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August 16 - October 7, 2021
And in retrospect, of course, Reed was right. Netflix might have survived with me continuing as sole CEO. But you don’t write a book about a company that survives. There is no doubt in my mind that without him assuming more of a leadership role, Netflix would not have become the company it is today. Paradoxically, if I hadn’t relinquished the title of CEO to Reed in 1999, I wouldn’t be writing this book.
Beautiful. Goosebumps.
The email summarized and reiterated the afternoon’s conversation. I was sure it was essentially a transcription of the PowerPoint slides.
Lol
my strategic sense, hiring, financial controls, people management, and ability to raise capital.
I wonder if we also try to raise capital other than what we have now
But titles mattered to VCs, and I wasn’t stupid: I knew that when it came to raising money for a rapidly growing (and still not profitable) startup, having Reed as CEO was one of our best assets. Reed’s presence calmed the board and reassured potential investors.
Reed can be…blunt. Patty can be, too. But she’s blunt in a charming, Texan way – she understands social graces. Patty knew that Reed didn’t always notice when he’d ruffled someone’s feathers, and that he was often oblivious to other people’s hurt feelings – especially people who didn’t know him well, like I did. If there was a contentious meeting, Patty knew how and when to take Reed aside and gently suggest that maybe he should apologize for calling somebody’s idea “totally unsupported by reason.”
Hahahaa
Netflix’s culture, at least originally, wasn’t the result of careful planning – of aspirational principles or cultural manifestos. How it was a reflection of the shared values and behaviors of the founders. How we trusted each other, worked hard, and had zero patience for traditional corporate bullshit.
But what happens when the team grows? When a company is small, trust and efficiency go hand in hand. If you’ve got the right people on your team, you don’t need to tell them exactly how you want them to do things – in fact, you often don’t even need to tell them what you want them to do. You simply need to be clear about what you want to accomplish and why it’s important. If you hired the right people – smart, capable, trustworthy – they’ll figure out what needs to be done, and they’ll go ahead and do it. They’ll solve problems on their own before you even know the problems exist.
We just made sure that each of us understood the company’s objectives, and which aspects each of us was responsible for. It was up to us to figure out what needed to be done to accomplish those objectives. And it was up to us to be honest with each other – radically honest.
we were most productive when we dropped all the bullshit and just said what we meant.
boisterous
Noisy energetic cheerful
“I don’t care where you work, or what hours you work. Work from Mars, for all I care. If all you’re asking me is about when you work and where you do it, that’s an easy answer: it makes no difference to me.”
haaahaah cute
“if what you’re really asking me is whether I’m willing to lower my expectations for you and your group so that you can spend time with your girlfriend? Well, that’s an easy answer, too. No.”
Needless to say, his girlfriend was a free agent shortly thereafter.
HAahaah
The manager felt empowered, free to make a choice about his own lifestyle, and the company ended up benefiting from his renewed focus. Everyone won.
At the expense of his relationship haha
A culture of freedom and responsibility, coupled with radical honesty, worked like a charm. Not only did we get great results, but employees loved it. People who have the judgment to make decisions responsibly love having the freedom to do so. They love being trusted.
If you fill your company with people who lack good judgment, then you have to build all kinds of guardrails to keep them in line. You have to define everything for them: how much they can spend on office supplies, how many vacation days they take, when they are expected to be at their desk.
People with the right judgment
That’s where Patty McCord came in. She was brilliant at pushing the boundary of rules and freedom. She identified that what was special at Netflix was our particular combination of freedom and responsibility. And then she endeavored to put structure in place not to limit freedom, but to encourage and preserve it.
Director of hr patty mccord
if you need to take a day off, just take it. I don’t need to know about your root canal, or your kid’s school schedule. Just get your work done, and cover for yourself when you’re gone.
What if we just trusted our employees to get things done? Unlimited vacation days and hassle-free expense reimbursement are almost clichés now. But they were groundbreaking at the time.
