Getting the right idea at the right time can be a game changer
In early 2000, Netflix founders Mark Randolph and Reed Hastings sat nervously in a conference room at Blockbuster’s headquarters in Dallas, Texas. At the time, Netflix was a two-year-old startup that rented DVDs to people through its website. He had 100 employees and 300,000 subscribers. In 1999, it lost $57 million. In contrast, Blockbuster, worth $6 billion, was the dominant player in the home entertainment industry. It was a David and Goliath situation.
The two founders were waiting for John Antioco, Blockbuster’s CEO and renowned strategist. This gave Mark and Reed confidence in their proposal, as they believed the Internet would transform the home entertainment industry beyond anything they could have imagined.
They proposed to John the idea that Blockbuster would buy Netflix for $50 million and leave Mark and Reid to develop and operate it. blockbuster.com As an online video rental department. John scoffed at its value and refused to buy it.
Twenty-four years later, Netflix has more than 238 million subscribers. The company’s market capitalization is $200 billion. Meanwhile, Blockbuster Inc. he went bankrupt in 2010. His lavish headquarters in Dallas is long gone, and all that remains is his video store in Bend, Oregon.
in his book no rules no rules: Netflix and the culture of reinvention, Reed asks the question, “How did this happen?” To this he replies:
“That day, we went to Dallas and Blockbuster held all the aces. They had the brand, the power, the resources, and the vision. Blockbuster gave us a resounding victory. It wasn’t obvious to me at the time, but there was one thing that Blockbuster didn’t have: a focus on people over process, innovation over efficiency, and very little management. We had a culture where there were no rules…Netflix is different. We have a culture where there are no rules.”
At first glance, Reid’s explanation seems reasonable enough. But if you think about it, Netflix operates in a market: the home entertainment industry. That market is part of a web of thousands of markets that combine to form the global economy. On the other hand, the economy…
