That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea

That Will Never Work bookBuckle up for the ride!! Marc Randolph, founder of Netflix, takes readers on the wild roller coaster ride of startups. It took Netflix only four years from initial launch to going public. I recently worked at a tech startup that went public within four years and it is a crazy, heart thumping, tightrope-walking journey. This book reads like a corporate thriller with heart stopping twists and challenges.

When Netflix initially launched in April 1998, after twelve months of incredibly hard work, their servers kept crashing as customers were going to their site. Cloud server companies didn’t exist at the time. Netflix employees kept running to Fry’s, an electronics store, to continually buy new desktops with only 64 megs of RAM each.

In 1998, very few DVD players existed so Netflix partnered with Sony and Toshiba to include promotional information about Netflix in each DVD player package. Initially Netflix offered the purchase and rental of DVDs. 90% of their revenue was coming from the purchase of DVDs rather than renting DVDs. Netflix tried many promotional gimmicks to try to interest customers in renting DVDs, but customer acquisition costs exceeded revenue. The breakthrough came with a subscription service.

A large part of the book is about creating company culture with a startup and Netflix’s company culture is legendary. Randolph credits Patty McCord, the first HR leader at Netflix, with being instrumental in creating their company culture as well as redefining the entire field of Human Resources. After the bubble burst, Netflix had to lay off 40% of their workforce to remain a viable company. The layoffs were handled humanely, in-person, and with compassion. Below is a link to the Netflix culture.

Netflix Culture:

Other hairpin turns throughout the book include conversations with Amazon and Blockbuster about whether they were interested in acquiring Netflix during the early years. Both companies were not interested at all. At the time of the conversation with Blockbuster, Netflix was doing $5 million in revenue and Blockbuster was close to $6 billion. We all know how that story unfolded.

Randolph credits his optimism and persistence throughout his life on not taking “No” as the final answer. There are many examples of this in his book but the best example is when he was turned down for a job very early in his career and he asked everyone in the interview process for feedback on how he could improve. He ended up getting the job.

There are many, many leadership and life lessons throughout this fabulous book, including the Randolph Rules that his father created and Marc kept near his mirror and read every morning. He has passed these down to his three children.

Highly, highly recommend That Will Never Work, particularly for those working or interested in startups, as well as those who love reading books that combine business, leadership lessons, and memoir.