Today, Netflix apologized for the lapse in communication when they made their price increase and explained that they were launching a new service called Qwikster, which will handle the DVD side of the business. The new service will still have the same cost as a Netflix DVD plan but will just be on a different website, run by a separate team, and under a distinct brand. Did that sentence just confuse you? The blog post that Reed Hastings wrote won't make it any clearer.
It seems that an organization renowned for its resolute focus and unique culture is bending to criticism and adding some bureaucracy and confusion to their offering. Now, if you want to utilize both of Netflix's offerings, including the one that was the original foundation of their success, you have to go to separate sites and have different interactions. It's really a bizarre decision. However, with the company stock plummeting 30% in a single week, I guess it was kind of shakeup the company felt was necessary.
My personal opinion is that this is just an extension of the underlying tone in the original move that Netflix believes the future of DVDs is grim and not very profitable. That's why they made the original decision, to focus on their most profitable customers. Now, by screening off Qwikster, the Netflix brand is free to ignore what they see as the past and focus on the future. I think they set up Qwikster so DVDs could have a place to die rather than a place to flourish.
With that being said, it still seems a little rushed to launch a new brand just to further yourself from a legacy business you don't believe in. I do think it makes sense from Netflix to send an even stronger signal that they're a streaming not a DVD company, but I thought the 100% price hike had already accomplished that. To me, this isn't a sign of an ailing Netflix, but just a misstep and some pain in getting to where they ultimately want to be. I still think the company has a bright future and will continue to grow (Qwikster is another story though...).
This past weekend was tax free weekend in North Carolina. For those of you who don't have a tax free weekend, it's a beautiful thing. Select items, usually focused around back to school, are exempt from sales tax all weekend (see a full list of exempt items). You can purchase them online or in the store -- either way you're safe from that pesky 7% of taxes.
I used this year's tax holiday to buy that MacBook Air I had my eye on for the past month. Macs are a high priced item that are almost never on sale, so tax free weekend is the perfect time to knock ~$100, depending on the model, off a price that would never be discounted like that in other circumstances. However, it's not just these big ticket items that drive people crazy over the weekend -- malls are swamped, highways are backed up, and stores are flooded with people looking for items as cheap as $10. I actually had someone tell me they were looking forward to tax free weekend to use a $10 Kohl's coupon they had randomly found.
You don't need to a lecture from Dan Ariely to understand that consumers can act predictably irrational when goaded with a perk or gimmick -- this one being the 7%. While many of the items likely would be bought anyway, there are certainly people who buy more than they intended to or end up visiting more stores at the mall because of the allure of getting something tax free.
People get put to work by stores bringing in part-time help or working people overtime, local businesses get an influx of dollars, and consumers get some much needed relief in hard times. Tax free weekends seem like a win all around to me and yet only 20 states currently have them in place. Some state governments are concerned about the cost to the state.
Don't get me wrong, in the recent debt ceiling debate I was on the revenue-raiser side, but a gimmicky weekend to spur spending doesn't strike me as something that could imperil a state's balance sheet. This year's tax free weekend is anticipated to cost the state of North Carolina around $14.5 million. Certainly not a number to scoff at, but let's put it in a little perspective. The state's current budget is $19 billion, meaning that in budget full of loopholes and tax breaks, this weekend for consumers amounts to .07% of the state's spending. Hell, the earned media the state and its Department of Revnue get for hosting the weekend probably amounts to close to $14 million.
It seems like a no-brainer to me that more states (I'm looking at you, Ohio) should put this policy in place to promote in-state shopping and give consumers a break.
"I see all these people who just keep going and going and going, and I just feel like, ‘Hey! You made it!’ But they get up every day and just keep going. You love the game, but the game for us? We just wanted to be in fourth place. We just wanted a good little company."
A cool quote from Andy Spade (Kate's husband) about their decision to sell their business with no plans for a huge second act. Nice to see someone achieve a goal, comprehend the feat, and then walk away on their own terms in order to enjoy life. (Also, yes, this means I'm trying to get back in the habit of posting here, even if just snippets like this).
I recently watched Note by Note, a really stellar documentary on the making of Steinway pianos. Steinway is one of the only brands in the world to still make their pianos 100% by hand. Their craftsmen are very passionate, interestingly diverse, and extremely skilled. The movie is as much about the workers and their individual stories as it is about pianos. One of the piano makers said something that stuck out to me:
When you work with your hands, you know a mistake. You can just feel it sitting right there and you can fix it.
