Episode #366: The Early Days of Netflix with Marc Randolph

Marc Randolph is a veteran Silicon Valley entrepreneur, advisor and investor. Marc was co-founder of Netflix, serving as their founding CEO, as the executive producer of their web site, and as a member of their board of directors.

Marc recently released his book, That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea.

Although best known for starting Netflix, Marc's career as an entrepreneur spans more than four decades. He's founded or co-founded more than half a dozen other successful start-ups, mentored rising entrepreneurs including the co-founders of Looker Data which was recently sold to Google for $2.6B, and invested in numerous successful tech ventures.

He is a frequent speaker at industry events, works extensively with young entrepreneur programs, sits on the board of the environmental advocacy group 1% for the Planet, and chairs the National Outdoor Leadership School's Board of Trustees.

This was a wide-reaching conversation about the lessons learned from the early days of Netflix, back when they were still wrestling with making VHS and then DVD by mail, a compelling business model.

Expect to take many gems of wisdom and memorable anecdotes out of this one, including:

Why Netflix turned down an 8-figure acquisition offer from Amazon after just a year of operating and before they had anything resembling a sustainable business model
What happpened when Blockbuster turned down the opportunity to buy Netflix for just $50M;
What truly differentiates success from failure at a tech startup - hint, it’s not genius; and
How Netflix went about scaling its freedom-oriented, high performing culture from 7 people to 7,000

WIth that, strap yourself in for my conversation with the co-founder of Netflix, Marc Randolph.

Topics Discussed:

Surfing
What the initial inspiration for Netflix was
Why ceativity is having many at bats
Calamities that characterised Netflix’s early days
Why business plans don’t survives a collision with a real customer.
Why Netflix cannibalised its video sales revenues (most of its revenue) to pursue video rental by mail (none of its revenue)
Turning down an acquisition offer from Amazon, even when Netflix had little going for it
Being turned down by Blockbuster
On stepping down from CEO and letting Reed Hastings take over
How to fight the complacency that comes with success
How to attract the best talent to your company, even if you can’t afford them
Why culture is what you do, not what you say
Why leadership is about helping people find their own way to the destination
How to empower peopple to make decisions, instead of suffocate them with process
How to scale culture
Firing your team, even after they had made large sacrifices to join you
What was the breakthrough that catapultued Netflix from startup to an actual business?
Why Marc left Netflix shortly after its IPO in 2002
What two very important things everybody should learn about themselves
Marc’s date night and dedication to balance at Netflix
Why more money doesn’t equal more happiness