A follow up to my thoughts on the Netflix split from last week: Their former CEO and co-founder, Marc Randolph wrote an excellent post weighing in. The quote above comes from it, and you’ll want to read it in its entirety.
His take? Focus.
Randolph claims no insider-knowledge, so it’s just a theory, but I’d file it under educated guess considering his past ties to Netflix. His take? Focus. He thinks Reed Hastings wasn’t simply trying to spin things when he said that Netflix-proper wanted the freedom to focus solely on the streaming service and that it was a bold and gutsy move to do it when they did.
He makes a compelling argument and backs it using the example of Netflix’s original transition away from DVD retail (something I didn’t know about). I still wonder if there are some other ancillary reasons for the spin-off and I still expect Qwikster to be up for sale sooner than later, but the spin-off will certainly allow for the type of focus Randolph talks about.
By freeing our designers from having to create a sign-up flow that accommodated two types of business, we were able to cut out steps, clarify instructions and simplify the process. Conversion went up.
I’d not thought about it that way, but the entire exercise could be an incredible lesson in product design. Having two split sign-up paths has to increase sign-up attrition rate. Now think about companies that are trying to simultaneously pursue several models. The ability to sell one thing and sell it well is really attractive.