Escaping the Build Trap: How Effective Product Management Creates Real Value

by Melissa Perri

Netflix then self-organized around key outcomes and strategies to help reach its goals. Gibson Biddle, who was a VP of product at Netflix from 2005 to 2010, talks about aligning his team around a common guideline for evaluating its product strategy. That guideline was to “delight customers, in margin-enhancing, hard-to-copy ways.” He set goals that would accomplish this and would help Netflix execute on the company vision around key initiatives (Table III-1), including personalization, instant access to entertainment, and ease of use. Teams were then able to explore tactics to accomplish these goals, and they were held accountable to success metrics for each. Table III-1. Gibson Biddle, Netflix strategy, 2007 Key strategies Tactics Metrics Personalized Ratings Wizard, Netflix Prize Percentage of customers who rate ≥ 50 titles at 6 weeks; RMSE Instant Hub expansion, streaming Percentage of disks delivered in one day; percentage of customers who watch ≥ 15 min/month Margin-enhancing Previously viewed, advertising, price & plan testing Gross margin, LTV Easy Simplify and kill; progressive disclosure Percentage of customers with ≥ 3 titles in queue on day one This combination of vision, goals, and key initiatives helps create a system in which Netflix can make decisions about its products — sometimes difficult decisions, like killing Roku. Netflix can change tactics or kill ideas because it commits itself not to the solutions they are building but rather to the outcomes these ...