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The Story Of Netflix, From One Of Its Co-Founders

Packages of DVDs await shipment at the headquarters January 29, 2002 in San Jose, Calif. (Justin Sullivan/Getty Images)
Packages of DVDs await shipment at the headquarters January 29, 2002 in San Jose, Calif. (Justin Sullivan/Getty Images)

Here’s an idea that will never work: replace brick-and-mortar video stores with DVDs in the mail. Well, it worked. We talk with Netflix co-founder Marc Randolph.


Marc Randolph, co-founder of Netflix. Author of “That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea.” (@mbrandolph)

From The Reading List

Excerpt from “That Will Never Work” by Marc Randolph

There’s a popular story about Netflix that says the idea came to Reed after he’d rung up a $40 late fee on Apollo 13 at Blockbuster. He thought, What if there were no late fees? And BOOM! The idea for Netflix was born.

That story is beautiful. It’s useful. It is, as we say in marketing, emotionally true.

But as you’ll see in this book, it’s not the whole story. Yes, there was an overdue copy of Apollo 13 involved, but the idea for Netflix had nothing to do with late fees—in fact, at the beginning, we even charged them. More importantly, the idea for Netflix didn’t appear in a moment of divine inspiration—it didn’t come to us in a flash, perfect and useful and obviously right.

Epiphanies are rare. And when they appear in origin stories, they’re often oversimplified or just plain false. We like these tales because they align with a romantic idea about inspiration and genius. We want our Isaac Newtons to be sitting under the apple tree when the apple falls. We want Archimedes in his bathtub.

But the truth is usually more complicated than that.

The truth is that for every good idea, there are a thousand bad ones.

And sometimes it can be hard to tell the difference.

Customized sporting goods. Personalized surfboards. Dog food individually formulated for your dog. These were all ideas I pitched to Reed. Ideas I spent hours working on. Ideas I thought were better than the idea that eventually—after months of research, hundreds of hours of discussion, and marathon meetings in a family restaurant—became Netflix.

I had no idea what would work and what wouldn’t. In 1997, all I knew was that I wanted to start my own company, and that I wanted it to involve selling things on the internet. That was it.

It seems absurd that one of the largest media companies in the world could come from those two desires. But it did.

This is a story about how we went from personalized shampoo to Netflix. But it’s also a story about the amazing life of an idea: from dream to concept to shared reality. And about how the things we learned on that journey—which took us from two guys throwing ideas around in a car, to a dozen people at computers in a former bank, to hundreds of employees watching our company’s letters scroll across a stock ticker—changed our lives.

Excerpted from THAT WILL NEVER WORK Copyright © 2019 by Marc Randolph. Used with permission of Little, Brown and Company, New York. All rights reserved.

New York Times: “Long Before ‘Netflix and Chill,’ He Was the Netflix C.E.O.” — “Long before binge-watching, the streaming wars and ‘Netflix and chill,’ there were two guys barreling down Highway 17 — the California roadway that connects Santa Cruz to Silicon Valley — trying to come up with the next big thing.

“One was Marc Randolph, an entrepreneur and marketing specialist who had co-founded a start-up, Integrity QA. The other was Reed Hastings, then the head of the software company Pure Atria.

“It was 1997. Mr. Randolph, whose start-up had been acquired by Pure Atria, did most of the pitching. Customized dog food, customized baseball bats, customized shampoo — all sold over the internet and delivered by mail.

“Mr. Hastings was the one with the cash and the ability to shoot down ideas without worrying about hurt feelings.”

Wall Street Journal: “‘That Will Never Work’ Review: Streaming Ahead” — “Starting a business is tough enough. Why would any sane person choose to start a business in a dying industry?

“One answer to that question can be found in ‘That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea,’ a charming first-person account of the early days of one of the most successful tech startups ever. The author, Marc Randolph, co-founded Netflix and helped run the company from its inception in 1997 until 2003. His book is a conversational exploration of the successes and missteps of those early days. Anyone looking for dirt about the media industry or Netflix’s better-known co-founder—current chief executive Reed Hastings —won’t find it here. The book instead offers an engaging read that will engross any would-be entrepreneur.

“The well-aired story that Mr. Hastings started Netflix after facing a steep late fee for an overdue rental of ‘Apollo 13,’ it seems, is apocryphal. ‘The idea for Netflix didn’t appear in a moment of divine inspiration,’ Mr. Randolph writes. Rather it emerged from a search for a next act. In early 1997, Messrs. Randolph and Hastings had worked together at Pure Atria, a Silicon Valley software company run by Mr. Hastings, who at the time was completing a merger that was about to make both of them redundant.”

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