“We should have a higher overall cancel rate.” – Reed Hastings, Co-Founder & CEO Netflix June 2017. While his company is enjoying unparalleled subscriber success, Netflix CEO Reed Hastings is worried that his widely loved streaming service is having too many hit shows. “It’s a sign we’re not trying enough crazy things. We should take more risks.” Was Hastings trying to hedge his company’s position towards investors in the sight of more cancellations? That’s a way of looking at it. The other way is that he’s willing to sacrifice a fraction of today’s profits to ensure Netflix’s growth tomorrow. Or should we call it survival? After all, Netflix’ rise coincided with the fall of Blockbuster as the latter neglected the future to make more money in the present. “Why would we care about you mailing DVDs if we’re making billions of dollars a year with our physical stores,” is what I imagine Blockbuster CEO John Antioco replied to Hastings when he proposed to join forces in 2000. Blockbuster declared for bankruptcy in 2010. Hastings could’ve also gotten his inspiration from Netflix’ current rival, Amazon and its charismatic founder Jeff Bezos. Bezos, soon-to-be wealthiest man in the world, doesn’t make a secret of what his secret sauce is. “Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day.” Bezos likes to compare business to baseball. If you swing for the fences, you’re going to strike out a lot, but you’ll also hit a couple of home runs. The difference between business and baseball however, is that in baseball the outcome is at most four runs – no matter how well you hit the ball. In business, you can get up to 1,000 runs and more.
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