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

by Marc Randolph

A few years ago, when my son graduated from college, he moved out to San Francisco with a buddy of his, intent on starting a new company. In less time than it took to drive from our place in Scotts Valley to San Francisco, he had built a website on Squarespace, set up a credit account on Stripe, bought some banner ads using AdSense, and set up some cloud-based analytics on Optimizely to measure the results. All within a single weekend. (One of the ideas they tested? Shampoo by mail. What can I say, the apple doesn’t fall far from the tree.) But back in 1997, you could raise $2 million with a PowerPoint. In fact, you had to. There are a lot of reasons for that, but the most fundamental had to do with time. In 1997 there was no Squarespace. No Stripe, no AdSense. No Optimizely. No cloud. If you wanted to build a website, you had to have engineers and programmers build it for you. You had to have servers to serve the pages. You had to figure out a way to accept credit cards. You had to do your own analytics. Forget a weekend. Try six months. And you needed money for that. Money to hire people, to rent space, to buy equipment…money to survive until you could prove your idea had merit, and until you could raise your first serious funding. It was kind of a catch-22: You couldn’t prove to your investors that your idea would work unless they gave you money to prove that your idea could work. You had to sell them on your idea.