Hi Reddit, great to be back. As the co-founder and first CEO of Netflix, I'm here to share stories from launching and growing the company. But since Netflix was my sixth startup, I’ve also got a lot of other good entrepreneurial advice if you want it.

I also love to climb, surf and bike. My favorite movie is Doc Hollywood. My book That Will Never Work just came out in paperback. And I'm Looking forward to this AMA!

And if you don’t get all your answers today, you can always hit me up here, here or here.

PROOF: https://i.redd.it/r7kqakbt2h491.jpg

EDIT: WELL KIDS . . . .It's been fun, but I've got a cold beer with my name on it waiting for me on the patio. I love doing these AMAs, so I'll do my best to come back again soon and answer even more of your questions.

in the meantime, if you want more great Netflix stories, I encourage you to read my book, That Will Never Work, the Birth of Netflix and the Amazing Life of an Idea. In bookstores everywhere, and now in paperback.

If it's entrepreneurial advice your after, check out my podcast, also called That Will Never Work.

And finally, if a 338-page book, or a 30-minute podcast is too much for you, you can get my wisdom in smaller easily-digestible pieces on twitter, linkedIn, Tik-Tok and Instagram, or at the epi-center of all things Marc Randolph - on my website at (www.marcrandolph.com).

Thanks all! Now Chill!

Comments: 92 • Responses: 29  • Date: 

Ajescent19 karma

What do you think of the current direction that Netflix is heading in? Were you still at the helm where would you consider sending the company?

thatwillneverwork16 karma

i think Netflix - and all the streamers - are just at the very beginning of a complete transformation of how the world consumes entertainment. Even collectively, all the streamers combined still fall very short of the global connected audience. It's going to be somewhat erratic as this happens - both as the streamers test new ways of making and delivery content - and as this global audience changes the ways it wants to consume it.

Viewed through that lens, I'm completely confident in the direction Netflix is going. When I was there we were focused on one singular thing: helping our customers discover great content. And now, 22 years after launch, they havn't changed. That is still the singular focus and I'm sure it's the right one.

1d42010 karma

How do you feel about the streaming model as a whole? Is it good or bad for content, creators and consumers? Where would you like to see it go in the future?

thatwillneverwork18 karma

No advances are without their drawbacks, but on the whole, streaming has been a remarkable advancement. Think back to how TV exclusively used to be: 30-minute episodes that were actually only 22 minutes to account for the commercials; every episode had to end with a cliff-hanger to bring you back next week; every episode had to start with a "as seen last week" piece to famliarize you with where you were, there was only room for two story arcs per episode. And worse of all, you had to watch when they wanted you to watch.

Now, not only are we freed up to watch what we want when we want, but the entire creative process has been disrupted. Episodes can be all different lengths. The story arcs can cross multiple episodes and multiple seasons. We don't need to fit in commercial breaks.

And think about choice: this is in many ways the golden age of television. As consumers we have an amazing assortment of great things to watch. And having multiple streamers means they all compete with each other to provide us with new, better, and different experiences.

As with most disruption, the entities that were bought into the old model do suffer. Cable is gravely wounded. In some ways so is the old ways of compensating talent. But on the whole I think we've freed up creativity and given all of us access to the best stories from around the world. That's a big net positive in my book.

bricked_machine7 karma

We're 98% streaming in my household, with no cable subscription. The other 2% is supplied by an OTA digital antenna.

My wife and I regularly chuckle when my kids are watching OTA television and complain - hard - about the commercials. At first it was an interesting novelty for them - "what this? A show within a show, except it's people acting strangely trying to sell me something?", but they quickly grew to hate it.

Dude...this was the way it ALWAYS was like 10 years ago...

thatwillneverwork7 karma

Its funny how spoiled we get.

