Lessons - How to Navigate Big Decision | Mark Randolph, Co-Founder of Netflix

Welcome to the lessons episodes of Success Story. These lessons episodes will be shorter clips from past guests, accomplished value community members, and myself. In each short episode, we'll feature concise and insightful actionable conversations and tactics, providing you with real-world strategies and tips to help you achieve your personal and professional goals. If you're seeking a no-nonsense approach to growth and progress, you've come to the right spot. Settle in, take notes, and enjoy. Today, you're going to hear from Mark Randolph, co-founder of Netflix. He's going to walk you through one of the most pivotal moments in Netflix history and how he led through a decision he made that cut revenue in half in the short term to 10X revenue in the future and the psychological and cultural impact that had on the team and the lessons that he learned as a leader going through that process. It's terrifying. I mean, you all of a sudden go from having a certain revenue level down to 5% of that revenue level level, and part of your role as a leader is to be able to communicate with clarity and confidence, we're going this way, and here's why. Even if, in fact, in some cases, you're not quite clear of that confidence internally that this is the right path, but it's also because in a startup, when you begin building that team, in my opinion, you're less interested in finding people with deep specific task expertise. You're surrounding yourself with people who have the right mindset to be in a startup who are totally comfortable with the idea that you're going to be constantly trying things and when they demonstrate they're not working, you're going to walk away from them, that you're going to come into work each day, maybe doing something that will be different than the previous day. So this wasn't like the challenges that a lot of big companies face when they have to pivot like this. That is brutal. This was, I won't say it's easy, but I think a lot of people can be shown that fundamentally our future is in that case rental, and that even though the sales is, quote unquote, working, can't you see how it's getting in the way of us fundamentally doing the right thing? And it's not like everyone just all of a sudden goes, okay, and off you go, there's a lot of people, of course, who are invested in certain ways of doing it. It takes the while to come around, but this is not, it's a courage thing, more than anything. It's recognizing that you're willing to walk away from something which is quote unquote successful because you see that no, the future is somewhere else. And Netflix has done that over and over again. It seems to be, again, this culture that is ingrained in Netflix is what has led to their success, and part of it is the ability to make these decisions, the candor, the transparency, all this stuff is what, obviously, look at the end result. It's the story tells itself, but these are the lessons that entrepreneurs have to internalize when they're starting their own thing. And these are things that get the build into the company from day one. It is that, you know, this is, culture is so, it's so critical because you, you can do it when there's, you know, I think when we did that, walking away from selling DVDs, you know, what were we, 30 people, 40 people? That's reasonably straightforward, but when it's 400 people or 4,000 people, it's a, it's a very, very different story. And unless you have this cultural sense that that's the way to approach problems, it's really, really hard. And I think that's what gets big companies in trouble, which is that you all of a sudden become successful. You all of a sudden find your repeatable, scalable business model. And you realize, wow, I can actually see pretty far into the future. I can see that it's going to go up and up and up and up. And then you say, well, let's begin. Maybe we should begin trying to shorten our supply chains. Maybe we should try and shave some margin points. Maybe we should become more efficient. And there is very specialized people who are phenomenally good at that, who are experts in these certain functions. And the people who are generalists who are just not super talented in a specific task, leave and are replaced by specialists. But then the world changes, and those specialists are not the right people who are comfortable coming to work the next day doing something completely different. And you get locked in. It's a very, very dangerous situation. And the culture I think that Netflix built was in some ways based on this realization, which was we never wanted that to happen. We wanted to never lose that flexibility, that experimentation, that risk taking of a startup, no matter how big the company got. And I think to some degree, they've been very successful at that. It's a big piece of their success.