1-Line Summary: That Will Never Work by March Randolph discusses the journey of Netflix from selling DVDs on a rental basis to having millions of subscribers on a monthly subscription.
- English (Publication Language)
- Octopus Publishing Group (Publisher)
Last update on 2023-09-19 / Affiliate links / Images from Amazon
That Will Never Work Summary [PDF]
Do you know how Netflix became such a giant library of movies and TV shows even though many experts rejected its idea?
How did the founders pick up the name NetFlix.Com?
Who were its competitors in the initial days?
How did Netflix raise millions of dollars and ultimately acquire millions of customers?
This book summary is a must-read if you have any digital business or plan to launch one.
Because in this book summary, I’ve shared fantastic business lessons that any digital business can benefit from.
Alright, so without further ado, let’s dive right in!
Lesson #1: Trust facts more than you do opinions.
Opinions of so-called experts have killed many dreams.
When the author was trying to get funding for Netflix, his idea was rejected by a potential investor who had a background in DVD technology.
He said that the plan to sell DVDs was rubbish.
If you don’t know, Netflix wasn’t always a subscription-based streaming service.
Today, we all enjoy various TV shows and movies while reclining on our couches, but people didn’t have fast Internet back then, around 1995-2000.
So people bought DVDs of their favorite movies.
That was also the time of the Dotcom bubble.
Internet was a new technology then.
Everyone was talking about it in the same way people talk about crypto today.
The idea of selling DVDs sounded illogical to many investors as the newer technology was around the corner.
And the author faced quite a lot of problems due to this.
Imagine if Reed and Marc (founders of Netflix) gave up on their idea.
There would be no Netflix then.
But Marc believed in his idea as the Internet hadn’t developed yet. And those who had an internet connection might have faced many issues downloading movies.
The key idea here is:
If you have data and the facts, proceed regardless of what anyone says.
The author says that nobody knows anything about the future.
Yes, we all do share opinions. But we can’t guarantee anything.
There are always multiple factors that may result in an entirely different future that nobody had imagined or expected.
Often young minds imagine big. But when they listen to the experts, they lose all of their hope.
It’s good to have opinions.
I’m not saying that you mindlessly delude yourself.
Gather data first.
Got a big startup idea? Validate it first.
Take baby steps!
Keep gathering unbiased data, and you will figure out what to do next.
Also read: Before You Start-Up Book Summary.
Lesson #2: Choose a catchy name for your business. And make sure that its domain name is available.
Often new Internet entrepreneurs make this mistake:
They spend hours deciding on a perfect name for their business. And when it comes to creating a website, they find that someone else has already registered that domain name.
If your business name is too common, then chances are somebody owns its domain.
The author made the same mistake.
He made a list of some names along with his team. (For example: Rent.com)
But later realized that it was already taken.
Fortunately, he had quite a long list.
And finally, the author and his team decided to keep NetFlix.com.
Again, it’s essential to check that you are not using a business name that is a trademark or is owned by another company.
Once that is checked, make sure that the name is easy to spell and remember.
The author advises something like “Goo-gle” or “Face-book.”
These names only have two syllables, and thus they are easy to speak, spell, and remember.
If your name is harder to remember, you will need a lot of marketing.
If your name is too simple, you may need a lot of marketing to stand out from the competition.
Don’t think that if you choose a cool name, your business will succeed.
Name isn’t everything!
But still, it’s a good practice to choose something catchy and easy to recall.
Also read: The 1-Page Marketing Plan Book Summary.
Lesson #3: “Culture is not what you say. It’s what you do.”
Often, when the founders are asked about their company’s culture, they use many fancy words to describe their culture.
But what they do is tell their opinion.
And opinions are often wrong if they aren’t backed by any data.
The people of the organization define the work culture in any company.
If the employees in a company don’t have any common goals and motivation, then there is no culture at all.
As a founder, one must know what his company’s culture is.
The author says:
“Real innovation comes not from top-down pronouncements and narrowly defined tasks. It comes from hiring innovators focused on the big picture who can orient themselves within a problem and solve it without having their hand held the whole time. We call it loosely coupled, but tightly aligned.”