Before I figured out that Hulu had an ad-free tier, we would watch things with Ads in them. Brutally painful.

hoozt8 karma

If you would start a new company today, would you rather try to bootstrap it or go the VC route?

thatwillneverwork25 karma

This is the perfect opportunity to give the most entrepreneurial advice of all: It Depends.

Generally speaking, i would bootstrap a company as long as I could - certainly I would try to hold off on using VC financing until I had found product/market fit.

The problem with taking VC money is that (damn them!) they want it back. Usually time 10. And your responsibility as an entrepreneur is to do what you have to in order for that to happen. That might mean locking in on a short term path that you know in your heart is the wrong long term plan. It means losing flexibility. It means having to justify your actions to someone. And it means potentially having to sell the company or go public before you want to.

Achieving product market fit usually means that you've got it basically figured out, and that you are now looking for money to scale. And that's a perfect use for VC dollars.

OK. Now the "it depends" part. When Lloyd Tabb and I started Looker, both of us had been in the Valley for 30 years and knew what we were doing. We both had very close relationships with certain VCs. And we were in a strong enough position to push back HARD on the terms. So we raised our very first dollar (in fact, our very first 2,000,000 of em, from venture). And we gained that support and expertise from day 1.

hoozt4 karma

Wow, great answer, thank you! 🙏 Cheers from Sweden

thatwillneverwork8 karma

And cheers from California.

Charlieuk8 karma

Where did the idea for Netflix originate?

thatwillneverwork43 karma

I know what you want. You want the Epiphany Story. You want to hear about that that flash of inspiration. The brilliant idea. That singular moment when everything became clear.

And I get it. We all want the story of Archimedes in his bathtub. Or Newton under the Apple tree.

We want the story of the guy who can’t get a cab on New Year’s Eve and BOOM there’s Uber. Or the two roommates who can’t make their rent, put an air mattress in a spare bedroom, and BOOM there’s AirBnB. Or someone has a $40 late fee on a movie, and BOOM there’s Netflix . . .

But that’s not the way it works.. . .

In my case, Netflix was just one of hundreds of stupid ideas I pitched to my friend Reed Hastings on our commutes to work in the morning. I pitched him personalized shampoo. I pitched custom dog food. I pitched him sporting goods. Vitamins. And then finally, I pitched him the idea for Video Rental by Mail. You would come to a web site - pick your movie out - and we would UPS it to you.

But this was in 1997 and video came on VHS cassettes. So it quickly became apparent that this wasn't going to work.

But then, one morning when Reed picked me up, he told me about a new technology he had heard of called the DVD. Thin. Light. And it gave us an idea. Maybe we could mail the movies to people.

So right that moment we turned the car around to see if we could find a DVD. But they were in test market and unavailable, so we settled for a used music CD. Then bought a little gift envelope, but the CD in the envelope and dropped it off at the post office. And went to work.

The very next morning, when Reed came to pick me up he just held up a little envelope with an unbroken CD in it that had gotten to his house in less than 24 hours for the price of a postage stamp.

And that was probably the moment we both though, "wow, this just ight work".

ADuckNamedPhil10 karma

I just realized I've been using Netflix for the last 25 years and I'm old.

Also, on behalf of all of us here, thank you for Black Mirror, Squid Game, Arcane, and Love Death + Robots. You may not have made them yourself, but they wouldn't be here without you.

thatwillneverwork13 karma

Just discovered Love, Death + Robots. Amazing, isn't it?

JasonNBD8 karma

Wow!! I love hearing about the process, the fact that it's not this lightbulb idea that is obvious and comes to you like a sudden epiphany.

I always find myself pitching random product/service ideas to my friends and girlfriend. Thinking "Wouldn't this be cool". Brainstorming is fun, can't imagine the feeling of bringing one of those ideas into reality + scaling

thatwillneverwork7 karma

Unfortunately, that part is a lot harder.

Jizzapherina6 karma

This was exactly the story I was looking for!

