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That Will Never Work

Lesson 1 of 1

That Will Never Work with Marc Randolph

 

That Will Never Work

Lesson 1 of 1

That Will Never Work with Marc Randolph

 

Lesson Info

That Will Never Work with Marc Randolph

Hey everybody! What's up? It's Chase. Welcome to the episode of the chase Jarvis live show here on Creative Live. You know the show where I sit down with amazing humans and today's amazing human is Mark Randolph, co founder and the very first Ceo, to that little company we love called netflix. If you are at all interested in um starting something, starting an adventure, a company pursuing something and there are people in your world telling you that that won't work, that that's not a good idea then this episode is for you. In part, we're going to talk about Mark's Book called That will Never work his podcast by the same name where he gives advice and helps people understand that the people who are telling you that it won't work, they are full of it. Um those things are I think foundational to the episode, but also um I think this there's this um stories around netflix founding when they were running out of money, 50 million in the hole and trying to sell it to blockbuster and blockbust...

er laughed him out of the room. Obviously there's now, there used to be 9000 blockbusters, there's now one and netflix is where 250 billion with a B. Um so this is a range of stories, markets, such a brilliant entrepreneurs had a number of exits and just sold another company to Google for two billion. But this isn't about big business entrepreneurship, this is about what your true compass is, how you navigate these uh these challenges, whether you're trying to start a solo effort or raise money um and start a company from scratch and an adventure world, both are so valuable and underpinning all this is Mark is truly a family man. He stayed married and has three amazing Children. He talks about that in a very heartfelt and honest way for anyone who's trying to make that work. So I'm gonna go out of the way and let you enjoy my conversation with Mark ran off. Mhm. Yeah, we love you and we are live with MArc Randolph. Mark, thank you so much for being a guest on the show. Welcome. Well, thanks. Chase. It's a pleasure to be with you speaking of shows. Uh just before we hopped on together here, I was listening to your latest episode. Congrats on the new podcast. Well, thanks. It's like super exciting. I mean, there's a combination of actually doing something I kind of wanted to for a while, but also there's this incredible learning curve for me of figuring out what the hell you guys do and how to make it work. It's, I gotta tell you, it's not as easy as you make it look well, it doesn't look easy on the outside, but you've done a great job and uh for those who don't know, um we'll go into Mark's background, you definitely know the things that he's built um and you heard from my intro, some of those things, but I as I am a fan of his book that will never work, which I'm holding here, if you're watching the video version, you see it, if you're in the audio, you don't uh it's well worn, it's well dog eared and uh it's the story of, of starting netflix and The podcast that we're talking about, which I think you're like, was it six or seven episodes in now, I'm like, yeah, we're gonna be releasing episode six in a few days, awesome. Uh and it's a podcast of the same name that will never work where mark sits down with entrepreneurs and helps them think about their business. It's fascinating. Um Just was listening to the one with the person who is 95% of their businesses is attached to Walmart, which could be scary. Um but before we go into the podcast, um let's go back to the way back you have sold. I think it's either, it's either your fifth or sixth startup that you've, that you've championed some of them, you've had incredible outcomes, netflix being one. Obviously you just sold another company to google, but I want to go back to the roots roots like was entrepreneur entrepreneurship, entrepreneurialism. Was that like a foundation of your kids? I mean I used, I lived in a golf course and used to find golf balls and sell them back to the golfers. So I I knew that I was an entrepreneur by age eight. I'm wondering if you can walk our listeners today back into your world where you first sort of figured out that this was part of your DNA or was it? Well, certainly it was part of my D. N. A. And I think that's probably the key thing to recognize is it's not like entrepreneurship was a thing when I was growing up. I mean there certainly were entrepreneurs, but they weren't called that especially done successful one. They were called either homeless or, or can't hold down a job or something like that. But it's, but I've just like you, I've always been compelled Um, to solve problems or to try and figure things out or to see a vacuum. You know, mine wasn't golf balls, you know, uh, I started off selling seeds door to door, but way back, this is back in the 60s, you know, uh, it was the American seed company and it was probably the closest thing in the United States to indentured servitude where Basically, if you sold 17,000 packs of seeds, you could earn a whistle or a stopwatch or something like that. But what it was basically was door to door salesmanship And you know, you walk to the front door and you get slammed in your face nine times out of 10 and you either go running home to mommy or you go, I'm going to figure this out. And fortunately I was in that latter category and I'm going, what can I do to try and actually get them to open the door? And then once they've opened the door, what can I do to get the order? And then once I've got the order, what can I do to try and increase the order? And it was this foundation for, I'm going to figure this out and I'm going to figure it out by trying stuff and I'm going to do things that maybe make me feel a little bit uncomfortable. Uh and so that's looking back at the time, it wasn't like I was thinking, I want to be an entrepreneur and I want to start a big company, and this is a great foundation, it just was what I was drawn to, and that really never went away in high school and college, I was always the person who was saying, let's let's start a club to do that, let's why don't we launch a magazine? Why don't we, why don't we, why don't we have a sale where we sell these things? I just would always see these opportunities and go, someone has to fill that, and then lo and behold that ended up, you know, being me, um and luckily, extremely luckily for me, that skill set ended up being something you could actually make a living with. Mhm. I mean, I joke off with my wife that, you know, if entrepreneurship hadn't become this fund a ble sustainable thing, I really would have been one of those guys who just couldn't seem to hold the job just because I I'm so kind of A D. H. D. That way. Well, there are so many people were listening to watching that, I believe, identify with your story that they don't fit the cloth of a company person and they either see themselves as like, I have to go do this on my own or I'm unemployable and I think that the Mhm our culture, if you will, is certainly changing, but there's still so much embedded in the advice that we get from our parents, from our career counselors, from our spouses, friends, peers, people out there telling us that here's what you ought to do. And I mean just go to the title of your podcast and book, which was where I'm most familiar with your work. There's always people telling you that that's not going to work. And it's like without being like, I want to go deep on this because to me this is the psychology of the thing that keeps people from doing the things that they were put on this planet to do. So if you would please share with us what you when you started hearing? No, that these were bad ideas that the club that you wanted to start or that you couldn't sell enough seeds. Or that that was a silly way of spending your time when you first started hearing No. And then what did you tell yourself? What practices did you employ? How did you have enough belief in yourself? Or where did it come from? Where did this ability to push through all the nose? Um how did how did it manifest for you? And if you could lace in some advice for those people who are hearing no, left and right, that would be I think helpful for the listeners. So the first thing is people to realize that there's nothing wrong with you if you're scared to take these steps. I mean, there is a fundamental human attribute that is what makes it so difficult to take these things on. And it's that fundamental fear of looking like an ass, that if you're going to do something that hasn't been done before, Absolutely. There's a chance you're going to fall on your face that it's not gonna work. And the most people myself included don't want that. You want to do well, you want to be successful, you want your ideas to work. And the most important thing is getting over that fear and realizing that the world is not going to collapse if this thing you try um doesn't