Long before binge-watching became the norm and “Stranger Things” captivated audiences with its penchant for nostalgia and the super-natural, there was Marc Randolph and Netflix just flexing its wings.
Randolph, the first CEO and co-founder of the streaming giant, was at the company years ahead of “Netflix and chill” becoming part of the vernacular, “House of Cards” even being an idea and way before Netflix dipped its toes into digital streaming. Netflix was a baby and Randolph was calling the shots with Reed Hastings, Netflix’s current CEO, bouncing ideas via Silicon Valley carpools and even turning down Jeff Bezos’ offer to acquire Netflix at its earliest stages.
That move paid off. Today, Netflix provides content to more than 151 million subscribers worldwide with original production from movies to hit TV series’. It’s become a staple in entertainment culture and the grandfather of the streaming wars as other networks and companies try to compete. Before all that, Randolph and Hastings were navigating through trenches around Blockbuster to find a way to make an idea work, first with DVD rentals that slipped in your mailbox before Netflix became what it is today.
But predicting what Netflix would become was still up in the air nearly two decades ago, when Randolph was the company’s CEO.
“We couldn’t say we were a streaming company because there was no content and there’s no bandwidth,” Randolph, 38, told Ladders recently. “We knew it was going to be streaming or downloading, [but] we didn’t know quite frankly which it’d end up being. But we knew that day would come when we were in that business, not in this plastic shipping business.”
Randolph, 61, has long been at peace with his decision to leave Netflix in 2002. In his new memoir, “That Will Never Work,” which was released in October, Randolph said he decided to wait years before writing anything because he wanted distance and to be able to put the first years of Netflix into perspective. He debated writing a how-to book for entrepreneurs but instead penned 200-plus pages inside the early years of Netflix leading to the company’s IPO in 2002 to anecdotes about when Hastings replaced Randolph as the CEO in 1999.
Randolph joked it’s best consumed via “binge-reading” with tips and tricks to help navigate entrepreneurs today through his ups and downs at Netflix and in his career elsewhere.
“The most valuable thing you learn is what does success really mean?” he said about being a CEO. “Why are we really doing this? Is it more important I be the CEO or be a famous person, or is it more important to make this company successful for everybody else who’s made this dream.”
In “That Will Never Work,” Randolph explains the moment Hastings popped his head into the office one night to lay out the future of Netflix — one in which didn’t include Randolph as CEO because as Netflix was growing, it had outgrown Randolph’s skill-set.
“My dream was to be the CEO of a successful company. I started to realize this dream, especially for a successful company, wasn’t just my dream anymore,” he said. “It was shared by my employees. It was shared by my investors. Was I suppose to chance my own dream at their own expense?”
Randolph admitted that he was a startup type, a CEO who thrives in the early stages but soon learned his skill set didn’t necessarily fit a company about to make the jump. He called his decision to step back as “one of the best decisions” he’s ever made because it allowed Netflix soon to enter its renaissance stage.
The next big thing
With Netflix behind him, Randolph has started to listen and is now mentoring other entrepreneurs thinking they have the next best idea. He’s noticed a few things wrong with today’s wannabe entrepreneurs.
“It’s been glorified,” Randolph explained about people starting their own company. “People think this is a path to being wealthy or this is a path to being famous, that they’re going to spend their days pitching or being on “Shark Tank”. It’s not that and if you expect to start a company because you’re going to be wealthy, you’re going to be sorely disappointed because it’s extremely unusual.
“You have to do this because you love solving problems. You love coming into something no one ever has done before and figuring it out. You’ve got to learn sitting around that table with really smart people solving really interesting challenges and then going out with those people and enjoying their company. That’s what you’re going to be doing every day.”
Some advice he gives up-and-coming entrepreneurs is entrepreneurs have to practice what they preach. He’s seen too many people claiming to have great ideas but find excuses to not jump-start their projects (“The single biggest failure is the failure to get started”). But for those already with their toes in a project, he warned the biggest fundamental problem is a lack of focus.
“Any time you’re spending thinking about things that are going to happen after your successful is completely wasted,” Randolph said. “You should be spending 100% of your time right now on what it would take to get that point. That requires a really disciplined focus and more importantly requires walking away from things that aren’t working and going on to the next thing.”