Let’s talk about something that almost never comes up in a business discussion: Love.
Yes, that many-splendored thing. Emotions seldom arise in business (even branding) discussions. Love least of all, perhaps because it’s so rarely relevant. But sometimes true love happens. When it does it’s remarkable, worth our attention.
Two recent events brought love to mind: Steve Jobs’s death and Netflix’ clumsy self-destruction. Both offer lessons.
Steve Jobs: Unforgettable
Four days after Steve Jobs’s death I was in Palo Alto and stopped by the Apple Store, a few blocks from his home. It was deeply moving. Store windows were covered with Post-Its conveying heartfelt affection and gratitude. Flowers, toys and pictures on the sidewalk transformed the storefront into a memorial.
Two good friends told me spontaneously they wanted to write to Jobs’s family. One of them has never owned an Apple product. Another friend said he will never forget the exact moment he heard of Jobs’s death.
This is what love looks like. We were deeply glad he was in the world and grief-stricken at his early death. We may not have wanted him as our boss any more than we would have wanted to model for Degas, but he left a legacy of world-changing impact and beauty. Love like this is extremely rare, but it is very real.
Netflix: You can’t take love for granted
In its early days, Netflix also inspired real love. The brand came up spontaneously in conversations at work, among friends. As I mailed a video at the post office, a postman was moved to tell me how Netflix had transformed life for his elderly housebound mother. Netflix let us browse in our bunny slippers, create our own obscure film festivals, dawdle without dread.
As time went on, we got used to Netflix. Ardor turned to affection. Managing our queues became part of life we didn’t think too much about, but fondness remained. The little red envelopes dotting our homes evoked friendly feelings.
Then everything changed. As most know, a few months ago Netflix raised its pricing 60% with no explanation. It announced it was splitting into two separate companies (DVDs and streaming), leaving customers to manage two separate accounts and queues. Then a CEO non-apology, after a huge public outcry and subscriber losses. Finally it reversed itself, remaining a single company.
Bye-bye love
I happened to have six conversations about Netflix’s new strategy and approach before the company’s value crashed. Five MBAs and a Stanford PhD—a sharp bunch. Opinion split down the middle.
Three rousingly approved, citing the company’s Bold Approach, their Willingness to Take Risks and Reinvent their Business Model, even if they lost some customers. Supporters included two heads of innovation at huge, multi-billion-dollar companies and a former management consultant. They spoke in bloodless, abstract terms about models, strategies, technologies.
The other three were completely appalled, like the rest of us. They talked mainly about people, about the impact on customers, the impact on themselves as customers.
By now Netflix has lost maybe $12 billion in market value. People 1, Abstractions 0.
As I thought about the detractors’ responses, Dan Ariely’s book Perfectly Irrational came to mind. He wrote of the delicate balance between social and market norms. In a relationship based on market norms, changes in terms and pricing, however unwelcome or irritating, are taken in stride. But if the relationship has been cultivated even partly as a social exchange, violation of social norms can trigger anger or betrayal.
Yes, of course we knew Netflix was a business. But we were also friends, treated each other well. In exchange for low prices and great service we spread the word and let those DVDs sit around for a few weeks or months. It worked, we thought.
“Boo! Boo! …You had true love and you…treated it like garbage.”
–The Princess Bride
I wanna know what love is
What inspired our love of Apple and Netflix? Here are a few ingredients. Both:
- Made important things in our lives easy and fun.
- Rescued us from the tyranny of a rigid, unfeeling autocrat with a monopoly.
- Empowered us, giving us meaningful choices and control.
- Were lively and passionate about what they were bringing us.
- Were friendly and accessible, not corporate.
Love over…and over
Steve Jobs kept doing it. Time after time he invented new ways to expand what we could do with elegance and ease. Whatever Apple’s internal state, he made sure we knew he was first and foremost in the business of enchantment and beauty.
Love is the ultimate permission asset. Amazing things can happen when you treasure and nurture that love. Money can’t buy you love, but love can get you money. Apple is the world’s largest company by market cap. It has only a shade over 30 products. Barring bad new products or Netflix-like emotional idiocy, Apple is likely to remain one of the world’s top companies for a good long while.
Reed Hastings, Netflix’s founder, has a degree in mathematics. But he failed at human calculus. Consumer reaction was utterly predictable—and preventable. He had love, then strong affection, and he squandered it. An ounce of empathy might have saved billions. These days Hastings is likely to be humming “Yesterday.” Don’t let this happen to you.
I loved the quote from The Princess Bride!
To the above Netflix blunders, I’ve got to add their recent issuing of equity. They sold stock at $70 share a couple of weeks ago, when just earlier this year, they blew a couple hundred million from company coffers, buying their own stock on the open market at over $200 per share.
The arrogance and fiduciary misfeasance they’ve displayed is just jaw dropping.
Thanks for your comments, Andre! I had no idea about Netflix’s equity misadventures. Wow. That does underscore a fundamental arrogance and cluelessness. Glad to hear you liked the Princess Bride quote. There’s much wisdom in that classic, so I suspect I’ll be citing it again!
…one more thing;
“Love is the ultimate permission asset.”
This is a thing of beauty.
Andre–You’re too kind. But thank you!