work. And if I look back on what really made the difference for me is that I started small. Uh and I encourage everybody. I don't just mean started small as a small person. I mean the risks that I was taking were very small. You know, I was pitching hay, if you buy two packs of seeds, I'll throw a third one in for free. So they say no, nothing happened. You know, they didn't laugh, they didn't get insulted and hit me. They just said no. And once you begin to realize that you can take these small steps and nothing bad happens, uh you get encouraged to try it again. And I think what people sometimes do is they have this idea, but they immediately leapt to the idea fully formed and they begin to say, what do I need to do to try this? And I've got to raise money and I've got to hire a team and I've got to get a co founder and I've got to finish school first and they've built this thing up in their head. So of course it's really, really hard. But you know, I don't know, chase whether you speak a second language or not, But anyone who's tried to learn a second language knows that the fundamental thing to learn a second language is you've got to be prepared to sound like you're in first grade, even with your a 40 year old person wearing a suit. Um, and that's how you learn a language. But the way you do it is you get your courage up to order a cup of coffee. You do not apply for a job as a simultaneous translator at the United Nations, you work your way up to that one. Um, and it's the same thing with any of these ideas, you have some idea, you figure out a way to start small to take a small step. And so when I look back at the things that gave me the confidence to do it, it's purely gaining experience that I can do this. I mean a perfect corollary, you know, I do a fair amount of public speaking, You know, and I've gotten to the point now where I'll go out on stage in front of 10,000 people and do an hour along keynote and you know, people go, gosh, aren't you terrified? And the honest answer is yes, of course I'm scared. Every time, whether it's going on in front of 20 people or 2000 or 10,000 people, I stand backstage and I go, oh my God, this is terrible. I'm not going to have to say, I'm gonna make an ass of myself. The difference is I have that other little voice now saying, Mark, I know you're scared, but remember The other 600 times you've done that the minute you're out on stage, all that fear goes away. And it's a very, very similar thing to uh, getting the courage to try something new and you know, the books called That'll Never Work. The podcast is called. That'll never work. Because that's what I heard 1000 times, especially with netflix. You know, I heard it from investors, I heard it from employees. I heard it from my wife. Um, but we all, we all hear that anybody who's doing something new is going to hear it and the sooner you recognize that no one knows anything, uh, they have no clue. The only way to figure out if it's a good idea or bad it is to try it. Then that's the big, the big step for you. Alright, let's unpack that a little bit further. You said you heard no. You said you heard no. Like no. This is crazy from your wife from investors. I want to know. Was it just repetition? Did was it just getting used to hearing no. That allowed you to push through because sometimes here's the kid, here's the catch. We hear those things. You mentioned your wife from people who we love and who know us and trust us and yet we're still hearing that terrifying. No. Or this is a terrible idea that will never work from people that we respect and appreciate and admire our our peers, our friends, our career counselor. So how do you, in the face of that people you respect, admire and appreciate? How do you keep going? How do you, what's the voice that's inside when they're telling, you know, and you say I'm going to do it anyway, I'll twist that answer around a little bit because I, the best way to answer it is that the way I say, when, when people ask me, who is it that you're willing to work with? How do you decide who you want? A mentor, who do you decide who you want to coach? And I'm looking for something specific and you'll see how this ties in in a minute. Uh, as an entrepreneur, you have to have unbelievable self confidence. Um you have to believe in yourself, you have to believe, even though this hasn't been done before, I'm going to figure out a way to do it and have this persistence to keep pushing through and trying, even though everyone's saying it won't work, but you have to have something else, you also have this ability to listen, you have to be able to recognize what is this person's objection? Is it valid? How do I factor this into my thinking? Do they really know something and they done this before, have they? To what degree do they know what they're talking about? And it's that combination of things that allows you to come get past it? And just as a perfect example, had my wife said that'll never work and if you do that, um, and you risk everything we've built together, I'm leaving, I never would have done it. I mean that's not, I don't believe in it that strongly, but that's not what in this case my wife said. She was saying basically, I think that's the stupidest idea I've ever heard. But I believe in you. Um and if you feel strongly about this, I'm I'm all in to support you taking a swing at it. And that's a very, very different message. And the reason I wanted to answer the question that way is that once people tell you that will never work, what's wrong is to take it as gospel to say, oh my gosh, this person, even for me, this person has founded seven companies. This person has had multi to multi billion dollar company. What the hell do I know about what you're doing? I have no idea. You're doing something that hasn't been done before you, but you also should say, well let me hear him out. Why does Mark not think this might work? And then you have to go back and say to yourself to what degree is that valid? Is that not valid to what degree do I still think I could see a path to making this happen. This is not to think that you say every time someone says that you blindly head on, just gonna send you into a wall, but it's equally wrong if it gets worse to say, oh Chase says it won't work, he's done shitload of these podcasts, Okay, I'm not going to even bother starting that's wrong too. Yeah, this I think this is uh this is a real thing in our culture and you have obviously managed to navigate and I think that idea with that you shared the story with your wife is is a really important one for us to emphasize here because right now there are people and I feel like I had had a fair amount of success as an entrepreneur, but prior to starting creative Live and creative life happened to be a good idea. But the more smart people you put around you and presumably your goal is to hire people or put yourself around people that are smarter than you, I found it increasingly more difficult to keep the, you know what I truly believed straight in my head. And yet, you know, there's there's conflicting advice, put yourself around smart people and yet the smarter people that I had around me and the more of them I started, you know, the genius A would tell me what a terrible idea thing X is and genius be would tell me what a fantastic idea thing exes. And I'm wondering, you know, beyond taking the leap, stay with a family member. How do you reconcile putting, you know, trying to put yourself around smart people when in many times the advice that you hear from them is going to conflict? Yeah, there's no, I mean, listen, I I can give you a glib quick answer and there isn't one because you're pointing out what one of the fundamentals of developing a culture of collaboration involves and that melding multiple people into solving a similar problem is tricky. Uh and uh the simplest way I can describe it is I spend way way more time trying to be the person who's trying to formulate where we're going and way way, way less time trying to formulate how we're going to get there. And that's what I want to do is empower other people on the team who are the closest to the problem, who have special skills to let them make those decisions without me dictating how I would get there. But that vision of where we're going, that's the most important one that people need to ultimately agree on. And part of that comes down to decision making culture, to mean net just taking one example, at netflix, for example, my co founder Reed Hastings, and I had this relationship which was established before we even started netflix, where both of us love to argue, could that be the best way to put it? That our method of figuring out where is the right place to go and what might be the right way to get there came from, battering it from all sides with as many different perspectives as we could come up with. And part of that is debating what's the framework you wanted to use to make the decision. Um and for read, because both of it was kind of founded on this shared interest in being brutally honest with each other, ended up being tremendously powerful decision making mechanism