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Gibson Biddle

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2022-06-20
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2022-06-20
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  1. “I don't see it anywhere. Did not work out. Yeah, I guess we could make an argument today. Every screen in the world is magically pre-wired so you can watch Netflix anytime, anywhere. There's sort of a kind of a flywheel or network effect at work. But anyways, that's great. So that's just a model, but I have found that model to be helpful in my thinking a bunch of times.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Growth loops. Yeah. Yeah. Yeah. So we actually, you know, we tried to experiment with friends and social getting movie ideas from your friends. The idea is your friends were on the network. You wouldn't want to leave. And you'd also get great movie ideas. By the way, that was a failed hypothesis.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “That's really interesting. People got a culture, and then I sort of specified what makes the Netflix product hard to copy, right? So I won't allow that one.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Yeah. So there's unique technology personalization is a great example. You just brought that up. There's only like one other idea that I think is, oh, there's probably two others for Netflix. So keep going. Dig deep”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Yeah, so Amazon would use a 10x, right? And so sort of a wash there, you'd probably lean forward and do it. We actually worked hard to try to isolate what that word of mouth factor was. It was really frustrating. And then, you know, the reality was Barry McCarthy was the CFO. He was apoplectic about the idea of using a 2x because it means you'll invest more in building a better product. If you let the product team use 10x, like various like, we don't have the money. You know, we don't have the money to spend 5 million on DVDs. Anyways, this is where we sort of refined our thinking about the model of delighting customers in hard-to-copy margin enhancing ways. Pop quiz, I know you know the answer, Lenny, but I want everybody else thinking about it. What makes Netflix hard to copy?”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “The hint was there was an assumption in my formula. You know, I said 5,000 customers times 100 bucks lifetime value times a 2x word of mouth. So the argument for why somebody might do it, they disagree with the 2x word of mouth and what might be the argument. Yeah, sure this goes.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Bring in one other customer for free into Netflix. And so we use this 2x word of mouth factor. And so if you do that math, it was worth about a million bucks to us as a company. So now you get into, okay, what's the cost of that additional inventory? And the answer was $5 million. So on one hand, you're bringing in a million bucks of value by retaining more customers, but you're spending $5 million more. So it doesn't seem to make sense. Okay, so easy question. Don't overthink this one, Lenny. Would you roll this out to all customers? You would not. Okay. Can you help build an argument for somebody who would choose to roll it out?”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Okay, so your guess is we won't see an improvement in retention. And I'm guessing people listening to us right now, there's going to be some folks that, oh, shit, yes. That's what everybody's asking for. Of course, we should deliver it to them, right? Well, in this case, both right, right? So we saw a very small change in retention. That was the surprise. And so it went from something like 4.5% canceled in the control. It was 4.45%. Very small change. So we could measure it. And so now you get in the math of delight versus margin. If you push this out to all million customers, you would essentially save 5,000 customers. And so what's the value in saving 5,000 customers? The way we valued it, we said, well, we've got 5,000 customers, the lifetime value of a customer then was 100 bucks. And then we multiplied it by two, which is our word of mouth factor. So our theory was if you loved it, Lenny, you tell your friends about it, you'd rave about it.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Cancel every month. So I'll just put it back to you. Do you think when we looked at the AB test results? By the way, you can't get this wrong, Lenny. So just relax. Do you think the perfect new release experienced improved retention?”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Got it the next day in the mail, and some people had to wait two months. And so the AB test we set up, we said, okay, everybody says they want this. They, you know, in focus groups and qualitative and surveys. Well, let's AB tests and see what we really learn. So the AB test was called the perfect new release test. So imagine we're at about a million customers, Circa 2005, 10,000 peeps are in a test cell. They get their new release DVD the next day in the mail. Awesome, right? And the control gets it whenever. Let's say average maybe two weeks later. And so the way we measure delight in this AB test is will you improve retention for the folks that are getting their DVD the next day on the mail? That's how we measured. It was retention. You know, when Netflix started, it was like 10% canceled every month. 2005, it was about 4.5% canceled every month. Today it's about 2%.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “It helps build a better business. But in that case, Blockbuster was able to copy it. So that's the model. So the hardest part in that model is how do you balance delight versus margin? So if Netflix said, hey, everybody, you're paying 20 bucks a day, but you're going to get exactly the same service tomorrow for five bucks a month. You'd be just like, this is freaking awesome. You'd be really delighted, but Netflix would not, the business wouldn't work. So one of the first places we sort of experiment on how to evaluate trade-offs between delight and margin In the old days, Netflix was a DVD by mail company. And yeah, if you ask customers what they wanted, then they all said the same thing. I want my new release DVDs faster, right? Back then, most customers would have to wait a week or two or four weeks. Back then, the movie came out of the theater. Two months later, it came out on DVD. We just couldn't afford to buy for that initial demand. So the way it worked was some people.