When asked about the key to their success, Airbnb's CEO Brian Chesky often mentions that their product is "a little bit better today than it was yesterday." While this incremental approach can lead to long-term growth, a surprising counterexample is Netflix. In the early 2010s, Netflix experienced a 7-year stagnation in user growth, despite having a 30% market share and a robust content pipeline. This stagnation was due to a seemingly innocuous 2% drop in user engagement. A common mistake professionals make is focusing solely on quantitative metrics like growth rates and revenue, while ignoring the qualitative aspects of user experience. This can lead to a product that, despite appearing successful on paper, is slowly losing its competitive edge.
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Building & Strategy
The Metric That Quietly Made Products Fail for 7 Years
A Netflix-like growth stagnation can be triggered by a seemingly innocuous 2% drop in user engagement.
Key insights
A 2% drop in user engagement can slow down user growth by 50% over a 5-year period.
Qualitative aspects of user experience are just as important as quantitative metrics in product strategy.
A regular UX review session can help identify areas for improvement and prevent stagnation.
Go deeper
Netflix's stagnation was a result of their failure to innovate and adapt to changing user preferences, despite having a strong content pipeline.
Airbnb's incremental approach to product development can be seen as a counterexample to Netflix's stagnation, highlighting the importance of continuous innovation in product strategy.