Netflix co-founder Mark Randolph on the streamer’s origin story

Adam Sandler’s new basketball movie Fussin which he plays a scout trying to counter the system to bring a prodigy from overseas to the US, is currently the most watched English-language film on Netflix — thanks in part to a staggering 84.5 million hours watched. on the platform in just the last week, according to the latest global Netflix Top 10 data.

If you go down to the individual account level, you’ll find that one of the many Netflix accounts that have watched the movie in recent days belongs to Mark Randolph, the man who co-founded the streaming service along with its current co-CEO Reed Hastings. .

When Randolph told me a few days ago that Fuss was the last movie he saw (and loved) on the platform, it wasn’t hard to imagine why a businessman would like this movie. Not to mention the guy who, along with Hastings, first conceived the strange idea of ​​what would become Netflix while commuting to work with Hastings every day in 1997.

It will never work

Randolph wrote a book about his role in the Netflix origin story, a paperback version of which was released just this month. Name, It will never work, opines that Randolph, sitting in the passenger seat of Hastings’ Toyota Avalon during their car ride together, will hear Hastings respond to his ideas. Again and again.

Individual shampoo. Dog food to order. Order vitamins by mail. No, no and NO. That’s why it will never work.

Like Stanley Sugerman, Sandler’s draft scout for the Philadelphia 76ers in FussRandolph was eager to try something new and bold. “Reed was just sitting there looking out the window like he didn’t hear me,” the 64-year-old serial entrepreneur told me, recounting how he laid out the presentation sequence for Hastings. “But I knew that his thoughts were spinning at about 100 miles per hour. Working on every idea.

Office Netflix
The exterior of the Netflix office building, with the large Netflix logo at the top. Image Source: FG/

If you can say that Netflix had a start, it was right here, during the loose talk between Randolph and Hastings. As they talked, they traveled down Highway 17—they had time, and nothing but the California sun and stream dominance ahead.

“Ok Reed, I have one for you”

The two men were in this position in the first place in this car at that moment in 1997, because in fact both of them were on the verge of losing their jobs.

At the time, they both worked for Hastings’ software company Pure Atria. He was sold to a larger company, and as a result, Hastings and Randolph, as Randolph euphemistically put it, were on the verge of being “fired.” Randolph, for his part, reacted as he always did: moving from one company meant it was time to launch another. “Reid wanted to keep his hand in the game and he said, ‘How about this – I’ll be your business angel investor.’ And I said great. He invested. I would start and run a company.

“We just needed an idea.”

close-up of a man with a goatee
Netflix co-CEO Reed Hastings. Image Source: KCS Presse/MEGA

Among the flops was when Randolph offered the winner, a video-by-mail rental, to a future Netflix executive. Hastings, too, regarded this with disdain. At that time, films were still sold on VHS cassettes. Too big, bulky and expensive to mail to customers.

The idea was shelved.

Until Hastings later found out about a new video format for the time called DVD. It was thin and seemed inexpensive to ship, like a CD. But won’t it crack or break in the mail? When he told Randolph about this format, during one of their many car trips, they decided to stop and turn the car around halfway. They wanted to test the idea right here and now.

Eureka Moment Netflix

“We tried to buy a DVD, but there was nothing,” Randolph told me. “At least not in Santa Cruz, California.

“So we decided to buy a used music CD. And then we went through a few doors and bought a little pink gift envelope. It’s like sending a greeting card in the mail. They put the CD in an envelope, addressed it to Reed’s house. The next morning when he picked me up, he had a small intact CD in a small envelope that reached his house in less than a day for the price of a stamp.”

It was a eureka moment. DVD by mail, video streaming, original shows and movies such as very strange things as well as Fuss — it all started on a summer day in 1997. When Hastings and Randolph walked out of Logos Books and Records on Pacific Avenue in Santa Cruz having just bought a used Patsy Cline greatest hits CD.

When he showed up in the mail safe and sound at the Hastings house, that was all they needed to convince them that the idea of ​​mail-order DVD rentals made sense.

Everyone knows what happened next. Meanwhile, Randolph left the company in 2003. He is most interested in the early days of a company’s life cycle, rather than managing a more mature company. This is what his current podcast is, It will never workis also focused on helping its guests to think and solve actual business problems.

Netflix founders

Having said that, Randolph drew some lessons from Netflix’s launch and early days that are instructive about what’s going on at the company now. And where can it go next.

First, Randolph told me, “I’ve learned that success is proportional to how many ideas you try.”

In a roundabout way, there is some connection to Netflix’s strike this year. The latter, of course, manifested itself in everything from a 70 percent drop in the company’s share price to the expectation that Netflix could report a loss of as many as 2 million subscribers when it releases quarterly earnings again in July.

Netflix has been so successful in the streaming game for so long that it has invited anyone to try it out. Some particularly wealthy contenders, such as Disney, Apple, and HBO, are slowly losing their dominance. To the point that Netflix has abandoned some of its long-standing pillars of its user experience that were once considered inviolable.

For example, the “eat it all at once” model is no longer sacrosanct. Many of his shows are now weekly. Advertising also comes to the platform. Netflix even offers a brand new content format – mobile video games available at no additional charge.

Reed Hastings: “Extremely Courageous”

Don’t count Randolph as one of Netflix’s bears, though. One of the key features of Hastings, which he told me about, “is that (Reed) is able to make extremely difficult decisions in a very impartial manner. He is always focused on the right decision, without getting bogged down in all sorts of secondary considerations.

“And that translates into courage. Reid is an incredibly brave man.”

Indeed, this is the same version of Hastings that, if the past is a prologue, is sure to get Netflix out of its current malaise. In fact, the same Hastings who foresaw the need to shift the company’s focus from DVD to online streaming. And from there to the original content. The same Hastings who correctly identified the technological DVD format that would have made the company possible in the first place. And who wrote, in the foreword to Hamilton Helmer’s 2016 book 7 powers: basics of business strategy:

“Strategy is an unusual beast. Most of my time, and that of everyone else at Netflix, should be dedicated to delivering superior results. Fail at this and you are bound to stumble. Unfortunately, this performance alone does not guarantee success. If you don’t choose the right strategy, you are at risk.”

More Netflix reach: For more Netflix news, check out the latest new Netflix movies and series worth watching.

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