When to Kill Your Golden Goose

Imagine being at the top of your game, with a business model everyone loves and a customer base that keeps growing. That’s exactly where Netflix was in the early 2000s. 

Their DVD rental service was the ultimate convenience, delivering movies right to your mailbox. By 2007, they had millions of subscribers, a booming business, and what seemed like an unshakable future.

But Reed Hastings, Netflix’s co-founder, saw a storm brewing on the horizon. DVDs were huge then, but they weren’t going to last forever. Streaming—watching movies directly online—was emerging as the next big thing. It was clunky, slow, and unreliable at the time, but Hastings saw the potential.

The decision he made next shocked everyone. Instead of doubling down on the DVD rental business that was making them millions, Netflix started pouring money and energy into building a streaming platform. 

To some, it looked reckless. DVDs were their bread and butter. Why risk it all for a technology that wasn’t even ready yet?

As expected, the backlash came fast. Customers were frustrated. Investors doubted the move. Netflix’s stock took a hit. People questioned Hastings’ judgment, calling it a mistake that could sink the company.

But Hastings stayed the course. He believed in the future of streaming, even when others couldn’t see it. Slowly but surely, the technology caught up, and Netflix’s gamble started to pay off.

Fast forward to today, and it’s clear who had the last laugh. Netflix now dominates the streaming industry with over 247 million subscribers worldwide and an annual revenue of over $32 billion. 

Meanwhile, their once-thriving DVD rental business, the one they let go of, faded into the background and officially shut down in 2023.

What looked like a bad decision at the time turned out to be a masterstroke. Reed Hastings’ willingness to take a risk paved the way for Netflix to revolutionize entertainment forever. 

Why Clinging on Is a Bad Idea

Netflix’s bold move to kill its golden goose is a lesson in trusting your vision, even when the world is urging you to play it safe. 

However, not everyone possesses Hastings’ foresight. Some missed their chance at new opportunities simply because they couldn’t let go of their cash cow. 

Take BlackBerry, for example. Once the crown jewel of the smartphone market, it was synonymous with secure email and messaging for professionals. 

At its peak in 2011, BlackBerry controlled 43% of the U.S. smartphone market and 20% globally. The company’s iconic physical keyboard was adored by loyal users, a golden goose that raked in billions annually. 

But as touchscreen smartphones gained traction, led by the revolutionary iPhone, BlackBerry hesitated to adapt. The company clung to its keyboard-centric design and proprietary software, ignoring the shift toward intuitive interfaces and app ecosystems. 

By the time they attempted a pivot, launching touchscreen models and opening up to Android apps, it was too late. The market had moved on. BlackBerry’s market share dwindled to less than 1% by 2016, and its hardware business became irrelevant—a cautionary tale about failing to embrace change.

Another example is Sears. Once America’s retail giant, Sears dominated with its catalog business and department stores. In the mid-20th century, it was as essential to American households as Amazon is today. 

By the 1990s, however, the retail landscape was shifting toward big-box stores like Walmart and, eventually, e-commerce. 

Sears had the infrastructure and brand trust to lead in online retailing but chose to focus on squeezing profits from its brick-and-mortar stores—a business that had been its golden goose for decades. 

Despite launching a website early on, Sears didn’t fully commit to digital transformation or prioritize customer experience online. 

Meanwhile, Amazon, a newcomer, was reimagining what retail could be. By the time Sears realized the power of e-commerce, it was deeply in debt and losing relevance. Its bankruptcy in 2018 was the culmination of years of missed opportunities.

Both BlackBerry and Sears teach us that clinging too tightly to what works today can blind companies to what will work tomorrow. 

Unlike Netflix, which was willing to sacrifice short-term gains for long-term survival, these companies struggled to break away from their golden geese, ultimately losing their place in the market. 

When to Retire Your Winning Strategy

At what point do you know it’s time to end a successful chapter and start a new one? How do you spot the signs? 

Companies that successfully navigate such decisions often share a keen ability to read market trends, anticipate shifts in consumer behavior, and act before their current model hits a point of no return. 

It's a balancing act: pivot too early, and you might alienate loyal customers; pivot too late, and the opportunity window slams shut.

Consider General Electric (GE), a powerhouse in household appliances and lighting for over a century. By the early 2000s, GE realized that the energy sector, particularly renewable energy, was gaining momentum as governments and businesses focused on sustainability. 

While their lighting business remained profitable, the company saw diminishing returns in traditional markets. GE made the difficult decision to shift resources toward wind turbines and other renewable technologies, even selling its lighting division in 2020. 

Today, GE is one of the leading players in wind energy, securing its place in a future-focused market.

Similarly, Adobe faced its golden goose moment in the early 2010s. For years, Adobe’s boxed software, including Photoshop and Illustrator, was its bread and butter. Each release generated a reliable stream of revenue. 

However, the rise of cloud computing and software-as-a-service (SaaS) models presented a new opportunity—and a challenge. Transitioning to a subscription-based model meant foregoing the upfront profits of software sales in favor of recurring revenue. 

The decision was risky, and there was significant backlash from customers reluctant to embrace the subscription model. Despite the initial turbulence, Adobe committed to the shift. 

Today, Adobe Creative Cloud generates billions in annual recurring revenue, with over 30 million subscribers worldwide, proving the bold move was worth it.

The right time to kill your golden goose often becomes apparent through several warning signs. One clear indicator is stagnation in market growth. If your business is peaking in revenue or user acquisition while competitors or adjacent industries are growing rapidly, it might be time to rethink. 

Another red flag is the advent of disruptive technologies. For example, Tesla disrupted the auto industry by investing in electric vehicles and autonomous driving, leaving traditional automakers scrambling to adapt.

Customer sentiment can also signal when a pivot is necessary. Are loyal customers starting to voice frustrations about your offerings? Are they gravitating toward competitors who address needs you’ve overlooked? 

When Peloton’s expensive hardware-based model began losing steam, the company expanded its subscription services and app accessibility, ensuring relevance even for users without their equipment.

Lastly, financial strain can push businesses to act. While it might seem counterintuitive to invest in change during tough times, clinging to a failing model only delays the inevitable. 

Take LEGO, for example. The company faced near bankruptcy in the early 2000s due to its over-reliance on physical toys, even as digital entertainment surged. 

LEGO diversified into digital gaming, film production, and licensing deals, turning its fortunes around and becoming a global cultural phenomenon.

Statistics consistently highlight the risks of ignoring these signs. A 2023 report by McKinsey found that companies investing in innovation during periods of market disruption are 2.4 times more likely to emerge as industry leaders within five years. 

Conversely, businesses that cling to their status quo face a 70% higher risk of revenue decline within the same timeframe.

So, when should you kill your golden goose? The answer isn’t simple, but it starts with a willingness to examine your market honestly and challenge your own success. 

If the foundation of your business begins to crack, don’t patch it up—look for stronger ground to build on. Pivoting isn’t about abandoning success; it’s about redefining it for the future. 

Whether it’s moving from hardware to software, from physical products to digital services, or from established processes to uncharted territory, the decision to change is less about sacrifice and more about survival.