#116: How Netflix Disrupted The Entertainment Industry with Marc Randolph

#116: How Netflix Disrupted The Entertainment Industry with Marc Randolph

Ever wonder how Netflix became the giant it is today?

In this episode, we are chatting with Marc Randolph, co-founder and first CEO of Netflix. Marc is a veteran Silicon Valley entrepreneur, advisor, and investor. As founding CEO of Netflix, he laid much of the groundwork for a service that’s grown to 150 million subscribers and fundamentally altered how the world experiences media.

Marc’s career as an entrepreneur spans four decades. He’s founded or co-founded six other successful startups, mentored hundreds of early-stage entrepreneurs, and as an investor has helped seed dozens of successful tech ventures. Most recently, he co-founded analytics software company Looker Data Sciences, where he now serves as director. Outside of the tech and startup world, Marc sits on numerous other company boards and is an outdoors enthusiast.

In this episode, we discuss how Marc started his career, his wilderness experiences that shaped his leadership style, and the importance of experimentation. We’ll also talk about why there’s no such thing as a ‘perfect’ idea, how Netflix rose to dominance, and Marc’s perspective on the importance of culture.

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Check out our website to meet the team, view show notes and transcripts: www.youngandprofiting.com

Timestamps:

00:51 – Marc’s Childhood

03:51 – How a Wilderness Organization Shaped Marc

8:25 – Marc’s Advice for Recent Graduates and The Beginnings of His Career

14:35 – The Importance of Experimentation

17: 25 – Why There’s No “Perfect” Idea

20:58 – Marc’s Experience with Panhandling

28:46 – Netflix’s Pitch To Blockbuster and What Went Wrong

34:08 – How Blockbuster Was Disruptable and How Netflix Won

38:38 – The Hardest Situation in Marc’s Career

41:40 – Why Marc Doesn’t Like Performance Plans

44:12 – How Netflix’s Culture Developed

52:34 – Marc’s Secret to Profiting in Life

Mentioned in the Episode:

Marc’s Website: https://marcrandolph.com/

Marc’s Podcast: https://marcrandolph.com/podcasts/

Marc’s Book, That Will Never Work: https://marcrandolph.com/the-book/

#116: How Netflix Disrupted The Entertainment Industry with Marc Randolph

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[00:01:33] You're listening to YAP! Young and profiting podcast, a place where you can listen, learn, and profit. Welcome to the show. I'm your host Hala Taha. And on young and profiting podcast, we investigate a new topic each week and interview some of the brightest minds in the world. My goal is to turn their wisdom into actionable advice that you can use in your everyday life.

[00:01:58] No matter your age, profession, or industry, there's no fluff on this podcast and that's on purpose. I'm here to uncover value from my guests by doing the proper research and asking the right questions. If you're new to the show, we've chatted with the likes of ex FBI agents, real estate moguls. Self-made billionaires.

[00:02:17] CEOs and best-selling authors our subject matter ranges from enhancing productivity, how to gain, influence the art of entrepreneurship and more, if you're smart and like to continually improve yourself, hit the subscribe button because you'll love it here at young and profiting podcast. This week on yap.

[00:02:36] We're chatting with Marc Randolph, a veteran Silicon valley entrepreneur, investor, and advisor. He's a co-founder and first CEO of Netflix. And before retiring from the company in 2003, he served on the company's board of directors. Marc's career as an entrepreneur spans four decades, he founded or co-founded six other successful startups, mentored hundreds of early stage entrepreneurs

[00:03:00] and as an investor has helped see dozens of successful tech ventures. Marc sits on numerous company boards and is an outdoor enthusiast Mark's best-selling book that will never work the birth of Netflix. And the amazing life of an idea was released in 2019. And he recently just launched a podcast that will never work earlier this year.

[00:03:19] In this episode, we discuss how Marc's early career experiences gave him the foundation he needed to start Netflix later on. We also talk about his wilderness experiences that shaped his leadership style and the importance of experimentation we'll then go into why there's. No such thing as a perfect idea, how Netflix rose to dominance and Marc's perspective on the importance of company culture.

[00:03:42] Welcome to the show, Marc.

[00:03:44] Marc Randolph: Thanks, Hala. It is a pleasure to be with you and thanks for having me.

[00:03:47] Hala Taha: [00:03:47] Of course. So I can't wait to dive in to everything you have to share with us today. But first I want to start way back in the beginning in your childhood, I knew that you grew up in New York. I think you were the oldest son in your family.

[00:04:02] Not necessarily humble beginnings, but not like now. And so I would love to hear what it was like for you growing up and how you gain that entrepreneurial spirit that you have.

[00:04:10]Marc Randolph: Since you brought it up, I'm not sure I'd call it humble beginnings. you know what, I think one of the things I've certainly recognized over the last bunch of years is how much privilege I've had.

[00:04:20]And in terms I grew up in an upper middle class or maybe even a wealthy community, I went to a gray school. I had a lot of breaks, certainly are great. It, wasn't not like it is. Now things are a little bit easier for me, but, In terms of realizing whether you're going to be an entrepreneur or not.

[00:04:36] That's not something that would have happened back then. This was back in the early sixties and being an entrepreneur, wasn't really a thing. There certainly were entrepreneurs, but no one used the word. It wasn't glorified. You didn't really read about it. And and I'm going to say, fortunately, which meant that I did it for what I'm going to consider the right reasons.

[00:04:57] I was never doing these things because I thought one of these days I'm going to be wealthy or famous or any of that stuff. It was a more of a compulsion. And even at the very beginning, I must've been, six or seven years old and I got this job selling seeds, like you would. For a vegetable garden or flowers.

[00:05:16] And it basically meant going door to door and knocking on the door and trying to sell them seed packets. And it was pretty close to being some kind of child labor law being violated because if you sold a hundred thousand packets, you'd earn a whistle or a cheap stopwatch or something. But nevertheless, I'd imagine that most people, especially young kids go up and knock and get the door slammed in their face and go back to watching cartoons.

[00:05:45] But. It triggered something in me because I said, I'm going to, I'm going to figure this out. I'm going to figure out what can I say to get them to open the door and keep the door open? And then once I've got the door open, what can I say to actually get them to buy my seeds and wow, I can get them to buy a pack.

[00:06:01] How do I get them to buy three packs or five packs? It was the beginning of kind of that problem solving that, seeing obstacles, not as something to get frustrated about, but as an obstacle to be overcome, I was going to figure it out. And fundamentally, that is what I spent pretty much the rest of my life doing is bumping into things and rather than saying, oh my gosh, that's so frustrating.

[00:06:26] I would say, there's gotta be a way to do this better

[00:06:28] Hala Taha: Yeah. So I love that. So from early on six years old, you were already knocking on doors, experimenting, seeing what works, what doesn't work, understanding human psychology, most likely when it comes to sales and things like that. Super interesting. I know another, like pivotal piece of your childhood was participating in a wilderness organization.

