The Importance of Evaluating Ideas: Lessons from Netflix's Failed Social Strategy and Kippt's Collaborative Bookmarking App

The Importance of Evaluating Ideas: Lessons from Netflix's Failed Social Strategy and Kippt's Collaborative Bookmarking App

Introduction:

In today's fast-paced world, companies are constantly striving to create innovative products and services to stay ahead of the competition. However, not all ideas are successful, and it is crucial for businesses to evaluate them thoroughly before investing time, resources, and effort into execution. In this article, we will explore the lessons learned from Netflix's failed social strategy and Kippt's collaborative bookmarking app, highlighting the importance of evaluating ideas and making informed decisions.

Netflix's Failed Social Strategy:

Netflix, the popular streaming platform, once attempted to incorporate a social aspect into its service. The idea was to allow users to share their movie preferences with friends and receive recommendations from them. However, this strategy did not resonate with users, as movie tastes are highly individual and diverse. It became evident that people did not want to reveal all the movies they had viewed, and the concept of relying on friends' recommendations for movie suggestions proved to be flawed.

Lessons Learned from Netflix's Failure:

1. Biases that Cloud Judgment:
   One of the reasons behind Netflix's failed social strategy was the biases that clouded human judgment. The assumption that friends would have similar movie preferences and could provide valuable recommendations turned out to be inaccurate. It is essential to recognize and question these biases before moving forward with an idea.

2. Small Wins Cloud Judgment:
   Netflix fell into the trap of small wins clouding their judgment. They focused on the increasing proxy metric, which indicated some success, but failed to realize that the social strategy would never gain enough traction to make a significant impact. It is crucial to ask ourselves if a project or feature will be big enough to matter before investing more resources into it.

3. Ignoring Sunk Cost:
   Sunk cost refers to the time, money, and effort already invested in a project or feature. Netflix's attachment to the social strategy made it difficult for them to kill the project despite its evident failure. It is important to ignore sunk cost and be willing to let go of projects that are not meeting objectives. Pride in ownership should not hinder objective evaluation.

Lessons from Kippt's Collaborative Bookmarking App:

Kippt, a startup backed by Y Combinator (YC), aimed to revolutionize the way people collect and share links through a collaborative bookmarking app. While Kippt's users initially requested more collaborative and social features, the true competition for Kippt was identified as traditional communication methods like email and wikis.

Lessons Learned from Kippt's Journey:

1. Social Aspect from the Beginning:
   Kippt recognized the importance of incorporating a social aspect into their product from the get-go. They understood that users wanted to collaborate and share information easily, moving away from traditional communication channels like email. By addressing this need, Kippt differentiated itself from its competitors.

2. Addressing Communication Challenges:
   Kippt acknowledged the limitations of slow and noisy discussions in emails and chat rooms. To overcome this, they added commenting functionality within the app, allowing users to have focused discussions without cluttering everyone's inboxes. Identifying and addressing communication challenges can enhance user experience and increase adoption.

3. Consumer Science and Evaluation:
   Kippt's approach to product development involved consumer science, which includes forming and evaluating hypotheses through data analysis, qualitative research, surveys, and A/B tests. This process helped them make informed decisions and refine their product based on user feedback. Evaluating ideas and gathering insights from users can lead to successful product iterations.

Conclusion:

Both Netflix's failed social strategy and Kippt's collaborative bookmarking app provide valuable lessons for businesses and entrepreneurs. Evaluating ideas thoroughly, recognizing biases, and considering the potential impact are crucial steps in making informed decisions. Additionally, being open to better ideas, addressing communication challenges, and leveraging consumer science can lead to successful product development. By learning from these examples, companies can increase their chances of creating products and services that resonate with users and stand the test of time.

Actionable Advice:

1. Spend time evaluating ideas and question biases before investing resources.
2. Determine if a project or feature will be significant enough to make a meaningful impact.
3. Ignore sunk costs and be open to better ideas. Kill projects that are not meeting objectives properly.