The Serial Entrepreneur
By Maureen Nolan
It took six months to build the website, and for launch day they rigged a little bell in a computer to ring when an order came in. Co-founder and first CEO Marc Randolph ’80 remembers a dozen or so colleagues gathered in his conference room at 9 a.m. when the chief technology officer hit some keys, and Netflix went live.
“And then we all just kind of stood around awkwardly staring at each other waiting for something to happen. Then, of course, ding — the bell rang. We all cheered, and we opened up champagne. And then ding, ding, a couple more rings, and we all cheered again, and then it rang a few more dings,” Randolph says. Then the bell went silent.
A wavelet of customers trying to buy or rent DVDs crashed the servers, forcing an emergency trip to Fry’s Electronics. That entire first day Netflix took maybe 100 orders, a number that now sounds paltry but blew past Randolph’s expectations. That wouldn’t be the last time the business surprised him with its success.
Netflix was fantastic, and it worked, and the fantastic thing about it was being able to go in every day and solve these really hard problems with really smart people — that’s the kind of successes that you want to repeat.
To state the obvious, in the subsequent two decades Netflix hit the big time streaming movies and television shows. Today, it bills itself as the world’s leading Internet entertainment service with more than 117 million members in 90-plus countries. It’s changed viewing habits, the television and movie industries, and brought the world “binge-watching.” Wired called Netflix a “cultural behemoth” on the occasion of its 20th anniversary in August.
Or one of its 20th anniversaries. Randolph says different people recognize different dates for that milestone — the date it incorporated, the date it raised its first money — but for him it was when Netflix went live on April 14, 1998. A few months shy of the anniversary, Randolph was still considering how to mark the day. He thought about getting a bunch of people together, but he had a surf trip scheduled in Mexico that he was loathe to cancel. He’s an outdoorsy guy who majored in geology because the coursework came with field trips.
Randolph has been gone from Netflix since 2004, when he left its board. He moved on to new entrepreneurial adventures, leaving his progeny in the hands of co-founder and now famous billionaire Reed Hastings. Netflix was Randolph’s sixth or so startup. He meandered into his life of serial entrepreneurship.
After Hamilton, Randolph ran a ski shop in Memphis and managed a little resort in Colorado, jobs that taught him about hands-on management of people and money. He found his way back to New York to work at a music publishing company, where he discovered an interest in direct mail and direct marketing. He started a mail-order company, launched a magazine, found a mentor, and eventually moved to California to turn around another mail-order company.
When he transitioned into the computer industry, he crossed professional paths with Hastings. As Randolph recounts the Netflix origin story, together, over a period of time, they developed the idea to sell and rent DVDs online. DVDs were newly invented and easy to mail, but the co-founders knew the future lay in streaming content. A big challenge was to build a company that would succeed in the interim and in the future.
Randolph says he applied his direct-marketing experience of targeting individuals, a concept that became part of Netflix’s DNA. “We were very, very early in the whole personalization model in terms of building our whole website so it served up something different for everybody,” he explains. He was the site’s executive producer.
After the first few years, when Netflix grew successful, Randolph still loved coming to work each day, but it wasn’t the same. Acknowledging that he’s pretty terrible at managing big companies, he says he figured out relatively early in his career that his strength is early-stage companies. “I was not necessarily doing the things that I was exceptionally good at. And I was fortunate enough that I had a partner at Netflix who was exceptionally good at those things. I decided this is a great opportunity to now spend some time on the other things in my life that are important to me,” he says.
After Netflix he didn’t have it in him to once again take on the all-encompassing work of starting a new business. But ever an entrepreneur, he created a niche as a sort of mentor/executive coach. Randolph embeds himself with an early-stage company that catches his interest, absorbs every aspect of the business, and then shares what he’s learned over decades with its founders. And at 5 p.m., Randolph says with satisfaction, he gets to go home.
When he talks about what he’s proudest of when it comes to Netflix, it isn’t helping birth a cultural behemoth. “I’m proud of the fact that I was able to help build a company as large and successful with so many hours of time and effort that went into it, but yet I managed to stay married to the same woman, and had three kids who all know me, and, as far as I can tell, like me,” Randolph says.
Three Essential Startup Skills from Marc Randolph
- Recognize which few critical issues to focus on when everything’s on fire: “If you get those couple right, everything else falls away.”
- Be an effective generalist: “You have to know enough about everything, because there’s so few people in the company that everyone has to do everything.”
- Inspire people to make the leap to work for you: “Fighting this seemingly impossible battle requires a certain style of leadership that I was always able to muster — to get people to want to take on, to tilt at this windmill with me.”