[00:06:49] I would love for you to tell us about that and some of the experiences that you had and how it taught you about leadership, because it's really funny, to think that somebody who invented like the biggest tech giant in the world, or one of them actually is really, an environmental advocate and really into the wilderness.

[00:07:05]It's very unique.

[00:07:07] Marc Randolph: Yeah. That's really been something that's been part of my life ever since again, I was very young, my parents would always take me camping. But it was more, I think I grew up in this household that encouraged. Risk-taking. I remember one time, for example, I wanted to learn how to repel, which is that process where you slide backwards down a rope.

[00:07:25]You see it in the movies or people going out of helicopters. And I go, I've got to learn how to do that. And I got a book and I went to my dad and said, I want to try this propelling thing out of the tree in the backyard. And I think most parents, when you're out of your mind, you're going to break your arm or something.

[00:07:41] And my dad just said, come on, let's go to the garage. I have a rope. So I'm saying that to go. I was boys into the outdoors, but perhaps the biggest break was that when I was maybe 13 or 14, my parents packed me off to Wyoming to attend this organization called the national outdoor leadership school, big name.

[00:08:01] But basically what they would do is take groups of people, maybe 12 or 13 young people and drop us off at a trail, head in the mountains and come back and pick us up a month later. So as long month long expeditions in the mountains, but what they were do is almost immediately break you into small groups of four or five and say, okay mark you're leader of the day for your group.

[00:08:26] And one of the instructors of course would follow behind silently, but almost immediately you were plunged into. All right. I've got to figure out where we're going to go. I've got to figure out how long we're going to hike. Before we take a break. I gotta figure out how long our brakes are going to be.

[00:08:40] I've got to figure out what to do. If someone says my feet are hurting or I'm tired, or I'm hungry, and three or four hours later, you get to camp or the six or eight hours later, you get to camp and the instructor would debrief you and how you did. But the thing that was happening is. You are being forced to make decisions about things, which you really weren't entirely confident about.

[00:09:04]You are forced to communicate these decisions to your group with clarity and confidence. Even if you weren't perhaps clear or confident about them, you are made decisions about the strength of your group, their capabilities. And I was doing this when I was 13 or 14 years old. I was making decisions with real consequences and finding out the results of those leadership decisions, just a few hours later.

[00:09:31] And then after everyone else in the group had their day, maybe four or five days later, I do it again. And I came back and did that another year, another summer, and then another summer after that, and then I began working for the school and I'm still associated with them. But the point is I learned leadership, not by reading about it in a book or taking a principles of leadership course someplace.

[00:09:55] I learned leadership by doing it and I've come to so firmly believe that if people have these aspirations to lead and I don't mean being an entrepreneur leadership takes place in any form, whether that's in business where you're leading a group or you're leading an apartment, or whether you're leading a nonprofit or whether you're just doing things with your friends, the way you get to be a better leader is by starting and by practicing and doing it in low consequence circumstances, which I had the opportunity to do.

[00:10:26] And that meant that after summer of increasingly complicated leadership circumstances, but the time I did it for real. In a business scenario, I'd already been doing it for years and years.

[00:10:37]Hala Taha: It's really interesting. I love that. You say, you learned by doing, you didn't get this fancy degree.

[00:10:43]I looked up like what you studied, it was geology. And I don't even think you've got an MBA in lucky founded like one of the biggest companies in the world. And you learn from hands-on experience. And I always talk about this on my podcast, get as much experience as you can, because that's how you learn in skill stack and put it all together.

[00:11:01] So that one day you can come up with a brilliant idea. So I'd love to, since we brought it up and, you went to school for geology, how the heck did you get your first job? Because that must've been really tough to enter the job market and try to land a job with that kind of a degree in business.

[00:11:17]Marc Randolph: Certainly it would have been Easy to land a job in geology. But that was the last thing on my mind. I didn't, I never majored in geology because I had any aspirations of being a petroleum geologist. I did it because I thought it was interesting. And I saw that all the other geology majors were all coming back from field trips in the mountains.

[00:11:39] And I said, wow, that's your beets hanging out in the library? So geology was for me, but I had no intention. It was purely out of curiosity. And I will talk about getting that first job, but pardon me, I have to segue for a second and say the lesson I would take away from this is for people who are young, young, who are still in school or have just graduated. Relax. Yes. I accomplished these things in business, which were pretty significant, but I didn't know what I wanted to do when I graduated. I didn't know what I wanted to do for a years. After that I had this incredible string of unrelated experiences that I was pursuing because they were interesting to me.

[00:12:19] And it's amazing where that lives. So listen, if you grew up, when you were seven years old and you said I want to be a veterinarian and that stuck with you for your whole life. You're lucky. Congratulations. You found your passion early, but if you're still going, I don't know what I want to do. Don't worry about it.

[00:12:35] It'll come to you. And it came to me. But the quick answer to that is that I did a lot of crazy things. My first job out of college, I managed a ski shop in Memphis, Tennessee of all places. And then a few months later, when the person wanted the ski shop bought another property, I went out and managed a ghost town bar, restaurant, and saloon and guest cabins in the mountains in Colorado.

[00:13:02] And I did that. And then I came back to New York and I was probably the worst realtor in the history of New York state. And then probably the job which did actually lead to something commercially interesting was I got a job as. I guess now it has a glorified title. Now they call it chief of staff, but fundamentally it means you're a gopher.

[00:13:25] And what I was the gopher for the CEO of a music publishing company. And I basically, my job was to follow him around all day with a pad and sit in meetings with him. And if he said, okay, so I need those numbers by Wednesday. I make sure they get Lauren the numbers by Wednesday, or if he committed, I'll make sure that I follow through on those things.

[00:13:49] But the value was I got a chance to firsthand see what a CEO of business does, how they deal with problems, how they prioritize their day, how they deal with people who work for them, with customers, with clients. But the amazing breakthrough for me is that this was a music publishing with a lot of different divisions and.

[00:14:10] When I say music publishing, this is a company which did sheet music. So for example, if you wanted to go, I want to buy led Zepplin for a harmonica. You'd buy the sheet music from them. And one of their divisions was a mail order division, which is also this overstating, what it really was because basically every music book had this little line in the back that said for a list of more great cherry Lang songbooks send in a self-addressed stamped envelope.

[00:14:39]And I saw that and for some ridiculous unexplained reason thought that was fascinating. I told my boss, I want that job. I want to run the mail order division. And he goes, if this sucker is willing to do that, he's welcome to it. And my job was I take those self-addressed stamped envelopes and make a Xerox copy of the list of more great trailing songbooks and mail it out.

[00:15:03] And when the order came in, I would go to the warehouse and I'd pick and pack and ship the order. And I love that job because I began experimenting. I began doing well. I do four pages of lists of great trailing songbooks. I began doing little brochures. I experimented with different envelopes with catalogs.

