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Netflix co-founder Marc Randolph: Tech companies should ditch “crap” gimmicks like bean bags and “Kombucha on tap”

  • He says companies should ditch “crap” ideas like “Kombucha on tap”, “a fireman pole”, or “beanbags” to motivate staff and trust them to use good judgement instead
  • He warns big companies too “scared” to take tough decisions to disrupt themselves, will be disrupted by others
  • Tells how he went through “hundreds of ideas” before hitting on Netflix


Randolph made the comments during  the Global Entrepreneurship Congress (GEC) in Riyadh, during a fireside chat with Jeff Hoffman, Chairman of the Global Entrepreneurship Network, taking place from March 27 to March 30.


On how a good culture is more effective than installing “a fireman pole; or Kombucha on tap” for employees…

“[Trusting people to have good judgement] that’s what freedom and responsibility means. And it’s easy to say, it is hard to put into practice, but it’s an incredibly powerful tool.

“It’s way more powerful than, believe it or not how much you pay someone. It’s way better than putting in a fireman pole; or Kombucha on tap; or bean bag chairs; or nap pods; or any of the other crap that companies seem to think it takes to attract and retain great talent.”


On how you need to be willing “to walk away from your present” to move forward…

“So there’s a key thing which Netflix does which other companies do, but what big companies largely fail to do, is be willing to walk away from your present, in order to do what’s right for the future.

“And your world changes, what customers want changes, and what happens too often is companies get locked in. The management is smart and well-meaning and they see what they have to do. But to do it is going to mean laying people off, it’s going to mean missing their quarterly numbers, it’s going to mean missing all these things that they are unwilling or unable or scared to do. And they keep thinking ‘one more quarter and then we’ll fix it, one more quarter and then we’ll fix it’.

“And believe me, there are plenty of startups willing to fix it for them. It’s this lesson that if you can’t disrupt yourself, you’re letting someone else disrupt your business for you. So what a company like Netflix is willing to do is continually walk away. I mean at the beginning, and I mentioned before we were renting DVDs. We were also selling DVDs, and we recognised that even though selling DVDs was 95% of our revenue, it was complicated, it was complicating our ability to get rental right. We said we have to walk away and we walked away entirely from selling movies to focus on this 5%.

“Again, years later when we launched streaming all of a sudden you have two businesses, which are very different, and you recognise wow the DVD business is 95% of our revenue but streaming is the future. Okay from now on every decision is optimised for streaming, no matter what impact it has on our cash cow business.”


On how Netflix was born after hundreds of other bad ideas… 

“We were commuting and every morning he’d pick me up at my house, and I’d get in the car and I’d pitch him a new idea. Seriously, these were the kind of ideas I would pitch to [current Netflix CEO] Reed [Hastings] – I’d go ‘okay, personalised shampoo’. Which was truly an idea I pitched him.

“I’d go ‘here’s how it’s going to work – we’re going to cut off a lock of your hair, you’re going to mail it in, we’re going to formulate a custom blend, you’re going to subscribe to it’.

“And then nothing would happen. Reed would just sit there driving, a minute would go by, two minutes. And then he’d turn and go ‘that’ll never work’ and lay into me and I’d fight back. And we did that for months – hundreds of ideas.”