and a little bit off putting for people. I mean, I can think back to times early at netflix, where the the two of us would be in a room with six or seven other people, and the two of us are going at it like cats and dogs about arguing back and forth. But what's the right way to think about something? And all of a sudden we're looking around the table and everyone's kind of there with his wife, like why is mommy and daddy fighting? Uh, but for us, it was just a way to try and establish what was right and what was unique about it is when you finish both, you immediately forget who held what position, because you've stumbled onto what is now self evidently the right direction. Or you certainly narrowed it down to where the differences of opinion? Where are they agree to disagree points. And then you begin getting into a much more interesting discussion about all right, well, how are we going to measure this? How are we going to know after the fact what was right? So that we've actually learned something from this process? So it's a long way. I wish you great. Now this has to do it. But it's not. This is yeah, this is what I love. And I think this is what is hearing you explicate first of all that. There are lots of ways to get to the right decision and that it's not pretty, it's not clean that there's not a one line answer. I think that is what so many people in our culture are looking for is like, where's the recipe? Again, a cup of powder or you know, a cup of effort and two cups of vision and one teaspoon of, of luck. And I'm going to, you know, make it successful and it's just, you know, your story confirms what we've heard over and over and over on the show and yet were also quick to forget that this is not, you don't have to see the whole staircase, you just have to see the next couple of steps and and you you do a nice job of painting that picture for us in in the book. Um, again, the book that will never work, which is about this founding story of netflix. And since you brought up your co founder read, um, I want to ask you to tell a couple of stories from the book that I'm on one right now. Page 1 80 when you're talking about one of those cat and dog fights that you're having with read where he's shared with you that you are an incomplete, I think was the word ceo. And so this comes to the point of just in entrepreneurship, in building anything really, whether it's a company or writing a book or you're going to hear, you're going to hear tough news and what role has tough news played for you and how do you? Is there, is there a paradigm that you have in your mind, your head or your heart for how to both receive it and give it? Well, I think I have to tell that story because you can't just leave that much of my hope, much as I'd love to say, and books available at all booksellers near you uh, because it was a hugely important moment for me and my uh, my life as an entrepreneur. And and this the real, the gist of this is that jumping back a long way, you know, read and I started the company, Read wasn't working there. You know, the two of us came up with the idea together. He was the angel investor, but I started and ran the company. He was going back to school to become an educational philanthropist to get his higher degree education. He was the chairman of the board, but he would stop it all the time um, for us to uh, you know, talk. Um, and we were not that far in. Um, and one evening when he stopped in to talk, uh, he prefaced it by poking his head in and saying those words you don't really want to hear, which is Mark, we have to talk. Um, and came in and he had his laptop computer open, he's holding it by the screen dangling open and he props it down on the desk and starts to walk me through this power point slide show he'd put together of concerns he had about my leadership. Um and it was this besides the fact I go, I can't believe you're coming in and pitching me on how I suck. Um I was a little shocking to hear him lay out these things that he saw his shortcomings in my leadership. And the reason it was so um difficult to hear in many ways is because of the thing we spoke about just a few minutes ago, which is that so much of my relationship with Reed was founded on rat on brutal honesty that read. And I always said what we thought we avoided at all costs having an ulterior motive or having something. We were trying to some secret agenda. And so to hear him say, he was concerned that, you know, although right now things are going well, he smelled smoke and he was concerned that as things scaled up these small concerns he was seeing would become bigger and bigger problems and at first I thought he was firing me. I mean he was chairman of the board, he had a bit more stock than I did, but as he went on, what I realized he was doing was actually proposing something very different. He was proposing that he joined the company full time as ceo that I'd move over as president and we would run the company together. And it was especially difficult that went way beyond the I see problems with your leadership. It was that I had this dream like every entrepreneur has of being the ceo of this big successful company. And read proposing this made me realize that that dream was actually two separate dreams. I mean there certainly was the dream of me as the successful ceo, but that dream of it being a big successful company was a different dream. And more importantly, it wasn't just my dream anymore. This was now the dream of my employees, who was the dream of my investors. To some degree, it was a dream of my customers and I had to ask myself my prepared to sacrifice one of my dreams to make the other one come true. And this was not a decision that came immediately or came easily, but it it took me um, you know, a number of quite a few bottles of wine on the porch at late nights with my wife, kind of talking through this, but fundamentally and not too long afterwards I kind of realized that reed was right, that it was hard to argue this company would be stronger with the two of us running it together and that read probably was the better person to lead us as ceo going forward. Um, and that if I really believed that my dream was having a successful company, I needed to do everything I could to ensure that was the outcome. Even if it meant that I was not the person who necessarily was solely bringing us there. And it took, it took a while to, you know, to get used to the ramifications of that. But I warmed to it and looking back probably was the most important decision I ever made it netflix. I mean certainly those next 3-4 years were read and I ran the company together where in many ways the Renaissance Netflix, I mean that is where so many of the big developments that formed what netflix is today came to pass. I mean that's that's where we found the first repeatable scalable business model. It's where we developed the personalization software. It's where we came up with so many of the innovations that have driven the company, the subscription model ever since. And then even more so after leaving the company to seeing what Reid has done as a ceo from that point forward has been nothing short of miraculous. So It helps to be able to look back and see that decision was a good one. But I got a segue for a second. And to your other question which fundamentally is probably the more important one. Which is what do you learn from this about communication? And I keep coming back to honesty that there's this tradition in modern business, especially larger companies and I'm not sure I'm having what's called Edwards called a A. P. I. P. Performance improvement plan or some something like that. Yes. Yeah pip. Which is that's probably the most cruel and unusual punishment since the spanish inquisition. That you recognize that chase, I recognize that you're not doing a very good job. And listen, I know I'm going to fire you and and you know that I'm going to fire you, but let's instead go through the six month Kabuki theater or we pretend that you're on this path to performance so that I can cover my ass when I eventually do fire you. How does that help anybody? Um, and I have so much realized it's so much better to sit someone down and tell them the truth, Go listen. You know it that you're not performing here well that you're not meeting the expectations and that you're unhappy and you're a great guy, you're smart, you're talented, you're just not suited to what we're working on right now. And the challenge that I've given you, let's find you someplace either in the company or in another company where you can do great work and be proud of what you do. And I'm not saying that person is not going to cry or be upset or worry about how am I going to get the next job. But almost universally they come back going, thank that was so much more gracious a way to do this. Then you have tortured me for months while we tried to fit a round peg in a square hole. What something you said in there I want to emphasize, which is look at the directness, the kindness, the thoughtfulness with which you approach that. I think giving someone like brutal honesty, like the brutal