[00:15:20] I began doing outbound mailing the list. I figured out how to build mail order fulfillment software. I taught myself basically direct response marketing, and this is the point. And I was, in my mid twenties, 25, 26, 27. Then when I finally discovered what I loved, which was direct response, marketing, this blend of data and creativity, and that became the passion.

[00:15:48] And in some ways built, my first startup was building this mail order company into something. And then when someone offered a job helping to start a magazine, I said, I'm part of the founding team of the magazine. And we sold the magazine and then I got to be the founding person for a male at our company.

[00:16:07]All these things lead in directions. You really never expected. There was a long answer to a short question. Sorry about that.

[00:16:13]Hala Taha: It was amazing. It was, I want the audience to understand your background and how everything led up to meeting Reed, Hastings, starting Netflix. And obviously this mail order business taught you something that you then took to Netflix later on.

[00:16:27] So I heard you talking about experiments that you guys would do at Netflix and how you never really knew if an experiment would work or not. The ones that you thought would be really good, ended up usually failing. So is there any overarching rules that you learned in the mail order business? This definitely works and maybe even still stands today? Are there any rules to this or is it always you need to just experiment and then you're going to figure out what works, what doesn't you can never really assume anything is going to work or did you learn anything concrete that, that works all the time?

[00:16:58] Marc Randolph: No, of course not. Yeah. The things that, work all the time, everyone else is already doing. So that's what fun is that? The fun thing is what you like about direct response is that you're always experimenting. Experimenting is one of the wonderful things about direct marketing and direct marketing, is basically doing sales.

[00:17:17] We are designed to get a direct response back. And what's beautiful about that is it's measurable that you could say. I wonder if a blue envelope works better than a red envelope. You could spend 50 hours. You're arguing with your friends or whether the blue envelopes gonna work better than the red envelope.

[00:17:34] But with direct response, you just mail out a thousand with a blue envelope and a thousand with a red envelope, and you see which one gets more orders and two or three weeks later, to the seventh or eighth decimal point, that blue beats red, for reasons that who knows, but it does, but that scientific approach doesn't tell you anything about what should I try next?

[00:17:56] In fact, it doesn't even tell you whether to do blue or red or what are the other 17,000 possible colors. So you've gotta be able to have this creativity of what might work. What should I try coupled with this willingness to suspend belief, no matter how you're always being surprised, no matter how confident you are, it's going to work.

[00:18:17] Things go a different direction. So I think if I learned anything, it's really that nobody knows anything that no matter how much are you and goes into, is this one going to work? Is this better? Or is that better? No one knows, but luckily if you have set things up properly, You'll find out after the fact exactly which one worked better.

[00:18:39] And once you realize that, how democratizing that process is that no one's opinion is any better than anybody else's that you can't tell in advance. It leads you to some very basic and important principles about starting companies or trying anything new, which is. You don't know anything until you start.

[00:18:55] And the more time you spend thinking about it, studying the problem, consulting with people, writing a business plan, you're just wasting time because you're really not going to learn what works and what doesn't work until you actually get out and collide your ideas with real people.

[00:19:12] Hala Taha: 100% just taking action, getting started, not procrastinating.

[00:19:16] Totally agree. And I know you always say that there's no such thing as a good idea, or a perfect idea. Can you give some color in terms of what you mean by that?

[00:19:27] Marc Randolph: Yeah. And listen to anybody who's sat in a conference room has had that experience where we're going to do some brainstorming today, everybody and so I'm going to start off with the most important principle, which is there's no such thing as a bad idea. And I call bullshit on that. There is absolutely such a thing as a bad idea. In fact, I will go out on the limb and say, there's no such thing as a good idea. There's no such thing as someone having an idea, which is absolutely going to work as promised, you always get surprised.

[00:19:57] And you have to realize that every single idea you come up with is going to have some kind of flaw. They are all bad. But that's okay because our job as innovators or people who are going to try something is not to come up with the foolproof idea. Our job is to figure out why our idea's a bad idea, because what happens and you take that idea, that bad idea, in advance, it's not going to work and you figure out a quick and cheap and easy way to try it.

[00:20:27] That's when the learning begins because the results will always surprise you, but there's almost always a glimmer of something and you go oh, that's interesting. Let's try this next. And let's try this next. And not only is that the only way to make progress, it turns out, at least for me, That's the wonderful, fun thing about being an entrepreneur or by being about someone who's starting anything new is you're on this journey of discovery and it is, it's like entering this entirely new part of the world's never seen before.

[00:21:01] You're learning something with every step is so energizing. And I used to have to comment for just a second on what the reverse is that if you get stuck up in this idea of a we're looking for a good idea, then you do the worst of all possible things, which is you. Wait, you go, let's see. Let's see if I can.

[00:21:21]I want more confidence. This is going to work. And I get it. I promise, I understand where that comes from. Cause no, but he wants to do something that isn't going to work. No one wants to look foolish or bad add no one wants to fail. And so we study the problem. We're afraid to start down the path because we can't see around the corner.

[00:21:43] But if you are always waiting, trying to get a better look, and if I could only tell, I guarantee you, someone will be there before you, or even worse, you'll never start or worst of all. You'll take that simple idea and let it live and grow in your head. We're of course, safe and wonderful and beautiful and has a million users.

[00:22:03] And just imagine how amazing this will be when everyone in the world is using my idea. Eight to break it to you.

[00:22:08] Hala Taha: Yeah, 100%. I always say that, do it messy. Don't worry about it. Don't be a perfectionist. Just go for it. Even if there's typos mistakes, as long as you get it to market and test it and see what works, you can keep pivoting and pivoting until you find something that actually works. So I completely agree there. There's one story that I really want you to tell my listeners. And I think it's so funny. You are actually panhandling in Connecticut and Irvin, Connecticut. When you were 21 years old, you were begging for money, as an assignment, not that you had to, but I'm sure it taught you a lot of lessons and I'd love to hear that story if you could take us back to when you were 21 years old, begging for money and learning this big life lesson.

[00:22:47] Marc Randolph: Yeah. And you're correct. This was not because I was homeless and living on the street or something like that. And it's a kind of an offshoot of those that national outdoor leadership school experience I had because eventually I began working for them in the summer.

[00:22:59] And I'd spent two months a year in the mountains of Wyoming working with largely privileged kids, taking them out in the woods. But then one month, a year I wanted to do something a little differently. And I work for a school in Connecticut called the wilderness school, which took disadvantaged kids, or I guess the official term when they were adjudicated youth.

[00:23:19] And you were really trying to put them in uncomfortable circumstances, which since most of them had barely stepped off a sidewalk, taping them into the mountains and having them canoe rivers and carry a backpack and sleep in the ground. And repel off cliffs made them very uncomfortable. And our job was to try and translate that to say, listen, you are so sure you couldn't do this, but what a surprise you did it now, how does that apply to other things in your life where you've said, I can't do this. And to make us more effective leaders in that circumstance, they wanted us to experience a little bit of what they were going through. They wanted to put us in uncomfortable circumstances and of course they couldn't do that in the woods.

