Pod Insights The $100 MBA Show How Netflix Grew To A $366 Billion Beast. Sharing Their CEO's Secrets About this episode You can have a great product, a smart strategy, and still get buried if your team and culture can’t keep up. That’s the part a lot of business owners miss. If you’ve ever felt like growth is getting harder, decisions are getting messier, or your company is starting to feel heavy instead of sharp, this episode is going to hit a nerve.
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0:23 Speaker 02 A limited number of ETFs are subject to a service fee of $100. See details at fidelity.com/ commissions. Fidelity Brokerage Services, LLC, member NYSE, SIPC. What do I gift my mom and nieces?
0:31 Speaker 03 Walmart has top brands you know, like Ninja, Disney, Lego.
0:38 Speaker 02 Oh, Dad loves music.
0:39 Speaker 03 Sonos can bring his songs to life with sound that hits just right.
0:46 Speaker 02 And my coffee-obsessed bestie?
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0:51 Speaker 02 All those great brands at Walmart? Who knew?
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1:00 Speaker 04 How did Netflix go from being laughed out of a boardroom to becoming a beast worth $366 billion? Well, let me tell you a story. In the year 2000, Reed Hastings, the founder of Netflix, walked into a conference room on the 27th floor in Dallas, Texas. Across the table sat John Antiocho. John is the CEO of Blockbuster. At the time, Blockbuster had 9,000 stores, 60 million customers, $6 billion in annual revenue. Netflix had 300,000 subscribers and they were losing money. So Hastings made a pitch to him. He said, "Buy us for $50 million and we're going to run your online business." Antiocho laughed them out of the boardroom.
1:44 Speaker 04 10 years later, Blockbuster filed for bankruptcy. Today, Netflix is worth $366 billion. That meeting is one of the most instructive moments in business history. Not because Blockbuster was stupid and dropped the bag, but because Netflix had something Blockbuster just didn't. It had nothing to do with technology. It had nothing to do with their business knowledge. It had everything to do with their team. And their culture. Reed Hastings wrote a book called No Rules Rules. And it's about the specific principles that built Netflix into what it is today. And today I'm going to give you the five most critical lessons from their playbook and exactly how to apply those lessons in your business right now.
2:28 Speaker 04 In fact, when I read this book, I implemented some of the things I learned immediately and saw immediate results. Some of the things I'm going to share with you today are going to make some of the biggest impacts in your business that you've ever seen. And that's no exaggeration because I've witnessed it in my own business. So let's get started. Do doom.
2:51 Speaker 04 Welcome back to the $100 MBA show. I'm your host Omar Zenhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday to help you start, grow, and scale your business.
3:04 Speaker 04 I got a quick favorite ask. If this show has helped you in any way, leave me a quick review. You could do so wherever you listen to podcasts. This helps me and my team reach even more people who need the same no fluff, practical business advice that you're getting from the show. It only takes a few seconds, but it makes a huge difference. Thanks for being a part of our journey to help others on their journey.
3:28 Speaker 04 Lesson one, talent density changes everything. And this is the foundational idea behind everything that Netflix does. They believe that a small team of exceptional people outperforms a large team of average ones every single time. And Hastings calls this the talent density. How dense your talent pool is in your business, even if that's just you and a co-founder or you and your executive assistant. Here's specifically what Netflix means by this. One exceptional engineer not just does the work of two average engineers, they do the work of 10. I've witnessed this myself, building a software business for over 10 years.
4:09 Speaker 04 I had an engineer on my team that was outputting 10, sometimes 20 times work than the average engineer on the team. Okay. So we had many engineers. There was one that was just so, so much better. And guess what? He was the most expensive one. This teaches you that exceptional people do not just work faster. They make better decisions. They solve harder problems. They raise the standard for everyone around them. And here's the flip side. One mediocre performer on a team of high performers doesn't just underperform. They drag the entire team down. They slow decisions. They lower the standard. They make the exceptional people around them work harder when they don't have to.
4:53 Speaker 04 Some of you know I play basketball and I'm competing in the World Master Games in Greece very, very soon. And when I practice with my team, and this is a team of very high performing players, many of them, if not most of them, have played professionally around the world. And when I play, because the standard's so high, I play my best basketball. But sometimes I play some pickup basketball with my friends. They're okay, but they're not at the same level. And when I play with them, my performance, just not as good. It's because I become worse of a player. I become less, you know, fast, less smarter. My passes are not as sharp because I don't have to play as good. So this is a good example of the environment really shapes how well people perform and how they show up at work. Netflix has this concept called the keeper test.