part doesn't actually have to be, isn't how you deliver the message. I think that's where people think that that somehow gives you a right to be an ass and it's not like that's not actually helpful uh, in leadership, but thoughtfulness. Directness, honesty. Those things are are key. And I want to know if you believe what I just said because I don't want to put words in your mouth. These are my point, my point of view. But it sounds like there's a shared event diagram of what we think about that because this is not a license to be a jerk. No, I mean listen from the outside, it's seen as being brutal. But no, it's in my opinion is compassionate and I own the I own the problem or I certainly share ownership in the problem. I hired you to begin with, I promoted you into this position. I made a mistake, this is on me and to somehow shift and go, you fucked up. Uh, that's that's not that's just not right. And part of owning it is to being gracious is you can't dump someone onto the street. You have to do what you can to help them. Um, you have to recognize was a shared responsibility and if you can afford it, you have to be as generous as you can with the severance. Uh, it's, it's just an and I'm not saying it doesn't hurt either. You know, we did a huge layoff at netflix at one point and I cried for every single with every single one of them. It's just it hurts. But your fundamental responsibility is to multiple stakeholders, not just to that one person. And that's part of the big, that's why that's why you have the job you have is you have to do hard things um sometimes, but it doesn't mean you're not compassionate, It doesn't mean you stay in touch. You don't that these people are bad or anything like that, someone steals from us. That's it's different. But that's of course, extremely or equivalent malfeasance. But that's listen, I don't wanna get sidetracked. We can talk about this is this ultra netflix forever, but, you know, it's just the nature of the issue of responsibility. Um the other part of honesty, which I'll talk about for a second is that, so let's let's talk about the product improvement plan again, or even if you don't have a product improvement plan or you go, God, this person is not really bad, but it's not really very good either. And maybe if I just ignored it will go away. And that's that's that's almost, that's as bad because what's happening is people aren't stupid and everyone else who has to work with that person is thinking something way worse than that person is not good. They're looking at you, they're going, this is bad for either. Mark is stupid and he can't see that this person is not holding up there and then making the rest of our jobs harder. And that's inexcusable are even worse. Mark is weak and he clearly sees that we're being forced to suffer a fool and he won't do anything about it. And as I kind of said, you know, in my effort to kind of preserve this employees reputation amongst their peers, I'm just trashing my own. Um, and that's not the right thing to do. And you know, this is, gets into part again, these were not one size fits all, plenty of people run their companies like families and they love everybody and they support everybody. Um, and you don't fire your son and you don't fire your cousin. Um, but I've never run companies like families. My responsibility is, yes, I have a lot of responsibility to the employee, but fundamental and responsibilities to the rest of the team. Um, and netflix is kind of famous for saying that, you know, we're not a family where sports team and we are not a sports, not a little league team where everyone plays and we all get a trophy. This is a professional major league team where as the coach, my job is to have the best people in each position. That's my responsibility to the fans that I don't go that second baseman. Yeah, I know he's struggling, but he's a good guy, you know, and we all know my responsible, the shortstop's going, I'm not turning double plays because you won't put a great player in a short at second base. Um my responsibility is to everybody else. Um and that and that requires being honest and doing the right thing. Um We have had erin Meyer on the show before and talked specifically about netflix culture and the culture that you and rebuilt their um is that a product of your two thinking's coming together? A little bit of the background that you talked about basically like learning and finding the best choice, the best idea through the Socratic method through discussion and an argument and creating a framework with which to go forward. Where does this high achiever, compassionate but direct uh, element come from? Well, it's a great question. I'll give you two different answers, not you'll see they fit together. Um, the first one is that these days now that entrepreneurship is a thing and people take classes and it can go to school and and like you said, they have the they have the recipe book and it's like we have one part uh you know, funding then one part product and one part culture, because I read that culture, read culture eats strategy for breakfast, and so they go, okay, let we had our product meeting and I've done the funding now, let's sit down and let's build our culture, let's get a white board and and that's what a ridiculous waste of time, because culture is not what you say, culture is what you do, and anybody who has Children knows exactly why that is. Um so I don't care what's in your power point and I don't care what's in your slide show or in your document you put in the website or you carve in your corner from your building. I want to know how you actually behave because that is where culture comes from. How do the founders act, how do they make decisions, how do they solicit input? How do they treat their co founders? How do they treat their employees? How do they treat their customers? Uh, that's where culture comes from. Who do they hire? Who do they fire? Who do they put up on the stage with them at the company meeting and say this person crushed it. That's where culture comes from. So yes, I fundamentally believe so much of the DNA of netflix um, comes from how read and I and the other handful of people there at the beginning acted. Um, the second piece is that a lot and that I think a lot of that is the radical honesty, the transparency, I think a lot of that comes from that. The other piece that netflix is famous for this freedom and responsibility culture. That's not particularly unusual at a start up. You know when you're at a person company, you don't have much choice. You have 10 people and you have 100 people's worth of things to do. Everything is on fire, everything is broken. You just simply don't have time for command and control to go chase your is your list of what you need to do. Check in with me, give me the report, I'll read it all feedback. Let me know. I go, Okay, see that mountain over there about 10 miles away. I'll meet you there in two weeks and here's what I need you to have with you. And then I turned to the next thing and the last, I'm going to see if chase for two weeks is that. But I count on you to solve those problems in your own that whatever I've asked you to get accomplished, you're gonna have to figure out you're gonna bump into you didn't expect. Um, you're gonna have to figure out using your skill set. What's gonna work the way you choose to get to the top is going to be different than the way someone else does. I'm going to give you total freedom to solve that problem and I'm not going to check in on you and in two weeks though you better be there and you better be there with the stuff done that we expected to have done because all of us are counting on that. If you were bringing the food and you don't show up, we all suffer. That's the freedom and responsibility and that's really common in early stage company. But what happens is the company scales. Um, It is well meaning, but chase shows up three or 4 days late and the well meaning ceo goes, ooh, that's not good. Okay to make sure that doesn't happen. I want everyone to check in with a how about a status report every two days and everyone goes like uh status reports, okay? And all right? So then someone else shows up and they got there in time. But they over spent. And the ceo goes, oh, that's not good. Okay. I want everyone to pre approve any expense over $2000. Everyone goes, oh and now all of a sudden this two week thing takes three weeks. And more importantly, the people who felt trusted and empowered, now feel infantilized if that's a word, pronouncing it right. Um, and it takes real discipline to maintain that freedom and responsibility when you have 100 people. And it's even harder when you have 1000 and it's almost non existent when you have 10,000. And what's remarkable at netflix is not that they had this when I was there with 10 people, even 100 or even approaching but the fact that they've managed to figure out how to scale that approach at the size, scale impact that netflix is today. And to that I give huge amounts of credit to read, had to some degree to patty patty McCord for saying how do you take these things which were second