It was life changing to be able to log onto a web site ( oh that first interface was so bad), choose a bunch of first rate movies, put them in order of precedence, and then get them delivered in the mail. The glory!

thatwillneverwork4 karma

I know, it was magic, wasn't it.

fahrnfahrnfahrn5 karma

Aside from what you did with Netflix, you write really well.

thatwillneverwork5 karma

Thank you. I work very hard at it.

and of course, your comment is the perfect lead in to say that you should read my book! It's called That Will Never Work, the birth of Netflix and the Amazing life of an idea, and it's an International best-seller that's been translated into more than 20 languages and received more than 1000 Amazon five-star reviews.

Now in paperback!

Traditional_Site_2366 karma

Do you Netflix and chill too?

thatwillneverwork16 karma

Yes. But maybe not as frequently as I used to.

But answering this slightly differently, I do watch a lot of Netflix (and yes, with my wife), but I also watch a lot of Disney, HBO, Hulu, Prime, etc - plus a bunch of fringe channels (F1, AFL, BritBox, etc).

harland456 karma

Did Netflix start with a vision of becoming a streaming-first company over the DVD delivery or did that just evolve when the technology caught up? Good thing the company wasn’t originally named something like DVDsbymail.com and Netflix still works as a name for a streaming business.

thatwillneverwork18 karma

I called my book (and my podcast) That Will Never Work, because that's what everyone (including my wife) said when I pitched this crazy idea about DVD-Rental-By-Mail. And they had two objections: first, Blockbuster. There were 9,000 of 'em. There was one on every corner. Who would want to wait for a movie to arrive in the mail. But second was the fact that DVDs were digital - "it was just a matter of time", they told me "before everyone would be getting their content digitally".

Well that latter group was right. And we knew it. But we also believed it would be much longer than anyone thought before that became possible. The DRM wasn't there. The bandwidth to the home wasn't there. And we knew that hollywood would be very slow to want to release content digitally for fear of being Napstered.

So, yes, we knew from day one that eventually we would be a digital delivery company. Thus the name Netflix. But more importantly, it deeply shaped our strategy; we couldn't position ourselves as a DVD company ("The world's Fastest Shippers of Plastic!!!) because that would eventually go away. But neither could we position ourselves as a streaming company (Bits-R-Us!) because that world might be decades away. So instead, we choose something that was delivery agnostic. Netflix was going to be "A Place to Discover Great Stories". That worked in a DVD world. And it would work in a Streaming World. And it will still work when we can (and I'm just spit-ballin' here) beam movies telepathically into our fillings. It was delivery agnostic.

And looking back, I think that may have been one of the top two or three best decisions we ever made.

TheFamilyJulezzz4 karma

We've seen the market move from a monolith (Netflix) to everyone and their brother creating a platform and original content. With the recent failures (see: CNN+), do you think we will see a consolidation trend? Or do you see success in (edit: or a future shift toward) prime's model of offering add-on services integrated within the Prime/Fire TV ecosystem? Would the rumored interest in Roku be a move in that direction?

thatwillneverwork4 karma

To be honest, I don't know. As I think you know, I no longer work for Netflix so I"m not privy to their strategies. But I think that we will certainly see the market coalesce into a handful of "full service" streamers, that carry a large and diverse content catalogue (Netflix, Disney, Prime, Hulu, etc) and then a very long tail of niche streamers (like the ones that I also subscribe to, like F1, Britbox, AFL, etc). In a way, people will be building their own cable bundles.

But the real answer is it will be intersting to see what happens.

I'm very curious to see if the Roku rumors are true, since Netflix has always said they wanted to be device agnostic. But I've certainly been wrong before as a Netflix oracle.

baggottman4 karma

When you were told, that will never work, what process did you go through to ensure your confidence that it would work, over came that negativity?

thatwillneverwork11 karma

Over the years I've learned that (as William Goldman once said), "Nobody Knows Anything". That it's impossible to know if it's a good idea or a bad idea in advance of doing it. So although people may tell you it will never work, they really don't know. The only way to find that out is to figure out a way to try it.