5:37 Speaker 04 Every manager at Netflix regularly asks themselves a simple question. If this person told me they were leaving tomorrow, if they got another job offer somewhere else, would I fight to keep them? Or would I kind of secretly been like, well, that's okay. I can find somebody else. If the answer is anything less than an emphatic yes, that person should probably be somewhere else. You probably shouldn't hire them in the first place. And Netflix fully understands this. Now, there's another exercise that I recommend that you do, that I teach inside the $100A program. And it's a thought experiment. The idea is that if you had to, you were forced to fire everybody on your team and have to start from zero, who would you rehire? Okay? So this concept kind of gets you thinking, well, I don't have the burden of having to fire them or go through that painful.
6:22 Speaker 04 I have to do it. So they're all fired, they're gone. Now I got to choose who I can rehire. That is a different idea of like, who would I actually value? Need and they're actually adding a lot of value to the company. So this is really, really good way to find out if your team has good talent density. Are most of the people you would rehire or most of the people that you would fight for so you can keep? Or are some of them, or most of them, just not worth rehiring? Now I want to pause for a second because you might be hearing this and saying, this is sounds very cutthroat. This sounds like, oh my gosh, like firing people is not a fun thing. And that's really not a nice thing to do, people. And I understand that, but you have to understand when you signed up to become an entrepreneur, when you signed up to start a business, you have a loyalty, you have an allegiance,
7:05 Speaker 04 you have a duty and responsibility to your customers to give them your best. And if you're shortchanging them because you are not choosing the right talent or keeping talent that are not the best people for the job, then that is something that you're going to have to live with. The fact that you're just not delivering the best quality, the best product or service that you possibly can do. And guess what? Your competition, they're going to do that. They're going to make sure that they have the best people. And especially as you start growing in your business, start competing with bigger companies, you're going to start realizing that, hey, it's all about talent. It's all about who can I recruit on my team so we can win? Netflix totally gets this and they don't wait, by the way, for annual performance reviews.
7:47 Speaker 04 They apply this test constantly and they act as a result. And they're very honest about this. They're very honest about a lot of things, which I'll mention. But this is a lesson I had to learn the hard way when I was building my software company, Weapon or Ninja. I had a software engineer that was genuinely good as a person, but not really adding a lot of value to the company. In fact, a lot of the other engineers were doing his job for him because he wasn't doing it good enough. But I didn't know what was happening. They were kind of hiding it so that they can cover for him. And this is a likable guy, but you gotta hit the standard. Otherwise, it's not fair for your customers. It's not fair for the rest of the team and it's not fair for you, who's making sure that you're trying to keep a high standard in your company. So I encourage you to do the keeper's test. Who would you fight for?
8:32 Speaker 04 If you had to fire everybody and had to rehire them again, who would rehire? This is something that you can implement right now and start asking yourself some real questions. Why wouldn't you rehire them? Can you train them? Can you help them out? Can you give them the support they need? Or you just need to get better talent. If you're honest about this, the answer is going to tell you a lot of things about the talent density in your team. Now, before I move on, I want to talk about something that a lot of entrepreneurs fall into, okay? It's a myth they believe. They believe they can find the diamond in the rough. They feel like they can find the best value. I'm going to find the person that no one knows about and it's pretty cheap from some country, blah, blah, blah. You get what you pay for. You get what you pay for. At the end of the day, don't try to find the diamond in the rough. I use a lot of sports analogies because I do believe that a business team is very much like a sports team. And Netflix believes this as well.
9:17 Speaker 04 I'll share that in a minute. But the New York Yankees, how many championships have they won? How many World Series have they won? Too many to count, okay? They also have the biggest payroll, okay? And there's a reason why, because they go after the best talent and the best talent, they deserve and demand a lot of money. So, in my opinion, it's best for you to have one person that's expensive than five that are mediocre and maybe, you know, less expensive and allows you to feel like, oh wow, I got a team of five people instead of one and kind of strokes your ego. No, you get what you pay for, go with the top talent and you're going to get a lot more than what you bargained for.
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10:08 Speaker 02 What do I gift my mom and nieces?