nature to mark from all of his background in climbing mountains? Um, and to make it work when all of a sudden you have people all over the world with different cultures and you have multiple layers of reporting responsibility. That's the really impressive part. So true. And I think to loop back, it's really important right now. If you're listening to this, this whether you are building a company of 1000 people or your soul produce or you hire the occasional contractor, the concepts of culture, the concepts of decision making. All these are the same that this, this framework that you're laying that marks laying out here um, applies and um, this idea of your actions actually define the culture. It's not the thing that's in the handbook or written on the wall. I think that there's a huge gap for most people there. They write something ambitious on the wall or in the handbook and then behave in a very, very different way. You must have seen this a million times to chase like you you go and I still see it, but I do some of the key network I do is at sales conferences. You know, come in to help because they today the whole theme for this year is innovation. We're going to be more innovative. We're going to take more risks. That is the thing I want to see from all of you is more risk taking. And, and now let's recognize the big achievements for this quarter and they bring up the sales guys and so they're saying one thing and doing another and it's one in 100 where I see the Ceo get up and say, we're really all about innovation this year and let me bring up someone who tried this and failed, but then tried this and failed and got shut down but figured out a way to get around them and ultimately made it work. And I'm recognizing that person as employee of the year. That's what drives culture. I said, I was going to ask you to tell two stories. One was the story of receiving some bad news. Uh, the other is, I just think it's fascinating given the, the company that, uh, one of many companies that you've started and, and have driven to almost immeasurable success in netflix is the cultural sort of icon that it is establishing. As you said, the subscriber subscriber, the subscription business model, um, completely transforming the physical nature of Dvds to online downloads. And that makes me, but I also just got wind of the documentary and the last blockbuster, which is a store that is that you all ultimately put out of business through your innovation, um, blockbuster who was put their head in the sand and said, no, we're going to still rent these VHS and you've got to be kind rewind and come here and shop and pay late fees and all those things that, for those of us who are listening and watching that are old enough to remember this stuff and that is you were, uh, if I'm not mistaken pursuing selling your business to them because you thought it might be helpful and that that might be a great outcome for you. So just given, given that you are the, you know, you've created the company that is now the gorilla, um, talk to us about some of these, these little moments that might not be widely known because I think these stories are fun and fascinating. And again, it's, it's in the book. I'm not going to cite a page number, but it's in there. So can you share that story with? Well, um, first of all, I was laughed because if you're saying might be a better outcome, I mean, might save our ass was probably a more apt description for what motivated that. And, you know, I mentioned, you know, listen, uh that the book that will never work because that's what everyone said over and over and over again. And of course we launched and what do you know, they were right, it didn't work, it was a terrible idea and we struggled for a year and a half uh to figure out some model that would allow us to be able to make a business out of renting Dvds by mail. Because back then, before the streaming, of course, if you wanted a DVD, we mailed it to you in a little red envelope, but lo and behold, about a year and a half in, we actually did finally test number 6211 uh stumbled onto something that actually worked. And it was a weird model. It was no due dates and no late fees. So you kept the movies as long as you wanted and when you wanted another one, you mailed it back and we automatically replaced it with the next one on the list you had made. That's kind of a weird idea. And even stranger is, we didn't care how often you swapped it that it wasn't a per swap price, it was a subscription, pay a flat monthly fee every month rent as often as you want. And when we combined all that into one program, it took off and it took off. You know, there there's the phrase of course the overuse the product market fit, which is what the holy grail for any entrepreneur and everyone kind of struggles to define what product market fit means. And all I can say, all I can say is that you know it when you see it and that's what it looks like is by boom, it just takes off, orders are flooding in etcetera now because it was this weird, ridiculous idea of no duties, no late fees, subscription. What uh, we decided that we would do a first month free and when you do first month free with the subscription, you're just compounding one of the all existing flaws with subscription models, which is that you pay all your costs upfront, then you recover your revenue little by little month after month after month. But what that means is that if you're successful, if orders are flooding in, Well, cash is flooding out and that probably would have been sustainable. Had we not timed this new innovation to coincide with the popping of the.com bubble in the year 2000. So I had to set the stage to. Here we are. Read and I have finally solved the problem. We have sought, we got it. We're going to crush it. But now all of a sudden we're going to go bankrupt because we cannot raise any money to support the fact that we have to do these first month freeze for all these customers. So that led us to say, okay, how do you get out of this one? Well, as they say in start up land, you pursue strategic alternatives, which means I love that this vernacular. So if you're not in this world, it's just basically how do we gotta sell this this thing and sell it fast? Uh, and the obvious strategic alternative for us was blockbuster. Uh, and so we began picking blockbuster and nothing like no response zero. Not even a no. Just didn't even answer. You know, we use the VCS to try and go between nothing. Uh, All right. So we go on with our work as it turns out, we happen to be at a retreat in santa Barbara, up in the foothills in a ranch called the Alice All Ranch. Um, and it's pretty casual, you know, when you go and retreat, especially from Silicon Valley, you don't bring anything. I had shorts and flip flops and T shirts and that's when blockbuster calls us and says, we have to see you tomorrow morning in Dallas and we're kind of look at each other and going, there is no way we can get to Dallas by tomorrow morning. Uh, and then, uh, read comes up with a great idea like, well, let's just charter a jet, which considering there are $50 million dollars in the hole was basically a rounding error I think at that point. So here we go. We fly off to Dallas Uh, all of a sudden next thing you know, we're in this 27th floor of this huge glass and steel skyscraper in this cavernous conference room, big massive conference table out of endangered hardwood or something like that. And then, and the blockbuster guys come in and there, you know, the incredibly expensive clothing and the alligator shoes and I'm there in um flip flops and shorts and a T shirt and we make the pitch that we will combine forces, they'll run the stores, will run the online business. And we laid out all the synergies that we saw that were so compelling and done deal. And then um, the CFL means forward and goes, okay, compelling. But what are we talking here? I mean, how much, what do you want for this? And we had rehearsed on the plane and so read kind of, we kind of figured, okay, we're $50 million in debt would be a nice clean exit if we could at least pay bakar backers. So read goes $50 million and john Antioco who back then? It was the ceo of blockbuster. He's kind of famous because of his relatability, whether it's pitching or whether it's executives or whether it's store employees. He's one, he's like bill clinton, you know, that he, I feel your pain kind of just kind of connect that way. But I'm sitting here watching John and Yoko take all this in, especially the $ million dollars part. And I can't quite figure he's got some expression on his face that I can't quite make out it's going through because I can consider, I can read people and then I figured it out. And he was struggling not to laugh At the hubris of this little company, $50 million dollars in the hole trough of the dot com bubble collapsing And we're asking for $50 million. And obviously it went downhill pretty quickly after that. It was this long quiet ride on the plane back to santa barbara. But it was, it was galvanizing because this, this was going to save us in in the movies. There's always that day a