Listen: Co-Founder Marc Randolph Shares Why Everyone Doubted Netflixs Success
"We wanted to kick this year off with one of the most explosive entrepreneurs of our time. Marc Randolph is the co Oh founder of netflix serving as their founding CEO as executive producer of their website as a member of their board directors until his retirement in two thousand and four. He's got a new book out. It's called That will never work the birth of Netflix and the amazing life idea mark. Welcome to the show with you explosive explosive. If that was explosive go well you know. I love the book because we hear that all the time we come across entrepreneurs and certainly when I was running my own businesses. They said that will never work. Why did you choose that title? Well that's pretty simple because basically most of the ideas you come up with a pretty crazy on the surface maybe crazy a few feet below the surface and when I began telling everyone about this crazy idea that we had to rent video by mail That's what they said was. That'll never work. And that came from employees it came from the people we pitch to raise money even came from my wife that was pretty universally panned as an idea so why marked if people think it never would work because folks enjoyed going into a store and getting their videos and seeing it all kind of up there on the shelves. I remember that I'm not too young for that. Yeah there was a that was probably the dominant reason. Well everyone is brought. That video rental by mail is pretty crazy because at the time this is back in nineteen ninety seven. We were pitching this nine thousand blockbuster stores while you could basically throw a rock from pretty much anywhere in the country in the world then hit a blockbuster shore so people couldn't understand how we possibly thought that somebody would be willing to you go online ordering movie way two or three days for to arrive when they could just pop in their car or walk down the block and get a blockbuster store just seem completely wheatley. Irrational and the weird thing is that you know ideas originally envisioned in fact the ideas originally launched didn't work it was a a bad idea and which is why kind of the subtitle for the book is the amazing life of an idea because most of these ideas you have are not what the final businesses. They're not that'd be all and end all they're just starting point and it really. What makes success in companies where you take it from there somewhere? What was the idea that didn't work and then I guess you involved into into mailing the DVD's by by mail well original idea listen work was vhs because back in the summer of nineteen ninety seven the news you may remember back then back in the good old days? All video came on Vhf so that didn't take a lot of research realized that's not going to work. Unless you're like me right right exactly. Yeah even less likely. But you know the breakthrough came maybe a month or so after we originally had the idea we learned about this new technology called the D and it was test marketed in San Francisco and it was small and it was like and we realized that we might actually be Taylor this then like using envelope and a stamp and so to validate that we as things my business. I'd turn the car around commuting at the time and drove back down to Santa Cruz where we lived actually went and bought a music CD because there was no DVD's too. We mailed it to reach House and Santa Cruz and it got there in less than a day for the price of a stamp. And that's when we realized wow we actually might be able to make this work and so the the business that launched this was an April now of nineteen ninety hey was mailing people. DVD's through the mail and it took anywhere from one to three days to arrive and we do eight late fees and you had to mail it back back and we charge you know. Four dollars per rental charge pretty much the only real innovation here was the fact that we had a single store Rather than trying to build out a chain of franchises or something like that I remember. I was an alert subscriber. I was excited when those red envelopes came in the now there was we were wrong about some things in fact people were willing to rent. DVD's but reluctantly but only for a weird reason only because I just was no other place to get a DVD that for those first few years while the install base was building out you know none of the video stores had any incentive doc DVD's there might only be a handful of players and their own neighborhood whereas for us. We're the only place to come and so we were getting pretty much. Anybody would a DVD player coming together. DVD's from us. Our problem is that it really was a pretty unsatisfactory experienced. And even though we maybe get somebody to rent from us once we'd have pretty pretty much no repeat business and they were small orders and it was a dog and we struggled for a year and a half trying to find something that could unlock Video rental by mail but it really wasn't until a year and a half later you know in the fall of nineteen ninety nine that we finally stumbled on the season more crazy idea of doing it as a subscription and be eliminating do late fees altogether. Just let people keep the discs as long as they want and when they were they were done it went back and we shouldn't excellent and that was an idea. Even more people thought would never work but as the strange strange story sometimes turn out it works and it worked really really well"