10:10 Speaker 03 Walmart has top brands you know, like Ninja, Disney, Lego.
10:16 Speaker 02 Oh, dad loves music.
10:18 Speaker 03 Sonos can bring his songs to life with sound that hits just right.
10:24 Speaker 02 And my coffee-obsessed bestie?
10:26 Speaker 03 Delongi Brews Coffee, right for mornings extra bright.
10:30 Speaker 02 All those great brands at Walmart? Who knew?
10:32 Speaker 03 We knew, now you do too.
10:34 Speaker 04 Shop gifts, no love at Walmart. Lesson number two, radical candor is the competitive advantage of Netflix. I'm going to tell you right now that this chapter is probably the most controversial chapter of the whole book. Most organizations, they have a feedback problem. Not because people don't have opinions, it's because they don't say them out loud. They don't actually give feedback respectfully and honestly. You know what I'm talking about? They smile. In a meeting and they complain in the car in the parking lot, right? You need to encourage your entire team to be as honest and respectful as possible at all times. So that we're constantly giving each other feedback, you know? Just five seconds ago, you didn't see it off camera.
11:17 Speaker 04 Josh corrected me. I made a mistake. I read the word on my script incorrectly. But that feedback I needed so that we can all win and that we can have a great episode. And I don't look like a fool on camera. In most businesses, they write performance reviews in the most diplomatic language possible. Not to hurt anybody's feelings, right? Makes sense, but often in that process, honesty gets missed. They tell their colleagues what they think, but they never really tell the person that they're supposed to hear it. Like the person that needs the feedback. Netflix decided that this is not acceptable. They built a culture they call radical candor, right? And I love this idea because and they really underline the understanding of that. We're going to be honest. We're going to be candid, but we're going to be respectful, right?
12:01 Speaker 04 We're going to give honest feedback to encourage each other to do better. Again, sports analogy, all the time when you're on the basketball court, you're telling your teammates if they miss a shot, don't worry about it. Next shot, you know, keep going after it, giving them people feedback constantly. Just so that people know that, hey, we're on the same team, but you need to hear, you know, find another way to influence the game. You don't have to always keep shooting. So the point here is that you want to give honest feedback to your team at all times and understand. And they all understand we have like a culture that, hey, we're doing this so that we all get better, right? Because if you win, I win, we all win. By the way, this only works if it's at every level. And one of the rules they have at Netflix that I absolutely love is don't try to please your boss.
12:45 Speaker 04 It's a great, great rule, which lets people know that, hey, you're not going to win any brownie points by trying to please, you know, the CEO or the manager or whoever it might be. What you want to do is give honest feedback regardless of who you're speaking to, okay? Because we all need to hear all the ideas in the room. So the person that's making the decision or the team that's making the decision got all the information. So they'll be able to make the best sound decision possible. So in Netflix, a junior employee, an intern can give. Feedback to a senior employee. Even the CEO himself, Reed Hastings, really encourages people not to try to like pander to him and you know, give him lip service. He says, please destroy my ideas if you think you have a better one. But the best part of this is that Netflix encourages feedback in real time.
13:29 Speaker 04 Not once a year, not once a quarter, in the moment. And there's nothing wrong with that. There's nothing wrong with taking that moment and say, hey, I'm gonna make this a teaching moment to give feedback. But also remember that you need to be open to get feedback. You gotta be open to say, if someone gives you feedback, be like, hey, I'm gonna consider that. I'm gonna try that next time. Because they're not gonna listen to you if you are not listening to them. And that's the whole point. And I think Netflix really nailed it with this framework. Now, I want to break down this framework so that you can apply it in your own business. And it's called the four A framework. And it's four As. The first A is aim to assist. Give feedback with the intention of helping and not criticizing. This is very important because if you don't have the right intention, it's gonna come off as you just being a little bit petty.
14:14 Speaker 04 So that's the first A, aim to assist. Number two, actionable. Focus on what the person can actually do differently. This is so important. So many people just say, well, I don't like what you just did. Well, that's not feedback that's helpful. You want to tell them what they should do instead, right? Not what you didn't like. A, number three, appreciate. When you receive feedback, resist the instinct to defend yourself. A lot of us will just like, no, you don't understand, this is why I did this. No, don't do that. Just say thank you. Just take it as a data point and say, I appreciate you giving me feedback. And then you can figure out what you want to do with it later. And the fourth A is accept or discard. You are not obligated to act on every piece of feedback, but you must genuinely consider it.