sec smacking a moment where the heroes are in the, in the back of the canyon and they're surrounded and the enemies coming in and there's no way to save them. And then uh, there comes the cavalry and miraculously they're saved. And but this was not coming out like a movie. I mean not only were, was there no one coming to save us now. Blockbuster was going to compete with us. Um, and it just really made us realize that sometimes, you know, as my dad used to say, the only way out is through that if we were going to escape and thrive, we would have to take them on, head on and the rest, as they say, I will point out that The company that they could have bought for $50 million 2000 now has a market cap of $250 billion. And as you pointed out, this company, which at the time had 9000 stores is down to one. So history can be cruel sometimes. Yeah. And again, if uh, knowing a little bit more about this story is of interest, you gotta check out the book that will never work that Mark wrote, I want to turn my attention to other things. One is a little bit more about your personal experience. I think a lot of people are well aware of your founding the company or co founding the company and the obvious success that netflix has achieved you just in part to find it with the market cap. And um, we've talked about it across the, across the um, show today, but uh, you've mentioned in passing just, you know, probably 15 minutes ago climbing mountains, um, finding adventure and so there's a little bit less on you personally out there on the Internet and I want to know paint a little bit of a picture of, you know, what do you do for fun and how does this relate to your professional experiences? Are they is one an escape to the other, the complementary just paint a paint a picture for us if you will. I was really lucky in a bunch of ways in that I discovered something really important about myself. I kind of discovered early on what drives me what really makes me whole, what brings me fulfillment and joy. Um and I also discovered a corresponding piece which is what I'm good at. Um and in some ways I've tried to craft this life ever since, which allowed me to kind of have both of those, the opportunity to do things I'm actually good at and get dr great enjoyment from, but also recognizing that that's not a, a monolithic thing. Uh I love the process of starting companies, I love the challenges of entrepreneurship of solving problems. I love coming in and sitting around the table with these really smart people, solving really interesting problems. There is nothing more intellectually fulfilling to me than that, but there's two other big pieces of my life that I from the very beginning of said are important that for me, the objective, my life has never been entrepreneurial success. The primary objective is balance. Can I maintain balance in my life and balances? Like anything that's different for everybody. For me, there's 33 parts to it, this is how my way of kind of answering the, what do I do when I'm not doing entrepreneurial stuff and there's three parts to it, So one of course is the entrepreneurial stuff and I'll never stop doing that, nor could I be like trying to hold my breath at last about two or 3 minutes. Um and I've built a fairly good way for me to do that, which we can talk about later if we want. Um the other piece that's important to me is uh the outdoor stuff and there's no catch all category except that um if it involves potentially getting hurt and it happens outside and it's non motorized I'm in. So for my whole life I've been a climber, alpinist, uh, do a lot of back country skiing, I do mountain biking, I love kayaking. Um, I love, uh, I've slept as last count probably 500 plus nights on the ground. Um I love that. I surf all those things that's so fulfilling and in the moment for me, the problem with that being the hobby, uh, as opposed to stamp collecting or something like that is it's not something you can easily squeeze in between your 11 o'clock call and your two o'clock meeting. And it's certainly not something you can easily do at night after the kids go to bed. So I kind of realized that I actually wanted to be able to fly up to Alaska and uh, canoe the no attack river through the wildlife refuge. I had plan my life in a way that made that work so that's part of the balance. Um, and I feel blessed that I've large, most part being able to construct a life that's allowed me to be a lifelong outdoorsman in addition to being a successful entrepreneur. But the other part and this is again not one size fits all. But for me, I vowed from the very beginning that I was not going to be one of those entrepreneurs who was on their sixth startup, but also on their sixth wife that I was going to recognize that I could not take my wife or my family for granted that they were not going to be something that I squeezed in around the other challenges of starting and growing a business that I was going to make that a priority. And I tell that story in the book about how way prior to netflix, that we had this rhythm where every Tuesday without fail At 5:00 I left the office and I would, my wife and I would have a date night and as anyone who's gonna start up nose having something that's predictable at five PM is really, really hard, you know, But I was resolute that if there was going to be a crisis, we were going to wrap it up by five and if you absolutely have to speak to me, we'll find we'll talk on the way to the car. Um, but I was going to make sure that I maintained that relationship with my wife and you know, I, I look back on, you know, said this before, but when I look back at what I'm most proud of in terms of my career, it is not netflix and it's not look or it's not the other companies, It's the fact that I was able to do those things. Why, while staying married to the same woman, um, having my three kids grow up, knowing me and best I can tell liking me. Um, and having been able to put together these three pieces of life simultaneously and that, that's been a challenge and that's been, I'm, if I look back and go, God, I'm really proud, that is able to, for the most part, get that part. Right right now, there's someone whose saying, Mark, I hear you, that sounds incredible how help me figure out how give me some advice. Because right now, You said I got, uh, 10 people and 100 people's worth of work. And how do I prioritize my health and staying outside? How do I prioritize my family when I've got investors, or even just the employees, I need to keep people employed and what's what's the again, no, no need to be glib here. Like it doesn't. I think everyone knows it's not a one trick pony. There's not only not 11 answer, but what advice would you give on? How people ought to think about this? I think this is a borderline crisis that entrepreneurs in our culture are facing the hustle porn. The but the internet does to make us feel unworthy and where people are posting their highlight reels of all their fantastic achievements while quietly crying in their basement. Like help us. What are the advice? It's the advice you have for the solo Preneurs entrepreneur, who what you've said sounds so compelling, but it is so hard to do. It's really, it's crazy hard to do. So I hope you don't take away from me that I that it was easy and and it's not universal. You know, I boil it down to a simple never ever. But you know, one of, one of the founders of organizations been involved with for years, guy named paul Petzel, you say rules are for fools and that the the key ingredient for anything is situational awareness. So listen something, listen, if if I'm trying to close the financing and the meeting has to be at 5 30 on a Tuesday, my wife gets it, but that's got to be the exception to the rule. So listen, I know you like the stories here. So I will tell you another story that illustrates the whole principle behind doing this. Uh and that I had a period where I did work for a big company, I had a moment where I ran european marketing for them and I was living in paris and I was dealing with the offices they had all over europe. Um, and my job was in the morning, I get up and I drive to the, to the airport and I'd fly to some european capital And the Milan one did not capital, but business capital flight him along or I fly to London or I fly to Oslo or whatever, whatever the case was. Uh, I was doing this four days a week. So I was catching a lot of flights and I formed this rule during that year of living concourse lee if I can use another word, which was never run for an airplane because I realized after having run for my share of airplanes that either you get to the gate and the plane has already is already gone, that all the hustling in the world didn't make the difference whether you made the plane or not or you get to the gate, it's wide open. The plane's delayed, you sit in your seat and then you stew in your own uh, sweat for an hour When you would have made the plane anyway. And I kind of realized using informal math that it made a difference about 1% of the time. And I think that most people are running for airplanes all the time. They're thinking if I