22 years ago, with Marc Randolph they began renting movies at home. Today they host the leading streaming platform in the world.
In 1998, Reed Hastings and Marc Randolph They co-founded Netflix, a flat-rate home movie rental service in California. 22 years after that milestone, and after a long process of reinvention, the company became the queen of streaming platform, with about 193 million subscribers in more than 190 countries.
Hastings, the CEO of the company today, has just released a book explaining how to build a successful business. Written with Professor Erin Meyer, the book There are no rules here: Netflix and the culture of reinvention, also tells the incredible story of the company and how it managed to expand globally accompanying technological revolutions.
As the book’s title indicates, the Boston-born executive says that at the company “no rules”. And she talks about “Netflix culture”, a work method that encourages freedom of action for its employees, whether in work or personal matters, without authorization or approval from their bosses.
The objective of this work dynamic is that workers have more facilities when taking productive risks for the platform. “The key is to address management on the edge of chaos. That is the message of the book, “said Hastings, who was in Argentina last February.
In an interview with the newspaper The TimesHastings argued that innovation is more important to him than employee efficiency. “Value people over process, drive innovation over efficiency, and give your employees context, not control,” he explained.
In this context of independence, employees of Netflix they can choose their vacation days and organize your schedules according to your convenience, for better performance. “Unlimited vacations help attract and retain top talent, especially Gen Z and millennials, who are reluctant to tick,” Hastings noted.
He then justified that form of management, explaining that it is more expensive to lose employees and hire replacements than to pay good salaries to the best talent. That way, the best talents decide to stay at the company before asking for a raise or looking for another job.
In that same interview, the president of the company spoke of the impact of the coronavirus for the streaming giant. Despite the fact that many original productions already scheduled for this year had to be suspended or postponed, the CEO assured that the pandemic was a lucky break” for Netflix.
Just as many companies had to shut down, reinvent themselves, or adjust their costs to stay afloat during quarantines around the world, the lockdown generated a subscriber increase to the platform so far in 2020.
According to numbers released by the company, almost 16 million people created accounts in the first three months of the year, almost double the number of new clients it added during the final months of 2019.
Netflix’s stock price too grew by more than 30 percent this year, as investors are betting on its ability to profit from the fact that people are spending more time indoors. “It turned out to be a biological virus that mostly did not kill people but kept them at home,” she said.
“We have to recognize that sometimes you have a stroke of luck for a business and it is not your fault,” remarked the CEO of Netflix. “It is not to feel guilty. We feel that we are serving our customers and we receive this increase. Then I knock on wood, the vaccine will arrive. The Covid will be over. We are all going to tell stories about 2020 and how crazy it was, “he reflected.
About the launch of the book, Hastings spoke with several US media, including, Variety. And he referred to his most direct competitors: Amazon, Hulu and YouTube, all VOD (video on demand) platforms that were launched between 2005 and 2007, such as Netflix.
“We have been competing for 14 years. We compete through focus. In Amazon you can get what you want, they are trying to be Walmart. We are more of a passionate brand; like an online Starbucks, or something like that. We are a real entertainment brand, much more like HBO ”, he clarified.
“The old fear used to be that Amazon would buy HBO, because then it would have been an empowered, entertainment-focused Amazon. But that never happened. We compete with them by making great content, trying to please people, ”he added. And he announced that Netflix’s next goal is to generate original content in Turkey and Egypt.