That Will Never Work
That Will Never Work: The Birth of Netflix by the first CEO and co-founder Marc Randolph
🚀 The Book in 3 Sentences
This is a book about the story and evolution of Netflix.
Netflix pioneered a lot of what has become standard today - monthly subscriptions, algorithms that predict recommendations, next day delivery and more.
Culture is so important in an organisation, Netflix had an unbelievable focus on this and codified it into 'freedom and responsibility'
🎨 Impressions
This was a thoroughly enjoyable, entertaining read about how Netflix went from an idea into the mega, media shifting organisation it is today. The events are written in a compelling, informative way with many practical ideas and advice for the start-up world, running businesses, testing ideas and creating a culture.
How I Discovered It
I watched the documentary 'Netflix vs The World' and was compelled to hear more about the story of Netflix.
Who Should Read It?
If you have an idea that you want to bring into the world - but not sure how to - this will give you inspiration and practical advice. If you want to know how Netflix became the company it is today and how it started. If you are interested in the start-up world especially around the dot com era this book provides fascinating inside insights.
✍️ My Top 3 Quotes
You're going to get things wrong. you just don't want to get the same things wrong twice.
Culture isn’t what you say. It’s what you do.
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.
📒 Summary + Notes
Debating the Idea
The truth is that for every good idea, there are a thousand bad ones. And sometimes it can be hard to tell the difference.
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.
“Sure. But you want something that will scale,” he said. “You want to sell 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.”
“We need a product that already exists in the world,” I said. “But that we can help people access online. Bezos did it with books. You don’t have to write books to sell them.”
Introduction of DVDs
Take note of that: compact disc-sized. That was what caught my eye. A CD was much smaller than a VHS tape. And much lighter. In fact, it occurred to me that it was probably small and light enough to fit into a standard business envelope, requiring nothing more than a 32-cent stamp to mail. Quite a difference from the heavy cardboard box – and expensive UPS shipping rates – a VHS would have required.
Christina did some digging and found out that the studios and manufacturers were planning on pricing the DVD as a collectible item – $15 to $25 per disc. That’s a far cry from what had happened in the eighties, when studios responded to the newly ubiquitous video store by raising the prices on tapes. Once the studios realized that the video rental stores were making all the money (by buying one VHS cassette and then renting it out hundreds of times – a right established by the Supreme Court as the “first sale” doctrine), they had decided that the only way to respond was to price the VHS high enough that they essentially captured their “fair share” of all that rental income. They knew that by raising the price like this they were saying good-bye to consumer purchases, but it was worth it because most people didn’t want to own a movie. The studios had learned from that mistake, and they wanted DVDs to be like CDs: collectible consumer products. If DVDs were priced low enough, they reasoned, customers would forget about renting and instead buy movies, the same way they bought albums on CD. The studios envisioned customers with shelves of movies in their family rooms – avoiding the rental middleman altogether.
The Netflix Culture
Culture isn’t what you say. It’s what you do.
Netflix had developed a culture of freedom and responsibility, coupled with radical honesty.
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. It’s the same at a start-up. 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.
What they really want is freedom and responsibility. They want to be loosely coupled but tightly aligned.
Advice for Entrepreneurs
In a pitch, perfection isn’t always the goal: projection is. You don’t have to have all the answers if you appear to be the sort of person to whom they’ll eventually come.
Success creates problems. Growth is great – but with growth comes an entirely new set of complications.
Focus. It’s an entrepreneur’s secret weapon. Again and again in the Netflix story – dropping DVD sales, dropping à la carte rentals, and eventually dropping many members of the original Netflix team – we had to be willing to abandon parts of the past in service of the future. Sometimes, focus this intense looks like ruthlessness – and it is, a little bit. But it’s more than that. It’s something akin to courage.
Helping people find their favourite movies, movies they’d love, was our real goal at Netflix. From the beginning, we’d known that our company couldn’t be tied to a shipping service or a mere product – because if it was, we’d be obsolete the second the technology changed. 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. Neither the technology nor the delivery method mattered. What counted was seamlessly connecting our users with movies we knew they’d love. That would be relevant regardless of what direction future technologies took us.
8 Guiding Principles
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 – up and down.
Don’t knock, don’t complain – stick to constructive, serious criticism.
Don’t be afraid to make decisions when you have the facts on which to make them.
Quantify where possible.
Be open-minded but sceptical.
Be prompt.
In them I see the basis for my practice of constant testing (#2, #6), my ethos of curiosity and creativity (#7), and my willingness to take risks in service of a goal (#5). I see the seeds for Netflix’s culture of Radical Honesty in #4’s admonition to stick to constructive, serious criticism. And of course there’s a direct path from rule #1 – Do at least 10% more than you are asked – to all the espresso- and pizza-fuelled late nights in the Netflix offices.
Closing Advice
As you get older, if you’re at all self-aware, you learn two important things about yourself: what you like and what you’re good at. Anyone who gets to spend his day doing both of those things is a lucky man.
Every start-up has hundreds of things going wrong at the same time, all clamouring for attention. I have a sense of which two or three issues are the critical ones, even if they are not the ones screaming the loudest. But they are the issues that, if you fix them, then all the rest will take care of itself.
The most powerful step that anyone can take to turn their dreams into reality is a simple one: you just need to start. The only real way to find out if your idea is a good one is to do it. You’ll learn more in one hour of doing something than in a lifetime of thinking about it.
So take that step. Build something, make something, test something, sell something. Learn for yourself if your idea is a good one.
You have to learn to love the problem, not the solution.
