đ˝ď¸ Streaming Now: The Netflix Story
Netflixâs origin story is more interesting than some of its originals. ReadOn!
âSuccess is not for the chosen few, but for the few who choose it.â
Netflixâs co-founders seem to live by this quote.
25 years ago on April 14, Marc Randolph and Reed Hastings chose success when they officially launched Netflix.
How did they choose this success?
How did they get a perfect idea?
Most importantly, what were the hurdles on their road to success?
Sit back, and grab a tub of popcorn as we dive deep into the origin story of Netflix!
ReadOn!
đ The Netflix Story: Popular Version
Back in 1997, Netflix co-founder Reed Hastings was charged a $40 fee by Blockbuster for returning the movie âApollo 13â late.
Well, turns out this version may just be a great marketing story that sells.
The real story is a bit more complicated, with a lot more ups and downs.Â
Hastings and Randolph had an entrepreneurial spirit: they wanted to build something on the internet, but they just couldnât decide what.
Yes, some founders just have the itch to build something and change the world. They figure out the what and the how as they go along.
đ The Netflix Story: Real Version
For any origin story, the story of how the founders met is super interesting.
Letâs see how Marc Randolph and Reed Hastings became âco-foundersâ.
Back in 1996, Marc Randolphâs company Integrity QA was acquired by Pure Atria.
Reed Hastings was the CEO of Pure Atria.
Now, Pure Atria was also soon going to get merged with another company, so the two entrepreneurs would be out of a job!Â
Now, as they carpooled to work every day, Randolph would pitch all sorts of ideas to Hastings: customised dog food, personalised shampoo, and even customised baseball bats!
Hastingsâ reply? âThey will never workâ.
One of their better ideas was online delivery of VHS tapes: people could get movies directly at home instead of going out to rent them!
The only problem?
Delivering these VHS tapes would be too expensive.
Now, thatâs when a miracle happened.
The world invented DVDs.
These DVDs were much lighter than tapes and posting them would be super cheap.
Hastings was instantly sold on this idea.
Thatâs it.Â
After a hundred brainstorming sessions on the go (literally), they found their âahaâ moment.
After a hundred brainstorming sessions, Netflix was born.
𤨠The Netflix Story: The Challenges
Netflixâs journey has been full of challenges, from the first day itself!
The website was launched on April 14, at 8 am with a library of 900 titles. Within 15 mins, the website crashed!
Yes, people were rushing to buy DVDs at 8:15 am!
By the end of the day, they got more than 200 orders!
Now, while people were loving the business, investors would laugh at the two co-founders in meetings.
They were told, âThis will never work.â
And this came at a time when Netflix was struggling.
After a year of operations, Hastings and Randolph were facing various challenges.
While DVD sales were good, they were losing money on rentals.
Thatâs when they got an acquisition offer from Amazon for $15 million. Yes, Amazon was trying to get into the DVD business.
Now, they could either sell out for a fair price or they could compete against the giant that Amazon was.
What did they choose?
To stand strong with their heads held high, not giving up on their dreams.Â
But little did they know, Netflixâs troubles were just beginning.
It witnessed the dot com bubble crash which led to a funding winter.
It saw only one way out: a strategic sell-out.
Who did they approach?
Blockbuster, their biggest competitor.
They wanted to run the online business for Blockbuster, while Blockbuster would continue with offline stores.
The meeting was going great, untilâŚ
Netflix demanded $50 million for this deal!
What next?
They were laughed out of the room. Again.
This was the last time someone laughed at Netflix.
In 2001, DVD players had somehow become a really popular Christmas gift.
More and more people started buying DVD subscriptions and Netflixâs business boomed!
By 2002, it had 600,000 subscribers.
That year, it also doubled its revenue from $75 million in 2001 to $152 million!
And its crowning glory?
It ran Blockbuster out of business in 2010.
This didnât make it complacent. It also caught up with changing preferences of users and launched its online streaming service in 2007.
Today, it is a $150 billion company with over 230 million subscribers!
đ§ The Key Takeaways
Netflix is one of the rare startups in the world that was born out of pure passion: a passion to change the world.
And in doing so, it changed the way we consume content forever.
Netflixâs story is full of lessons, not just for entrepreneurship, but for life.
Our major takeaways are:
Your first idea may not be the best idea. You may have to dig and dig until you strike gold.
There will always be people mocking you. There will always be people telling you âThat will never work.â Thatâs what people do. But, you have to keep your head high. Sometimes the only way is through.
The only way to stay at the top in this fast-paced world is to embrace change. Netflix embraced the changing behaviours of its users and tweaked its offerings. Blockbuster failed to do this. Today, Blockbuster has just one small store. And ironically, Netflix has a show about this!
Oh, and yes. Always keep an open mind. Embrace new experiences in life.
Who knows, your next carpool may give you your million-dollar startup idea?!
What other lessons did you learn from Netflixâs story? Let us know in the comments!
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