The goals of every individual in a company must be tightly aligned with the common goal.
But it’s also crucial that you allow them enough freedom to make decisions.
Avoid being overly restrictive.
To build a great culture and ultimately a great company, you need innovators who know how to work together.
Focus on the big picture.
If you constantly decide for your employees, you will not be free to think innovatively.
If you are always doing all the work, you won’t get time to do things that may scale your company.
Repeating, the people define culture.
If you want to build a particular type of culture, hire people whose life goals are aligned with your goals.
No great culture is built simply by using fancy business lingos.
Lesson #4: Don’t confuse your customers by offering them too many choices.
Often they think:
“The more, the better.”
But this doesn’t work in business.
You may look resourceful by providing lots of things and, at the same time, lots of choices. But your customers will get confused. And start ignoring you.
The key idea is:
Don’t ask your customers to use a lot of brain-power to make decisions.
The author realized this quickly.
There was a time when Netflix was selling DVDs using both rentals and subscription models.
This created confusion:
Rental or Subscription.
The founders of Netflix decided to drop the rental model later as they didn’t want to confuse the customers.
Remember, too many choices often lead to no choice.
Every business should try to make things as simple as possible for the customers.
Relating this idea to Building A Story Brand book, offering too many choices is like asking your customers to run on a treadmill every time they make a choice.
No customer wants to do that.
Keep your choices to a minimum if possible.
I recommend that you know your audience well before making any significant decision for your business.
If a particular option is not helping either you or your customer, it’s better to drop it off.
Lesson #4: Make life easy for your customers.
Life is already hard, to begin with.
As a business owner, one must make life easier for its customers.
If you had to buy a DVD in the old days, you would go to a shop and ask the person there. He would recommend you a trendy one.
Or you already knew what to buy.
But still:
It was a lot of work to decide what to watch next.
Netflix wasn’t as it is today.
They didn’t have any recommendation system.
So the viewers could only choose from a limited number of movies.
The founders of Netflix wanted people to spend more time enjoying the movies they liked. It meant more money for them and more entertainment for people.
In short: this was a win-win opportunity.
These days, almost all recommendation systems are powered by Artificial Intelligence (AI).
If you go to Amazon, it starts recommending products to you based on your buying history and other hidden factors.
Similarly, Netflix also recommends TV shows and movies based on your watch history and interests.
These systems weren’t that advanced back in that time.
But the point worth noting is that the idea is not new.
Twenty years ago, people started thinking about it.
The key idea behind it was:
The more time customers spent on their platform, the more money the owners made.
And this is true even today.
YouTube also follows the same ideas these days.
Still, it’s a win-win. It makes our lives easy.
Some people may argue that it’s not suitable for our lives as it makes decisions for us, and what is right for them may not be right for us.
A lot of debate is going on on this topic.
It’s true, though: If you are not making choices for yourself, the recommendation system will make it for you.
Suggested read: The Automatic Customer (Summary)
Lesson #5: Don’t depend too much on a particular technology.
Most businesses these days rely on technology.
And it’s a great thing.
Softwares these days save business owners a lot of time.
But the problem is:
Technology changes and proliferates.
Some technology might be helpful today, but it may become obsolete after 5-10 years.
Netflix was dependent on DVD technology in its initial days.
But as we know, today, nobody uses DVDs.
First, DVDs got obsolete. Then people started using Pen Drives.
After a few years, we can see that they have almost become useless today.
People today use cloud storage to save their data.
Netflix now uses advanced AWS cloud technology to deliver high-quality (up to 4K) tv shows and serials to our gadgets.
They adapted with time.
Imagine if Netflix was still selling DVDs today.
They would go bankrupt and fail.
Adaptability is vital in any business.
It’s also one of the biggest fears of business owners.
It’s hard to adapt quickly.
Every year we see new technology, and it brings the fear of becoming irrelevant within the minds of business owners.
Earlier, we required editors to correct articles. Today, Grammarly can do most of the job.
Nobody knows how many jobs the AI will take.
I’m not against AI, but it’s essential to adapt yourself with time.
If you are a business owner, make sure you provide something more and don’t rely just on technology.
