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

by Marc Randolph

Where you go to work, you come home, sit on the porch, and then get asked to judge a barbecue cook-off.

Helping people find their favorite movies, movies they’d love, was our real goal at Netflix.

If we wanted any chance of surviving long-term, we had to convince customers that we were giving them something better than an online library and quick shipping.

serendipitously

But by late 1999, we had almost 5,000 movies to work with.

Pleasantville,

The thing about taste is that it’s subjective.

“collaborative filtering,”

Ultimately, the algorithm would become much more complex than that. But for it to work at all, we needed users to review movies—lots of them.

My goal was to make sure that however quickly we moved, however efficient we got, we were always fundamentally seeking to connect with our users.

Leslie Kilgore,

Ted Sarandos,

Our other metrics were looking pretty impressive as well. We now carried 5,800 different DVD titles and shipped more than 800,000 discs a month, and our warehouse was packed with more than a million discs.

At the time, not going public had felt like a major blow. But in retrospect, it was possibly one of the best things that ever happened to us. If we’d gone public in the fall of 2000, we would have been tied to the portal idea and to the unrealistic financial expectations that we had built around it—and that would have been a disaster.

schadenfreude.

tangentially.

Wayne Huizenga,

ubiquitous

As big a deal as we were online, we did a fraction of the business they did. We were on track to do $5 million in revenue in 2000—Blockbuster was aiming for $6 billion. We had 350 employees—they had 60,000. We had a two-story HQ in an office park in Los Gatos—they had 9,000 stores.

meritocracy

flouncing

rapturous

John Antioco

transacting

deus ex machina

albatross—so

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

callous

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.

LIFO

At Netflix, there was nothing wrong with disagreement. In fact, disagreement was a critical component of our culture of radical honesty. We expected disagreement, because we encouraged vigorous debate.

Everyone was expected to fight for their point of view until a consensus had been reached.

It didn’t matter who was right—all that mattered was that we got it right.

capriciously

Winnowing

Here’s what I’ve learned: when it comes to making your dream a reality, one of the most powerful weapons at your disposal is dogged, bullheaded insistence. It pays to be the person who won’t take no for an answer, since in business, no doesn’t always mean no.

Everyone is aligned when the wind is blowing the right way. It’s when a storm comes up that all of a sudden it becomes apparent that people have different goals and objectives.

You never knew who might end up being useful to you.

“Building the book”

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.

Chappaqua.

I grew up around fabulously wealthy, fantastically miserable people. You could spot them a mile away—impeccable loafers, beautiful bespoke suits, and an empty half smile on their face.

alcove

happy as a clam at high tide.

In the time it took for a ticker symbol to scroll across a screen, an entirely new path had opened up. For the first time in my adult life, I didn’t need to work. And I never would have to, again.

They all had to work. But I didn’t. Just a few hours before, I’d been the same as them—but now, suddenly, things were different. 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. 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.

I loved building the company, watching it stumble, then rebuilding it again. I loved the arrivals and the departures, the triumphs and the losses—the raucous laughter at the offsite and the stunned silence on Vanna White’s jet.

It wasn’t about the money. It was about what we did before we ever knew we’d get it.

Pies laden with pepperoni, sausage, and cheese rotated on spindles in the window. For a moment, before I opened the door, I savored that scene—on the day I’d dreamed about for years, minutes after the entire trajectory of my life changed, I was going to have a slice of genuine New York pizza with my oldest son.