I'll go even further. Not only is it impossible to tell a good idea from a bad idea in advance, there actually is No Such Thing As A Good Idea! They are all flawed. If you think you have a good idea, it just means yo haven't yet figured out what it's not.

The true skill is not coming up with good ideas, it's being clever and creative enough to figure out quick, cheap and easy ways to test all your bad ideas.

So my process for gaining confidence was simply to realize that everything I tried was going to be flawed in some way. And more importanty, I realized that not only was the world not going to end if something didn't work, but quite the opposite. This was my opportunity to learn why it didn't, and inform my judgement about the next thing to try.

Our friend Elon Musk has this attitude in spades. When one of his rockets failed to land, he simply told people, "didn't expect this one to work, but next flight has a good chance.". And last year, talking about Starship, he said, "success is just one of the possible outcomes".

baggottman3 karma

Thanks a million! Really appreciate the insight, and background. Go néirí an t-ádh leat!

thatwillneverwork3 karma

Go raibh maith agat. déanfaidh mé mo dhícheall.

JasonNBD3 karma

What was the leadup in realizing the traditional 'working 9-5 life' wasn't for you? Was it the friends you had around you? Did you gather enough savings to want to invest in a business of your own?

thatwillneverwork3 karma

I just got really lucky, in that one of my first real jobs out of college was very entrepreneurial - where I was given almost complete freedom (and responsibility) for building a business within the support of a larger org.

It made me realize that a) I loved it, and b) that i was good at it.

I never looked back.

HHS20193 karma

What is the next evolution in entertainment? If you'll allow me to provide a framework to answer that:

Dawn of man - 1930 Live theater

1930 - 1950 Black & white films in theaters

1950 - 1985 Color films in theaters

1985 - 1995 VHS becomes mainstream

1995 - 2006 DVDs become mainstream

2006 - 2018 Streaming becomes mainstream

2018 - Present Netflix faces competition from other services like Hulu, Amazon, etc.


thatwillneverwork5 karma

It's a good question, but I'll point out that evolution is rarely a smooth continuum -but instead is moment of dramatic disruption followed by long periods of accommodation. If you'll allow me to modify your chart slightly, you really have Film (1930-1985), Video (1985-2019), and Streaming (2019 - Present).

Each of those previous eras was 30-50 years long, during which the innovations were subtle (black and white to color) and (VHS to DVD).

We are at the very beginning of the streaming era. Although Netflix began streaming in 2007, I wouldn't say the streaming era really began until Disney, Prime, Apple, etc all decided that this was in fact the future of content - and that wasn't until just a few years ago.

All these companies are now focused - not on trying to out innovate each other - but instead on trying to consolidate gains over alternate forms of content delivery (like linear TV, Cable, etc) - and that will be taking place for many many years.

There certainly will be another big evolution in entertinament, but it is - I believe - to far away for me to meaningfully guess at it.

There are a lot of things that COULD happen. Certainly VR is going to be interesting. And I personaly think that Web 3.0 is going to disrupt the world in the same way that the Internet did (namely, in completely unpredictable ways).

This is all why it's important to spend less time trying to predict the future, and more time making sure you are in a good place to take advantage of it when it arrives - whatever it looks like.

[deleted]3 karma


thatwillneverwork5 karma

Although I do sign on to mentor early stage organizations, my dance card is full. Best I can do is suggest that if they (or you) are looking for my counsel, to apply to be a guest on my podcast. On each weekly episode i do a one-on-one mentoring session almost identical to what you get were you sit down with me for a few hours - or spend some time with me on the phone. If that interests you, my website (www.marcrandolph.com) has all the information on how to apply.

