But what if I want a faster horse?

For any given thing or category of thing, a tiny minority of the human population will be enthusiasts of that thing, but those enthusiasts will have an outsize effect in determining everyone else's taste for that thing. For example, very few people have any real interest in driving a car at 200 MPH, but Ferraris, Lamborghinis and Porsches are widely understood as desirable cars, because the people who are into cars like those marques.

If you're designing a consumer-oriented web service like Netflix or Spotify or Instagram, you will probably add in some user analytics service, and use the insights from that analysis to inform future development. However, that analysis will aggregate its results over all your users, and won't pick out the enthusiasts, who will shape discourse and public opinion about your service. Consequently, your results will be dominated by people who don't really have an opinion, and just take whatever they're given.

Think about web browsers. The first popular browser was Netscape Navigator; then, Internet Explorer came onto the scene. Mozilla Firefox clawed back a fair chunk of market share, and then Google Chrome came along and ate everyone's lunch. In all of these changes, most of the userbase didn't really care what browser they were using: the change was driven by enthusiasts recommending the latest and greatest to their less-technically-inclined friends and family.

So if you develop your product by following your analytics, you'll inevitably converge on something that just shoves content into the faces of an indiscriminating userbase, because that's what the median user of any given service wants. (This isn't to say that most people are tasteless blobs; I think everyone is a connoisseur of something, it's just that for any given individual, that something probably isn't your product.) But who knows - maybe that really is the most profitable way to run a tech business.

This is the cycle I keep seeing:

Most great products start out for enthusiasts and often by enthusiasts. They’re opinionated, sharp, sometimes rough, but exciting.

Then VC funding comes in, and the product has to appeal to a broader audience. Things get smoothed out and the metrics rule decisions.

Eventually, the original enthusiasts feel left out. The product’s no longer for them.

So a new product comes out, started again by enthusiasts for enthusiasts. And the cycle repeats - unless someone chooses to grow slowly and sustainably, without raising, and stays focused on the niche.

To simplify:

1. Innovate.

2. Exploit.

You start by innovating a "fast horse". This gains you early adopters who pull in a larger audience. A horse can only be so fast, so continued innovation might lead to something more like a car. This will only cause you to bleed users. Stick to the horse.

Instead of continuing to innovate endlessly, you switch to exploitation. Fire the visionaries. They're just a waste of payroll. Bring in people who can squeeze every last dime out of your user base.

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The above isn't anything new. However, it's clear that some companies are better at maintaining quality while exploiting. Are they doing something different, or is it just that their customers have to choose them repeatedly? e.g. Most people don't sign up with one car company for life. They'll buy several cars over their life and that's a choice that the car company must win each time. Meanwhile, people sign up for Netflix or Spotify and stay subbed. They don't look at the alternatives every few years. Porsche needs to keep up with the latest and fastest horses to continue exploiting their reputation, while Netflix can focus purely on making more money from their users. A faster horse may come along, but Netflix doesn't break down and need to be replaced.

Porsche is easy to replace only if you bought it as just another fast car. If you bought it for the design, the legacy, or what the brand means to you, it’s not so easy.

Netflix has their content as their moat. Even if someone today builds a better version of what Netflix used to be, it wouldn't matter. They won’t have the rights and licenses to the shows and movies. That’s what keeps people from switching.

Porsche has to keep earning you as a customer with every new model. Netflix just needs to keep you watching.

> Even if someone today builds a better version of what Netflix used to be, it wouldn't matter. They won’t have the rights and licenses to the shows and movies. That’s what keeps people from switching.

What, apart from Stranger Things and Squid Game, has been enough of a cultural touchstone that it keeps people on Netflix? Those aren't things you keep coming back to again and again.

Netflix doesn't own Friends, Seinfeld, The Office, Community, Parks and Rec, etc.

I'd argue Max (nee HBO) has better legacy titles and franchises. They have both enduring IP as well as the reputation of being "destination television".

The thing that keeps people from cancelling Netflix is that they have a better content slate of licensed classics paired with new originals. And they do it in the greatest volume of all the streamers, so there will be "something" on, even if it isn't particularly good.