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Sign up for, they put in their email, their credit card, they would get a free trial. It looked like crap, you know, like everything startups sucks at the beginning. But he put a happy family on the couch on this screen. And that's where you put in your email. And that got a lot more people engaged. And so it delighted customers, but it was helping to build the business because more folks were setting up for a free trial. I'm like, that's great, HB. But I'll bet my paycheck that within a week, Blockbuster is going to put a happy family on their couch too. And this is the problem of doing things that are easy to copy. So in the long term, if you can delight customers and create hard to copy advantage, things are just a lot better. And so the last phrase, March enhancement, that's just a fancy phrase for making money. So margin technically would mean profit. So I just gave you an example with a non-member page with the happy family on the couch delights folks.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Sure. She got the model right. And I mean, the short answer is I definitely learned it from Reed Hastings when I started at Netflix. Actually, he did a reference check to a friend of mine checking up on me. And the only question he asked, my pal, his name is John Dawes, was, hey, John, is Gib ready? Can Gib delight customers? That was the only question he asked in the reference check. So luckily, you know, I built really delightful kid software. Back then, people were talking about satisfying customers, listening carefully, understanding them, et cetera. And the delight, it just said, no, no, the job is to delight customers like Peter Teal, his book from zero to one, the job of an entrepreneur at the beginning is just to find out something that's 10x better. Delight is trying to work in that magnitude. The hard to copy part, definitely, I learned that. I had a product leader work for me. His name was HB Mock. He was focused on the non-member page. That's where people.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Well, your number's bigger. Like, you could just go off of what $115,000, your newsletter? Yeah. You get into a billion, Lenny. You're going to be to the next level, 500 million to a billion.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “60,000 people have watched that one video, for instance. Anyways, and then lifetime, it's probably getting into 500,000 to a million. So that's my swag. I could be 2x wrong on either side.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “I thought it was going to be a how many pms does it take to screw on a light bulb? I thought it was going to be a joke. Okay, my swag. Swag is a stupid wild ass guess. Important idea. So my guess is in real life, I've worked with product leaders where I was in the building with them. I would be like 500 to 1,000 when I would manage an organization. You know, there might be 200 or 300 people in it. So that's in real life. The next one would be via talks, workshops, newsletter. That's probably, I kind of can swag my way into that, probably 50 to 100,000 a year. The reason I sort of know, you know, I'm a feedback freak, so there's a survey monkey at the end of everything I do. So for instance, every morning I wake up. It's always feedback for the same talk. I did a branding for builders talk for product school and there'll be like 10 surveys. I've got like 6,000 surveys for that. They're all watching and recording. You know, my guess is that means like.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, yeah. And so the product role is like I grew up into. I call it a mucketee muck, but a VP of product or a chief product officer. Joined Netflix in 2005. I left out some failed startups. That's important. It's important to let folks know I had some failed startups. But you can gloss over it in the brief version. Netflix 2005 and then 2010, I went back to my heart, which is teaching. Cheg was a textbook rental and homework help company and it continues to exist. And we took that public sort of 2014. And then last five years, I stopped direct deposit. And I'm really back to the coda in my career. I'm back to teaching, which I really love to do. So I do talks, workshops all over the world. I do more writing, which really saves my voice, and then experiment with different ways to really try to be helpful to product leaders around the world.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Exactly. And then after pch school, this is the tech journey. I joined electronic arts, punk kid in the right place at the same time, at the right time. I joined in marketing. And then I switched over to product. It was a great place to learn product. They call it producer college. I learned a ton. And my first startup was actually a joint venture between electronic arts and Disney. We created what's called EA Kids at the beginning. And that came Creative Wonders. And we sold that company. It's a wonderful from Shark Tank. He was the CEO of the Learning Company. They know that Reader Rabbit software and Oregon Trails. That dates me because most of listeners have probably played Oregon Trails as a kid.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Yeah, well, we come around to that. But at the end of the day, it's all about packaging and positioning and branding. And so I was curious about that. I got good at it. And then I lived in Silicon Valley and I wanted to go into tech. And so I decided to go back to business school and I went back to talk, which is at Dartmouth. It's the only skier. It's the only business school that has its own ski area, which is why I went there. It's in Hanover, New Hampshire.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “It's hard because I'm older than dirt to be very brief, but I'll give my best shot. The intro was I discovered I love teaching. Early, I ran a sailing school, took a year off from college. That was my first startup. And then the three chapters of my life, the first one was in marketing. So I actually started in the mail room and an ad agency and then went into account services and create a service that helped name new companies and products. Like if you're in the Bay Area, the Versatel or the Versateler, it's a Bank of America name.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Great, Lenny, thanks for having me. It's fun to virtually be in the same place at the same time. Someday we'll do that in person.”

    2022-06-20 · Lenny's Podcast · Gibson Biddle on his DHM product strategy framework, GEM roadmap prioritization framework, 5 Netflix strategy mini case studies, building a personal board of directors, and much more · IDENTIFIED FROM THE TRANSCRIPT · source