As companies grow, there are a few common criticisms about the product strategy:

• Teams see and understand the projects, but not how they fit together.
• Investors complain that there’s not a big enough product vision.
• The product team feels too focused on the short-term.

The GLEe model helps product leaders to form a product vision to address these criticisms. The model encourages teams to think big, think long-term, and describes a phased, step-by-step approach to build a product that “dents the universe.”

The exercise also helps product leaders avoid the “one and done” phenomenon articulated by Jeff Kagan, a financial analyst who reflects on Yahoo!’s demise:

The GLEe model encourages teams to ask, “What’s next?” and forces long-term thinking. To invent the future, you have to be optimistic, and long-term thinking enables an “anything is possible” attitude. By long-term, I mean 3–5 years, and in this timeframe, most things are possible. But the GLEe model goes far beyond this to encourage product leaders to think 10–15 years ahead.

Below is an articulation of the Netflix product vision, as described in 2005. (To understand why I call it the GLEe model, look carefully at the first letter of each word.)

Netflix Product Vision

1. Get big on DVDs

2. Lead downloading

3. Expand worldwide

The model is deceptively simple. What follows is more about its derivation and the thinking behind it.

Netflix began as a DVD-by-mail service, and the initial business plan anticipated digital delivery in 2002, but streaming did not launch until 2007. At this time, internet connections were finally fast enough to move beyond postage stamp size video. And by 2007, Netflix could afford to pay the license fees for reasonable quality streaming content.

We expected each of the three phases to last 3–5 years. The first phase, “Get big on DVDs,” corresponded with both the launch of DVD players and the growth of e-commerce — two significant trends to “surf.” The initial
“get big on DVDs” phase enabled Netflix to establish product/market fit and afford itself the time to build both a brand and economies of scale — two critical, hard-to-copy advantages.

The second phase, “Lead streaming,” began in January of 2007, and by 2010, Netflix started its international expansion with a streaming-only service in Canada. Global expansion required a digital-only service as it would have been too challenging for Netflix to integrate its DVD-by-mail service with postal services around the world.

During the streaming chapter of Netflix’s life, the company also expanded its device partnerships to nearly every TV, game system, DVD/Blu-Ray player, and mobile device in the world. By 2012, Netflix finally established a hard to copy network effect through its device ecosystem.

In 2012, the fourth chapter of Netflix’s life began: original content. In 2007, Netflix had experimented with exclusive DVD content via “Red Envelope Studios,” but failed. But in 2012, Netflix launched its first streaming original content, “Lilyhammer.” The next year, a $100M investment in “House of Cards,” delivered a worldwide hit. In 2020, Netflix’s hard to copy economies of scale power its $20B investment in original content.

Like product strategies, these three phases are high-level hypotheses; they help tell a story of how a startup might develop over 10–15 years. You’ll occasionally get the stages wrong, but putting a stake in the ground enables teams to see how things fit together and to imagine how big the product might get.

The GLEe model also reinforces that you don’t have to do everything at once. Netflix focused on its DVD-by-mail service for eight years before it launched streaming. And they needed to transition to streaming before they could expand globally. Last, Netflix needed the economies of scale that international expansion enabled to make significant investments in original content. Today, Netflix is experimenting with its next step-level innovation — interactive stories — through Black Mirror’s “Bandersnatch” and an interactive version of “The Unbreakable Kimmy Schmidt.”

When you look at the three phases from the GLEe model together with your product strategies, things get interesting. Note the importance of Netflix’s personalization strategy over the four stages of Netflix’s growth:

• As Netflix got big on DVDs, personalization powered the merchandising of high-quality, high-margin titles.
• In the early days of streaming, when Netflix had limited content, personalization helped members zero in on the small number of titles that were “just right” for them.
• As Netflix expanded globally, personalization helped connect members with movies they loved, regardless of nationality.
• Today, with original content, personalization helps Netflix to right-size its content investments. Based on the knowledge of its 185M members’ tastes, Netflix can reasonably forecast that 20M members will watch “Bojack Horseman” while 100M members will likely stream “Stranger Things.” Well-informed forecasts let Netflix invest its $20B content spend very intelligently. At a ballpark level, they spent $500M on “Stranger Things” and $100M on “Bojack.” The ability to forecast streaming hours based on member tastes enables Netflix to build lots of great niche content, as well as an occasional worldwide hit.

Finding a high-level product strategy that supports multiple phases of a company’s growth is rare. But if you accomplish this, it builds a huge, hard to copy advantage.

Product Strategy Exercise (#10)

To outline the GLEe model for your product and company, ask yourself three questions:

1) What is the initial product that enables the company and product to “Get Big” over the first 3–5 years of its life? Are there trends that the product can “surf,” much like Netflix rode the wave of DVD players and e-commerce? What are these trends for your company and product?

2) What will you “Lead?” Three to five years in the future, what is the next wave your product or company will ride — the equivalent of internet video for Netflix?

3) Once your product establishes a leadership position, how might it “Expand” even further? Given the brand, network effects, economies of scale, and unique technology your product will have at this point, what is the next wave of activity?

Reflecting on your answers to the questions above, complete the GLEe Model for your product and company:

Product Vision

1. Get Big on:
2. Lead:
3. Expand:

In the next essay, I’ll share the GEM model and how you can help your company to prioritize Growth, Engagement, and Monetization.

Essay #9) The GEM Model

Best,

Gib

Gibson Biddle

www.gibsonbiddle.com

PS. Here’s an index of all the articles in this series: