Reed Hastings and Marc Randolph

Apollo 13 helped inspire the idea. Reed Hastings had forgotten to return the VHS. It was six weeks late, he owed $40, and he didn’t want to tell his wife.  

 Coming out of a successful company where he struggled with business management and challenges with acquisition integration, Hasting was determined to learn from his mistakes going into his next start-up. Hastings met Marc Randolph at his previous start-up, Pure Software. They carpooled to work – the idea for Netflix started there. They replaced the rental model to one of a single flat rate per month where customers keep discs as long as they wanted. They invested in DVDs, an online catalog queue, and a rental site. Neither knew if the company would work, but they believed it had potential and dedicated themselves to bringing a completely new way to get movies into customers’ houses.  

 “Reed and I were in downtown Santa Cruz and we were saying, ‘I wonder if we can mail these things’, Randolph said. We went in and bought a music CD and went into one of the stationery stores … and bought a greeting card and stuck the CD in the envelope and mailed it to Reed’s house. And the next day, he said, ‘It came. It’s fine.’ If there was an aha moment, that was it” 

 Netflix grew massively, but Hastings and Randolph didn’t stop there. They recognized the need to shift to streaming and entertainment production. Netflix’s reputation stems from its willingness to try new things, push limits, and adapt to changing customer preferences – an ethos that is always deliberately emphasized by Hastings and Randolph.