14:56 Speaker 04 And this is really good advice, even as the leader of your business, as an entrepreneur. Anytime you hear anything, and we're gonna talk about this in a future episode, but anytime you hear anything like advice from a podcaster or some guru on YouTube, or something you read in a book, just see it as a data point. See it as something that you can add to your arsenal to help you make better decisions. It's up to you what you do with that information. So what does this actually do for you? What does radical candor do for your business? Well, it eliminates the gap. Between what people think and what gets said. You know, a lot of people, they think something, but they don't actually say it. Right. They keep it to themselves. And that gap is where bad decisions live. That's where problems really fester and you don't want to do that. By the way, this is applicable to even just personal relationships where the thing everyone knows is wrong.
15:40 Speaker 04 Never gets fixed because no one wants to say it out loud. It's very hard for you to address something that you don't recognize. Here at the 100 MBA, we've built a culture where we have learned through repetition, how to give feedback the right way. When something's not working, what we like to do is we like to be very direct and honest. But there's no reason to be mean about it. Right. There's no reason to be like, you know, spiteful about it. You can just be respectful and even you can have a little fun with it and just be nice about it. So we like to have a direct conversation. We don't have like a strongly worded email or anything like that. It's just easier to talk to somebody face to face or even on a zoom call and just have a chat. And more times than not, we're actually on the same page. We just decided to implement whatever we decided to do in different ways.
16:23 Speaker 04 So we have to save yourself from those bad decisions that can be created by miscommunication, by the fact that you just never told that person the way you wanted it, or the way you envisioned the project to go. So always communicate. We have a rule that you can never over communicate because over communication really doesn't exist. You know, it's good to reiterate things, remind people and also give feedback when it's needed, but also encouragement. Feedback is also encouragement. Just say like, hey, I really liked what you did. That was fantastic. And that just tells them, hey, keep doing that. That's the direction you move in. The point of this takeaway is you want to build a culture where honesty is safe. It's not just tolerated, it's rewarded, it's respected and it's celebrated. Lesson number three.
17:07 Speaker 04 Now, some of you are going to really need to learn this lesson and some of you, this is going to come naturally. And what's lesson number three? Treat people like adults. Netflix has a very generous vacation policy. In fact, they have a no vacation policy, which means there is no policy. Okay. They just allow people to understand that these are your responsibilities. This is what you got to get done. As long as you get them done, that's fine. They're just result oriented. And you know, I know that a lot of countries have different laws and you know, you have to kind of follow these laws. But if the spirit of your holiday policy is you figure it out, you're going to be fine if you need to take a few weeks off, no problem, as long as you get your job done. That is really what you should embody from this lesson is that it's not just about the vacation policy,
17:50 Speaker 04 but you have to treat people like they are autonomous, like they're responsible, like they're adults. Netflix does have a lot of policies, whether it comes to expenses or holiday or sick leave or whatever it might be. But they do have one rule, and this rule is very simple. Act in the company's best interest. So they don't have any forms to fill, no approval chains, not even receipts to submit to a committee. They just submit it straight to accounting. But they have a rule that says, hey, whatever you do, we're expecting you to act in the company's best interest. And that kind of covers all the bases. Now, most people, when they hear this, they hear that, oh my God, people are going to abuse this. If I just give them unlimited holiday, they're just going to be gone for six months.
