The Netflix Story: Reed Hastings laughed out of the Room 🤷♂️
When Netflix execs Marc Randolph and Reed Hastings met with Blockbuster brass in 2000 offering them to buy Netflix for $50 Million, Blockbuster laughed them out of the room. Today, Netflix is worth over $129 Billion, meaning if you had invested in Netflix, you would have made 25 times your money today.
While traditional corporations are working with many Startups today, startups continue to move fast and upend the rules of this new age of capitalism. There are countless examples we can give you but the pattern is always the same.
Perhaps, Reed was struggling not to laugh today as Blockbuster was driven out of the marketplace.
It reminds one of the medicine practices centuries ago where doctors would let patients bleed. The worse they got, the more they were bled. If traditional firms keep applying what doesn’t work, and when that fails, do it some more. That’s the definition of insanity.
This all the more reason to adapt in this digital economy and which is holding back most corporate investments. Businesspeople in the new digital age need to know what the rules are before they commit, what’s driving the innovation economy and huge success may provide a teachable moment to your floundering competitors in your industry.
Even in the Investment Banking industry, recalling when I was an investment banker a decade ago; has changed tremendously. In the innovation economy, every day business people will have to learn anew what new business models to scale or they will find themselves competing in a very red ocean. Imagine if a startup in South East Asia out of nowhere replicates the model of Robinhood in the US just like how Grab replicated Uber just years ago?
1) How to Stand Out in the Innovation Economy
We have more products than older generations, the automobile, the smartphone, and of course the internet. Every Apple ads every six months to a year comes with the same pseudoscientific approach to careful crafted messages like unprecedented leap in …, better than ever…, world’s most popular this … or that… for the first time ever…like never before… and so on.
2.) Difference between Rich & Poor
With the privilege of getting to work with many high net worth individuals throughout my career, I can square the consumerist ethic with capitalist of a business person. The difference of that the rich take great care in managing their assets and investments and the less well heeled often go into debt buying cars or the newest television they don’t really need.
3.) New Opportunities for the New Age
The rise of the internet and the improvement in most cities infrastructure brought about new opportunities for the new breed of entrepreneurs. The internet created jobs never heard before, not just for Search Engine Optimization professionals, social media influencers, but also for internet giants like Amazon and Google. It’s one thing to consume free information or entertainment, a very different thing to create content which might reach a very large potential audience.
4.) Leverage in the New Age of Capitalism
Leverage in business is what startups are willing to use in order to scale quickly when a business model that is proven to work with a small base of clients. Leverage enables people to grow their businesses, tech or non-tech, quickly and easily to offer the product or service to an even wider base of consumers.
I have the privilege of interviewing some of the most successful entrepreneurs in South East Asia while crafting campaigns for Fortune 500 companies.
5.) Why Large Corporations Today Struggle with Innovation.
The buzzword today is disruption. But what is getting disrupted really? True disruption can come from unexpected angles in this innovation economy. Airbnb for example is now bigger than the world’s top five hotel brands with 4 million listings on their site, outstripping Marriott International, Hilton World, Intercontinental Hotel Group, Wyndham Worldwide and Accor Hotel Group with only 3.9 Million.
Airbnb claims to have 2 million people staying in their listed properties every single day all around the world. I think instead of using the word disruption, it will be much better to use the word cooperation, like how TDAmeritrade’s partnership with ThinkorSwim, or Uber’s partnership with Volvo. Companies can create even more value as a result of that.
We must open ourselves to a wide spectrum of opportunities, we must test various business models; we must learn to appreciate the laws of branding. One of the best ways to thrive in the innovation economy is to break free from competition.