According to a story in today’s New York Times, Netflix CEO Reed Hastings was sitting in his hot tub a few months ago with a friend when he mentioned his plans to separate Netflix into two websites – one for streaming content, and one to mail traditional DVDs. The friend, a Netflix subscriber, told Reed that it was a “terrible idea – I don’t want to manage two accounts”.
Hasting claims he is not one of those CEOs who takes his friends’ advice on running his company, and went ahead with the plan anyway. And the result? After the disastrous announcement of the plan Netflix lost 800,000 subscribers, and the share price plummeted 25%.
Now don’t get me wrong. I am not advocating that anyone should operate their company based on hot tub chatter. As a matter of fact, by the time my friends and I strip off our clothes and make it to a steaming cauldron of 102 degree water we are typically not at our mental peaks.
But I think the real message here is that in the technology world “simple wins”. As consumers we are overwhelmed by the increasing complexity of our day-to-day lives. Fifteen years ago our communication responsibility tended to consist of going to the mailbox and checking our home and work voice mail. Now we have to do all of the above, but also check our cell voice mail and texts (some of my friends actually keep two cellphones – one for work and one for home), work and personal e mails, go to LinkedIn and Facebook, and probably communicate via the social networking platforms on dozens of other sites.
When we shop we can’t just go to the mall like the old days. We have to check all our daily deal websites and coupons, check online reviews at a couple dozen sites, perhaps complete a few product reviews as part of our social responsibility, and then decide to shop online or go to the mall.
So for me, simple wins. If I shop online I usually go to Amazon, because they have almost everything and it is really simple to use. They ship efficiently and their customer service is great. If Netflix had divided into two sites, I would have dropped my account on at least one of the sites. I want to spend less time online – not more.
One of the reasons Apple has been so successful is that they understand this. They build intuitive hardware that is pretty simple to figure out. They send their customers to one site – iTunes – where we can find all our entertainment in one place, and it’s easy to download. While they do update iTunes frequently – their downloads are simple and elegant, and reflect constant improvement. Now with their Cloud technology they will even make sure that all our devices are updated without a hassle – as long as we continue to buy from Apple. And from my perspective, I hope Apple continues to dominate the technology world with simplicity. I am sick of having complicated televisions and remote controls, and dealing with multiple cable and satellite providers that each have complicated interfaces. I don’t like spending hours of my time talking to customer service reps in third world countries trying to get my miracle toys working. Simple wins.
But much of the technology world has not figured this out. I have been an XM Radio subscriber for many years, with systems in my home and cars. And when XM merged with Sirius last year I assumed they would seamlessly blend the two companies. Not the case. Over the last year I have purchased two cars that came equipped with Sirius radios. XM and Sirius do not share a database – so I need two accounts – and there is no way they can link them. Yesterday while driving my Sirius subscription apparently ran out – and I spent a half hour with someone in India trying to find my account. Finally I gave up – and realized – “this is too much of a hassle”. That realization got me questioning whether or not I really needed a Sirius account in the car. After all – the car also has an iPod jack, and it is just as easy to plug in my phone with all the music and podcasts I love. Problem solved by Apple and simplicity – bad news for Sirius.