Netflix is not a tech company (2019)

There's a third category that you're missing, and it's where the definition gets real blurry.

There are companies that effectively use technology to outcompete (or "disrupt") incumbent companies in a market. Amazon in retail, Netflix in media, Craigslist for classifieds, Uber for taxis, etc.

It seems as if many existing companies, like Cadbury's perhaps, aren't able to effectively re-work their business models with the new possibilities available via tech. Thus they're "non-tech" companies even if they do make some modest use of technology, but ultimately their business model predates tech.

"Tech" companies in this space are the ones creating or adopting brand new business models in an existing space enabled by technology. This is the "software eating the world" part of the tech market.

Similar Point: "Hedge" and "Edge" share a lot of letters and semantics. If you are really good at dealing with tail risk (Pandemics, perhaps...) this not only allows you to rugged-ize and preserve your internals structures and practices in extreme circumstances but also potentially massively outcompete your competitors.

For a modern information-centric company, what does that mean? Get the technology right. Pay some smart people to get your internals ship-shape and reproducible, for example.

I used to read a lot of writing like this and still do (tech strategy newsletters--Stratechery, Benedict Evans, etc)

The hazard of reading stuff like this is that it makes the world seem much more orderly and predictable than it is. Case in point: Zoom. "Videoconferencing is a commodity". "Distribution is all that matters". And all of a sudden, someone does this "commodity" a lot better, without the pre-existing network/distribution/brand of someone like Skype, Google, etc. How do they explain this? How does it make sense that a team can work heads-down without any clear distribution advantage and just grind, and build a large, meaningful company by making a better product?

It's the same deal with Yamaha Motorcycles. Read their story. Bootstrapped from a "nobody" brand in the US, stiff competition against Harley-Davidson and their ilk. They just got better and better, gradually improving year after year, until they're taken seriously by hardcore enthusiasts and are one of the leading motorcycle companies in the US. How do you explain this success in terms of moats, 2x2 matrices, SWOT analysis, competitive positioning, etc? Sometimes a company wins because they just want it more badly and are willing to push their people harder, and outwork/out-deliver the competition.

Calling the tech "still fundamentally a commodity" bothers me not because I'm a technologist, but because it's horribly hand-wavey and imprecise. It sounds precise, but what...exactly...does this mean? As other commenters have pointed out, sure, a commodity that cost oh, 100 billion dollars and a decade to build, isn't easily duplicated, and meaningfully contributes to the user experience? I heard someone describe gold as a "6000-year bubble" last week in the context of the "crypto bubble". Same idea--"a commodity that nobody else has, took a decade to build, and over 100 billion dollars". Some "commodity".

As a CEO, I increasingly find all this strategy stuff noise. All that matters is delighting your customers. You do that and charge a reasonable price, you're going to succeed. It might take a while, and of course you need decent sales/marketing execution, but overall, just focus on keeping customers happy, and you'll get there.

No. For the first decade plus of its existence, Netflix was a DVD by mail rental service and there, its technology was a key differentiator. You paid a subscription depending on how many DVDs you wanted to have out at a time, Netflix mailed them to you in red envelopes, and you mailed them back in the same envelope. The ingenious part was that there was a website where you entered in all of the DVDs you wanted and Netflix would mail them to you as they either became available or in order of priority (the original Netflix queue).

Yes, you could be pedantic and call a lot of that logistics, but the lack of physical stores, the website, the queue and rating and recommendation system (the Netflix recommendation algorithm was a huge part of its appeal, even after the streaming stuff, until Netflix got sued for accidentally outing someone with the algo), were all tech.

Netflix has ALWAYS been a hybrid tech and content company. Always. But it started out very much more on disrupting the video store model the same way Amazon disrupted brick and mortar bookstores.

Eh. Netflix gambled hard. Real hard. They thought streaming would destroy all dvd and physical mediums. That was a real gamble in 2005. That was a huge payout. Now we all have "genius" insights how it worked out - but honestly they deserve every penny. And no, they are not a tech company anymore they just produce content. Anyone can upload a video and hide it behind a paywall. Rock on netflix.