Download as PDF, PPTX
More Related Content
Similar to Netflix: From Product Strategy to Execution
Netflix: From Product Strategy to Execution
- 2. Netflix: From Product Strategy toExecution Gibson Biddle @gibsonbiddle Products That Count NYC November 15, 2017
- 3. Gibson Biddle EIR Product,Adviser, Teacher (2015) CPO, Chegg (2010) VP Product, Netflix (2005) SVP, The Learning Company/Mattel (1995) Producer, Electronic Arts (1991)
- 4. Product questions • DoFrench & Americans have similar movie tastes? • Is demographic data important? • Should rows “float”? • Should Netflix cancel “House of Cards”? • Should Netflix send a reminder before your “Free Trial” ends?
- 5. • Encourage independentdecision-making by employees • Share information openly, broadly and deliberately • Are extraordinarily candid with each other • Keep only our highly effective people, and • Avoid rules At Netflix we: Our core philosophy is people over process.
- 6. 1.Strategy models 2.Meeting setup 3.Simulation FromStrategy to Execution
- 7. 1- Strategy GLEe &DMH models Netflix Product Strategy
- 8. Strategy • Plan toachieve long- term goal • Hypotheses for how to build customer & shareholder value Tactics • Project or experiment against a strategy
- 9. Why strategy? • Ensureteamwork in highly aligned, loosely coupled way • Motivating, high-level view • Discipline without process • Enable prioritization & saying “no,” a lot
- 10. Focus & phasing:GLEe 1. Get big on ______ 2. Lead ________ 3. Expand _________
- 11. Focus & phasing 1.Get big on DVDs 2. Lead downloading 3. Expand worldwide
- 12. Every company ridesthe growth wave up, until it crests then falls. The secret is to continually create the next growth wave.” Jeff Kagan, Industry Analyst “
- 13. The DMH Model •Delight customers in • Margin-enhancing, • Hard-to-copy ways
- 14.
- 15.
- 16.
- 17. Delight customers • Personalized •Instant delivery • Value • Easy • Selection • New releases • All devices • More original content • Download & playback • Multiple streams • 4K video and audio • Voice ID & control
- 18. Margin-enhancing • Price &plan tests • Used disk sales • Advertising • Long-tail content
- 19. Hard-to-copy • Brand • Networkeffects • Unique technology • Economies of scale • Switching costs Examples • “Movie enjoyment made easy” • Device virtuous cycle • Personalization • Content costs • Profiles
- 20. Hypotheses • Personalization • Instant •Price & plans • Easy • Huge selection • Exclusives • Open APIs • Movie-finding tools • Cinematic/entertaining • Community (“Friends”)
- 21. Results • Personalization • Instant •Price & plans • Easy • Selection • Exclusives >> Originals • Open APIs >> Device ecosystem • Movie-finding tools • Cinematic/entertaining • Community (“Friends”)
- 22. Product Strategy • GLEe+ • DMH + • Tactics & Metrics
- 23. Appendix Netflix 2005: ProductStrategy
- 24. Metric: Optimize retention againstcost Willing to spend up to $200 per saved customer
- 25. Appendix Focus & phasing 1.Get big on DVDs 2. Lead downloading 3. Expand worldwide
- 26. Product Strategy: • Personalized •Instant • Margin-enhancing • Easy Tactics: • Netflix Prize • 100 Hubs, streaming, device ecosystem • Price/plan tests • Progressive disclosure
- 27. • Personalized • Instant •Margin-enhancing • Easy Metrics: • 25% of customers > 50 ratings @6 weeks • 95% disks < day; 10% watch > 15min/mo. • Gross margin, LTV • ?% cust > 3 titles in First Session Queue Product Strategy:
- 28. Personalization Delights customers inhard-to-copy, margin- enhancing ways over three “chapters” of growth
- 29. The secret toNetflix success: high- cadence failure” Gibson Biddle “
- 30. 2- Meeting Prep Strategyfor each swim lane
- 31. Goals of quarterlymeeting Provide context through strategy Share and debate: • key results & learnings, and • future hypotheses Develop business maturity, and Determine level of investment.
- 32. Netflix Swim lanes •Personalization • Merchandising • Search • DVD • Instant • TV • Community • Open APIs • Help/account • Non-member
- 33. For each swimlane Key strategies Tactics, and Metrics
- 35. 2017 Non-member metrics Deliver30M WW members through increased: • Trials/Visits (2.1%) • Month One retention (94%) • Lifetime value ($180), and • Lower acquisition cost ($50) Data estimates for illustration only.
- 36. Strategies • Brand &positioning • Price/plan/free trial • Personalization • Multi-platform • Open APIs • Social Tactics • Original content • 4K plan testing • Featured titles • Alexa launch • Universal search • Recommend to a friend
- 37. Meeting prep Publish viaGoogle slides Articulate overall strategy + pod strategy/tactics/metrics Describe results, learning & future hypotheses Data & design rich
- 38.
- 39. Rules of engagement AskQ’s, form opinion, debate NOT a decision-making meeting CEO-level communication
- 40. Who’s in themeeting?
- 41. End of freetrial reminder
- 43. Hypothesis “Your free trialis almost over” reminder will: - Decrease Month 1 retention, - Decrease LTV, BUT also: + Improve CS call rate, and + In LT, Increase T/V & “starts”
- 44. Results • M1 Retentiondrops from 94% to 89% • M2 Retention > Control • LTV drops: $181 to $177 • Estimated annual loss: $40M • CS savings: $5M • Brand & long-term effects?
- 45. Data estimates forillustrative only
- 46. Discussion & debate •Launch, or not? Result • Launched to all • Positive WOM and brand effect • Customer more likely to restart • Revenue shift not loss? • Possible long-term gain?
- 47. Good meeting likea movie Well-defined script Strong prep & engagement Drama: • Success, failure & diving catches • Debate, decide, & do Denouement: Beer & NPS survey
- 48. The meeting =culture mechanism Highly aligned, loosely coupled Candor Customer, business & data-focused Fast-paced learning to develop business maturity
- 49. 1.Define the overallproduct strat, metrics & tactics 2.Repeat for all of your swim lanes, then 3.Execute your first quarterly prod start meeting 4.Keep getting better Next Steps for You
- 50. If you wantto build a ship, don’t drum up the people to gather wood, divide the work, and give orders. Instead teach them to yearn for the vast and endless sea.” Antoine de Saint-Exupery The Little Prince “
- 51.
- 52. Resources www.gibsonbiddle.com for videos "Howto Run a Product Strat Meeting" Follow me on LinkedIn Follow @gibsonbiddle on Twitter gbiddle616@gmail.com
- 53. Feedback “Feedback is the breakfastof champions.” Ken Blanchard
- 54. Jan. 18 NYC“Product Leader Summit” Apply at: www.productleadersummit.com 80-100 CEOs, CPO’s, VP, and Director-level product leaders