The quote doesn't seem that complex at first, but as you continue to ponder the remark, it will hit you on deeper and deeper levels. Being able to truly feel mistakes and fix them as we go along is a rather unique situation available to only a select group of professions. Craftsmen, programmers, and chefs, to name a few, are able to receive instance (dis)gratification by quickly feeling or testing the solution their working on to see if it's up to snuff.
However, there's a far larger group of professions that don't have the advantage of instantaneous feedback. This fraternity includes people like architects, journalists, and...marketers. I'm obviously in that last classification and this frustration with going forward blindly for days, weeks, and months at a time has been even more recently evident for me as our company markets our first product, HiFi CMS.
We've worked on marketing plans, made advertising buys, and put strategic initiatives into motion, but there's really no way to know if these things will ultimately be successes or failures until they've had a time to run their course. Marketers aren't able to add a piece of code to the app, test it, get a bug report, attempt a fix, and repeat. We add in the line of code and unless it blows up the whole damn machine, there's no way to know its success or failure for a bit of time.
However, even with the inability to feel mistakes as you go, marketers do have certain tools in their tool chest to feel around mistakes, trying not to fall victim to them. Here are a few tactics our team has tried lately to get an inkling of where an imperfection might pop up and attempt to circumnavigate it.
Always be testing. While you can't upfront run a test to see if a certain program will be a failure or not, in absolute terms, you can be continually testing along the way to look for relevant successes and optimize for that. As an example, you may not be able to answer if it's worth spending a lot of resources to make a kickass product screencast video. That's a hard question to answer, you can A/B test your site layout to optimize placing that video wherever it'll get the most views, thus making the most of your either prophetic or idiotic investment. (Note: we *love* Optimizely for A/B testing.)
Watch competitors. One of the best ways to avoid mistakes is to observe what your established competitors do in the space. If they all send out weekly email newsletters, then it probably makes sense for you to do the same. Your competitors have been doing this for awhile and certainly made plenty of mistakes in the past -- you have to assume they learned from them and they're doing certain things and ignoring others for a reason. That's not to say you should always 100% emulate your competitors, they may miss or ignore some things you know are great strategies (blogging is a popular one), but you should use them as a baseline for your activities and avoidances.
Get feedback at every step. Similar to always testing, you should also always prod users, prospects, friends, and others for feedback. Thoughts from a small minority should never 100% shape your direction and will never tell you if you're going to fail or not, but it will give you some solid foundations from which to tweak messaging, change an ad buy, or launch new initiatives. By getting feedback, you'll get others to buy in and get a timely response if you ever do make a truly ghastly decision or gamble.
Those three are just a start of things to do and still don't solve the biggest issue, which is that all could be for naught if you've started down the wrong path anyway. What are some other ways to minimize room for error as a marketer or another professional who can't feel mistakes as they're going?
There is a stigma against picking fights. It's seen as crude, immature, and cheap. Anyone who has been with me after a few drinks knows that I have a different point of view. Actually, even in the most sober of states, I'm more than happy to pick a fight or push someone a little too far.
It's not because I'm hoping for an actual all out brawl or because I revel in the discomfort of others, but because I understand the emotion that it can evoke. When speaking to coworkers and employees, if you position an upcoming competitive task as a fight rather than just an objective, they are far more likely to fiercely rally behind the cause, and your opponent is much more likely to feel intense heat from your efforts rather than just an uninspired flicker.
Examples of this strategy can be seen across the business world. Larry Ellison is the perfect example. Boisterous and provocative, he doesn't see things in gray, only black and white. Right and wrong. Oracle or a contender. When he hired Mark Hurd, he didn't shy away from confrontation -- he went so far as to step over the line and immediately called into question the entire HP partnership. He rallied the troops and spit fire, and HP limped away.
The same strategy can hold true for startups and small companies. One of my favorite marketing strategies of the past year was when Posterous called out Tumblr and encouraged people to "graduate" and switch services. They could have been coy and hinted at the advantages associated with Posterous, but they instead chose to be blunt and pick a fight. I don't know the final results of the campaign, but I know it convinced me and was a well trafficked promotion.
While business has good examples of the value in picking fights, the best niche is probably politics. Look at the tea party -- isn't that what they're doing (maybe the only thing)?