[00:24:02] I was second nature to all of us. So what they did was do this urban immersion, where, which eventually led to a van, pulling up on a street corner in Hartford, Connecticut the door opening and me jumping out with no wallet, no watch, no ID, no money, pretty much just the clothes on my back. And a promise from the van driver that he'd seen me in three days.

[00:24:27] And I was on my own and I had to figure out basically how to survive in what was for me, a very unfamiliar environment. And it was quite an adventure. And I could certainly have spent the entire podcast telling you things that happened here, but the intro, one of the interesting things that actually did have legs for me later on, was that being a 21 year old male, it didn't take long for me to get really hungry and I go, I need some food.

[00:24:53] And at first I came up with what I thought was a pretty clever way to solve the problem, which is I found a food court at a mall. And I basically would hover off to the side. And if I saw someone stand up from their plate and leave it behind the table with some half-eaten food on it, I would swoop in and finish their meal.

[00:25:11] Oh, the days

[00:25:12] of pre COVID. Could never do that now.

[00:25:14] Yeah. I'm not sure I'd want to do that now either, but under any circumstance, but anyway, listen, desperate times call for desperate measures. But after awhile I realized this is pretty disgusting. I would love to buy my own food. I need money.

[00:25:28] And I said, I'm just going to try panhandling. How hard could that be? And the answer of course is really hard. There is something about going up to a stranger and making this naked ask, which is, I want you to give me something and I'm giving you nothing in return. And for someone who has the sense of pride and worth, and it's remarkably difficult to humble yourself like that, it took me hours to get up the nerve to actually put my hand out and then probably an hour more before somebody eventually.

[00:26:04] Put something in it, but it was the exact same experience as it was being a six year old selling seeds door to door that I saw this as a problem. How do I change? How do I change my story? How do I change the way I stand? What do I use as my opening line? And I iterated and iterated, and the remarkable thing that I learned, because eventually of course, I got reasonably good at it enough to feed myself.

[00:26:32] Was that the trick was honesty. The trick was going up to someone and looking them in the eye and explaining it. Could you spare any change? Because I'm really hungry because they can see that in my face. They can see that in my eyes that yes, I was hungry. And in many ways, as an entrepreneur, you never stopped panhandling.

[00:26:53]You're no longer on the streets in Hartford, Connecticut asking for 25 cents, you might be in a, on sand hill road in Silicon valley asking for two and a half million dollars, but you're still asking for something in some ways for nothing. But you do have to be honest, you have to explain I'm hungry and.

[00:27:14] What I've often said is that once you have panhandled for 25 cents on the streets that asking for 25,000 or $250,000 is nothing.

[00:27:24] Hala Taha: I love that. Oh my gosh. I have so many questions after that story that I could go to, but I'll go to this one. You mentioned that you love, you have a passion for solving problems and I've heard you say before that we need to focus on the problem, not the idea when we're thinking of a business idea, why is that important? Why do we need to focus on the problem and not get so infatuated with the actual idea?

[00:27:46]Marc Randolph: That goes back to something we said just a few minutes ago is because that idea you have that ideal, you're in love with that idea, you're sure is going to change the world.

[00:27:54]Surprise is wrong. It is not. It's a bad idea. I haven't even heard it yet. I know it's a bad idea because again, I think all ideas are bad ideas, but. Your problem that you're trying to solve. Ooh, that's a good problem. And what I had five people to do is to fall in love with the problem.

[00:28:15] Don't fall in love with the idea, because the idea is going to go away. I can't tell you how many ideas I've had that you try them and you realize that's no good, but if you have the right problem, the problem stays with you forever. If you look at I there's this glorification of ideas, yes. There's this myth about the Eureka moment, the moment where it all becomes clear, there's that the stories, there's the two guys who can't pay their rent and let's put an air mattress in a spare bedroom and boom, there's Airbnb, or someone's stuck on new year's Eve and can't get a cab and boom, there is Uber.

[00:28:56] Or even boom, we can late fee on a movie and boom there's Netflix, but no, that's just not the way it works. It's these random meandering path, but the eyes, the problems don't go away. The more you learn each failed experiment makes the problem richer and more complex. So all in love with the problem, don't fall in love with the idea.

[00:29:20] Hala Taha: I love that. I love that. Okay. So like you said, you are on the streets, begging for money for this project. And it ended up helping you on later on as an entrepreneur, when you're pitching, investors to either buy your companies or help you fundraise for your companies. So there's this popular meme that everybody has seen in terms of Netflix and blockbuster.

[00:29:41]If you missed an opportunity, don't feel bad because blockbuster could have bought Netflix for 50 million and now it's worth, 230 or 250 million, whatever it is today. And so there's always that popular meme going on. And so I want to dissect that because I think there's two sides to that story.

[00:29:56] There's what happened in the pitch, because it should have been a slam dunk. I would think that blockbuster would want to buy a company like Netflix. And then, so what happened with the pitch? Did something go wrong with a pitch? And then for the other flip side, what was blockbuster thinking? How come they couldn't see the opportunity that was at hand so I'd love to hear your perspective on that.

[00:30:15] Marc Randolph: What do you mean? Was there something wrong with the pitch? Come on, give me some credit. It was a work of art. It was masterful. No. And just to give people the context here, Netflix, despite how excited everyone is about Netflix. Netflix is actually becoming a reasonably old company.

[00:30:32]I think we had our 23rd anniversary in April of this year. So it's been around a long time. And although Netflix seems ubiquitous and makes its own movies and its own television shows, it was very small for a long time. And the story that we're talking about here took place two and a half years in and an even then two and a half years in Netflix probably had less than a hundred employees.

[00:31:01] And Netflix was probably on track that year to earn about $5 million in revenue. But, and here's the kicker and Netflix was on track to lose about $50 million that year. And so the interesting fact is we were ready to give it up. We decided it was time to sell to, or as we say, the euphemism is we're going to pursue strategic alternatives.

[00:31:25] But that just means basically we got to get the hell out of this one and our obvious strategic alternative back then, and this was in the year 2000 was blockbuster, which you may remember was at one point a monster, 60,000 employees and 9,000 stores and $6 billion in revenue. And they were the obvious people for us to sell the company to, but we were nothing to them.

[00:31:51] And that. And so we tried getting this meeting, nothing happened. And the weird, funny story about it is that the time they actually finally called, we were on this corporate retreat in Santa Barbara at this dude ranch out in the mountains. And, I was all I had with me was shorts and t-shirts and flip-flops, and that's when.