18:35 Speaker 04 If I have no expense policy, they'll just, you know, run up a huge bill and, you know, drive me out of business. And here's what actually happens in Netflix. Okay, employees take roughly the same amount of time off as if they had a traditional policy. The funny thing is that people will just act responsible if you just allow them to be adults. Remember, you're hiring top talent, people that care about their job, that want to keep their job, that want to keep on doing what they're doing for a living. And yes, I understand that things can get expensive, travel costs and all that kind of stuff. But you have to understand that what's the cost of making your employees feel like you don't trust them? And in Hastings' book, Literally and Figuratively, he really believes that that's a small price to pay. It's a small price to pay to have no policy
19:20 Speaker 04 and maybe to have a little bit of overspending here and there to make sure that the team understands that I trust you, I appreciate you, and I also believe that you're going to act responsibly. But that's not the best benefit of having as little rules as possible or as little number of policies as possible. The number one benefit of this is speed. When people do not have to approve to make any kind of decision, things get faster, things get done quickly because they don't need a committee, they don't need approvals, they're not waiting months to get something done. For example, when they don't need to submit an expense request, they just buy what the business needs and move on and they get the job done. When they are trusted to manage their own time and their own holiday,
20:05 Speaker 04 they take ownership of their output rather than their hours. They make sure that the team is not burdened by the leave. They take care of things so that they can take the leave responsibly, but also comfortably. Their entire model is built on one belief. Most people are adults that want to do good work. And treating them like children who cannot be trusted and are gonna run amok if I don't, you know, stop them from doing so. That's the kind of culture and behavior that a lot of people don't want to be around. People don't want to be a part of a company that makes them feel restricted, makes them feel that they can't be creative and they can't make decisions and can't be autonomous. The flip side of trusting somebody is that they understand that they're responsible, right, and they respect your trust.
20:49 Speaker 04 Control, on the other hand, produces really just compliance. You don't want that. You want innovators, you want people that are gonna go after it and do better work than you could ever do. Hey, if you're loving this episode, do me a favor. Smash that subscribe button, whatever app you're using, subscribe. Because we have an upcoming episode I don't want you to miss. And as soon as it goes out, you'll see it in your feed. And this episode's all about how to create a vision for your business without feeling cliche or corny. I'm gonna give you a step-by-step plan of how we come up with our vision, how we communicate our vision to our team. And it's not a once and done thing. It's something that we try to do over and over and make it a part of what we do every day. And this is actually quite simple. It's not some big corporate concept and framework that is hard to follow. It's simple, it's step-by-step, and I'm gonna share it with you.
21:34 Speaker 04 So hit subscribe so you don't miss that episode so you can nail your vision, not only what it is, but how to communicate it. Lesson number four is something that I kind of talked about and hinted on throughout today's episode, and that's we are a team, not a family. Now, this might rub you the wrong way, okay? But you have to understand that in business, you have competition, just like in sports, just like a professional sports team. And the goal of a professional sports team is to win a championship, right? And they want to assemble the best team possible to be the best. You know, the best team wins in sports. Now, most companies describe their culture as a family. We're a family here. We take care of each other. We're loyal to each other.
22:18 Speaker 04 And no matter what, we got each other's backs. That sounds warm. It sounds human. It sounds kind of nice, but it's not reality. That's not the truth. You're actually lying to people because that is not what actually happens in business. Why? Because family doesn't cut you out when your performance drops. They don't have any obligations to do anything other than love you. Okay? That's what makes family so special. It's unconditional. I'm going to, you know, support my sisters, my mom, my parents, no matter what. But that's not the reality of business. If somebody just shows up to work and does nothing all day, are you going to continue to pay them? Of course not, because you have an agreement. You have an exchange. This person is supposed to deliver a certain level of value to the company and in exchange, they get compensated.
23:02 Speaker 04 So this is not reality. This is stop calling it a family because family is a whole different thing. And love your family. You know, your family keeps you in the family because you belong, your blood, you're a part of the family, not because of how you're performing, has nothing to do with the way you're performing. Okay? But a business that operates like a family ends up keeping people out of loyalty rather than results, which means high performers carry the people who are not performing, which means the standard drops, which means your high performers are going to feel resentful and they're going to look elsewhere to work. They're going to go somewhere where everybody's an A player and you're just not going to compete. I'm just giving you the truth here because if you want to operate your business like
23:45 Speaker 04 a family, then in a lot of ways, you're not a real business. You're a non-for-profit, right? You're just kind of operating in a way that makes you feel good rather than what actually gets you results. So like I said, at Netflix, they compare themselves to a professional sports team. Think about a professional sports team and what they do at the start of the season. They try to have the best roster possible so that they can win the championship. Every player on that roster has a role. They're there because they are the best available person at that position right now. Okay, and as long as they are the best option, they will remain on the team. But if there's an opportunity to have somebody that is in that position, that you know, with their skill set and what they provide to the team, that is better than them at whatever they do,
24:29 Speaker 04 then it's the obligation of the team and management to go after that person, because it's going to make them more competitive. Now, within the team, the coach has a deep loyalty for the players or to the players. The players have a deep loyalty to each other. But if a player's performance drops and someone better comes along, you know, the team management is going to sign that player. Trades happen in sports all the time. And it's not because the player is a bad person. It's because the goal of the team is to win. And that's just the bottom line. And this is how Netflix thinks about every role in their organization. The manager that genuinely cares about people on their team, they invest in their team because you can develop the players on your team and make them better and make them the best in the industry.
