Turning Disruption Into Your Finest Moment

Blockbuster had 9,000 stores. Netflix had envelopes. Guess who blinked.

Netflix didn’t just outlast Blockbuster, it rewrote the script while Blockbuster was still fiddling with rewinds. This wasn’t luck. It was strategy with a long fuse. The kind that’s easy to write-off… until it makes you a $200 billion company. This isn’t a new story, but it’s relatable to most innovator’s key stakeholders and the heart of the issue resonates many industries over. We need to extract the real lessons from it and share the story, even if just a reminder to those of influence in our organisations.

Netflix didn’t beat Blockbuster by offering better titles. What I often hear is how it beat them by killing the late fee. But the stores weren’t killed by a revenue model alone – it was that they made customer experience to be more than just a department. Convenience isn’t a feature to Netflix, it’s the essence of their offering. When you prioritise the customer experience over your own metrics, magic happens. The key is making metrics that uplift the customer underpinned by a strong strategy, then you can rise above short-term profit margins or quarterly reporting cycles.

Is it that simple? Of course not. Most companies set up cross-functional teams like a group project - everyone gets a line item of work, no one gets complete ownership. Netflix did the opposite, because silos are where transformative ideas go to die. Their teams had autonomy, shared data, and a mandate to move fast. I am not one to advocate for low-governance in innovation, but it’s hard to argue the success of their outcomes. Not every major decision needs to have a 20-slide deck and three steering committees, if the groundwork is laid down correctly beforehand.

Here’s the kicker most can’t wrap their head around; success didn’t come without sacrifice. Netflix took a short-term margin hit to build long-term dominance. That’s not patience, it’s discipline. They ran DVDs and streaming side-by-side, watched the data, then quietly scaled the future. It’s a bold move, that needed a clear strategy and a narrative to long term market share - even if the future is at a lower margin per unit of trade.

And that’s the thing, sacrificing margin and betting big just looks crazy to some. Maybe you have to be a little crazy to think it’s a sane play? Blockbuster thought scale was protection. Netflix knew scale without adaptability is just baggage. The moment a company starts optimising for what worked last quarter, it starts losing next quarter.

The Netflix–Blockbuster story isn’t just a case study - it’s a warning. Use it to challenge legacy thinking and pressure-test your business model. Your innovation pipeline isn’t a trophy case; it needs both quick wins and long bets, all aimed at killing friction for the customer. Stop asking “what’s next” and start running ideation sessions around “what would wipe us out?” Then build that.

Disruption isn’t the threat, it’s the test. Most fail. Netflix passed with extra credit. Maybe you can too the next time a startup comes knocking, even if everyone writes them off.