[00:32:12] Blockbuster calls and says, we'll see you tomorrow in Dallas and we're going, this is ridiculous. It's impossible. There's no way to get from here to Dallas. By tomorrow, this meeting we've tried to get for months, we've screwed it up. And my business partner and co-founder Reed Hastings, he had a solution.

[00:32:31] And so we chartered a corporate jet, which we listen. If you're $50 million in the hole, that's a rounding error, flew to Dallas and all of a sudden find ourselves on the 37th floor of this beautiful glass and steel skyscraper in this cavernous conference room and picture this cause I'm standing there in t-shirt and shorts.

[00:32:54] And I remember I was jealous cause Reed is wearing a Hawaiian shirt, buttons up one step up, but then the blockbuster folks come in and they've got their fancy suits. But we did make the pitch and the pitch. Was really, I thought very compelling because what had scared us for a while was blockbuster getting in the business and doing a blended model.

[00:33:19] Because back then, for those of you who are new to the Netflix game, back in 1998, when we launched all the way through 2007, you wanted a movie, you couldn't stream it. We had to mail it to you on a DVD, in an envelope. And we were scared that blockbuster would do a version of having this internet rental and stores.

[00:33:41] And so that's what we pitched them that we would do join forces, they'd buy us that they had run the stores, we'd run the online business, find all these synergies and it would create a monster and it was going great. They were asking good questions and leaning in until they asked. The big question, which is how much, and we had rehearsed this on the plane and decided we're $50 million in debt.

[00:34:06] It would be wonderful if we could pay back our investors and at least be clean. So Reed, leans forward, goes $50 million and you're right. They laughed at us at the hubris that in the depths of the.com meltdown, a company that was $15 million in debt in this ridiculous new internet thing would dare to ask $50 million.

[00:34:31] And, the memes are right, because it was a huge missed opportunity because like you said, the company they could have bought for 50 million is now worth 250 billion. And the company that had the 9,000 stores has one left, but it's the lesson. If you're not willing to disrupt yourself, I guarantee you, someone will come along and disrupt your business for you.

[00:34:55] Hala Taha: Yeah. And I'd love to hear like why and how blockbuster was disruptable. For example, I know you say, like they didn't put customers first and you guys really had a customer first mindset. So what were the areas that you felt like we can poke holes in this and we can win.

[00:35:10] Marc Randolph: So as a quick, as you can tell, I always have to start from a walking start where I can get into these stories.

[00:35:17]I imagine that if you're, for people who are familiar with my book, which is called, that will never work. And my podcast is called that will never work. And pretty much it, my Instagram handle is that will never work. And it's because that's what every single person told me. When I pitched them, the idea of Netflix that'll never work.

[00:35:33] And they had two reasons for saying that will never work. And one of them was. It's just a matter of time, but where everyone's streaming, who's going to use DVDs. But the other other reason of course, was was blockbuster who was apparently invincible, but there were a couple of flaws that we saw in Blockbuster's business that we thought would give us a chance.

[00:35:54]And the first was the fact that as you alluded to people, hated blockbuster. And in fact, blockbuster had as this core principle of its business model, this thing called managed dissatisfaction, and you love to compete with someone whose core principle is called managed dissatisfaction. So we go, we can certainly beat them on that, but there was another more technical reason we thought they were vulnerable, which is that they were bricks and mortar.

[00:36:22] So each store served a certain number of households and. DVD was brand new. So if I'm going to make the numbers up, let's say a single blockbuster store served 5,000 houses. They might have three DVD players amongst those 5,000 houses. There is no way a blockbuster store is going to invest all the money to fill out their inventory with DVDs, at least for years, until.

[00:36:49] There was enough players in the neighborhood, but because we were one store serving the entire country, we could make that work. So we thought we'd have a two or three-year headstart. And fundamentally going back down to my direct marketing days, I said, I bet you, we can make this a personalized experience right now.

[00:37:10] If you're going to look for a movie in a video store. And again, those are the people who have heads that look like mine. And for those of you who can't see it, it is glistening in the morning light. In other words, people are a little bit older. Remember that experience of going to a video rental store and you walk in and you basically you're wa it's like wandering in the desert, looking for food.

[00:37:27] There's just nothing to eat video after video. And you go, what? And just end up with the new release wall on everything. He wants that a stock we go, we can do better than that. We can help connect people with stories they love, and we can use technology to do that. And that's the things that we were pretty sure that we could win on

[00:37:46] Hala Taha: This episode of YAP is sponsored by Restream.

[00:37:50] I just switched to an awesome new live streaming platform called restream is an OJ in the live streaming world. And they've been around since 2014 and continue to innovate and dominate in this space. They have the most advanced features when it comes to live streaming. Restream allows you to live stream your video to LinkedIn, Facebook, YouTube, Twitter, and over 30 social channels at the same time, you can invite up to 10 guests experts or co-hosts. You can stream with stereo sound and in full HD, you can even customize your stream with overlays, logos, backgrounds, and play prerecorded videos at any moment while you're streaming. And lastly, you can download the video and audio recordings of your live stream and use it to repurpose for podcasts.

[00:38:33] Just like this whole session was recorded on restream with Mark Randolph that you're listening to right now. So you can. Download that audio upload it to a podcast, or you can use the video content for micro content for your social media. So this is a great way to create long form content that you can then distribute to a podcast or, chop up and put on your social media.

[00:38:53] It is amazing for that purpose. And it's no wonder that restream is the number one platform for content creators to stream live to multiple platforms simultaneously, and they have over 3 million streamers who use restream. I know so many of you guys out there are looking to start a podcast and a live stream show on Facebook or LinkedIn is a perfect way to get your feet wet.

[00:39:15] Take some baby steps into this world and see if a podcast is something you want to take. Seriously, try out restream and get $10 in free credits when you sign up at. Restream.io/join/yap that's restream.io/join/yap. I'll stick that link in our show notes and go ahead, try out restream. It is my favorite live streaming platform.

[00:39:38] This episode of yap is sponsored by Olay body. Guys most of us are still working from home and not yet back at the office. And while it's nice to have all this flexibility with our schedules, it can wreak havoc on our routines and in such uncertain times, it's more important than ever to create healthy routines.

[00:39:56] And that's why I think you shouldn't be skipping your morning shower. Even though sometimes it's tempting to wait until later in the day, those who shower in the morning or before they start their day, tend to have a higher productivity level. If I don't take a shower in the morning, I feel sluggish. I feel unmotivated.

[00:40:12] And I know there's a lot of folks out there on a cold shower kick, but personally I prefer a warm shower because it helps me relax. My thoughts. It decreases my anxiety and it even promotes creativity by giving me the space for some quiet and alone time with my thoughts. It's one of the only moments of the day that I'm not distracted by any pings and rings.

