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

by Marc Randolph

There’s a popular story about Netflix that says the idea came to Reed after he’d rung up a $40 late fee on Apollo 13 at Blockbuster. He thought, What if there were no late fees? And BOOM! The idea for Netflix was born. That story is beautiful. It’s useful. It is, as we say in marketing, emotionally true.

Epiphanies are rare. And when they appear in origin stories, they’re often oversimplified or just plain false.

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.

Time is cruel, and there are no monuments in tech.

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.

Companies establish concentric circles around themselves—a sort of radar range of overlapping environments. The center of the circle in large part determines the company’s guiding philosophy, which is in turn modified by what people bring to it, from the outer boundaries of the orbit.

If we took the amount of effort, manpower, and mind-power Canadian expansion would require and applied it to other aspects of the business, we’d eventually get a far greater return than 10 percent. Expanding to Canada would have been a short-term move, with short-term benefits. It would have diluted our focus.

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...

Don’t knock, don’t complain—stick to constructive, s...

Don’t be afraid to make decisions when you have the facts on ...

Quantify where p...

Be open-minded but s...

Be pr...