It can be copied easily too.
Every business needs to stand out from the competition and thus offer something unique.
That’s why Netflix keeps making changes in its UI and the recommendation system using a lot of data sets collected from millions of users all over the planet.
Lesson #6: Personalization is the key to hooking people on your platform.
One reason Netflix became so prominent is that they deliver a personalized experience.
The movie recommended to you might be different than the one recommended to your friend.
So how does Netflix figure out what you would like?
Simply, they track a few parameters like:
- What genre do you like?
- How much time do you spend on a particular genre?
- What type of movies do you watch the most?
- And a lot many…
The AI learns the behavior of the user.
And it keeps collecting as many data points as it can get.
So the next time Netflix suggests a fantastic movie, don’t be surprised.
That was served based on your behavioral data.
What does this mean for business people?
Yes, personalize your campaigns.
The more people relate to you, the more they will return.
If you find out exactly what your audience likes and want to see, you have a recipe for exponential growth and success in your business.
Lesson #7: It’s tricky to figure out what to spend money on in the business.
How you spend your money in business determines how much you will grow.
The author says:
“Instead of furniture, we spend money on technology.”
Once they start earning some profits from their business, most business owners start spending money on useless things like furniture.
No matter what your profession is, humans find money appealing, and that’s why it requires a certain mindset to handle it well.
Often people don’t know how to handle their impulses and tendencies. Thus, they spend a lot of time and money buying things that fulfill their innermost desires.
Talking about the author, he was wise. He knew that technology could help scale their business. So he didn’t waste his time buying a lot of furniture.
He had around 2 million in funding.
It’s challenging when you have that much money. Your mind goes in different directions.
One time, you think about all the things you could buy.
Another time, you fear what would happen if you fail.
You think: “How will I return that money.”
The thing is:
Investors invest in any startup because they want more returns from it.
It’s not a charity thing. It’s business.
After getting a check with approximately 2 million dollars, the founder found himself in a dilemma.
But times change…
These days Netflix raises billions of dollars in funds.
Imagine what the author thought after he got his first funding.
No matter how much the money, it’s tricky to figure out how to use it wisely.
Lesson #8: The hustling phase is the most exciting part of the journey.
You struggle whenever you try to do something new and challenging in life.
You have to hustle to get what you want.
When we don’t get the desired results, we start thinking about how painful and unfair life is.
We dream big. But people reject our ideas.
Almost nobody helps us when we struggle.
Even our families and friends don’t believe that our ideas can grow into something big.
We often hear successful stories of startups that made it big in the market.
Netflix also had a narrative that “It started when the author had to return an Apollo 13 DVD, but he had to pay a $48 late fee, only after then the idea of Netflix came.”
But if you read the book, things were not that simple.
Many things helped in building Netflix as it is right now.
Stories are simple to understand.
And that’s why they get so much reach among people.
The truth is:
If you are doing something extraordinary, it will be challenging initially.
Things are easier when you are following a proven path.
The author’s ideas were rejected many times.
He had to make many tough decisions.
But when you look back, you realize that it was a fantastic ride with lots of ups and downs.
The fun part was the journey. Not the destination.
What does this mean for you?
If you are in a struggling phase right now, then don’t worry too much about it. Later, it will become a part of your story.
And you will be writing that story in a book the same way the author did!
That Will Never Work Review
- English (Publication Language)
- Octopus Publishing Group (Publisher)
Last update on 2023-09-19 / Affiliate links / Images from Amazon
If you are interested in learning about how Netflix became a successful business, then you won’t find a better book than this.
But if you expect lots of lessons, I won’t highly recommend it.
There are lots of filler stories that won’t help you much.
If you want to read it for fun, then it’s okay.
Also, note that there is no guarantee that the events discussed in this book happened precisely as written.
The key idea from this book is that your dreams may come true despite others not believing in them.
Overall, I found this book okay. I wasn’t much impressed with it as I usually read books to learn great ideas.
Also, the book I ordered from Amazon was damaged. It was a hardcover version.
Maybe that ruined my experience a bit…
This book has a few lessons, but they weren’t enough to satisfy me.
My rating: 6/10.
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