[00:40:31] And now my showers are even better because Ole just launched a new collection of skincare, inspired body washes that include premium skincare ingredients. I personally love lays soothing body wash with vitamin B3 complex and oat extract, which is perfect for eczema prone skin. It's really hard for me to find a body wash that doesn't leave me feeling irritated, but Oles soothing bodywash with vitamin B3 complex and oat extract is extremely gentle and makes my skin feel so soft and so smooth and absolutely zero irritation.

[00:41:03] And the best part is this is truly a fragrance-free product fun fact. I only use fragrance-free products on my face and my body, and I think that is. The secret to looking young. In fact, I've been using Olay fragrance-free products since high school. And I often get told I look 10 years younger than I am.

[00:41:19] So thank you very much, Olay. I appreciate it. And you guys need to give these Olay body washes a try. They completely changed how I thought about my body care routine and my shower. You can find a LA soothing body wash with vitamin B3, complex and oat extract and other Olay body care products in the store or online Olay body fearless in my skin.

[00:41:41] So let's see Kate, if you want to put up a couple of questions from the audience, let's see what they have to ask marc. I'm going to be surprised too, because I can see the comments cause my screen is split.

[00:41:52] The hardest situation in your career?

[00:41:56] Marc Randolph: Yeah. Gosh, there's a lot. Certainly, I've done now seven companies and not everything works all the time and this even Netflix, we talked about, it took us a year and a half a year and a half of one failed test. After another, before we finally found the business model that worked. But let's see, let's let, what is the hardest situation? The hardest situation is laying people off, which is always hard because it's impacting people's lives.

[00:42:26] And if you're an empathetic leader, Meaning that you can, this is going to sound corny, but you can know how people are going to react to things. Before you say it saying something to someone which you know, is going to hurt them is the most painful thing in the world. But it's especially hard at a startup because usually when you're doing a layoff, the people that you've hired, you've Vince them to come and join this crazy irrational quest.

[00:42:57] They've almost universally left, better, higher paying jobs with greater benefits, all the common help you. Follow this dream and they've done it. Everything you've asked, they've worked nights and weekends and given up time to try and make this dream come true. But your all ultimate responsibility is to the company.

[00:43:19] And sometimes you have to sit someone down and say, you've done nothing wrong, but I'm afraid you can't come with us on this next part of the journey. And I just, I, right now I'm having like a PTSD. It makes me, it makes my heart hurt even to say the words and to say it to someone who you've considered a great friend who has just worked so hard on your behalf as the worst thing.

[00:43:40] You have to do. And w I'm a person who always insists on firing people. Face-to-face eye-to-eye personally, I owe it, owe that to them. And I cry a lot, but sometimes this is not. And easy job. And that's one of the hard parts.

[00:43:58] Hala Taha: I totally agree. I'm a new entrepreneur. I have 40 employees, have to let people go sometimes.

[00:44:04] And it is the worst feeling about being an entrepreneur because you just want everybody to be happy and like just, always want to do the right thing by people. And sometimes people just don't get it, and just can't keep up or whatever it is. It's not a good fit and they'll be better off quickly leaving and finding someplace where they do fit in where they can succeed.

[00:44:21] And so I totally agree. And I also agree that you should be quick to as soon as you feel like it's not a fit, don't let it linger. And I think you agree like you don't do performance plans or you're not really an advocate for performance plans, right?

[00:44:34]Marc Randolph: That's the understatement of the year. I think that is the most cruel and unusual punishment I can imagine because listen, okay, now you triggered me here. We're going to talk about performance. These are called for those of you who don't, that aren't going a corporate environment. It's usually called them. PIP or I think it's a performance improvement plan. That's where I sit you down and I go, okay, there's some issues of concern with your performance, but let's make it a little list of the things you have to work on and what you're going to have to achieve in the next six months.

[00:45:05]Oh my God. Because what that really is, you strip away the nice nodding and smiling is I like, listen, I know I have to fire you. And of course that I'm going to fire you, but we have to go now through this six months of pretend so I can write up all the official reasons that I can fire you.

[00:45:26] It's so much better just to be honest and go, it's not working. I know it's not working everyone in the company knows it's not working. It is not you. I did a bad job matching you this wasn't to your skillset. You're a talented person. Let's find some place where you're going to do a great job where you can go home at night and be happy about what you've accomplished and I'll help you find a new job, but it can't be here and people appreciate that. Sorry about that. I rambled on here.

[00:45:52]Hala Taha: That was great. But I totally, I just have so much to say about that too, because also when you let somebody stay in the company, who's isn't performing, it makes you look bad. It also hurts the culture. It's like the bad apple spoils the bunch and it just.

[00:46:07] Hurts the overall culture, which is the topic I would love to get into next, because I know that Netflix is so known for their amazing company culture. I used to work at Disney streaming services and I wanted to work at Netflix honestly, but I ended up landing a job at Disney. And one of the reasons why was because of the company culture.

[00:46:26] Now I've grown my company in the past year to 40 employees. And from what I hear, Netflix has a really organic company culture. And we do too. My company started as volunteers from my podcast on, in a slack channel and I just started this slack channel of 10 volunteers. And then that just blew up into this whole marketing agency podcast, production agency, and very organic everyone is so happy and enthusiastic because the leader started as podcast fans who literally just want it to work for me for free. So I'd love to hear how did the culture at Netflix develop?

[00:47:00] Marc Randolph: I'm a big believer that culture is not something that you make up. That's not something you design because culture is not what you say. It's what you do. I don't care what you put in your culture deck or put in your break room posters.

[00:47:15] Fundamentally, your culture is how you behave because how you behave, how you treat your employees, how you treat your co-founder, how you treat your employees and your customers. That's what the rest of the company culture eventually becomes. So the culture has to be true to you. And Netflix was no different.

[00:47:34] It sprang from the way that Reed and I were and the way we treated each other. And there were certain aspects of that came from our past. And one of them is one of the things that when I met Reed Hastings, That immediately drew us to each other was we shared this incredible belief in direct honesty.

[00:47:53] I've never been someone who liked shading the truth, or avoiding saying something unpleasant to avoid hurting someone's feelings, or it's so much cleaner to rip the bandage off and say what you think and Reed felt exactly the same way and what that led to was an amazing problem solving mechanism. Or we could argue like cats and dogs about something, but it was never personal because as soon as one of us or the other made it clear, it became clear, oh, that is the right answer.

[00:48:25] You instantly forget. Who was dug in on what side or the other, and you immediately get excited about moving forward. So that radical honesty, pervades Netflix. And the other one, though, I'm going to say, perhaps it came a little bit from all my mountain experience because in the mountains you don't have time to tell everyone exactly how to do things. You have these shared goals. You go see that mountain peak over there. We're all gonna, we're climbing the peak or even worse. It's an expedition and you go, we're going to meet in that location in three days. And I expect you to get there with this, you to get there with this, and everyone's got to figure it out on their own, the people will have to get there quickly go one route with people that are carrying stuff, go different routes. The people of the boats go a third group. And I'm not answering all their problems or figuring out on their own. And I've been thinking the same thing in a business as the case. You just have to tell people, be really clear.

