Former Netflix CEO: “They're Lying To You About Hard Work!” Building a $278 Billion Company Wasn’t Built On Hard Work!

Marc Randolph (0:00)

We were in deep trouble at Netflix. We had losses of about $50 million. We have got to sell this sucker fast.

SPEAKER_2 (0:07)

Marc Randolph is an American tech entrepreneur, the co-founder and first CEO of Netflix. With a career panning numerous startups and ventures, Marc's expertise in innovation, leadership, and business strategy is unparalleled.

Steven Bartlett (0:19)

August 1997, Netflix was founded.

Marc Randolph (0:21)

Yes, and the reality is the idea was ridiculous. It didn't work. Nobody would rent DVDs by mail. But with over 40 years of being an entrepreneur, I've learned every idea is bad. We just don't know why they're bad yet. The important thing is how clever can you be to come up with a quick and cheap way to test it? For example, we thought, let's just have a subscription and no late fees. It was a ridiculous idea. But when we tested it, people loved it.

Steven Bartlett (0:47)

The Netflix DVD service has changed the world. You explored selling Netflix to Amazon two years after you had launched.

Marc Randolph (0:54)

For probably 10 to 15 million dollars. That's not a bad return for 12 to 18 months work. But I thought it was much more interesting to take the shot and see what Netflix could become. But all of a sudden in a matter of a week or two, in spring of 2000, we were going to go broke being successful. We tried going to Blockbuster for months, but they weren't going to save us. They were going to compete with us. Netflix wouldn't have survived. But there's a story which has not really been told, which took one of Netflix's biggest impediments and turned it into one of its biggest assets. So...

Steven Bartlett (1:35)

Marc, in this season of your life, if you could consolidate your mission and the work that you're doing across the content you produce, the people you speak to, your professional endeavours, if you could consolidate that into a singular, focused mission, what exactly would that mission be in this season of your life?

Marc Randolph (1:55)

For me, at this point in my life, it's all about mentorship. You know, I've done seven startups. I kind of recognized quite a while ago, I do not have the appetite to do another one. It's that seven by 24 focus that I don't want to do anymore. I have other things that I would love to have spending time on, but you can't turn it off. I've also realised that over 40 years of being an entrepreneur, I've learned a few things about how to actually play this game. And so my mission now is how do I pay that forward? How do I help other people either have a shot at it, like I did, or if they're already playing the game, how do I try and increase their odds of success?

Steven Bartlett (2:43)

You wrote this book called That Will Never Work. Why? Books are painful and hard to write. What is it that you want someone who gets to the end of this book to walk away with?

Marc Randolph (2:53)

I've come to believe that almost all of the information that people receive from the general media about entrepreneurship is wrong. It glorifies entrepreneurship in what I think is a damaging way. You watch these movies that are about entrepreneurship and it's all about driving around in the fast cars and having the parties and that's not it. It's a very lonely profession. In a simple answer, the reason I wrote the book is I wanted to give people a true story of what it really means to come up with a crazy idea that everyone thinks is never going to work and the struggle to make it real. If someone reads that book and gets to the end and goes, this sounds great, then that's exactly the right person who should be an entrepreneur.

If someone goes, this sounds a lot harder than I expected, well, then I've done a service in that way as well, which I've kept someone from getting into this for all the wrong reasons.

Steven Bartlett (3:57)

When you look back on your journey to Netflix, I remember hearing Steve Jobs speak about the decisions he made in hindsight that when he reflects on his life resulted in him starting Apple and the decisions he made with an Apple. So obviously, things he's famous for saying is that he went to a typography class. He dropped in and he started learning about design and typography and that shaped him. What are those early sort of experiences that in hindsight fed into the creation of Netflix?

Marc Randolph (4:29)

Probably the meta thing was the fact that most of these endeavors were entrepreneurial. So for example, initially, my first foray into direct response marketing was when I asked if I could run the mail order division of this sheet music company that I was working for. And so what it meant to run the mail order division was every day you got the mail and if you found someone's asking for a list of great songbooks, you'd make a copy and you'd mail it out. And then if an order came in, you'd go to the warehouse and pick, pack and ship it. And that spoke to me and I began experimenting and said, okay, now what happens if I do two pages or do it in color? What happens if I mail it out? And I built this mail order division into a real mail order company. So it was this combination of direct response, but more importantly, it was building something. It was creating a company inside a company. So there are certainly those preparations. From the direct response side, hugely formative for at least Netflix. Because if you think about it, what direct response marketing is about is all about testing. It's all about analytics.