The rocky road from startup to colossal success.
Randolph, co-founder of Netflix, makes an engaging book debut with a candid memoir recounting the history of the company as it evolved “from dream to concept to shared reality.” After co-founding the magazine MacUser and working in direct marketing for a software giant, Randolph, eager to work for himself, had been coming up with new business concepts (e.g., personalized dog food) when he hit on the idea of renting videotapes. When his friend Reed Hastings, looking to fund a new company, expressed mild interest, Randolph gathered a dozen “brilliant, creative people” to see if the idea made sense financially. Videotapes, it turned out, were prohibitively expensive to mail, but the upcoming new technology of DVDs seemed viable. Inventing a name for the new company (NowShowing and CinemaCenter were possibilities) was the least of their problems: Only by contracting with Toshiba and Sony to offer free rentals with the purchase of a DVD player did they entice customers, but even then, sales of DVDs were stronger than rentals. For a few years, the company was “almost always on the razor’s edge between total success and total failure.” When individual rentals failed to put the company on secure footing, Randolph and his team came up with the idea of a monthly subscription service with no late fees, a move that proved popular. Yet even with 200,000 subscribers, Netflix still lost money and was forced to trim its staff; the layoffs, writes the author, were painful. Besides internal changes, the company looked for alliances with more successful enterprises, but a deal with Amazon (it would sell DVDs and steer customers to Netflix for rentals) collapsed and a hopeful bid for Blockbuster to buy Netflix fizzled. Elevating Hastings to CEO helped to lure investors, and after “years of work, thousands of hours of brainstorms, dire finances, and an impatient CEO,” Netflix went public in 2002. Now with 150 million subscribers, Netflix has morphed into a media behemoth.
An entertaining chronicle of creativity, luck, and unflagging perseverance.