[00:49:20] Here's what our objectives are. Here's what I expect from you, but then leave it to them. To figure it all out. And what's amazing is it turns out that's an incredibly attractive thing for people. Fundamentally what's important to employees in my opinion, because again, culture is personal is not snacks and kombucha on tap and nap, pods and Fireman's pole and all that bullshit.

[00:49:46] What's important to people is being given the opportunity to make real decisions, being given the freedom, to solve things on their own. Coupled with the responsibility to accomplish the things they're expected to accomplish. And that Netflix has called the freedom responsibility aspect of it. And that combination of things of radical honesty and freedom and responsibility is an amazingly powerful force for moving quickly for being able to attract and retain really great people.

[00:50:15] And just for those of you who are listening, I'll give you some really quick examples of what, how these things work. And again, this is complicated. It's taken ethics 23 years to finesse these, but I don't know if people are familiar with our vacation policy, but there isn't one, if you need time, take time whenever at our expense policy.

[00:50:37] There isn't one our travel policy, there isn't one, there aren't policies. All the policies are the same is use your best judgment because what most companies do is build these guard rails for people who don't have good judgment, they go, we don't trust you. You're in charge of a million dollar, a year sales account, but I don't trust you to make a good decision about what class air plane you should take when you're flying your meeting or what level hotel you can stay in.

[00:51:08] Or I want you to pre-approve your expenses. You built these guardrails to protect yourself from the people that are not good enough judgment to make those calls. But what that does is drive the people with good judgment, nuts. It treats them like kids. And so Netflix experiment was what happens if you build a company, not for the people with bad judgment, but you build it with no guard rails because you're assuming all the people have a good enough judgment to not need them.

[00:51:35] And that's really interesting. Make your own decision if listen here. Okay. Let's give a specific example. And the problem is I can speak about culture forever too. But I'll give you one quick example. So I had an employee, he was an engineering manager. In other words, he had a number of engineers reporting to him, engineers, of course, the people who were doing the software programming and oh, great thing happened to him.

[00:51:56] He fell in love with a young woman and she happened to live in San Diego. And this is up in  up in Northern California. And he came to me and goes, mark great news. I'm in love. And I want to, here's what I'd like to do, but she lives in San Diego. So what I propose is this, I will fly down to San Diego every Thursday afternoon, and then I will work from there on Friday and say the weekend they'll work in there Monday and I'll fly back on Tuesday morning.

[00:52:23] And I said let me make sure I understand what you're asking me. If you're asking me if it's okay to work from San Diego, I could care less where you work from the moon, work the half a day a week. If you want. I don't care. I trust you. He goes, but if you're asking me, is it okay if you're asking me to expect less from you in exchange for this, then the answer of course is no you're an engineering manager.

[00:52:48] You have people who report to you need access to you. And so you use your judgment. Can you. Work from San Diego and that schedule you, you decide. And he decided, and that's what I mean by, I don't care. I don't care whether you work four hours a day or 40 hours a day. I don't care whether you do it from home or do it from the office or do it from the park.

[00:53:13] It's freedom. But. It doesn't take away the responsibility to accomplish the things you're expected to accomplish. And not because of me because of your team. If you think about these, a sports metaphor, Netflix never describes themselves as a family. You don't fire your family. And we call ourselves a team and not a little league team where everyone plays and gets a trophy, a professional team where the manager's job is to put the very best players in every position because your responsibility nominees a sports metaphor.

[00:53:44] I apologize. The responsibility to the shortstop is to put the very best player they can at second base, not, oh, he's a good guy. And no I want to play for a team that wins and your job is put the best people that replace your camp.

[00:53:59] Hala Taha: [00:53:59] Amazing. I love that. Honestly, Marc, I could talk to, I feel like I have 30 questions I didn't get to answer so I hope I get to have you again, maybe on clubhouse. I'm one of the creators first programs on clubhouse. So maybe we can coordinate something, but I do want to respect your time. And so the last question that I ask all my guests, and this is your opportunity to give any piece of advice that you didn't get a chance to yet is what is your secret to profiting in life?

[00:54:24] Marc Randolph: [00:54:24] So I, before I even get my success to profiting in life, I've got to say we got cut off here because we could have talked forever about it. I do have to say, I do have a podcast as well. It is called that will never work. It is where I spend my time answering these exact questions in specific contexts by interviewing not celebrity entrepreneurs, but people who are really in the trenches doing it and actually doing live mentoring. But the question was what is what is success.

[00:54:51] Hala Taha: [00:54:51] What is your secret to profiting in life. And then after that, I'm going to, we're going to talk about all the places where people can find you. So don't worry. I wasn't going to cut you off without doing that. Of course,

[00:54:59] Marc Randolph: [00:54:59] it sounds great. The profiting in life is balanced. You've got to do the things that make you happy in life, because believe I, I tell you the answer isn't necessarily money or fame or any of that stuff. You have to say what's important to you and make sure you construct a life that gives you that. And if you don't know what you want, the odds of you actually getting it are extremely remote.

[00:55:23] And for me, it's, I've always had these three pieces to it. I love being an entrepreneur. I do have to do that, but it's not everything. I've also got a wife and I have three kids and I want to know them and I want to have a relationship with them and I've got to make sure I carve out the time to make sure that's important.

[00:55:39] And as you've also heard, I love being outdoors. And unfortunately, although being outdoors is incredibly rewarding, it usually is not the kind of thing you can squeeze in between an 11 o'clock meeting and a two o'clock call. You've got to plan and build the life that allows you to get away and do those things.

[00:55:56] So if you can put together the things like that, if you can have that balance in your life, you're going to have the relationships, the personal fulfillment. And of course, the things that make you intellectually engaged. You are a rich person. Indeed.

[00:56:08] Hala Taha: [00:56:08] I think that is a beautiful message, making sure that you have time for family, for your hobbies, for your passions. Don't just be so obsessed with work. I know everybody at young and profiting are overachievers and anybody who listens to this show, but make sure you take time for yourself, for your family, for your passions and Marc where can everybody go to learn more about you and everything that you do?

[00:56:26] Marc Randolph: [00:56:26] So certainly the hub for all things, Marc Randolph is marcrandolph.com, which provides all the access to the writing I do in my blog provides access to all the handles for all the short form content.

[00:56:38] The thing that I'm perhaps most excited about now is the podcast where really are these live sessions with early stage entrepreneurs. With me providing the type of advice that I've been doing for 20 years, these are real live calls where I spend time coaching people through helping them turn their idea into reality or taking a side hustle and making it into a real business or taking a real business.

[00:57:01] And. Hopefully getting it to the next level, but it's really, I think, interesting, fun, entertaining. And it's a great way to pick up on the things we talked about, which were more generalities and say, wait a minute, how do I apply that to the problem that I'm wrestling with? And that's my shot at that.

