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

by Marc Randolph

One of the ways people measure a marketing or sales assignment is by analyzing the difficulty of the ask. What are you asking for, and what are you promising in return? Years later, when I was first entering the marketing profession, I looked to bottled water as one of the great triumphs of salesmanship: marketing in its purest form.

We’re conditioned not to ask for things—and when we do ask for them, we’ve learned that we have to offer something in return.

brusque,

I had climbed mountains. Rafted rivers. Run triathlons. But this was the hardest thing I had ever tried to do.

cynicism

It made me feel sleazy to ask. It made me feel low when people said no. But by far the most difficult thing to bear was the invisibility. Mustering up all your courage and desperation, then debasing yourself in front of a stranger, only to be totally ignored—that was worst of all.

Compaq Presario.

But he batted away every counterargument with a dismissive wave of his well-manicured hand. And if you’re arguing with a potential investor, it’s already over.

scrupulous

Sales is theater: every pitch, every call, every interaction in which you, the businessperson, are trying to convince someone else—the customer, the client, the potential investor, you name it—is a little performance, in which each side plays a role.

The only thing I really remember—and I thought this was the epitome of grace, when she said it—was that she knew that her investment would bear fruit in the long term. “I’m sure in fifteen years I can use this money to buy an apartment in the city,” she said, laughing.

I almost wished she had said no. Because now I had to actually do it.

monstrosities

daffodils.

I’ve always believed that you should spend the money you’re given. Spend it wisely, but spend it.

“Bulls make money. Bears make money. Pigs get slaughtered.”

emergent

If you wanted to do something, you had to build it yourself—from scratch.

muesli

He was industrious, creative, and mostly silent. For the entire time we worked together, I’m not sure I heard him say more than twenty words.

Culture is a reflection of who you are and what you do—it doesn’t come from carefully worded mission statements and committee meetings.

In our quest to build a library of every DVD in existence, we often spent weeks looking for a single copy of a single hard-to-find title. Even though there were only a few hundred movies available on the format, it took us months to build a sizable library.

We had to make it easy to use. Intuitive to figure out. And it had to be small and light enough to qualify as first-class mail. The moment our mailer veered into fourth-class-mail territory, our costs went up and delivery speeds went down. And neither of those outcomes would be sustainable.

I was in the basement, building something, knowing that someday in the near future I’d have to invite everyone else in to have a look.

Culture isn’t what you say. It’s what you do.

I’d recruited almost everybody in that office. I knew how they worked. I knew that Christina loved to impose order on chaos—and that she’d thrive if given a lot of chaos to handle. I knew that Te’s creativity would flourish if she was given free rein to try out her most out-there ideas. I knew that Jim Cook would solve almost any problem put in front of him—but you had to give him room to work. I knew that I, and everyone else on that initial team, would thrive if given a lot of work to do and a lot of space to do it. That was really all our culture amounted to. Handpick a dozen brilliant, creative people, give them a set of delicious problems to solve, then give them space to solve them.

Know your staff. Know the others around you. Know how to get the best out of them. Know how to push them. Know when to pull back. Know how they respond. Work on your emotional intelligence!!!!

Your job as a leader is to let them figure that out. You’ve presumably chosen this group for such an arduous off-trail trip because you trust their judgment, and because they understand their job. So as a leader, the best way to ensure that everyone arrives at the campsite is to tell them where to go, not how to get there. Give them clear coordinates and let them figure it out.

Sometimes you have to let people choose. We all want a different path/challenge at times. The important thing is arriving at where you are working to go. It’s about the destination, no time table on arriving.

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.

What they really want is freedom and responsibility. They want to be loosely coupled but tightly aligned.

As a result, DVDs became the province of the fringe distributors. These distributors were flaky. They didn’t return phone calls. In our quest to acquire at least two copies of every DVD, we’d spend days tracking down a title, only to play phone tag for a week.

Because there were so few retail stores that even carried DVDs, acquiring a library of every title would require thousands of hours, hundreds of miles of travel, and a good slug of chance.

I love negotiation, and I’m pretty good at it. In large part this is because it’s easy for me to identify with other people’s needs. I’m able to understand what another party in a negotiation wants, what they need—and how they feel about getting it.

parried

Nowadays, they call that “self-care.” Back then, we just called it common sense. If we were going to try to fundamentally change an entire industry, we needed to have our wits about us.

At first, this occasioned some conflict. But eventually, after people got the memo—and after I’d remained firm in the face of numerous challenges—my colleagues knew not to schedule anything that would conflict with my deadline. They both respected and worked around it.

But no matter how high I’d climbed, or how many steps I saw ahead of me, I always left the office at 5:00 p.m. sharp on Tuesdays. I didn’t want to be one of those successful entrepreneurs who are on their second or third startup but also on their second or third spouse. Saving a night for my wife kept both of us sane and in tune with each other.

Eames chair

That’s what it’s like being in a startup. You spend a lot of time thinking about what might happen. And preparing for it. Sometimes you actually put a backup plan in place, but most of the time you just think through how you will respond—you scout out the rivers for rocks, check out the cliffs for things to grab onto if you fall. Most of the time, the worst doesn’t come to pass.

linoleum

inscrutable.

We’d have to compose confirmation emails by hand for each individual customer. That wasn’t ideal, obviously, but I figured it would be workable.

The internet doesn’t have business hours.

We’d expected 15 or 20 people to use the site to order a DVD. We’d gotten 137—and potentially we’d gotten more than that, since we didn’t know how many people had tried to access the site when it was down.

It was an enormously promising start. But that’s all it was: a start. There were hundreds—no, thousands—of changes we still needed to make.

decant

We were still building our kitchen, even as we lived around it. Just like Netflix, I thought—we’d built it, but it wasn’t finished yet. It would probably never be finished, truthfully. Every day, we’d have to work to keep it upright—to keep the water flowing, to keep the cabinets filled. To keep the burners clean and the gas bill paid.

Saint Elmo’s fire—a

That’s how Netflix had felt, all that spring—a blue haze buzzing around all of our heads. But starting on April 14, Netflix wasn’t just potential energy anymore. It was a live current, positive meeting negative. It was a lightning strike. And now we had to figure out how to manage it.

With so much data to consider, it’s easy to get overwhelmed.