don't stay up this extra two hours and work on this, it's not going to be successful. If I don't check everyone's work. That could be the thing that makes the difference between us being successful or not successful as a business. And I just don't think that's true. I think the most important skill is triage is recognizing that in a business of the 100 things on fire, most of them, you're not going to be able to fix them, that patients going to die anyway. Another big chunk of them um, are going to be fine. Even if you don't pay any attention to them, then in reality there's just a handful of things that if you get those right, it makes all the rest of it go away. Uh, and that's the key to being able to free up the time for the rest of your life. Is recognizing you are not indispensable recognizing that you do not need to get your hands in every decision, recognizing you do not need to get everything perfect and that if you can get the few important things mostly right. Um, if it's going to happen, that will make it happen. And if it wasn't going to happen, spending staying up all night every night and ignoring your health, ignoring your family, ignoring your personal interests isn't going to make it so wisdom, wisdom and thank you for sharing that. I think that's an important thing that the if you're listening right now and walking on the path or sitting on the park bench commuting in your car on the subway, that is something you ought to underscore right there. Um last question mark is around what I just felt from you is this guidance, this um it's like a thoughtful um mentorship at scale, this is you, I felt like your, there's that resonated with a lot of people and that is clearly having listened to four of the six episodes of your new podcast that will never work this, the mentorship that you basically, I want you to describe how you came up with the show, the format, so that people who have found some value in this conversation today and maybe in your book or in what you've built in in netflix are inclined to tune in and check out the the new show. You know, Ever since I left Netflix, I don't know, 18 years ago. And pretty much ever since, um I've realized that I get tremendous fulfillment out of helping other people hopefully have even a shot at it the way I had a shot at it. And that takes a lot of forms. But largely it's been mentoring people and, you know, some people actually spend hundreds of hours with founding teams. So I'm really trying to take those two, sometimes three founders and try and help them steer their company the right place. But perhaps more frequently are these simple one off calls. You know, just this morning I did a long call with the founder who was struggling with something and I spent an hour on the phone with them trying to coach them through And I've been doing this like I said for or 18 years and we'll continue to do it. I love it. What changed is I began getting repeat questions, People had similar issues, so I said, I'm just gonna start taping someone with their permission tape these calls and then when someone else calls in, I'm gonna go listen, I just went over that exact same thing. You're struggling with someone else, I'll send you the tape and I would do that and they come back and go, Mark, that was really helpful for one. It helped answer the questions, so thank you. But the other thing that was kind of cool is it really made me feel supported and that it made me realize I wasn't in this by myself, that there was someone else out there struggling with the same thing I was struggling with because as you know, you know, entrepreneurship fundamentally, it's a very lonely thing, no one really understands the problem you're trying to solve and you're alone and to have someone else to recognize other people are struggling with the same thing makes you realize you're part of a much bigger community than you thought. And then the more surprising thing is they would say send me some others, these are funny and I love these stories and there's interesting and it kind of gave me this thought that maybe maybe this could be a way to, as you said, do some mentorship and scale, which is to begin sharing these mentoring calls with other people. And so I did the classic entrepreneur thing was, I don't know what I'm doing. Well, let's just start. So the next four people who said, we do get on the phone with me, I said yes, but listen, I'm gonna record them. I'm going to try seeing what it feels like to make them in a podcast with no intention of releasing them. I even told people that, but I wanted to try and I did four of them and learned, wow, this is hard. Uh and how do I figure out what's going on soon enough? So it's not a two hour, you know, session with, with the 1st 60 minutes being not, that's not it, nope, that's not it. Exactly. So how do I do that? So the first four grade learned a lot, then said, okay, I'll do four more and wow, learned a ton more, then did four more, learned even more and then finally got to the point where I go, okay, it's time for me to start making my mistakes in public um and began doing it, but the basic premise hasn't changed. These are calls where I'm just mentoring early stage entrepreneurs and what was fascinating is that I kind of was nervous, We'd run out of topics that everybody would be worried about their technical stack or they're worried about their go to market strategy or their financing. And it's been so remarkable with the scale of of these problems are like, for example, the woman that that you listen to most recently, you know, when I first spoke to her, she was pitching this ridiculous product like a combination cardholder grip for a cell phone, and I remember going, this is ridiculous, this will never work and lo and Behold. And all of a sudden I hear from her 2.5 years later, and and now she's got this huge order from one of the world's biggest retailers, she's got a patent, but what is she worried about? Where do I, where do I go from here? Which is a really interesting problem that people don't talk about. Another person is launching a 6000, 60, square foot indoor adventure park with like zip lines and repelling serving alcohol. And I mean, it's a great combination there, you know, what can go wrong, But he was not calling to talk about marketing or fine. He goes, I've got three kids under eight. Um this business is going to be open 18 hours a day, seven days a week, how am I going to actively managed to stay connected with my family while this is all going on? So it's this combination of quirky, crazy ideas, quirky, interesting entrepreneurs and this chance to kind of listen in as we're really digging in, trying to give concrete advice about how to take a specific example specific case and make it a and make it work. It's ended up being remarkably fulfilling in the sense of the mentoring at scale as you mentioned it. But as a, as a personal thing, the coolest thing in the world is learning something new and trying to figure out how to learn this new medium. I feel young again. Well, it's a really compelling show, I want to say congratulations. Um folks, if you haven't, please do go check it out again, that will never work. Uh, same title as Mark's Book Market has been a treat to have you on the show, I want to say, thank you very much. Um, I think obviously people know that the work that you've put out into the world, we didn't go into some of the other successful outcomes. You've recently sold another company to google for a couple of billion. That's whether it be. Um But if people do want to learn more or no more, are there some particular places you'd like to steer our community um where they can, is it is it just the book and the podcast or other areas? How can we in this community to be a service to the great work that you're doing? Well, first of all, thank you for that. The probably the Randolph central is probably found at the website, which is Mark Randolph dot com, which is marked with the sea and Randolph. There we go. And Randolph of the ph listen, I I've been having that spelling for years. Um and and from there, you can certainly find links to the podcast, to the book, to the blog. Um and to all the other ways that I try and communicate with people as you mentioned, the book and the podcast share the same name, which is that will never work and available wherever books and podcasts are found. And here you go. Here's a tricky one. The instagram is called. That's right folks that will never work. Uh you're smart, you can figure out how to find the other way. So if you don't like the uh 30 minute podcast, you don't like a 12 hour book And you want it all in 32nd form, 32nd bite sized predigested chunks. Well, I got that for you too. Awesome Mark. Thanks again for being on the show. Really, really appreciate it. Uh community. Let's uh sport Mark in his work. And again, I I find that you will my my bet is that you will find a lot of value in listening, specifically the podcast. Um Thanks again for being on the show mark. We look forward to the next time. Until then I bid you and everyone out there. Thank you. Mhm. Yeah. Mhm. No. Yeah. Yeah. Yeah.

