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

by Marc Randolph

I was now one of only five students from throughout the Northeast, all of us competing for a single job. I didn’t get it. I bounce back quickly, so my disappointment in not having gotten this dream job quickly turned to confusion. What could I possibly be missing that some other candidate had? Ignorant of all the invisible criteria that were being applied to me (and that I would be especially aware of when it was later my turn to be on the hiring side of the table), I frankly couldn’t conceive of what I was missing. So I decided to ask. 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 one hundred 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.” I’m cringing thinking about this now. But it worked. Just four days later, I got a call. One of the senior partners in the agency wanted to meet with me. This was the guy who ran the whole business side of the agency. Several days later, as we sat in a plush corner office forty-two stories above Sixth Avenue, he offered me the job. 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 ac...

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.

On the day you take a company public, only some of the stock is bought by individuals—“retail,” in Wall Street terms. The majority of what gets sold on day one is institutional: large funds managed by sophisticated investors who are taking the long view. Think pension funds, university endowments, retirement funds, mutual funds—not to mention “ultra-high-net-worth individuals,” people with so much money that they hire entire offices of investment professionals to manage it.

The bank’s challenge, the morning of our IPO, would be to figure out the ideal number to use as the opening price for individual shares. Set the price too high, and interested purchasers would drop out—and we would miss our $70 million target. Set it too low, and Netflix would leave millions on the table. Another complicating factor? Given the choice, the bank didn’t really mind a price that was too low. Part of the reason they’d fought so hard for a deal with us—above and beyond the big commission—was the opportunity to give their best customers an opportunity to buy low at the opening and sell high at the closing.

I didn’t know how I felt about the shift. 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.

Kiosks were a no-go. That meant that I was drawing up my severance package. Mitch, for his part, used the tests from our three months in Vegas to start another little company. You might have heard of it. It’s called Redbox.

So many aspects of the corporate culture spring from the way Reed and I treated each other and the way we treated everyone else. Radical Honesty. Freedom and Responsibility. Those were there from the beginning—

The most powerful step that anyone can take to turn their dreams into reality is a simple one: you just need to start. The only real way to find out if your idea is a good one is to do it. You’ll learn more in one hour of doing something than in a lifetime of thinking about it.

Nolan Bushnell, the co-founder of Atari, once said something that has always resonated with me. “Everyone who has taken a shower has had an idea,” he said. “But it’s the people who get out of the shower, towel off, and do something about it that make the difference.”