The story of Netflix is one of hardship, perseverance, and incredible success, all thanks to a brilliant original idea. In short, Netflix is one of the ultimate success stories of our time – and as such, it has a lot to deal aspiring entrepreneurs on how to deal with opportunities and blunders.
Netflix has become our go-to entertainment in recent years. Building on a great initial concept, Netflix underwent a few changes in its business model over the years, ever since it was first founded in 1997. The first important lesson that we can take away is that entrepreneurs should not be afraid of change – you need to adapt to a changing market. And you also need to be able to understand where the trend is going. Netflix did a great job doing just that – and today it is not just the leader in online content streaming services, it basically invented the genre.
Change is good and being able to identify the right opportunities to change is an essential skill for businessmen looking to get their idea off the ground. In what has been listed as one of the worst business decisions ever made, home entertainment company Blockbuster failed to identify that need for change. Blockbuster was a leader in video rental services – at its peak during the 2000s, it used to own more than 9,900 stores across the globe and make almost $6 billion annually. Netflix approached Blockbuster in 2000 to suggest a partnership for $50 million. Blockbuster’s CEO laughed the Netflix executives out of his office but he soon came to regret that decision, when Blockbuster was forced to file for bankruptcy in 2010 and Netflix was soaring.
Admit Your Shortcomings
When you have made a bad business decision, there are a few ways you can go about it – and Netflix has something to teach us about how to deal with failure, too. In 2011, the company decided to divide its services into two distinct categories. Its streaming services would go on unchanged under the Netflix name, while its DVD-by-mail sector would be rebranded as Qwikster. It took only two months for them to realise that the plan and their approach was a complete disaster. Not only did they take it back quickly, but the company’s CEO issued an apology to users, admitting to the company’s lack of transparency and respect in dealing with them.
Owning up to your bad business decisions is the first step towards addressing and correcting them – so never forget to let your clients know that their grievances have been heard.
Join the Thousandaire newsletter
Subscribe to get our latest content by email.