Don’t Get Netflixed

R&D for New Business Models is the Strategic Imperative

I’m feeling nostalgic today. Netflix has announced that after 25 years and 5.2 billion DVDs it is ending it’s pioneering OG business model, DVD-by-Mail. I have long sung Netflix’s praises for bringing Blockbuster to its knees with a better business model followed by disrupting itself as it transformed its business model into the global streaming juggernaut that we know today. My persistent mantra to companies, institutions, communities and to all of us as individuals continues to be “ don’t get netflixed”.

R&D for new business models is the new strategic imperative for all leaders. Why? Business models don’t last as long as they used to. All businesses are vulnerable to being netflixed. A Netflix, Uber, or Airbnb can swoop in and disrupt or totally destroy existing industry business models. And make no mistake — this is not about new technologies or new products, it’s about new business models. These upstart companies didn’t invent anything; they all deployed new business models that networked available capabilities in different ways, to change how customer value is delivered.

Incumbent companies were caught flatfooted and unable to compete, because the typical company responds to competitors’ disruptive business models by leaning against them — creating regulatory moats to slow competitors while at the same time working urgently to strengthen their current business model and hold on to customers. However, tweaking and protecting the…