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Comment by jedberg | Hacker News Reader

Netflix only lost to Blockbuster because Blockbuster didn't believe in online anything strongly enough to properly fund it. Blockbuster had the better network and better penetration, and even had equally good technology. But corporate didn't want to fund them to hire the next set of engineers they needed.

Blockbuster would have won if their board had been just slightly more forward looking. And Netflix knew it.

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Isn't this the Sears case again? They were the veteran incumbent with a mountain of experience in the industry, but turning a corporate ship on a dime seems to be impossible.

I guess that manifests as a form of "corporate didn't believe in..." or "didn't invest in the engineering" as you say.

You can keep the shareholder calls easy for now by just keeping costs low and praying. If you suddenly add a new high cost department that isn't going to be pulling in revenue for 12+ months, those calls are going to get harder, and you need to have the clout with your investors to convince them it's the right more. If you're a hired CEO who's done nothing but tweak logistics and optimize inventory, then they aren't going to trust that you are making the correct move when it comes to completely changing customer acquisition and product delivery.

It was worse than that though. They had already built a second ship pointed in the right direction, it just needed a little bit of extra fuel. They had already innovated.

Sears was already in the wrong place at that time because not just was it incapable of turning on a dime, it already had corporate raiders inside it turning over every couch for leftover dimes. It was already getting chopped up and shopped for parts by the time the internet arrived.

Aka https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma

If you didn't have the Sears Catalog you had the JC Penney catalog. They both dropped the ball, probably by watching each other to see who blinked first.

Kodak is another great example.

Google has massive range and tons of way to push their services onto users, and google+ failed miserably.

Resources are not guarantee of success.

I'm convinced that what killed Google+ was their slow rollout, which was an absolutely bone-headed move that I'm really surprised a company like Google would make.

Google+ was a social network. For a social network to have any value, you need your friends to be on it as well. By making it invite-only and throttling how many people could join, they guaranteed that most of your friends weren't there and COULDN'T be there. There were so many memes being made of Google+ being described as this amazing party you got invited to, only to get there and find there's nobody there.

GMail being invite-only at first wasn't a problem because using GMail didn't require everybody you sent/received e-mails to/from to be on GMail as well.

Yes. It seems like they learned the wrong lesson from both Gmail as well as Facebook.

With Gmail, the invite-only rollout had the effect of making the service seem exclusive and valuable. I remember getting my invite from a friend and being “let into the club”. (I didn’t take it that seriously, but the feeling of being “in” was still kinda there). And as you note, email still works across providers, so no network effects were harmed.

Facebook also had early exclusivity, but it was entire cohort schools at once! If I was allowed to create a FB account, that meant all my classmates were also being admitted to the club.

G+ didn’t start with any natural cohorts, so being rolled out slowly just guaranteed that initial experiences were tumbleweeds and disappointment.

Then again, Facebook did a slow rollout - first it was just for American college students, then (if memory serves) it was rolled out internationally for colleges and universities outside the US, then finally it was available everyone.

This helped build word-of-mouth. While a social network has value, so does an exclusive nightclub with a long queue around the block to get in.

I've no idea, but I wonder if this was the thinking behind Google+. Build up a demand with artificial exclusivity, so you build buzz (maybe "buzz" is the wrong word, given Google's other dead project of that name). This approach also helps you from the technical side - easier to deal with scaling and other teething issues when you have a few users at once rather than the mad rush.

At the end though it was probably the wrong decision - people were already on Facebook so they just shrugged and forgot Google+ existed.

Excellent point. It's easy to remember google stuff used to be limited and "cool" and it was desirable to get an invite.

G+ was around the time that started to swing around and people didn't think Google was so amazing or desirable.

I wonder if it would have been possible to ‘bribe’ blockbuster executives into making such decisions. As much as Blockbuster was prepared to pay them to do their jobs I’m sure Netflix would have offered them more to not do their jobs. An indirect/legal way to do this would simply be to poach talent away with good offers, easy to do when you’re poised for substantial growth.

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