That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea

by Marc Randolph

And when a company decides to seek strategic alternatives, what they’re saying is we’ve got to sell this sucker – and fast.

They were king of the world in 2000, but we had no idea if they even knew who we were. Or if they cared.

But in Silicon Valley the only thing that really matters is the quality of your work. It’s a programmer’s world, with a programmer’s ethos. Every programmer is accustomed to having their code subjected to peer review, in which fellow coders evaluate its brevity, elegance, cleverness, simplicity, and ultimate effectiveness.

There’s nothing like going into a negotiation knowing that the other side holds almost all the cards.

“But there are certainly areas where Blockbuster could use the expertise and market position that Netflix has obtained to position itself more strongly.”

Barry and I nodded at all the right beats, occasionally interjecting a supporting comment. It was all I could do to hold back from spontaneously shouting, “Amen, brother. Hallelujah!”

Lol

accretive

Growth

Now it was clear that if we were going to get out of the crash alive, it was entirely on us. We would have to be ruthless in our focus on the future. We would have to look within. As my father used to tell me, sometimes the only way out is through.

“Blockbuster doesn’t want us,” I said. “So it’s obvious what we have to do now.” I smiled. Couldn’t help it. “It looks like now we’re going to have to kick their ass.”

Yessss

necessarily. But if we ever wanted to go public, banks (and the investors they recommended our stock to) would have to see a path to profitability.

barnacles

External shell

hull.

Main body of the ship

Sometimes, what looks like a barnacle to you is someone else’s favorite feature.

We had proved whether it did each of these things and knew exactly by how much. But once we’d learned what we needed to learn, the usefulness of the test fell to zero for us. Unfortunately, the cost stayed the same.

easy. Most times, deciding what not to do is harder than deciding what to do.

callous

Insensitive disregard for others

spending less money running the business. There were only so many costs

It’s a maxim of startup life: you’re going to get things wrong. You just don’t want to get the same things wrong twice. At one meeting in the summer of 2001, just

At 6’4”, he was a powerful presence, but he held himself in a gentle way that made him approachable. In an office full of shorts and unwashed T-shirts, Joel dressed like a university professor: button-down shirts, cardigans, corduroy pants, and black oxfords. He was extremely measured in his speech and chose his words carefully. He was an even more thoughtful listener, nodding slowly and considerately at even the stupidest utterances, as if the failure to find some genius in them must lie with him.

Disagreement was collaborative, not ego-driven. It didn’t matter who was right – all that mattered was that we got it right. And that was where Kyle was falling short.

When I looked up, I saw someone I had hired myself, many years ago: a hard worker, a skilled coder, a nice guy. He just hadn’t made the cut. “Sorry, Marc,” he started. “I don’t want to interrupt you, but I wanted to come back and make sure you were okay. This must have been really tough on you.” I held the soccer ball and cocked my head. I didn’t know how to answer. It didn’t make sense. He’d just been laid off, and he was wondering if I was okay? “Well, anyway,” he awkwardly continued after a few seconds. “Thanks for everything.” He turned and started to walk away. But then, just before he passed the end of the row of cubes, he stopped, as if he had suddenly remembered something. “Hey,” he shouted back, a smile on his face. “Crush Blockbuster, okay?” And with that he was gone. 18.

KAsakittttt :.(

When you retain only star players, you create a culture of competitive excellence. It’s more fun to come to work when you know you’re part of the handpicked elite. Plus, it’s much easier to attract other elite talent to your team when you’ve established a reputation for superstar talent.

Neil didn’t need to shout. As soon as he began to speak, people would lean in to listen.

Like

fizzled.

Make a feeble hissing sound

“No doesn’t always mean no,”

I knew that our idea was good. It might not happen now, but it would one day. Here’s what I’ve learned:

It pays to be the person who won’t take no for an answer, since in business, no doesn’t always mean no.

What could I possibly be missing that some other candidate had?

I wrote a long letter to every single person who had interviewed me, taking the opportunity to recap for them all of my positive traits. I explained that while I had concluded that I must be missing something important, I was hoping they might be able to explain to me exactly what that was. “You see,” I explained, “since there is a 100 percent certainty that I will be applying for this job next year, I would like to take the time to work on whatever skills I am deficient in.”

It turned out that none of the candidates had actually been offered the job the first time around. N.W. Ayer knew that being an account executive was a selling job. A turning-a-no-into-a-yes type of job. So they had said no to all of us.

Amazing. Relentless

Reed had the reins. And he deserved them. Raising over $100 million in capital would never have been possible without him. His leadership had taken us through the dot-com bubble’s age of irrational exuberance – and beyond it.

Idol

VCs will always say that they’re aligned with your mission, that they want what’s best for the company. But what they really want is what’s best for their investment in the company. Which isn’t always the same thing.

wager

Bet

It wasn’t a question of money. It was a question of usefulness, of the pleasure of utility. Working, for me, was never about getting rich – it was about the thrill of doing good work, the pleasure of solving problems. At Netflix, those problems had been incredibly complex, and the joy came from sitting around a table with brilliant people and trying like hell to solve them.

But a part of me knew that one phase of the journey had just ended. The dream was a reality. We’d done it – we’d turned an envelope and a Patsy Cline CD into a publicly traded company. It was the sort of success we’d all hoped for, the thing that we had promised the people who had invested their money in us.

I was going to have a slice of genuine New York pizza with my oldest son. I was just where I wanted to be. “Are we there yet, Dad?” Logan asked, looking up from the printouts he’d smuggled from the trading floor, listing thousands of share prices. “We sure are, Logan,” I answered, and opened the door. “Come on. We made it.”

Aweeee!

courteous

Polite respectful

ethos

The characteristic spirit of culture era

prompt

Cause or brin about to take action

But more importantly, the pride I felt came from the message I was giving that night: how the media landscape is changing, and what you can learn from the companies that are changing it.

My father died just days before the collapse of the internet bubble. As a value investor, he’d never understood the hype, never understood the frenzy. He would have been unspeakably delighted to have seen that he was right all along. I wish he could have seen it. And I wish he could have seen us survive it. He never got to see us take the company public. He never heard my stories about taking a private plane to New York with my son in tow.

But you know what? It didn’t matter. Because he got to see me onstage, talking about the thing I love: solving problems. Team-building. Building a culture that works. How to refine your startup mentality. He saw me doing what I loved. That’s what really mattered.

As you get older, if you’re at all self-aware, you learn two important things about yourself: what you like and what you’re good at. Anyone who gets to spend his day doing both of those things is a lucky man.

But as quarterly numbers mechanically came and went each successive year, I slowly realized that although I loved the company, I no longer loved working there.

turns out that I did know what I like, and what I’m good at. And it wasn’t a company as big as Netflix. It was small companies struggling to find their way. It was newly hatched dreams for which no one had yet discovered a repeatable scalable business model. It was wading into companies rife with crisis, to solve really complex problems with really smart people.

And I’ll blow my own horn here for a minute: I’m pretty damn good at it. Every startup has hundreds of things going wrong at the same time, all clamoring for attention. I have a sense of which two or three issues are the critic...

warily.

Cautiously

He’s too smart not to have noticed that my skills weren’t the ones that Netflix would be needing in the years ahead, and too honest to hide that from me for long.

It’s a great principle. But it left me out of a job. Kiosks were a no-go. That meant that I was drawing up my severance package.

Ouch

It introduced the concept of binge watching, and is a popular euphemism for getting laid.

HAhaha netflix and chill lol