The Blurb On The Back:
The incredible untold story of how Netflix went from concept to company – all revealed by co-founder and first CEO Marc Randolph.
Once upon a time, brick-and-mortar video stores were king. Late fees were ubiquitous, video-streaming unheard of, and widespread DVD adoption seemed about as imminent as flying cars. Indeed, these were the widely accepted laws of the land in 1997, when Marc Randolph had an idea. It was a simple thought – leveraging the internet to rent movies. With Reed Hastings as the primary investor and Randolph as the CEO, together they founded Netflix.
Now with over 150 million subscribers, Netflix’s triumph feels inevitable, but the twenty-first century’s most disruptive startup began with few believers and calamity at every turn. Marc Randolph’s transformational journey exemplifies how anyone with grit, gut instincts and determination can change the world – even with an idea that many think will never work.
Full of counterintuitive concepts and written in binge-worthy prose, Marc answers some of our most fundamental questions about taking that leap of faith in business or in life: how do you begin? How do you weather disappointment and failure? How do you deal with success? What even is success?
From idea generation to team building to knowing when it’s time to let go, That Will Never Work is not only the ultimate follow-your-dreams parable, but also one of the most dramatic and insightful entrepreneurial stories of our time.
The Review (Cut For Spoilers):
Marc Randolph is a Silicon Valley entrepreneur, advisor and investor best known for co-founding Netflix with Reed Hastings. More business history than memoir this is an engaging, self-deprecating read about Netflix’s origins and how it weathered common start-up issues and the dot-com bust of 2001 but Randolph left before Netflix moved into streaming and content business or battled Blockbuster, so the book stops before the real story gets started.
I’m going to start this review by admitting that I am a very late technology adopter, and didn’t get a Netflix subscription until earlier this year (I was literally the last person I knew to get a subscription and took a large amount of flack and laughter for being so behind the curve). Obviously, I was familiar with the company though, having tracked newspaper and magazine articles on the company and I’d listened to a number of podcasts about its rise, including its battle with Blockbuster, which I found fascinating. However, in everything I’d read about Netflix, Randolph’s name was something of a footnote at best with all the attention being on Reed Hastings (the current CEO who has been in post since 1999) so I hadn’t realised that Randolph had actually co-founded the business and been its first CEO and was interested in reading his story.
The book is billed as part-memoir and part business history but while Randolph does delve into his personal background and family (he counts Sigmund Freud in his family tree) and talks a little about the impact of running a start up on his wife and family and, more movingly, about his relationship with his father who died shortly before Netflix became big, the real meat here is about how Netflix got started and there is a lot of interest here. For example, he’s honest about how the story Hastings tells about the late fee from Blockbuster having offered the idea for the company is something of a fabrication as in reality, Randolph and Reed had been thinking about business ideas after working together at Pure Atria and spitballing suggestions on their drive to the office. Randolph is also honest about the strains of running a start-up, including the financial stresses it put on his family and about how he and his wife sometimes fantasised about retreating to a small town in Montana.
However, while Randolph is open about disagreements with Hastings – most seriously in 1999 when Hastings persuaded him that he needed to step aside as CEO to allow Hastings, and then threw in that he also wanted to dilute Randolph’s shareholding – I couldn’t help but think that Randolph holds back too much. This makes sense because he still works in Silicon Valley and he has to mingle with these people so it’s not good politics to be too honest, but at the same time I had difficulty believing that he was really able to come to terms with the eventual agreement he made with Hastings, just as it’s noticeable how he doesn’t address how he feels about the success of the company since he left or whether he has any regrets about what happened because while he sold out when he could and it was always his plan, you wouldn’t be human if you didn’t admit to a ‘what it’ given everything that’s happened since.
Randolph claims the credit for Netflix’s company culture and how it treats employees and it was interesting to get his views on how employees need to be treated as adults rather than as children who need to be controlled and monitored. Equally though, there’s a tension between Randolph’s emphasis on how employees are trusted to get the work done with their ability to manage their private lives, which is demonstrated by an exchange he recounts with an engineer who wanted to part work in San Diego to be with his girlfriend. Randolph is at pains to say that he left the decision to the engineer but from his own account of the exchange it’s clear he didn’t think the engineer could perform satisfactorily on that basis and at no point does Randolph consider whether that expectation is what led the employee to split with his girlfriend rather than lose his job.
Another blindspot for Randolph is the make-up of the company. He describes the tech world as “about as close to a true meritocracy as you can get” but it’s noticeable how all the engineers he talks about seem to be men while the women work in marketing and HR and he talks fondly of a game called Coins in a Fountain that the men used to play using the urinals, which sounds horrifying. Basically, Randolph appears blind to the bro-culture and how it self-replicates and can be alienating and hostile, which is a shame. Given the revelations that have come out about Silicon Valley companies and the blindspots of tech, this book would have given him an opportunity to add his own thoughts but instead he misses it completely and the fact that he does, says an awful lot about his own privilege.
The make-up of the company and the way he cites the loyalty of the employees also comes across as a one-way street. He talks about the redundancies that followed the dot-com crash as Netflix had to rein in its costs as access to venture capital tried up and a planned IPO was aborted, which included people who had been with the company since the start. It’s noticeable how little he talks about regrets about this and one feature of the book that did fascinate me was how he mentions taking people from well-paid jobs into these start-ups on lower salaries and then dumping them when it doesn’t work out or the company doesn’t need them. I know it’s business but there’s something incredibly cold about it and while you can argue that it’s the bargain people make as they’re trading off the chance to become millionaires with stock options if there’s a successful IPO, it is still disquieting to see people dumped so casually, even if Randolph is still in touch with some of them and used them as contacts for the book.
Randolph is a good communicator (which you’d expect from someone who has his marketing background) and the book is clearly written and has an easy, self-deprecating style that keeps it engaging. I enjoyed the way he broke down the various issues the company encountered from logistics on posting to how to pick films and what does come through is how integral customer data was to its operating model from the very start (indeed, it’s quite frightening how much data the company was picking up on customers from the beginning and what they were using it for). I particularly liked reading about the move into DVDs where Netflix was first mover and basically helped develop the DVD market and having had experience with Japanese electronics manufacturers myself, I had a wry grin as Randolph recounted his experienced with dealing with Japanese manufacturers and the many, many layers of management and decision-making.
Misgivings aside, this is a genuinely enjoyable and informative read that tells you a lot about the internet start-up environment of the late 90s/early noughties. The biggest problem with it is that Randolph left before the company made the move from DVDs into streaming and before the real battle with Blockbuster took off (although Randolph does recount an early meeting where Netflix was hoping Blockbuster would buy them out, only to be laughed out on their suggested price). As such, you get a sense of the acorn but not the tree and, again, I would have liked Randolph’s more in-depth thoughts on what Hastings has done and where he’s going. That said, Randolph does come across as a man who can walk away and he does have sensible advice for people looking at getting into start-ups and running their own business. As such, whether you’re interested in tech, or you’re interested in start-ups you’ll find something of interest in this book to make it worth your time.
Thanks to the Amazon Vine Programme for the review copy of this book.