Very few companies have led the spawn of an entire industry, and still managed to stay ahead of the curve, like Netflix.
The video-streaming giant marks its 20th anniversary this year, touting a valuation of $60 billion. That works out to about $3 billion of added market value a year. But as impressive as Netflix’s growth has been, it’s their founder Reed Hasting’s vision for the future that is truly inspiring.
On this episode of Real Estate Pros, we discuss Netflix’s rise to fame, why Hasting’s pivoted the company in the year 2000 and the lessons for our beloved real estate industry from a company that’s grown from zero to $60 billion in 20 years.
Recently, I’ve been dialled into a podcast called Masters of Scale with Reid Hoffman – the co-founder of LinkedIn. If you’re a podcast listener, this is defiantly one to add to your list.
On each episode, Reid interviews people who have built radically successful businesses – people like Mark Zuckerberg (Facebook), Brian Chesky (Airbnb) and Eric Schmidt (Executive Chairman at Google’s parent company – Alphabet). But it was a recent interview with Reed Hastings, CEO and founder at Netflix, that really stood out for me. Reed told the story of how Netflix came to be what we know it for today.
As impressive as Netflix’s growth has been, it’s Reed Hasting’s vision for the future that is truly inspiring.
Most of you (probably) already know that Netflix originally started as a DVD rental service via mail. You might also remember those vending machines at local shopping centres where you could rent DVD’s on the spot.
But as a computer scientist, Hastings always had a passion for the internet. And after years of delivering DVD’s by mail, Netflix launched its online streaming service in 2007 – having delivered more than 1 billion DVD’s. By 2010, Netflix’s streaming business had grown so quickly that within months the company had shifted from the fastest-growing customer of the United States Postal Service’s first-class service to the largest source of internet streaming traffic in North America.
On 18 September 2011, Netflix announced its intentions to rebrand and restructure its DVD home media rental service as an independent subsidiary, separating DVD rental and streaming services.
From this moment forward, it was off to the races for Netflix.
Netflix has become one of the fastest growing companies in history – with 104 million subscribers in 190 countries who subscribe to their streaming service as well as being ranked 5th on Forbes list of the World’s Most Innovative Companies.
Back in 2000, Hastings believed that streaming video over the internet was the future and that DVD rentals would eventually become a thing of the past. His bold move to pivot the company from DVD rentals to online streaming of video content came at a time when it was business as usual for companies like Blockbuster. And we all know how it turned out for them.
The irony in all this, however, was that in 2000, Netflix offered to be acquired by Blockbuster for $50 million, but the offer was declined.
Today, Netflix is worth roughly $60 billion USD.
So, if you could peek into the future of what your business looks like in 5 or 10 years time, would it look exactly the same as it does today?
I believe, right now, is the most exciting time to be in real estate.
We’ve never had more tools and technology at our disposal to deliver an amazing customer experience, which is ultimately why Netflix, Uber, Airbnb and all the other cliche examples of disruption have succeeded. They’ve used technology to deliver a better customer experience.
Due to the nature of our industry, I believe people will always be at the heart of the transaction and thus, for the most part, agents will not be completely replaced by robots or DIY online services as many have predicted. Technology is already replacing many of the repeatable tasks in real estate businesses and as computing power becomes ever more powerful, we’ll continue to see the list of tasks performed by computers, not humans, increase.
I believe the ‘Netflix’s’ of our industry are those who use technology in a way to give them more face-to-face, voice-to-voice time with their clients and prospects – to provide a better experience, at a lower cost, with higher margin and in a shorter time frame.
Is this what you want your business to look like in 5 or 10 years time?
Let’s get started.