With more than 60 million subscribers, Netflix is the most popular streaming service in the world today. As its CEO and co-founder, Reed Hastings has been instrumental in the company’s successful disruption of the linear TV model.
Netflix is so popular that it now accounts for 37 percent of all internet traffic from 9:00 pm to midnight in North America. It should come as no surprise that CEO Reed Hastings is worth $1.39 billion.
But oddly enough, he never saw himself as an entrepreneur when he was younger. He saw himself as many other things — a marine, a Peace Corps volunteer, a teacher in Swaziland, even a developer of artificial intelligence — all of which he did. Yet Reed managed to grow the 1997 DVD delivery rental company into the $32.9 billion giant it is today.
Here are the 6 success lessons from Reed Hastings – “Netflix Founder and CEO” for entrepreneurs,
1. When you screw up big, make an equally big apology and move on strategically
Hastings told the New York Times, “I realized if our business is about making people happy, which it is, then I had made a big mistake”. He was referring to the thousands of emails received from furious and disappointed customers who were upset over price increases.
2. Turn a “no” into a new revenue stream that keeps on giving
When Netflix couldn’t come to agreement with the studios to license online content on terms agreeable by all, it got into the content business (a.k.a. “backward integration”). Original content has contributed to a new subscriber count of more than 40 million.
3. Spend your time on tomorrow, not today
“The percentage of our time we spend on DVD by mail [still Netflix’s biggest revenue source by far]is tiny. We’re entirely focused on streaming.” Most newspaper companies’ organization and usage of staff time is focused on print. That means it is facing today, if not yesterday. Expend as few resources on the current operating model as possible, says Hastings, and run to the future. Put your best minds there — and most of your company. “We knew that the DVD business was temporary when we founded the company. That’s why we named it Netflix and not DVD by mail. We wanted to become Netflix.” Whatever the brand name, aspire to what and who you want to become.
4. Culture counts
Hastings talked at some length about the culture he’s built at Netflix. He talked about working in a place with people you want to work with and people who value excellence, chords that should send a shiver down the spines of too many news publishers. “If there is a God we worship, it is the god of excellence.”
5. Keeping it simple
The battle-tested KISS principle holds a ton of power at the Netflix headquarters. The company is ripping a cherished page out of the Apple playbook. Netflix won’t try to do everything for everybody, with potentially mediocre results. Instead, Hastings chooses to focus on doing a few things very well. The strategy has worked wonders for Apple over the past 15 years, and Netflix is following the same path more strictly than you might think.
6. Maintains a work-life balance
Marissa Mayer gives herself a week-long vacation every four months. Hastings doubles that. Taking six weeks of vacation a year, he makes a concerted effort to get away for from work for the sake of his physical and mental health. In fact, he thinks that taking breaks makes him better at work.
This isn’t one man’s wishful thinking. Psychologists are strong proponents of taking more vacation time, citing its benefits to productivity in the workplace.