HARDBOUND

Disruption and chill

Founder and first CEO Marc Randolph tells the incredible story of how Netflix came to be

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Published 6 months ago on Nov 22, 2019 Read

Over time, I realized that for my dad, it wasn’t finishing the train that he liked. It was the years of labor: the days at the lathe, the thousands of hours at the drill press and milling machine. I don’t have many memories of watching those trains run. What I remember are all the times he excitedly called me down to the basement to show me a piece he’d just built—a piece that, when connected with fifty others, might amount to a single axle.

“A piece of advice,” he told me once, peering through the magnifying glass over his left eye. “If you really want to build an estate, own your own business. Control your own life.”

I was in high school at the time. Most of my energy was directed at girls, rock climbing, and convincing the guy at the liquor store that I was old enough to buy beer. I wasn’t quite sure what an estate was, but I thought I caught his drift. Sure, sure, I thought, why not.

But twenty years later, in the early nineties? I thought I finally knew what he meant. I’d spent years working in marketing for other people, at large corporations and small startups alike. I was a co-founder of MacUser magazine, as well as MacWarehouse and MicroWarehouse, two of the first mail-order sources for computer products. I’d spent years at Borland International, one of the software giants of the eighties. At all of these places, I’d been focused on direct marketing: sending letters and catalogs directly to individual consumers and studying the way they responded. I’d enjoyed it, and I was good at it. I had a knack for connecting products to customers. I knew what people wanted—or if I didn’t, I knew how to figure it out. I knew how to reach them.

But I’d always been working, in some sense, for someone else. At Borland, I’d been part of a huge corporation. And even as a co-founder at MacUser and MacWarehouse, I’d helped develop an idea that was only partly my own. As rewarding as those jobs were, part of me had always wondered what it would be like to build a company from the ground up, completely solo—if it would be more fulfilling if the problems I solved were my problems. That, after all, was what my father was telling me, hammer in hand. That’s why he descended like Vulcan to his workbench under our house in Chappaqua. He wanted to set up his own problems, and then knock them down.

By 1997, so did I. I was a year shy of forty. I had a wonderful wife, three kids, enough money to buy a house that was a little too big for us on a hillside overlooking Santa Cruz.

I also had, somewhat unexpectedly, quite a bit of time on my hands.

Barely six months after acquiring our company and giving me the green light to build out the marketing department I’d inherited, Reed had agreed to the corporate merger that would make all of us—me, Reed, and the two people I’d just brought in to work with me—redundant. For the next four months or so, while the feds went over the paperwork, we had to come to work every day. We were still getting paid, but we had nothing—and I mean nothing—to do.

It was tremendously boring. The Pure Atria offices were nothing like the laid-back startup offices of today. No nap pods, no pinball machines in the lobby. Think: cubicles. Think: fake office plants. Think: a watercooler gurgling at regular intervals.

Reed was busy finalizing the merger and had already started making plans to go back to school. As his tenure as CEO was coming to an end, he was feeling a little burned-out. He wanted to change the world, but he was increasingly convinced that he couldn’t do so as a tech CEO. “If you really want to change the world,” he said, “you don’t need millions of dollars. You need billions.” Barring that, he thought the way to effect change was through education. He was increasingly passionate about education reform, and he thought that no one would take him seriously unless he had an advanced degree in the field. He had his eye on Stanford. He had no desire to start a new company…but he also indicated that he wanted to keep his toe in the water, as an investor or an advisor, or both.

At first, I filled my limbo merger time with athletic pursuits. Along with a big group of fellow East Coast transplants homesick for ice rinks and pucks, I conned a few Californians into comically lopsided parking-lot hockey games. We’d while away a few hours in the shadows of the office park, body-checking each other into parked cars and batting a scuffed-up tennis ball through homemade PVC-pipe goals.

I also spent some time at the driving range, and those first few weeks brought me a revelation: I’ll never be good at golf. I’d always thought that if I spent enough time on it, I could practice my way into a decent golf game, and for weeks I tested that hypothesis. I’d take an hour-and-a-half lunch, then stop by the range on my way back to the offices.

But no matter how many balls I hit, I never got any better.

I think a part of me knew, even then, that a perfect swing wouldn’t cure what ailed me. What I needed wasn’t a sweaty hockey game or a birdie at DeLaveaga. What I needed was the feeling of being deeply engaged with a project. What I needed was purpose.

Hence the ideas for a new company. Hence personalized shampoo by mail.  

I kept a little notebook of ideas in my backpack and carried it with me everywhere I went: driving, mountain biking, you name it. It fit into the pocket of hiking shorts really nicely. I’d even take it surfing—leaving it in my backpack on shore, of course. There’s a reason why rejected idea #114 is “personalized surfboards, machine-shaped to your exact size, weight, strength, and surfing style.” They say the best ideas are born of necessity, and nothing’s more necessary than a properly shaped board when you’re scrambling for waves at Pleasure Point.

I’m an idea guy. Give me hours of empty time in a Silicon Valley office with a fast internet connection and multiple whiteboards, and you’re going to need to buy more dry-erase markers. I probably would have come up with business plans just to get out of embarrassing myself at the driving range.