Startup Secret No. 2: Change and die
What does Reed Hastings know about change management?
--Reed Hastings, CEO of Netflix, in An Explanation and Some Reflections, September 18, 2011.
"Change or die," is a popular expression among aggressive business leaders. It's usually true. But not always. You can die from over-reaching.
When Hastings originally wrote the post today's tip is taken from, two months after Netflix raised its prices, and by way of announcing the plan to spin off its disk-rental business, the jury was still out on the ultimate impact of the moves.
The verdict is in now, though: Netflix screwed up, and destroyed years of accumulated customer good will.
Customers like innovation. But they don't like paying more, especially not if you're making the product less convenient while you're raising rates. You don't have to be a business genius to know that this will not win you fans. Do it in a small enough way and customers will, at best, tolerate it. At the worst, they'll just quietly leave you.
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