MagicalWhisk3 karma

What did you want to be when you were a kid? Vet? Astronaut? Manager of a blockbuster store?

thatwillneverwork2 karma

One out of 3 aint bad.

raduhs3 karma

Few questions! Also, Thanks for the AMA Marc :) When your family found out you had that kinda money, how'd you handle the random family member coming out of the woodworks that asked for a gift?

How can you tell nowadays, if someone you engage with has some ulterior motive?

What was your first big purchase after you realised you 'made it'?

What's the nicest gift you've received (nicest doesn't mean most expensive, but the one you enjoyed/appreciated the most)?

thatwillneverwork4 karma

May surprise you, but the "relatives coming out of the woodwork" genuinely hasn't been a problem. And the "ulterior motive" i bump into more often is not the "they want money" motive, it's when they ask me to be "an advisor", when in fact what they really want is just to attach my name to something.

The more fun question to answer is first big purchase: easy. It was a mountain bike. I think it cost me nearly $1,000 (gasp!). But I loved it, and sitll have it.

WrestleClaw2 karma

Do you think Netflix is heading down a good direction or a very dicey direction when it comes to how the stock market is currently? How could Netflix survive an recession?

thatwillneverwork4 karma

I'm watching this from the outside - same as you - and it puzzles me since Netflix is no different a company than it was 12 months ago. They were very transparent that the rush of subscribers they got in the early quarters of Covid was demand pulled forward (rather than completely net new subs) and that eventually things would slow. It's also not big news that other streamers are taking this seriously and will be coexisting with Netflix for the foreseeable future.

The positive aspects are unchanged as well. They still have a huge content catalogue and the money and talent to be a force in that area for a long time. And they still behave like a startup, and demonstrate a willingness to do whatever is needed in order to serve the customer.

The stock market is a strange barometer indeed.

Gundud2 karma

What was the biggest challenge in scaling up the early Netflix, and what's your takeaway from that?

thatwillneverwork2 karma

The "early Netflix" was a DVD by mail service - so the big challenge was figuring out a way to ship that many DVDs to so many people so quickly.

When we were just starting out, everything came out of a single warehouse in San Jose, CA - but that meant that the shipping times to San Francisco were very fast. Miami? Not so much.

One of the biggest breakthroughs we had during that area was figuring out a way to serve almost the entire country with one-day delivery - and do it without building a single new warehouse.

But I"m afraid you're going to have to read my book to get the more detailed description of how we did it.

productivewinks1 karma

Which is your favourite streaming service OTHER than Netflix?

thatwillneverwork3 karma

I swing back and forth. But I"m currently watching THREE shows on HBO (Barry, Minx, and Hacks). But for a while, not too long ago, I was watching a bunch of stuff on Hulu.

NoCarpet611 karma

Do you need to have a strong entrepreneurial mindset or one can just “push through” to become successful?

thatwillneverwork3 karma

I think you definitely need the entrepreneurial mindset, but that doesn't mean that anyone can't develop that.

But a big part of entrepreneurial success is "letting go" and not striving to be successful. Instead, you have to follow your curiosity.

HHS20191 karma

What's your favorite movie and TV show of all time?

thatwillneverwork3 karma

Back when I worked at Netflix, I used to tell people that my favorite movie was Pulp Fiction. It was a big enough movie that people had actually heard of it, but edgy enough that it came off as a "good choice".

Although I do love Pulp Fiction (and have watched it dozens of times) I'm now comfortable to admit that my favorite movie as actually Doc Hollywood, staring Michael J. Fox as a big city plastic surgeon stranded in a small country town when his car breaks down, and discovering the heart of small town life. It's a little corny, but it's funny and well done, but most of all . . . (and this is the most important part) . . it speaks to me.

Maybe it's because I'm in a very fast paced high pressure business, the idea of small town living and values appeals to me, but I've always loved that movie.

KnightsOfColumbus_1 karma

Thanks for doing this! I’ve heard stories that you and Hastings knew even in the DVD delivery days that content would be streamable through the internet instantly on a platform just like Netflix exists today.

