Netflix

“GQ actually called us the Netflix of eyewear in the article they put.”

“The future of e-commerce was going to look a little bit like the history of Netflix. That a platform that was streaming other people's content and distributing other people's content would vertically integrate and start to develop their own proprietary content…”

“In fact it's kind of mind-blowing, but rec.music.gdead, the Grateful Dead news group, was the most popular thing on the entire internet. It was like, in terms of traffic, it was the Netflix of its day, just like the text postings going back and forth”

“We had just started shooting Our second season of The Morning Show, and we were meant to have a show, start production for Amazon, a show called Daisy Jones and the Six was going to start in April, and then we had another show for Netflix called From Scratch t…”

“Very few companies really change their underlying business model once they have a certain scale and then live to tell about it, right? We know the names of the companies that have done this, like Netflix went from DVDs to streaming, Adobe you know, from box so…”

“Just before the pandemic, we were featured on a Netflix TV show called Ugly Delicious. So about steak. So we were already seeing a decent influx to our online sales because of that. And then COVID hit right in the middle of March. And we definitely saw quite a…”

“Eventually, yep. We look at our journey similar to Amazon or Netflix which started in the third party world. Consumer goods in the case of Amazon, content in the case of Netflix, and they eventually moved from third party to first party, where they were actual…”

“The future of e-commerce was gonna look a little bit like the history of Netflix. That a platform that was streaming other people's content and distributing other people's content would vertically integrate and start to develop their own proprietary content.”

“Right. And so they, I think they got 20% of the company. So after, Netflix invested and we started shipping the Netflix player, we then decided to raise venture money. And so we raised money from a venture capitalist called Menlo Ventures. And then Netflix dec…”

“And I think Reed sent an email to Steve Jobs saying, are you guys interested in this? And Steve Jobs replied, no, we're not interested because we hear you're building Hardware that competes with Apple TV. And so why would we ever do business with you? You know…”

“And so he actually told me once that he, you know, I, I've allocated, I'll call it three percent of our revenue to keep working on this idea of streaming in the background so that we don't miss the transition.”

“Well families are dysfunctional in many ways. And so, yes, I think it's a inferior model.”

“So it's an artistic execution business. And, you know, if we can improve those ratios to from one in 40 to one in 20 to one in 10 to one in five, we'll be a monster. But it's hard.”

“VHS cassettes, which was the way movies were distributed weighed about a pound and cost about four dollars to ship. So if you got shipped a VHS cassette, And then shipped it back. That was eight dollars on top of the three or four dollar rental. So that didn't…”

“Well, if you look today at TV viewing in the United States, as an example Disney's ahead of us. YouTube is, this is combining linear and on demand. YouTube's ahead of us. They're the largest. Disney's ahead of us. Even Paramount's ahead of us, because they all…”

“In hindsight, I tell other entrepreneurs that don't be in a hurry to go public because it gives your competitors a lot of information.”

“No. There's, it's not rational when you let someone go. I mean, you want to think it through, but it's an instinct that you could get someone better for that role. So that the test we use is called the keeper test. Would you fight to keep that employee if they…”

“We talked about it as the informed captain. The leadership model is to be the informed captain. So the captain of a ship is the absolute ruler of that ship and makes decisions. We want our leaders to feel like they're the captain. It's not a democracy, but the…”

“And I don't remember them actually making an offer or, but I think we probably would have taken any offer, but it was not, it didn't result in any deal transaction.”

“We had to bid against HBO. This was not Kind of junior content. This was first, you know, lead content. HBO was thinking of it. And we came in with a higher financial bid, even though we couldn't justify it at the time.”

“You take away 20% of the revenue from every store, and that takes away the profit, right? And our customer base was highly distributed, you know, across the U.S., So, we knew that if we got to a certain size that it was like, you know, a billion, it was very p…”

“So when we went public two years later, we were at fifty million.”

“And I would say the big challenger is YouTube because they have doubled in the last four years. Their share of television viewing somewhat in the U S but dramatically around the world”

“So we closed that round of them investing fifty million. I don't remember the valuation, but it was a good valuation. And that was February of 2000, and then March of 2000 is when the bubble broke.”

“The core of it was if you had incredibly talented people, you didn't need a lot of process and rules. Netflix was anti-process and rules and pro-talent density.”

“So the thing we instituted on big decisions Is everybody publicly weighing in, you know, on a 10 to -10? Is this a wise decision? So that would affect, like, going into Europe, going into original content, pricing changes, so that everyone knows where everyone…”

“So I don't think it actually cost us money because it got managers to act more quickly. And it made it easier on the person who was let go because they got, you know what they perceived as a generous severance package. So then, you know, we could be letting go…”

“I put in the initial two million dollars and was chairman, and then the site launched in, like, May of 98, roughly”

“And if they had known that they would have spoken up more forcefully, and we probably would have taken a slower, more cautious approach.”

“In hindsight, we were too early. Okay. We should have waited a couple of years to launch.”