In Netflix, Patty saw an opportunity to redefine the role of HR departments. No longer was HR just a lonely cubicle filled with employee handbooks, sexual harassment claims, and benefits summaries. Instead, she envisioned the department as a proactive agent for culture.
designed systems that were almost totally on the side of employee freedom.
Part of why she was so successful is because she held everyone, including senior leadership, accountable. It didn’t matter who you were – Patty would call you on your bullshit. She was never afraid to speak truth to power.
She knew how to do something rare: scale up culture.
The look on his face when he realized that he wasn’t eating popcorn or M&M’s was priceless.
HAhaha
Another time, I brought in a dozen balut.
Ph too!
off-putting
Repellant disconcertinf
When you’re building something from nothing, you rely on talented, passionate generalists: people who can do a little bit of everything, who buy into the mission, and whom you trust with your time, money, and ideas. But once you’ve gone from 0 to 1, and the seed you’ve planted is starting to grow, some shuffling happens. Often the person who was right for the job at the beginning is not right for the middle. Sometimes bringing in people with decades of experience and institutional know-how is the necessary thing to do. That
shambling
Moving with a slow shuffling gait
We were sending them tens of thousands of customers – they were sending us hundreds.
In a single stroke, this would completely turn our biggest weaknesses into our greatest strength.
Instead of storing in warehouses, store it with ur customers
We’d designed our site so that the impact of even the slightest change could be measured and quantified.
We should begin quantifying the data we have so far. Especially when they have launched
If it was a bad idea, even more attention to detail in our test wasn’t going to make it a good one. And if it was a good idea, people would immediately fight to take advantage of it, despite obstacles or sloppiness on our end.
If people want what you have, they will break down your door, leap over broken links, and beg you for more. If they don’t want what you’ve got, changing the color palette won’t make a damned bit of difference.
Overplanning and overdesigning is often just overthinking – or just plain old procrastination. When it comes to ideas, it’s more efficient to test ten bad ones than spend days trying to come up with something perfect.
Trueee
“But don’t feel bad. It wasn’t that good of an idea a few years ago. And besides, nobody knows anything.”
If Nobody Knows Anything, then you have to trust yourself. You have to test yourself. And you have to be willing to fail.
There are bad ideas. But you don’t know an idea is bad until you’ve tried it.
Always a good idea until tested
It would have diluted our focus.
we were confusing customers, giving them too many options.
Doc Hollywood is no one’s idea of a masterpiece. But it speaks to me – I’m not sure why. Maybe it’s simply because it taps into some deep desire to live an uncomplicated life with a real connection to people, family, and place. In many ways, Doc Hollywood is my fantasy. It makes me yearn for the simple life, for a place where everyone knows and cares for each other. Where you go to work, you come home, sit on the porch, and then get asked to judge a barbecue cook-off.
What counted was seamlessly connecting our users with movies we knew they’d love. That would be relevant regardless of what direction future technologies took us. Easier said than done, of course.
Reed, in typical Reed fashion, pushed for automation.
In the end, we realized that the best way to give users what they wanted was to crowdsource data from them. At first, we did what Amazon did. Using a process called “collaborative filtering,” Amazon would suggest products to you based on common buying patterns.
And it turns out that people love to be asked for their opinion. Everyone’s a critic.
VCs on our board had told us that if we wanted to go public, we needed to think big: movie showtimes; movie reviews, a monthly column by Leonard Maltin, king of the video guides. Etc. We’d done all of it, but I’d been unable to shake the suspicion that we were getting distracted, salivating over dollar signs and eyeing possible valuations.
We never would have been able to make any money as an all things to all people site. Becoming a “movie portal” was the complete opposite of the Canada Principle. It didn’t allow for the rigorous focus that set us apart – and that ultimately provided us with the business model to succeed on our own terms.
schadenfreude.
Pleasure derived from someones misfortune
We had a different problem than the Dr. Koops or Webvans of the world: we were successful, and success is expensive.
Our business model was hard to explain to potential customers, but we knew that if people tried our service, they’d be hooked. That’s why everyone who wanted to try Netflix got their first month free. That was expensive.
When someone says we decided to pivot, what they really mean is we fucked up, royally.