Is it true that such a 15-20 year strategy was set from the conception of Netflix? What drove that early strategy and was it always in anticipation of becoming a streaming service with original content? I’m fascinated by 10-20 year growth plans especially in such quickly evolving technological times.

thatwillneverwork3 karma

I did answer this in an earlier post but it's a bit more complicated than the way you are framing it.

We definitely knew in the early days that content would be streamable and that this would be the dominant (or only) way it would be delivered at some point in the future. but although we knew it was coming, we didn't so much "plan" for it - since we had no idea what it would look like, nor when it would happen. Instead, we simply positioned ourselves to be "ready" when that transition took place.

Our strategy (if there was one) was that all the equity we built up with our customers during our DVD era, had to be equity that was still valuable when the world shifted. Thus the focus on content, rather than the delivery method we would be using to get it to you.

And in fact, i think this is the biggest competitive differentiator between Netflix and it's competitors. While Disney certainly has been creating content for much longer than Netflix, Netflix has had a direct relationship with it's content consumers for 24 years (while Disney has been intermediated by theaters, cable channels, and the other ways they had relationships with the people who consumed their content.

The advantage was that customers have though of Netflix consistantly over the last 24 years - but also that Netflix has been learning about customers for that same period.

Rumrobot1 karma

What do you think of netflix is going quantity over quality (atleast in my opinion)?

thatwillneverwork6 karma

It's an interesting question, because Netflix really HAS to do both (as does every streaming service).

They have to have quantity. With 220,000,000 subscribers, each of whom watches about 3 hours a day, they need to have 600 million hours of content available every day! It just isn't possible to have every one of those hours of content be a blockbuster movie or an award winning series. So Netflix has realized that it's fine to have a show that only 100,000 people watch, provided the cost to produce it was proportionate to it's usefulness. So although to you, it seems like some stuff is poor quality - I promise that everything there (for the most part) is being watched by somebody who wants to watch it.

Now there is another reason for content - and that is to give people a reason to choose Netflix over another streaming service. And that does require very high quality content, and I hope you agree that quite a bit of it does exist (and certainly the awards services think so).

But the point is, not all the content needs to be like that.

but thanks for the great question.

Helpful_Raspberry7151 karma

What stand-out traits made you become so successful?

thatwillneverwork7 karma

I'm not smart. 99% of my ideas are bad one.

I am persistent. Since you don't keep trying one thing after another without some degree of persistance.

But my stand out trait is probably my optimism. I'm a believer. Even when Netflix or any of my other companies were at their darkest hour, I always believed we would make it out.

But that's attitude. I do actually have three things i do which help a lot:

  • I am pre-disposed to action. I think less and I do more. Rather than working on business plans, forming committees, or any of that bullshit, I immediately jump to "how can I quickly just try this".

  • I am great at triage. I have a good intuitive sense which problems - out of the hundreds of things that may be going wrong - will be the ones that, if I fix them, will render the others meaningless.

  • I can focus. When you have a hundred things on fire, it's really. hard to say I'm going to put all my effort into the two critical ones (see above trait) and ignore all the others - even if they are the ones that are burning the hottest.

But hey . . . that's just me.

Helpful_Raspberry7151 karma

Thank you for such a detailed response. Follow up Q: When you just jump in and try something, isn’t that working “in” the organization instead of working “on” the organization like I imagine CEO’s to do? Perhaps it’s the founder piece that keeps you trying things. Do you get carried away with trying things you could have delegated?

thatwillneverwork3 karma

Well the first think you should know, is that although I think I'm a very good early stage leader, I'm a terrible late stage one. And maybe you've put your finger on why. I've always been intrigued with solving problems, breaking into new markets, and figuring out ways to do things differently. i'm good at that. But when it comes time to the higher executive functions like "find efficiencies", "bring more to the bottom line", "shorten supply chains" and stuff like that . . . I suck.