Building Products & The Importance of Focus: Lessons from Netflix's Failed Social Strategy

Building Products & The Importance of Focus: Lessons from Netflix's Failed Social Strategy

In the fast-paced world of product management, the key to success lies in focus and perseverance. Product managers who stick with one idea for an unreasonable period of time are the ones who ultimately succeed. This principle applies not only to individual product managers but also to founders who are tasked with building a single idea for an extended period. Venture capitalists, the ones who fund these ideas, seek conviction and focus. It is essential for product managers to avoid becoming a "used car salesman" with a plethora of products to pitch and sell. Building great products requires unwavering dedication to a single idea.

This principle is exemplified by the failed social strategy of Netflix. Despite the CEO's support for the idea, the company failed to evaluate it properly. Spending time on evaluating an idea, regardless of the level of support from higher-ups, is crucial. Small wins often cloud judgment, making it difficult to see the bigger picture. It is essential to ask oneself if a project is going to be substantial enough in the long run. Ignoring sunk costs is also important, especially when one becomes emotionally attached to a project. The attachment can make it harder to kill a feature or project that may not be yielding the desired results.

Netflix's failed social strategy was based on the assumption that people would want to share and discuss the movies they had watched. However, the reality was quite different. People's movie tastes are incredibly diverse, and no one wants to reveal all the movies they have viewed. Netflix eventually realized that their members' movie tastes were not reliable indicators of quality recommendations. This realization was a result of biases that clouded human judgment and the inherent difficulty in inventing the future.

Netflix's social strategy would have succeeded if at least 20 percent of their members had engaged with it. However, the company failed to recognize early enough that it would never reach that level of engagement. Small wins, such as an increase in the proxy metric, kept the company optimistic, but they failed to see that it would never be big enough to matter. The focus on addressing execution challenges distracted Netflix from a more careful evaluation of the social strategy itself.

One of the key lessons from Netflix's failure is the importance of evaluating an idea on its own merit, regardless of its source. It is crucial to temper one's pride in ownership and establish clear objectives for a project. Taking off blinders and being open to better ideas is essential for long-term success. Killing projects properly, without being swayed by sunk costs or emotional attachment, is necessary to make room for more promising ventures.

To avoid falling into the same traps as Netflix, product managers should embrace consumer science. This process involves forming and evaluating hypotheses through existing data, qualitative research, surveys, and A/B tests. It requires a finely tuned intuition and the ability to objectively assess the potential of an idea. By incorporating consumer science into their decision-making process, product managers can ensure that they are making informed choices and avoiding the pitfalls that come with biases and limited perspective.

In conclusion, the importance of focus cannot be overstated when it comes to building successful products. Product managers and founders must resist the temptation to constantly chase new ideas and instead dedicate themselves to one idea for an extended period. Evaluating ideas properly, ignoring sunk costs, and being open to better ideas are essential for long-term success. By incorporating these actionable advice into their approach, product managers can increase their chances of building great products that stand the test of time.