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Startup Secret No. 2: Change and die

What does Reed Hastings know about change management?

"Companies rarely die from moving too fast, and they frequently die from moving too slowly."

--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.

Startup Secrets is based on personal interviews with people building companies, and from their blog posts and news stories. Subscribe to Startup Secrets on Twitter or come back to Rafe's Radar every day for a new one. See all the Startup Secrets.