Why does Netflix fail so frequently? Two reasons: 1.) There are many biases that cloud human judgment, and 2.) it’s hard to invent the future.

Friends failed to get big enough to improve retention, but the real question is, why did Netflix persist so long?

It’s hard to quit when the CEO is passionate about an idea.

As a strategy, social makes sense. Friends promised to fulfill the holy troika: to delight customers in hard-to-copy, margin-enhancing ways.

Small wins cloud judgment. The proxy metric kept going up and to the right, but Netflix failed to recognize early enough that it would never be big enough to matter.

Netflix assumed the failure was in the execution, not in the idea.

Paradoxically, small success makes it hard to kill features.

Behold the idea and not the source.

Temper your pride in ownership. As builders, companies love to build stuff. And nobody likes to kill projects. Passion and hope can cloud judgment.

Establish clear objectives.

Setting a goal guards against we’ll-figure-it-out-next-quarter youthful enthusiasm.

Successful projects develop momentum quickly. Customers enthusiastically embrace good ideas despite early shortcomings.

Don’t let past investment inform future investment. Ask yourself, “Given what we know today, how much should we invest going forward?”

When engaged in a project, your humanity can cloud a disciplined evaluation of its merit. Take a moment to reevaluate, discounting both executive-level support and conventional wisdom. Remain objective by setting an objective goal, taking stock in your pride of ownership, and asking, “What should we invest in today, regardless of past investment decisions?”