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

by Marc Randolph

Epiphanies are rare. And when they appear in origin stories, they’re often oversimplified or just plain false. We like these tales because they align with a romantic idea about inspiration and genius. We want our Isaac Newtons to be sitting under the apple tree when the apple falls. We want Archimedes in his bathtub. But the truth is usually more complicated than that. The truth is that for every good idea, there are a thousand bad ones. And sometimes it can be hard to tell the difference.

Truths like: Distrust epiphanies. The best ideas rarely come on a mountaintop in a flash of lightning. They don’t even come to you on the side of a mountain, when you’re stuck in traffic behind a sand truck. They make themselves apparent more slowly, gradually, over weeks and months. And in fact, when you finally have one, you might not realize it for a long time.

“If you really want to build an estate, own your own business. Control your own life.”

“You want something where the effort it takes to sell a dozen is identical to the effort it takes to sell just one. And while you’re at it, try and find something that’s more than just a onetime sale, so that once you’ve found a customer, you’ll be able to sell to them over and over again.”

The truth is that no business plan survives a collision with a real customer. So the trick is to take your idea and set it on a collision course with reality as soon as possible.

When it comes to financing your dream, use only other people’s money. Entrepreneurship is risky, and you want to ensure that the only skin you have in the game is…well, your actual skin. You’ll be dedicating your life to your idea. Let others dedicate the contents of their wallets.

Real innovation comes not from top-down pronouncements and narrowly defined tasks. It comes from hiring innovators focused on the big picture who can orient themselves within a problem and solve it without having their hand held the whole time. We call it being loosely coupled but tightly aligned.

People want to be treated like adults. They want to have a mission they believe in, a problem to solve, and space to solve it. They want to be surrounded by other adults whose abilities they respect.

People don’t want hot tubs—not really. They don’t want free snacks or Ping-Pong tables or kombucha on tap. What they really want is freedom and responsibility. They want to be loosely coupled but tightly aligned.

In a pitch, perfection isn’t always the goal: projection is. You don’t have to have all the answers if you appear to be the sort of person to whom they’ll eventually come.

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.

Focus. It’s an entrepreneur’s secret weapon. Again and again in the Netflix story—dropping DVD sales, dropping à la carte rentals, and eventually dropping many members of the original Netflix team—we had to be willing to abandon parts of the past in service of the future. Sometimes, focus this intense looks like ruthlessness—and it is, a little bit. But it’s more than that. It’s something akin to courage.

Hiring and keeping star players is about much more than just quality of work, however. It’s a culture thing. 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.

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.

RANDOLPH’S RULES FOR SUCCESS Do at least 10% more than you are asked. Never, ever, to anybody present as fact opinions on things you don’t know. Takes great care and discipline. Be courteous and considerate always—up and down. Don’t knock, don’t complain—stick to constructive, serious criticism. Don’t be afraid to make decisions when you have the facts on which to make them. Quantify where possible. Be open-minded but skeptical. Be prompt.

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.

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.

You have to learn to love the problem, not the solution. That’s how you stay engaged when things take longer than you expected.