25:13 Speaker 04 And you can invest in your team and your training of your team and the ability for them to take on more responsibility. That's going to make them a better player. So all these things are with the mindset of, hey, how can I level up all my players so that we as a group are the best of the best? But what if somebody no longer is the best person for the role anymore? You have to have a conversation. And Netflix really believes in having, again, an honest, clear conversation. And they, you know, make sure that they take care of them and they give them a good reference. And the funny thing is that when people leave, and in the book, they've interviewed people that left Netflix, whether they didn't make the cut and they had to be cut from the team, or they resigned, they say the same thing.
25:55 Speaker 04 They feel honored that they were even chosen in the first place to be part of this. Elite team. So it's not seen as a bad thing. They seem like, hey, you've made the team. We were able to use your talents and your abilities for a period of time, but now you're going to move on. And you've got to remember Netflix is at the top of the media game. So anywhere they go, you know, people would love to have them. So in a lot of ways, it's something that is understood in the company and they understand that, hey, we respect what you've given us, but we got to keep on growing. And now we're going to move in a different direction and get somebody else to do this role. Because by the way, this is one of the worst things a lot of people do. They keep somebody in a role that they're not succeeding in and they are not feeling fulfilled.
26:39 Speaker 04 They're not feeling like they're doing their best work. So it's actually better for them to move on to somewhere where they can be more useful and get more fulfillment in another company. And by the way, through my 20 years of experience in business, anytime I had a conversation with somebody who's not performing, they know it. They already know it before you have the conversation and they actually feel relieved we're having the conversation and that there is a path forward, whether it's them getting trained up or them moving on to another company. And they actually feel a sense of burden that, hey, I'm not pulling my socks up. I'm not the person that's actually helping out the rest of the team. They're helping me out. And I'm kind of burdening them with my responsibilities. So they're actually relieved when they have this conversation. I say nine times out of 10.
27:22 Speaker 04 So don't be afraid to approach them and say, hey, we've got to do something about this because they can feel it and they want to improve or they want to change. I've talked about this in a previous episode where I waited too long to make a fire that I needed to do back in the day with Webinar Ninja, my software company. And when I had that conversation, it was a clear and quick conversation because we've already had a few other conversations beforehand and they saw the writing on the wall. They kind of understood that this is where it's going. But I actually dragged it on for too long. This person was with us for about two years. I should have known this within the first few months and I kind of knew it, but I was hoping that things would just get better. And I didn't really apply any kind of strategy or tactics to make it better. I didn't have a plan for them to get better or even putting them in a different position.
28:07 Speaker 04 I just hoped that I was wrong. And that's not a good way to look at it. You've got to face those challenges head on. So one, you're not wasting their time. You're not wasting your company's time and making sure that you have the best person for that job. Lesson number five, reinvent before you have to. Let's go back to that Blockbuster story that we shared at the top. Because the lesson of that story is not that Blockbuster was arrogant. It was that Blockbuster was trapped. They were trapped by their own success. This is often called the innovator's dilemma. They were really good at movie rentals, but they never innovated into streaming. And that's where the, you know, movies were going. That's where any kind of media was going. I mean, think about it.
28:47 Speaker 04 You're a business that has 9,000 stores, 6 million customers, $6 billion in revenue. It looks like success by any metric, right? Everything about that business was optimized for the model that it was at the time. But they didn't see the fact that they were going to become obsolete within a decade. And people that were running this business could not see it because they were so obsessed with what was working rather than what will work in the future. That's a principle that Netflix continues to embody. In the beginning, they were just DVD by mail. You know, they were sending DVDs in the mail. You could return it. And then they moved to streaming. When internet speeds got better, they moved to streaming. Then after that, you know, they were streaming movies and TV shows that were produced by other production houses.
