Must-Read Book: That Will Never Work by Marc Randolph

10.02.20

I was drawn to this book for two reasons. I love innovation and I love change. Some would say probably too much. This book delivers a large dollop of each as it reveals some fascinating insights behind one of the greatest business successes of the last 25 years.

 

Netflix is so popular and ubiquitous, it’s as if it always existed. Why wouldn’t it seem that way? But like many of the greatest ideas, it wasn’t always a product the world needed.

 

I started MediaHQ in the autumn of 2006, when I purchased The Irish Media Contacts Directory publication from journalist Mike Burns. Mike, a former RTÉ News and London Editor, started the directory with his late wife Lynette Fegan in 1991. Some Irish MEPs needed a directory of the Irish media for a European election. With the introduction of local radio in 1989 there was a significant growth in the number of contacts, and there was no simple way to keep track of who was doing what. Mike got a small European grant to get going and a new publication was born. When I took over they had been doing it for 14 years, 2020 is my 14th year at the helm so I guess Mike and I are quits.

 

Soon after taking over, I had a stark realisation. A printed book wasn’t fit for the purpose of keeping track of the media industry. Think about it. All the sweat, effort and grunt work that is needed to meet a print deadline for a book with about 1,200 contacts in it. The final publication is entirely correct for one moment on one day a year, and hopelessly out of date for every other day. That’s a lot of time to have a publication more wrong than right. The information was also in the wrong format – if we were to include every one of the 6,000 or so people working in the Irish media industry, the book would be the size of a rather large concrete block. In tandem with this, really large organisations were purchasing one copy of the book and photocopy it for colleagues and handing it out. It was a complete calamity.

 

Back then I had one member of staff, a new baby, a new business and I knew little or nothing about software. What could I do? Then one day a call came from Ken Robertson – the first ever self-styled Head of Mischief at Paddy Power. Ken wanted to order a couple of copies of the directory. We swapped some pleasantries and at the end of the call, Ken delivered the line that set my business life and MediaHQ on a completely different path.

 

“Would you ever do me a favour? Would you stop publishing the book and make a digital directory instead and we’ll be your first customer.”

 

As I put down the receiver, I paused and stared at the back of my hand as I did so. I knew instantly that it was a moment. Paddy Power are one of the most technology savvy companies around and they wanted an online media contacts database. Back then I didn’t know much about technology but I know the PR industry and PR inside out.

 

I reflected on what our mission was. I kept asking myself. Why do people do business with us? Why do people need us? What do we do that people really like? I realised that we weren’t in the publishing business, we were doing something entirely different. We exist to help people to shape and make the news agenda. People used our information to find the right journalist for their story. And what could we not do with a book that Ken Robertson wanted us to do? When people got our latest edition of the printed book, they still had hundreds of hours of grunt work to do, data entry and updating media lists, sifting through hundreds of pages. Imagine if we could devise an online product that would solve that problem.

 

I wrote our mission down:

‘To help our customers to make and shape the news agenda, by taking the grunt work out of PR and allow them to focus on the things that really matter.”

 

I started planning. I reviewed what currently existed in the market and knew we could do better. I’m a big fan of simplicity and finding the easiest way to do the job. Out of that our four pillars grew:

Great research.
An amazing user experience.
Innovative software – that solves those annoying PR jobs.
And caring customer service.

 

It took a year to build the first product. I focused on fixing all the pain points I had as a political press officer. If I could fix them I’d have a great product.

 

I picked this book to read because over the last 15 months – I’ve been through this process all over again as we expanded into the UK market. When we decided to bring MediaHQ to the UK it was going on a whole new journey. I wanted to see what the journey was like for one of the most successful and innovative digital products on the market.

 

If you’re interesting in growing a business, or building a product you have to read this book. It’s full of useful insights. Netflix started with a simple problem to solve – renting a DVD was a pain in the backside. They decided to do it by mail order. Easy – no almost impossible, and they nearly failed on so many occasions. Nobody was doing it. Being a pioneer is very hard – because nobody has led the way. If you add in the additional problem that DVD was a new technology in the late 1990s you see how difficult it was.

 

My favourite story in this book is about when Netflix was on the brink of failure. They hit so many bumps on the road and they couldn’t get customers to rent DVDs. Sure they would buy DVDs but no one, and I mean no one would rent them. DVD rental was a mere 3% of their revenue. As a last throw of the dice they came up with three initiatives:

We will gift you four DVDs and we don’t want them back.
 When you do send one back we’ll send you another
We’ll charge you $15 a month.

 

Marc Randolph (the book’s author and Netflix co founder) wanted to do the offers one at a time for testing purposes, but his co-founder Reid Hasting said no. He said to do them all together. They sent out the email and got a 92% success rating. People were falling over themselves to give them their credit card details.

What I just described is an analog version of Netflix we now all use. The model is still quite similar, and they had to get to the edge to devise it.

 

Agile innovation comes by trying things. After that decision the road wasn’t always smooth but they became who they needed to be as a business. Today Netflix is worth about $150 billlion. They book is well worth a read.