Class Description

There's a common misconception that artists have a monopoly on creativity...But the very act of making waves - no matter the career - is a creative one. The Chase Jarvis Live Show is an exploration of creativity, self-discovery, entrepreneurship, hard-earned lessons, and so much more. Chase sits down with the world's top creators, entrepreneurs, and thought leaders and unpacks actionable, valuable insights to help you live your dreams in career, hobby, and life.

ABOUT THIS EPISODE:

How many of us let what others think and say dictate the way we value our ideas? Does hearing no discourage you? How about when someone tells you that what you’re working on will never work? This week’s guest has literally made a living as an entrepreneur, being told that his ideas would never work every step of the way. Marc Randolph is the cofounder of Netflix, author of the book, “That Will Never Work,” host of the podcast “That Will Never Work,” serial entrepreneur, investor, advisor, and mentor to young founders. Marc would be the first to tell you that the ability to receive critical feedback positively and constructively can be the difference between expanding on your idea and watching it fade.

We discuss Marc’s backstory, and how he came to discover his own entrepreneurial spirit. Marc speaks on the importance of communication and brutal honesty both at home and in the workplace. We talk about developing company culture, delegation and workflow, and the balance of freedom and responsibility within a company. Other topics covered include:

  • Having hard conversations with compassion
  • Socratic discussion and problem solving
  • Important skill sets for entrepreneurs
  • Work/life balance
  • Identifying the few important things to get right that will solve the rest of the problems
  • Why actions speak louder than words

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