Vital Lessons From Netflix For Real Estate Investors
Netflix was a hugely successful business story. Sadly, like Zillow and other giants, they may now become most famous for their failure.
There are essential lessons to be drawn from their rise and fall. Leverage the good, and avoid making the same mistakes if you want your real estate investing business to grow, and avoid collapsing. Especially with the market changes on the horizon.
Unique Solutions, Adding Great Value & Convenience
These are the things that made Netflix, and put the final nail in the coffin of the physical Redbox and Blockbuster before them.
The price was low. Better than renting DVDs. It was convenient and easy to use. They were the leaders in the space.
Scale Fast, Grow Your Brand Name
Netflix leveraged and grew fast. They established their brand name as the verb for watching TV and film online.
They got big and seemed dominant. Then appeared to forget what it was that made them successful.
They started going in the opposite direction. It seems everyone else in the world except for the executives at Netflix could see the writing on the wall, and knew their choices were going to self-sabotage the company. It was just common sense. Unfortunately, their investors are paying that price dearly.
Don’t Sacrifice Your Most Loyal Customers
Like other multi-billion dollar companies that have steeply declined, one of Netflix’ most obvious mistakes was to begin sacrificing their most loyal customers.
Not only did they seem to stop innovating, but they began raising prices on their biggest fans, instead of rewarding their loyalty.
Raising Prices, While Stripping Value
Raising prices when it is necessary is one thing. Raising prices, and giving less value is something else. It is always a losing strategy.
Power users found little to watch, and were already interested in other competitors. Netflix basically forced them to the competition. Depending on your plan, you may be paying $16 a month for Netflix, and just $1 for Hulu. A service that seems almost the same, with more fresh content for new users.
Failing To Keep Innovating
Even if it is working right now, you can’t just keep on doing the same thing. If you aren’t constantly innovating, your company is going to die.
You must constantly be improving and offering new things.
Doubling Down On What’s Killing Your Business
Of course, the inevitable happened. People stopped using Netflix.
In just one day the company lost $54B in investor value.
Then at the time of writing this was falling off a cliff. Already having lost 5 years of gains, and with its stock price down by over 70%.
So, did they correct course? Offer more content and value? Cut prices to be competitive?
No. Instead they are talking about adding back in advertisements. Which we can get on regular TV if we want them. Or on YouTube for free. They are further cutting back on shows and the content they will offer.
It is a race to the bottom.
Learn from their mistakes, and what they once did well.
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