A two-question test Reed Hastings reportedly used to kill Netflix's first advertising business in 2008: 'who's going to be the best in the world at advertising?' (answer: Google) and 'do we need to be [the best in the world at it]?' (answer: no — Netflix needed to be best in the world at personalization instead). The test forces a company weighing entry into an adjacent business to name the category leader explicitly and then justify why matching that leader is actually necessary for its own strategy, rather than entering by default. It's an applied, memorable version of the Four Sources of Hard-to-Copy Advantage (Brand, Network Effects, Technology, Scale) and DHM Framework (Delight, Hard-to-Copy, Margin-Enhancing) lenses aimed specifically at adjacent-business decisions; contrast with Netflix Advertising's Context-Dependent Reversals, where the same advertising decision later reversed once context (competitive proof from Hulu, need for a lower price point) changed.
Before entering an adjacent business, ask who is already the best in the world at it and whether your company genuinely needs to match that — if the honest answer is no, and your differentiation lies elsewhere, that's a reason not to enter.
Из тем: Netflix, Consumer Science, and Strategy Storytelling