[00:57:17] Hala Taha: [00:57:17] Yeah. And it's called this will never work, right? Correct. That will never work. That will never work. Awesome. So that's the name of your book? That's the name of your podcast and as a special, thank you for coming on the show. What I'll do. If you give me permission as I'll play a clip from one of your episodes, you could let me know which one, and I can close out the show, playing a clip with that episode so that people get a taste of what your podcast is like.

[00:57:37] Marc Randolph: [00:57:37] I love that idea. That would be fantastic. And I'd really appreciate that.

[00:57:40] Hala Taha: [00:57:40] I would love to do that. Thank you so much, mark, for your time. I hope we meet again. And for everybody tuning in, you're listening to a live episode of young and profiting podcasts. We're going to put this up on the podcast channels in a couple of weeks.

[00:57:51] So if you missed it, make sure you go subscribe to young and profiting podcasts so you can get the link. This is Marc Randolph. He is the co-founder and CEO of Netflix. Also a serial entrepreneur, a very smart man. He's got a podcast. Make sure you follow that. And this episode is sponsored by restream. And with that, this is Hala and Marc signing off. Thanks guys.

[00:58:09] Marc Randolph: [00:58:09] Thanks very much everybody

[00:58:11]Hala Taha: [00:58:11] Thanks for listening to young and profiting podcast with Marc Randolph. I hope Marc's experience with co-founding. Netflix has inspired you to give life to your next idea. Stop overthinking, and just give it a try, because like Marc mentioned, some ideas are bad and the only way to know for certain, if an idea is good or bad is by putting that idea out in the world. So let me take you back to how scott thought of. So Marc and his feature, Netflix co-founder Reed Hastings cycled through hundreds of ideas while carpooling to work each morning. Some ideas stuck, but most of them were disregarded.

[00:58:48] And even though so many ideas failed, Marc and Reed kept working towards finding an idea, finally worth pursuing. And they did on April 14th, 1998, they found that idea called Netflix. And it started as a video rental service before it moved into streaming. And all of you guys know how big Netflix is now.

[00:59:07] So remember when you have an idea, you have to recognize that nobody can tell in advance whether it's a good idea or a bad idea. So stop spending a lot of time trying to validate an idea. Doing so much research or planning, it's all a waste of time. You need to immediately collide your ideas with reality.

[00:59:26] You have to take that risk. You have to do something to start something, build something, make something, test something, try something. And as mark says, you'll learn more in an hour of trying something. Then in six months of thinking about it or building a business plan about it. So that was my big takeaway.

[00:59:42] There's no such thing as a perfect idea. And you're not going to know if an idea is good or bad, if you don't go out and test it. The other big takeaway I had in this episode is that anything is possible, but nothing is an overnight success. Just a handful of people with zero experience in the video industry took down blockbuster, a billion dollar, 60,000 employee company, but it didn't happen overnight.

[01:00:04]Mark told us a story about him getting rejected by blockbuster in terms of them buying him same thing with Amazon, they rejected Netflix and it took 10 years, but eventually they drove blockbuster to bankruptcy. It wasn't an overnight success, but it was worth the wait. And I don't know about you guys, but I feel really inspired and I don't know how you could leave this episode without feeling expired and ready to tackle your next big idea. If you love this episode of young and profiting and are interested to learn more from another tech billionaire, why don't you check out my episode, number 69, the innovation stack with Jim McKelvey, he's the co-founder of square, the super successful point of sales company.

[01:00:42] Here's a clip from that episode.

[01:00:44] Jim McKelvey: [01:00:44] So what I recommend is that people find something that appeals to them. Here's the problem, holla entrepreneurship in its current definition. This just start a business. It's like starting a business ship is super popular. It's cool these days. And because it's cool, a lot of people are going into it just because that's the way they want to make money.

[01:01:10] And in those cases, I think those people would be well-served by just copying an existing business. Find something that's working in Cincinnati and move it to Des Moines or find something that works in San Francisco and copy it in New York. That's a good formula for making money. I am not the right guy to talk to about that stuff.

[01:01:28] I believe if you want to be an entrepreneur, you probably, you're not going to succeed, but if you succeed, your success will be a hundred or a thousand X, what a normal business person would be let's think about the problems that you're going to encounter and others. And that money is a very weak motivator.

[01:01:48] The difference between being a middle-class person in the end United States and being a billionaire is not that great. And I'm just telling you there's not anything really, that money makes that much of a difference. If you get, if you're basically in the middle of class, It doesn't get much better than that.

[01:02:05]You're still gonna sleep in doors. You're still gonna have Netflix. You're still gonna have just all this stuff is pretty much the same. Like maybe you'll have a fancy art car, but you know what, who cares? Maybe you'll fly on a private plane as opposed to a regular plane and you know what, who cares?

[01:02:20] That just, there's no big difference. So money is a very weak motivator if you get into real problems. So pick a problem you care about. So I'm not interested in talking to people who want to start a business. I want to start a business. I don't care, but somebody who comes to me and says, Hey, Jim, I want to fix this problem that I care deeply about.

[01:02:41] So look, just look out your window. Look at the issues we have in society. Okay. The terrible problems going on right now, I spend every morning working out with a guy. He's a 76 year old. African-American like he was been, he'd been through the civil rights movement. He's been through all these situations.

[01:02:57] Like he and I talk every morning for an hour and a half about what's going on. And he's telling me all these things that there should be solutions for now. Are those going to be good businesses? Some of them will be, some of them will be great businesses because what I talk about in the innovation stack is the massive power of serving the unserved.

[01:03:16] Hala Taha: [01:03:16] Again, that's number 69, the innovation stack with Jim McKelvey. And if you haven't subscribed to young and profiting podcast, yet, please take a moment to do so that you can be alerted every time we drop a new episode. And as always, I want to give a quick shout out to one of our recent apple podcast reviews or cast box pod bean, wherever you listen to the show, make sure you drop us a review.

[01:03:37] And the review I'm going to read today is from Stefan from Canada, much love for this podcast. Excellent topics covered every time the positivity is contagious and it's all relevant in the business world. To help you succeed. The speakers are well chosen and provide a wealth of insight. Happy listening, Stefan NACHA.

[01:03:56] Thank you so much, Stefan for your amazing review. And if you're out there listening and found value in today's show, please take a few minutes to write us a review on apple podcasts. Castbox pod bean podcast Republic. Wherever you listen to the show, drop us a review. It is the number one way to thank us.

[01:04:12] And you can find me on Instagram at yap with hala or LinkedIn, just search for my name it's Hala Taha and now I'm one clubhouse. I'm hosting rooms in there almost every day. Make sure you follow me on clubhouse and tag us on LinkedIn. Tag us on Instagram. I love to see our stuff on social media.

[01:04:28] Big thanks to the YAP team as always you guys rock this is Hala signing off.