How the feedback loop saved Netflix from free fall (and probable death)

Hey, NES and floppy disk people, y'all remember when Netflix was just a company sending DVDs by mail?

Yes, young padawans, there was a day when both DVDs and mail, with a real envelope and stuff, were still a thing, and I'm *that* old 😅

Anyway, back to the story, you guys remember Qwikster? Me neither.

Yet, it could have killed Netflix completely in 2011.

At that time, customers received a sudden email that went like:

"Hey, we're splitting DVDs and streaming into 2 separate services. #KThxBye"

Wrong move. The stock crashed 75%. Netflix lost 800k (yes, with a K) customers OVERNIGHT.

Reed Hastings destroyed his $12B company with ONE email.

He and his leadership team had an emergency meeting (at 3 AM) to analyze the data, and it was clear:

40% of canceling customers didn't want to manage 2 separate services.

People didn’t hate streaming. They hated how Netflix was making them switch.

Hastings knew that streaming was the future (and we all know now he was damn right).

But he chose adaptability over rigidity. Customer satisfaction over pride.

Qwikster was killed in just 23 days. No ego. No “let’s wait and see.” Just courage and action.

We know the rest of the story: Netflix became the king of streaming, launched original content, and is a $300B company.

I'm not, and probably never will be Reed Hastings.

Still, lessons can be learned there:

-> Product-market fit beats being "visionary.

Look at Google Glass back in the days, while now Apple Vision Pro sells for the price of a kidney.

How Facebook Metaverse flopped when it launched, while products like Gather are used in many offices and communities.

-> Being customer-centric is crucial. Feedback loop needs to be there from the very beginning.

Some products will be needed and used, some won't. They're not necessarily bad, per se.

But if your users don't want or use them, they end up dead and buried.

Being early isn’t enough. Listening, adapting, and evolving with customers is.

The best ideas don't (always) come from you.

Launch, Listen, Adapt, and Repeat 🚀

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