About 15 years ago (!) I worked for Reed Hastings. He was not one for sitting pat. At the time, he realized that the software category of Software Quality Assurance (SQA) was going to consolidate. And that you could either embrace that eventuality, or hold on to the past.
He embraced it, by seeking a merger between his baby Pure Software (he was the founder) and Atria. Soon thereafter, the combined company was part of Rational and is now a product suite at IBM.
Reed is at it again. Netflix is separating its DVD-by-mail service from its live streaming service. I loved the quote from Engadget today:
What really happened here is quite simple: Reed Hastings just put a gun to the side of his DVD-by-mail business and pulled the trigger. Given that he aimed for the ankle, though, it’ll probably take a while for it to completely bleed out. But hey — proactively putting a fading business out of its misery sure beats bleeding for it on the balance sheet.
Joseph Schumpeter and more recently Clayton Christensen have written about creative destruction and disruptive technologies. Reed is one a few high tech leaders that has the courage to implement what the rest of us know: do unto oneself before it’s done to you.
Here’s the bit that stops others from doing the same: Netflix’s share price, and perhaps even near-term revenue, could suffer. For most of the industry, one can’t tolerate the thought of taking a step back to take two forward. And hence the balk at such bold moves, fearing the reaction of others. Like shareholders or pundits.
Perhaps the definition of “courage” is not fearing the reaction of others? Game on, Reed.