Most companies are not immediately successful on the market. Indeed, it’s true to say that over 90% of startups will fail within their first year. What’s the lesson here? You need to make sure that you know how to start small and work towards building your business the right way. You shouldn’t jump too many steps ahead because this could mean that your bills grow while profit levels remain the same.
If you are looking at how to start out small the right way, you may want to take a few leaves out of the Netflix logbook. Most people forget that Netflix did not start as the streaming media giant that it is today. The business actually began life as a DVD rental service. How did it become the industry champion that it is today and what can you learn about the path this business took to success.
Embrace Diversification
The first step in the growth of Netflix was to diversify their business venture. While they began to offer a DVD renting service, they would eventually offer a streaming option as well as blu-ray rentals. It’s worth pointing out that once Netflix began to build a streaming service, they did not abandon DVDs or hard media options immediately. Instead, they offered customers several options, diversifying their model. This ensured that if one area of the company failed as it began to during the dot-com crash, other products would remain profitable. Diversification of your business and what you offer is a smart step to take as soon as you began to grow your small company.
To this day, Netflix continues to adopt a solid model of diversification, offering both original contents developed by the business and content that they have purchased streaming rights for from other companies.
Plan For Success
Previous employees of Netflix have shared insight into the mindset of the company and the growth of the business. Ultimately, employees were instructed to build for scale and work on the premise that an idea, product or service was already successful. If a product was successful, it was going to be used by millions, and thus it made sense to plan for this possibility.
According to past employees, this even helped reduce costs. Adding ten or twenty percent during a core development phase in the company was far more beneficial than adding two hundred percent for growth after initial development had been completed.
Think Beyond The Bottom Line
Finally, a lot of people think that growing a small startup is about constantly focusing on the bottom line or the cap table. However, one of the reasons why Netflix reached their incredible level of success was due to their ability to see the bigger picture. Netflix did not shy away from mistakes but rather embraced them and built their company while looking at issues that could impact the overall model, continuing to create products for mass consumption. This is what you should learn when creating your own products and building your own business from the ground up.
Ultimately, your company could become the next Netflix in terms of size and success and you should plan for this possibility.
