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When I was at NBC, I was part of the team that seeded the idea that became Hulu. There was a lot of disruption in the media world at that time. It was just as Youtube was starting to scale and Google had bought them. People producing their own videos, video going online, was an incredibly exciting and threatening thing, especially to the traditional television broadcast. We had tried a couple of attempts to start our own video service, and usually it was to protect the network. We realized that wasn’t going to work. Those ideas failed. They failed because no consumer would want to use them. We made it too difficult. The experience was horrible.
We ended up doing a couple of things that I think were really key. We teamed with a competitor, and that was News Corp Fox, and we said we see the future of television being streaming video online. We know neither of us are good doing it ourselves. Let’s get together and seed it, but we’re going to have to seed it in a way that we’re challenging what we do. And we don’t think either of us can do that well inside. If we picked somebody from inside our team to do this, they’re not going to challenge us in a hard way. We intentionally decided to set up what I call a “challenger brand”, and that became Hulu. We hired this amazing CEO in Jason Kilar. His job was to challenge the incumbent—to challenge NBC and Fox News Corp to say, here’s how I can do a better online streaming service. Intentionally we set up someone to do a better job and to try to beat the old way of doing it. It’s fraught with all kinds of tension and learning.
I believe every company needs to think about that, in terms of even small efforts that you may be launching in your company. Maybe there’s one way you’ve always done performance reviews. Is there a way to test, because maybe they’re a little outdated? Do you have these people in your organization who are good at challenging? Give them a project to see if the challenger can help the established way do it better or differently.
We see with the NBC example, I mean Hulu did a great job in terms of being a challenger. But you also look at it and the market was changing. Netflix became a huge force, now becoming a market capitalization that’s bigger than any of the established television companies. Without that challenger position, I think it would’ve been much harder for people to accept that that future was coming.