That Will Never Work

Randolph co-founded Netflix with Reed Hastings and was its first chief executive, and this is his account of the founding and the early years through his departure from an operating role. It is a corrective to the standard origin story.

The substantive content is about how the business model was found. Randolph describes testing the mail-order concept by posting a CD to himself to see whether a disc would survive; launching in April 1998 as a per-rental store with late fees, which is what everyone else did; and discovering through repeated experiments that the subscription with no due dates and no late fees was what worked. He is explicit that the founding insight was not an insight, that the late fee story Hastings told is not what happened, and that the model emerged from a sequence of tests most of which failed.

He also covers the near-death moments: the attempt to sell to Amazon in 1998, the meeting where Blockbuster declined to buy the company for fifty million dollars, the collapse of funding after the dot-com crash, the decision to lay off a third of the staff, and his own replacement as chief executive by Hastings, which he describes candidly.

The book is a founder's memoir and its lessons are stated more than demonstrated. It is useful for the honest account of how long the model took to find and of how much of the story was constructed afterward. It stops before streaming, so it is not a history of the company as it exists.