It’s been a bad year for Netflix. A 60-percent price hike came out of nowhere and turned the DVD portion of the company into Qwikster and then back to Netflix.
A massive customer exodus led to a stock plummet that would make a downhill skier blush. We’ve heard CEO apologies and seen the widening eyes of their competition.
How did we get here? How did a company that was dominating the market and had a loyal customer base fall apart into a million pieces, seemingly overnight?
The answer teaches a much broader lesson than how to rebuild the company with the red envelopes.
Netflix crashed because it forgot about the people who were there from the beginning and started looking toward the people
who were starting to take notice.
Netflix was trying to make itself a power player in the everlasting Google-Apple-Microsoft war for technological dominance. It wanted someone to dangle billions of dollars in front of the company. It wanted someone to invite them to the country club.
Yet in doing so, Netflix started alienating the people who made it strong in the first place. It charged $16 for a service that used to cost $10. At every turn, it looked to become more valuable, instead of more popular and more beloved.
It’s not like it announced the price increase along with some great expansion of the streaming catalog or a new feature. It was just so obviously about higher profits and a better date to the dance.To the people who were there from the beginning, it was a turn off. Those loyal subscribers left. If Netflix were going to treat them like that, they’d find someone else.
This is a life lesson in the truest sense. Dance with the one who brought you.
Netflix raised its prices without warning and without any idea that its original stalwart customers might be upset. These people made Netflix a giant and Netflix left them at the altar. Customer loyalty goes both ways.
Politicians, businesses and athletes take note. Everyone take note. Understand the people who got you where you are and be true to them.
What’s the point of getting an offer from Google if the people who made you great left for Hulu? Who cares if you’re about to win the presidency if the people who got you started don’t want anything to do with you?
It’s a hollow, hollow victory if you succeed like that. Your legacy will be greater if you stand by those who stood by you when no one else wanted to. You might make a little less money, rise a few stories lower or win a few less games but you’ll have done it the right way.
Everyone wants to stand next to you when things are good, but the people who stood next to you when things were bad are the people who want next to you always.
Netflix might make billions in the next 10 years when some titan of technology comes to buy them, but it was already a powerful company. It changed entertainment forever and then success changed them.
The message here is not to give into the temptation of success if it means leaving behind the reasons you were given that opportunity. Netflix shouldn’t turn its back on the loyal subscribers just to look like a better investment for someone else.
Politicians shouldn’t start voting with power players just because it might be better for their careers when their constituents sent them because they didn’t like the power players.
Athletes shouldn’t leave for a little more money in another city just because it’s a measure of status. No one’s ever going to love you like the hometown fans. They don’t build statues for people who left town for more money.
Dance with the one who brought you. Netflix didn’t, and LeBron James didn’t, and look what happened to them. It’s a lesson for Albert Pujols, and hopefully for the people of St. Louis and baseball fans everywhere, he’ll listen.
But more than anything, it’s a lesson for all of us. Succeeding with the people who stood by you is much sweeter. Dance with the one who brought you, and it’ll make all the difference in the world.