A couple weeks ago, I was disappointed to read that President Obama was shying away from a public fight and was going to use a loophole to temporarily appoint Elizabeth Warren as the chief consumer watchdog.
I understand that it's a delicate time of year for politicians, but I cannot understand how it would hurt his standing to publicly advocate and fight for a nominee whose sole charge is to protect consumers from Wall St. That would be a hell of a rallying cry for the November GOTV efforts. However, by avoiding the fight, the issue has slipped virtually under the radar and the administration is unable to leverage the fervor that a public fight would stir up.
I'm not saying that you should use a sledgehammer to kill ants -- many situations are still best resolved by discussion and compromise. However, it's important to remember the value of picking a fight when you want to really create momentum, corner a competitor, or rally the base. Don't be afraid to throw the first punch.
Barry Sanders is one of the greatest running backs ever. It seemed impossible to bring him down unless you had an entire team tackling him. A sportswriter once asked Barry, "What do you see different than the rest of us that allows you to find all the holes and make these amazing runs?" Barry responded simply and powerfully, "I see the same thing as you. The difference is that I know I can get there."
What an awesome quote. Sanders was fast, but not the fastest person in the game and he certainly wasn't the tallest, at 5'7" he was actually one of the shortest. However, he knew he could get there.
I think this philosophy applies to business and life as much as it does to football. We're all seeing the same thing, the difference is some people just know they can get there.
Everyone experienced losing a package or having it arrive two days late -- we all saw that the mail system was broken. Well, Fred Smith saw it and knew he could get there, causing him to start FedEx.
Companies had already built mp3 players, people knew the music industry was changing, but Steve Jobs saw it and knew he could get there, leading to the iPod.
Look at Facebook -- there were plenty of people in the space before Mark Zuckerberg, and while they recognized the value of social networking, they were content to just go with the flow and enjoy the ride. Zuckerberg's determination to actually get to what he saw is the real difference in why Facebook crushed the competition.
These people all have unique skills, similar to Sanders' speed and agility, but those assets alone don't explain how they become such gamechangers. The real difference is their supreme confidence in those skills, even in the face of daunting challenges, and their committment to getting there.
You can have all the foresight in the world, but if you're not totally confident in being able to close that gap and do what's necessary to get into the endzone, you will fall short of the mass disruption you're shooting for.
For me, I vividly remember the first time I embraced the concept that I could "get there." Our startup was less than six months old and two of our co-founders decided to go on to graduate school, and Joel and I decided to buy out the majority of the shares. Joel and I sat in a room, talked about the option for maybe 30 minutes and decided to do it. The decision put us in debt and altered our career and life trajectories toward the unknown.
At this point, the company hadn't paid us a dime, struggled to show a longterm growth path, and was seriously hurting our chances of graduating from college. However, I remember sitting there thinking, "If it comes down to it, I'm willing to get up at 6 am everyday to cold call or knock on people's doors to talk about websites. I'll do whatever it takes to sell some damn websites."
That was me realizing that my vision may be blurred and there could be some big obstacles approaching, but I was confident that I would do whatever I needed to to get there. That was almost 400 websites, nine employees, one co-founder returning, and four years ago to the day. I know the next time I'm presented with such a grand decision, that I can have confident in my determination to get there.
We could all learn from Barry's philosophy whether in work or pleasure, there's value in not just resting on the fact that you recognize something, but actually taking the strong steps to get there.
Over the past decade, Google has become so ubiquitous that it’s easy to forget how remarkable and powerful of a company they are. However, it’s amazing to sit back and think about the sheer might of their algorithm and data processing capabilities. I wanted to share a couple of articles that came out over the past weeks that highlight this very idea.
This article is the most comprehensive about Google’s Algorithm that I’ve ever seen. Definitely a must read. It explains how Google’s algorithm has been honed over years and billions of queries. It also highlights an awesome anecdote about the mike siwek lawyer mi test.
Good article on how Google is building a better web translator. To me though, the most interesting part of this story lies in two sentences:
“In 2007, for example, it began offering 800-GOOG-411, a free directory assistance service that interprets spoken requests. It allowed Google to collect the voices of millions of people so it could get better at recognizing spoken English.”
Talk about brilliant! I’ve used Google 411 and never knew why the company offered it for free, but now it makes sense. A perfect example of the innovation and power of Google.
Just a couple of quick articles that I found really interesting to help peer into one of the most interesting companies, ever. I hope to start posting quick, link-heavy thoughts like this more often.
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