Reject the hunt for BIG ideas, look for this instead

For a long time, we’ve created this myth in our culture that all innovation comes from big ideas. We’ve created legends around “visionary” leaders who were seemingly struck by a thought that helped them change the world.

But in reality, most innovation doesn’t come from big ideas, it comes from novel approaches to fairly common ideas or problems.

Netflix is a great example. Today, it operates in over 190 countries and close to 73 million of its 130 million subscribers are outside the US. Earlier this year, its international revenues exceeded its domestic revenues for the first time. This is a huge achievement for a company who was only in the US before 2010. Netflix had a big idea: take streaming video worldwide. But the idea, although huge in nature, wasn’t really novel at the time. Amazon Prime was already established in Germany and India. Countries like France had local players who were dominating as first movers. However, in the end, it was Netflix that conquered with more subscribers worldwide than any other pure streaming service. And the way it did it was not by having the best big idea, but by having the best approach.

Unlike any player at the time, Netflix approached growth through a unique three-stage expansion that focused heavily on what the company did and learned from those markets. Here’s what the process looked like:

Netflix did not enter all markets at once. It carefully selected its first expansion in terms of geography and psychographic behaviors. First, it entered Canada which is geographically close and shares many similarities with content consumption patterns in America. They were able to play the same game with the same content while taking their time to learn the regulatory parts of the expansion, which helped them develop the capabilities to replicate that process in other markers.

Netflix then did the same thing again in another country with a similar regulatory landscape, but with different content preferences, which helped them develop a process for securing regional content deals and curating local-language programming.

Drawing on the lesson from its first phase, it then amped up its footprint to 50 countries. They chose the markets by attractiveness, shared similarities with test markets, and the presence of available customers. During this stage, Netflix focused on gathering data and making investments into geographically-focused content. It continuously used the data to optimize its programming and foreign products.

The lessons from that second phase accelerated Netflix’s reach to 190 countries, using everything it learned from the first two phases. It had gained expertise in the content people prefer, the marketing they respond to, and how the company needed to organize itself. From there it focused on adding more languages, subtitles, and optimizing its personalization algorithms to make it the very best choice in each market. It used every single learning to work with and respond to the new markets it entered.

And that’s how it grew to be the #1 streaming service worldwide. Did you notice how little of that had to do with big ideas? What about how much “the process” factored into its success?

So should we be on the hunt for big ideas? I’m not sure that this is even the right question. Whether or not we should be hunting for big ideas, the fact is that it’s how you execute that will differentiate you from everyone else. That’s how you win. What are you going to do about it?

Reject the hunt for BIG ideas, look for novel approaches to fairly common ideas or problems instead.

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