29:32 Speaker 04 But then they were like, hey, maybe we should produce our own movies and shows. And the first show they produced was House of Cards. By the way, remember when I just did Dum Dum? That is actually the sound of Frank Underwood, the character, the main character of that show, pounding on the desk with his ring. And that's where the Netflix sound bit came from, where he's going bum bum on the desk. But I thought that was really cool. But the point of this is that they keep reinventing themselves. Now they're producing their own shows. They produce their own movies. When they produced Roma, which won a ton of awards, it kind of put Netflix on the map as like a real production house. They didn't stop there. They kept on changing. Now they do live events, whether it's sports, whether it's comedy. I just saw Kevin Hart had some comedy roasting special that was live.
30:17 Speaker 04 So they're constantly reinventing themselves. They're constantly trying to make sure that they're on the next thing and not just settling with what works. They're constantly trying to figure out what will continue to work, not just Today, but tomorrow and the future. Why? Because technology changes. Customer expectations change. And the business is still optimized for what's working right now. So you've got to work on your business, but also work on the business you're going to become. You have to like work on two businesses at once. We had to do this at webinar in our software company, where we were serving the needs of the customers and what they wanted, what they're asking for today. But we knew in the future, they're going to need other things that they're not voicing today because they don't know they need it yet. And that's a tough compromise because you've got to split your effort and your time
31:01 Speaker 04 and your money and your capital and all that kind of stuff on what's working and making you money, but also on a few bets that you hope will work so that you are ahead of the game before it actually happens. One of those things we had was automated webinars. We realized that people didn't want to always do live webinars. We were one of the first people that did automated webinar so that you can run webinars 24/7. So when we launched that, people were like, wow, yeah, that's something that I want to do. That's something that I actually need. They didn't know they needed it, but we kind of knew it because they expressed some of the problems they had and we knew that this would be a good solution. So you're constantly looking to do what's next and not just work on what's working. So you want to be a company that always is asking, what does the future look like? What does the next version of my business look like? And then build it before you have to.
31:47 Speaker 04 All right, to wrap up, here are the five takeaways, the five insights that I absolutely loved from this book, No Rules Rules by Reed Hastings, the founder of Netflix, CEO, wrote it himself. Talent density, number one, very important to make sure that you have as much talent possible on your team, even if you have a smaller team. Number two, radical candor. Build a culture where honest feedback is the standard. It's safe, it's expected, and it's respectful. Number three, freedom and responsibility. Treat people like adults because they are adults and you shouldn't have to have to manage them and micromanage them constantly. Hey, that's a lot of work and a lot of headache. Relieve yourself of that and treat them like adults. Number four, build a great team, not a family. Right? Make sure you build this culture
32:31 Speaker 04 so that you can compete at the highest level. And number five, reinvent yourself before you have to. Build the business you are going to become while you're running the business you have right now. One of the best things about business is building what Derek Sivers calls, "Building your own utopia," creating your own perfect world that you create yourself. That's the joy of entrepreneurship is that you get to create the culture and the vibe of what your business is like. So you get to choose what it feels like to work there. You get to choose the spirit, the talent, the type of feedback you give and the respect you show each other. In my opinion, it's one of the hidden benefits of starting a business is that you get to create a world of your own. I highly recommend you check out No
33:15 Speaker 04 Rules Rules by Reed Hastings. It's also co-written by Erin Meyer, who is actually outside the company. She's somebody that interviewed Netflix employees to get an honest understanding of what it's like to work there. So she's just not interviewing Reed where he has got biased opinions as the leader, okay? But it's a fantastic read. I highly recommend it. If this episode made you want to think deeper about the business you're creating, the team you're creating, then subscribe. That's your way of saying thank you. You're always showing love and allowing other people to find this episode, just like you found it. I also want you to subscribe because we have great lessons that are coming up that I don't want you to miss. We recently published an episode that I think you're going to really love if you like today's episode. It's called "The Right Way to Fire
33:56 Speaker 04 Good People Who Are Bad Employees," okay? Sometimes the best, nicest people are just not good at their job and you have to have a plan on how to approach this situation because again, you want to have a high talent density in your business. So check out that episode if you want to continue learning. Thanks so much for making it to the end of the episode.
34:18 Speaker 04 If you found today's episode helpful and you want more practical business lessons to help you start, grow and scale your business, the best thing you could do is subscribe to this podcast. Hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify or wherever you listen to podcasts. By hitting subscribe, you get our next episode automatically and it's the best way to support the show. It's absolutely free and it's a way for you to commit to growing your business. And now that you've subscribed, I'll check you in the next episode.
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