Hastings' obsession - this 10-year old Forbes article is strangely just as relevant today as it was when it was written. How to operationalize this obsession? Keep trying new things! Just like Amazon does, the critical element to drop acorns through experimentation.
And experimentation requires boldness. Hastings continues, "Every business we could think of died because they got too cautious." So how to resist the gravitational pull of cautiousness?
One tactic that's very effective is to redefine the competition. The more ambitious the organization's growth objectives, the more broadly it needs to define the competition - specifically away from narrow substitutes (ie indistinguishable alternatives, think Coke and Pepsi - sorry Dad), and more towards psychological substitutes (ie what meets the same underlying psychological need) and resource substitutes (ie what's competing for the resource your product demands: time, attention, share of wallet, etc).
Netflix has been clear for years that its biggest competitor isn't HBO or Disney or even gaming... it's sleep! Think about it: for most folks, the question is not, "Should I watch another episode or switch platforms?" but, "Should I watch another episode or go to bed?"
This is not a semantic distinction. Think about the product development such a competitive framing informs: if you're competing with sleep, what kinds of features do you push? How about auto-playing the next episode (eliminate the decision!)? How about dropping entire seasons at a time, and normalizing binge watching?
These are very deliberate competitive decisions inspired by an organizational obsession with defending against disruption and irrelevance. How might you reframe your competitive set?
Click here to subscribe to Paint & Pipette, the weekly digest of these daily posts.