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The Netrepreneur: The Early Years of Netflix’s Reed Hastings

He used to teach mathematics in Swaziland as an American Peace Corps volunteer. So, when 48 year old Reed Hastings decided to found his own software company, some eyebrows were raised. But Hastings would prove the disbelievers wrong with the subsequent founding of Netflix, the largest movie-rental service via mail in the U.S. With over 10 million subscribers and sales in the billions, Hastings proved he was able to go from living in Africa, to living in affluence.

Bringing Flicks to the Future: Netflix is Launched

In 1991, Hastings quit his job with Adaptive Technology and set up his own company called Pure Software. It was dedicated to developing troubleshooting products for software. But, as the company grew, Hastings found that his mathematics and computer background was not match enough for running a business. Indeed, he asked his company’s own board of directors to replace him for the good of the company.

Lesson #1: “Don’t be afraid to change the model”

“I got the idea for Netflix after my company was acquired,” says Hastings. “I had a big late fee for ‘Apollo 13.’ It was six weeks late and I owed the video store $40. I had misplaced the cassette. It was all my fault.”

Lesson #2: “Be big and fast and flexible”

“We named the company Netflix, not DVDs by Mail because we knew that eventually we would deliver movies directly over the Internet,” says Hastings. “DVDs will be around a long time, but we’re building for the day when they’re not.”

Lesson #3: “Never underestimate the competition”

Netflix has grown to become the largest movie rental by mail service in the U.S., but its path to success has not been without its hiccups. Indeed, Hastings admits that one of his biggest mistakes came in underestimating the capacity, and strategy of his competition.

Lesson #4: “There are no shortcuts”

“Occasionally great wealth is created in a short amount of time, but it’s through a lot of luck in those situations,” says Hastings. “You just have to think of building an organization as a lot of work. It may or may not turn into great wealth.”

Lesson #5: “Our model is to increase employee freedom as we grow rather than limit it”

“Imagine if every person [you worked with] is someone you respect and learn from,” says Hastings. “In creative work, the best are ten times better than the average.”

Movies by Mail: How Netflix Netted Billions

Netflix is one of the most closely watched home entertainment companies around. Why? The reason lies not only in its current success, but in Hastings’ intent to continue to roll out many of the latest technologies, including Blu-ray and video-streaming into the company’s services. But how did this once-math teacher in rural Africa create a billion-dollar business that has become a household name?

Reed Hastings Quotes

Reed Hastings Quotes

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