Why You Should Run Your Startup Like a TV Reboot- Valutrics

In 2011, a little online streaming service called Netflix turned heads by outbidding HBO, AMC and Showtime for a new show called House of Cards. And they didn’t just commission a pilot, like most studios would. In an unprecedented move, they immediately committed to two full seasons.

But Netflix had data to back up their bet. They knew the original was popular with a chunk of their users, they also knew what stars their users liked, and what the viewer overlap between House of Cards and those stars’ projects were. Since traditional TV creators didn’t have this data, Netflix saw a hit where others saw a risk.

House of Cards has now far surpassed the original series to become a culturally unavoidable, multiple Emmy Award winner.

The model Netflix followed was a data-driven version of the theory behind many successful reboots: take the best parts of a show and repackage them. This theory can also make a successful business, no matter what stage of the game you’re in.

Startup? Use someone else’s draft

Sometimes, the most successful ventures are tweaks of things that already exist, not shiny new ideas. House of Cards enjoyed success in the UK, but it didn’t reach cultural phenomenon status until the Netflix reboot.

Similarly, there’s significant evidence that being first to market, counterintuitively, isn’t all that advantageous for a startup. Those first to market often have a great idea, but don’t have a workable business model, or the best customer knowledge. “Fast followers” benefit from their lateness — they have an 8% failure rate, while first to market fails a whopping 47% of the time.

A great example of how this strategy plays out is Amplitude’s copycat entry into the mobile analytics market. They looked at existing mobile analytics options, like Mixpanel, and saw that the only thing they needed to create from scratch were the features they wished that other mobile analytics platforms were providing.

They know they copied the basics from Mixpanel, but their take is: “We’ll get to market faster by building nearly the same product as you have. What you make money on, we’ll give away for free [… and] our technology is a little bit better. And that’s how we’ll win.”

Making a few tweaks to an existing product was all it took to make something great, so that’s what they did.

Growing? Adapt more than you innovate.

As a startup, innovating on everything comes naturally. But constantly reinvent everything about how a company should run, and you’ll lose sight of what makes yours special in the first place.

A great example of this is Wistia’s structural shift. Wistia relished being a non-traditional company with the flexibility and courage to think outside the box. And that extended to having a flat team, which CEO Chris Savage felt “was core to our identity.”

But flat stopped working as the team grew. Unwilling to adopt a ‘corporate structure,’ Wistia “spent five years reinventing the basic technique that’s been used to organize teams for a millennia.”

Then, they adopted a hierarchy and it maximized their production so they could funnel their energy into their product. As Savage says, “best practices [are] best practices for a reason […] not everything [is] worth trying to pioneer.”

Netflix used the UK House of Cards as their ‘hierarchical structure.’ They figured out what made the show a success — the slimy narrator, political drama, and sly breaks of the fourth wall — and ripped these things off for their Americanized remake.

This gave them room to get creative with everything else — casting, creative direction, the choice of director. And it also let them take advantage of the core of their business, instant streaming. For House of Cards, they innovated the full-season release, which was heralded as a “seminal” event in television history.

Established? Corner your market.

Once your business has established itself, there’s incredible value to following your competition in order to keep dominating your share of the market.

Netflix’s market domination started to shrink, fast. First, more streaming services appeared. Then, licensing costs began to rise as companies realized the value of streaming — think $1.355 billion for Netflix in the first quarter of 2013 alone.

If you just wanted to watch TV online, you could stream from anywhere. But you could only watch shows like Entourage or Game of Thrones on Netflix’s biggest competitor — HBO GO. Netflix had to become a landing spot for exclusive content to compete.

Then came House of Cards. Overnight, Netflix was differentiated from websites that simply streamed, and on the same level as HBO.

Similarly, Instagram and Snapchat are both competing for attention. Instagram wants to maintain their hold on their larger user base, so they copied Snapchat and added a “stories” feature.

Snapchat is still expanding. Every new Snapchat user is someone who isn’t solely focused on Instagram. The more users, the more visits a user makes, the more posts they like and pictures they post — these metrics add up to real value for Instagram.

By adding the stories feature, they are cherrypicking elements of their competition to keep their users loyal and stay profitable.

Every Business Copies

You don’t have to be the first one to come up with something to make it great, or to make it profitable. USA is importing Norwegian TV, and Romeo and Juliet has been redone more times than you can count. Every business has started by copying a structure, idea, or product and making it more appealing to consumers.

House of Cards didn’t make a shot-for-shot reproduction of its UK counterpart. It mined the brilliance out of a great show and made it appeal to a whole new market. If you can serve a customer better than your competition, it doesn’t matter who came first.