The invisible man behind Netflix.
Netflix has 182 million subscribers worldwide, but most of them have never heard of Marc Randolph, its first CEO and co-founder. Randolph ceded the CEO post to Reed Hastings (co-founder of Netflix) in 1999.
The Beginning
Marc wanted to replicate the e-commerce model pioneered by online bookseller Amazon. He started his career by running mail orders for a sheet music company called Cherry Lane. He gained the experience needed to eventually disrupt that industry.
During the 80s and 90s, Blockbuster Video dominated the movie rental industry. Marc had heard that DVD’s were being tested in several U.S. markets, and he wanted to explore the concept of selling the compact new digital format online. He and Hastings could not find a DVD, so they tested the idea with a compact disc. They wondered if they could mail these CD’s. Thus they tried delivering the CD to Reed’s house through mail. That’s when they knew that was it.
This is how Netflix took birth. The initial business model was to let people rent videos by selecting it online and having it delivered to their door. This service was unparalleled at that time and was a big shift in the industry.
Netflix’s mail order system revolutionized their ability to rent movies from the convenience of our own homes and opened the doors to online streaming as we know it today.
The Dilemma
Netflix faced major stumbling block in its initial stage. There was a time when Marc and Hastings were considering selling Netflix to Amazon back in 1998. Jeff Bezos (founder of Amazon) offered something between $14 million and $16 million. Marc thought it was reasonable but Hastings resisted. On their way back from the meeting they mulled the pros and cons of selling to Amazon. They felt that it didn’t seem the right moment to give up. And their choice paid off in shades as we see that Netflix is now a multi billion dollar company.
End of Journey at Netflix
Randolph departed from Netflix in 2003 after helping guide the company through its initial public offering (IPO) which was in 2002.
Reasons why Marc left Netflix:
- He enjoys the challenges of working in the start-up stage rather than the realities of running a public company. He loves the chaos and the mess. He says “If there are a hundred things broken and you need to pick the three you’ve got to fix, I’m really good at that. I’m not good at the other ninety-seven.”
- Marc had a long list of things which he wanted to learn. He wanted to spend time with his family and wanted to mentor other entrepreneurs. Mentoring entrepreneurs gives him excitement of the start-up world without 24/7 lifestyle.
Marc really enjoys solving puzzles that either don’t have obvious answers or don’t have answers at all. He loves sitting around smart and intelligent people so that he can solve interesting problems. Thus he has no regrets of leaving Netflix.
He has been a mentor for many startups one of them being Looker, a business intelligence software startup. He is glad that he has a chance to work with scores of early stage entrepreneurs helping them make their dreams a reality.
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