Happy Monday!
I hope you had a safe weekend. (from coronavirus)
Let me give a brief about Marc Randolph before I share 1 interesting story, 2 quotes to think about and 3 short lessons from him for you to read this week.
Marc Randolph (@mbrandolph) is the co-founder and first CEO of Netflix. Although best known for starting Netflix, Marc’s career as an entrepreneur spans more than four decades. He’s founded or co-founded more than half a dozen other successful start-ups, mentored rising entrepreneurs including the co-founders of Looker Data which was recently sold to Google for $2.6B, and invested in numerous successful tech ventures.
1 STORY FOR YOU
Now we're going to have to kick their ass.
Marc Randolph, Reed Hastings (Current CEO of Netflix), and McCarthy were in rural California at Netflix's first-ever corporate retreat when McCarthy got word that Blockbuster wanted to meet with them. At the time, Netflix was in trouble. The dot-com crash had made its once-rosy future look grim. The idea of a DVD-by-mail rental service, which was all that was possible in that era of slower download speeds, was catching on, but not quickly enough for the company to be anywhere near profitable. Two years earlier and in headier economic times, Hastings and Randolph had turned down the opportunity to be acquired by Amazon. Now acquisition by Blockbuster seemed like the perfect solution and the perfect lifeline to keep Netflix afloat.
With this in mind, Netflix executives had been requesting a meeting with Blockbuster's leadership for months. Now a word came through that Blockbuster wanted to meet them--at 11:30 the following morning in Dallas which was less than 12 hours away.
Hastings, who has described entrepreneurship as jumping out of a plane in the confidence that you can catch a passing bird, pointed out that they could make it if they chartered a plane for 5 a.m. the following day. "Probably even have enough time to grab an espresso," he added.
McCarthy objected that this would cost at least $20,000 when the company was well on its way to running out of money and having to close its doors.
"We've waited months to get this meeting," Hastings replied. "We're on track to lose at least $50 million this year. Whether we pull this off or not, another 20 grand won't make a difference." The logic of this was inescapable. The three of them chartered a plane
At Blockbuster's Dallas headquarters, everything seemed designed to impress visitors with the company's wealth and power, from the building, which Randolph describes as "an unbroken cube of steel and glass" to the loafers worn by CEO John Antioco. "His loafers probably cost more than my car," Randolph writes.
Antioco had every reason to treat himself to luxury footwear. He'd arrived at Blockbuster two years earlier when the once-successful company was on a slide due to some poor business decisions, such as trying to sell apparel. He had not only turned Blockbuster's fortunes around, he'd led it through a successful IPO that raised $465 million the previous year. "I'm sure he was feeling self-assured," Randolph writes. "He was ready to hear us out, but what we said had better be good."
It was damned good if Randolph's description is accurate. Hastings quickly ran over Blockbuster's strengths and then noted that there were areas where it could benefit from Netflix's market position and expertise. "We should join forces," he said. "We will run the online part of the combined business. You will focus on the stores. We will find the synergies that come from the combination, and it will truly be a case of the whole being greater than the sum of its parts."
Antioco's response is probably very high on his list of things-I-wish-I'd-never-said: "The dot-com hysteria is completely overblown." Blockbuster general counsel Ed Stead then explained how the business models of Netflix and just about every other online business were not sustainable and would never make money. The Netflix execs debated this point with him for a while, then Stead cut to the chase: "If we were to buy you, what were you thinking? I mean, a number."
"Fifty million," Hastings said.
Randolph writes that he'd been closely watching Antioco during this conversation. Throughout, the Blockbuster CEO appeared as a polished professional, leaning in and nodding and giving every indication of someone who was listening attentively. Now Randolph observed as an odd expression crossed Antioco's face, turning up the corner of his mouth. It lasted only a moment, he writes. "But as soon as I saw it, I knew what was happening: John Antioco was struggling not to laugh."
Needless to say, Blockbuster did not accept Netflix's offer or make a serious counter-offer. "The meeting went downhill pretty quickly after that, and it was a long, quiet ride back to the airport," Randolph writes. He put it to the guys on the plane afterwards, “Now we're going to have to kick their ass.”
2 QUOTES FROM HIM
“Telling people helped me refine the idea — and it usually made people want to join the party.”
“I always disagree that there are no bad ideas. There are bad ideas. But you don’t know an idea is bad until you’ve tried it. And sometimes, that ideas have a way of becoming good ones.”
3 LEARNINGS FOR YOU
Nobody. Knows. Anything.
Because if Nobody Knows Anything – if it’s truly impossible to know in advance which ideas are the good ones and which aren’t if it’s impossible to know who is going to succeed and who isn’t – then any idea could be the one to succeed. If Nobody Knows Anything, then you have to trust yourself. You have to test yourself. And you have to be willing to fail.
Never be afraid to share your ideas
Being afraid to share an idea because you’re afraid it will be stolen is the single biggest reason people give for not starting. It is highly unlikely that the idea you begin with will look exactly the same by the time you start your business. The trick is to use your original idea as a starting point, then let it collide with reality and morph as you improve it. What the entrepreneurs in Silicon Valley realized is that the trick is to tell everyone your idea. Then they will be able to offer you valuable input so that you can improve your idea.
Be flexible
The most dangerous thing you can do is fall in love with these ideas when they are babies. You can project on them future greatness. You can say to your ideas, ‘You’re going to grow up and be a Heisman Trophy winner, or win the Nobel Prize,’ when they’re infants. But they may grow up in totally different ways. You have to give them the freedom to do that – to grow up and change.
That’s it from me, until next Monday! Also, share with your friends :)