Reed Hastings knows what it’s like to build a small business into a huge success. In fact, he’s done it more than once. His first startup was Pure Software, which produced products that detected bugs in Unix software. The company grew rapidly and went public in 1995. Pure was later acquired by Rational Software and Hastings left shortly afterward.
The idea for his next startup came when he misplaced a movie rental from Blockbuster and ended up with a $40 late fee. He realized that his gym had a better business model—pay a monthly fee and work out as much or as little as you want. And Netflix was born.
But the first iteration of the company—rental by mail with no late fees—wasn’t a great success. It wasn’t until Hastings changed the model to a subscription service that the business really began to grow. More recently, Hastings again shifted the model to add content delivery over the Internet. In addition to running Netflix, he has served as a board member for both Microsoft and Facebook.
Mr. Hastings has spoken often about technology and education reform as well as about the future of Netflix. And he’s said a few things that might inspire other entrepreneurs and small business owners, like these:
“…as an entrepreneur you have to feel like you can jump out of an aeroplane because you’re confident that you’ll catch a bird flying by. It’s an act of stupidity, and most entrepreneurs go splat because the bird doesn’t come by, but a few times it does.”
“Truly brilliant marketing happens when you take something most people think of as a weakness and reposition it so people think of it as a strength.”
“Most entrepreneurial ideas will sound crazy, stupid and uneconomic, and then they’ll turn out to be right.”
“Don’t be afraid to change the model.”
“With failures, you learn one of 99 things to avoid. So they are not that useful. I think it is more useful to learn from others’ failures.”
“At Netflix, we think you have to build a sense of responsibility where people care about the enterprise. Hard work, like long hours at the office, doesn’t matter as much to us. We care about great work.”
“Guessing right is a skill developed over time. Not all smart risks work out, but many of them do.”
“Responsible people thrive on freedom and are worthy of freedom. [They are] self-motivating, [pick] up the trash lying on the floor, [and behave] like an owner… Our model is to increase employee freedom as we grow rather than limit it.”
“Occasionally great wealth is created in a short amount of time, but it’s through a lot of luck in those situations. You just have to think of building an organization as a lot of work. It may or may not turn into great wealth.”
“When there’s an ache, you want to be like aspirin, not vitamins. Aspirin solves a very particular problem someone has, whereas vitamins are a general ‘nice to have’ market.”
—Reed Hastings, Founder and CEO, Netflix