Note: While reading a book whenever I come across something interesting, I highlight it on my Kindle. Later I turn those highlights into a blogpost. It is not a complete summary of the book. These are my notes which I intend to go back to later. Let’s start!
People want to be treated like adults. They want to have a mission they believe in, a problem to solve, and space to solve it. They want to be surrounded by other adults whose abilities they respect. Years later, Patty would end up revolutionizing the field of HR at Netflix, and much of her philosophy can be traced back to the realization we both had that day at Borland: People don’t want hot tubs—not really. They don’t want free snacks or Ping-Pong tables or kombucha on tap. What they really want is freedom and responsibility. They want to be loosely coupled but tightly aligned.
- Focus. It’s an entrepreneur’s secret weapon. Again and again in the Netflix story—dropping DVD sales, dropping à la carte rentals, and eventually dropping many members of the original Netflix team—we had to be willing to abandon parts of the past in service of the future. Sometimes, focus this intense looks like ruthlessness—and it is, a little bit. But it’s more than that. It’s something akin to courage.
Christina was right. The longer we ran the test, the more apparent it was that next-day delivery was a real game changer—just not in the ways we thought. It didn’t affect retention—it affected sign-ups. Next-day delivery inspired real dedication, the kind that makes you tell all your friends about this new service you’re using. Over time, we noticed that our penetration into the Sacramento market was approaching Silicon Valley levels. Silicon Valley! Where all the early adopters of DVD technology lived! The whole saga had provided a valuable lesson: trust your gut, but also test it. Before you do anything concrete, the data has to agree. We’d suspected that next-day delivery was important, but we’d been myopic in our analysis of our tests, so we hadn’t understood why. It took an additional test, with a truly outside-the-box execution, to understand what we’d already intuited to be true. And once we understood it, we could refine the idea and maximize its potential—which was huge. Next-day delivery was like magic. We knew it had to be part of our plans going forward. Now we just needed to figure out a way to make it work without driving the DVDs ourselves or building enormous warehouses all over the country.
- Winnowing our staff made us leaner and more focused. We no longer had time to waste, so we didn’t waste it. And while we certainly had to lay off some very talented individuals, we’d been left only with superstar players. With superstar players doing all of the work, it was no wonder that our quality of work was very high. You see this often in successful startups. The business gets off the ground because of the focus, dedication, and creativity of a small group of dedicated people. It hires, grows bigger—and then contracts itself. It rededicates itself to its mission—and often, accomplishes it through the renewed focus and energy of its most valuable members. Hiring and keeping star players is about much more than just quality of work, however. It’s a culture thing. When you retain only star players, you create a culture of competitive excellence. It’s more fun to come to work when you know you’re part of the handpicked elite. Plus, it’s much easier to attract other elite talent to your team when you’ve established a reputation for superstar talent.
I knew that our idea was good. It might not happen now, but it would one day. Here’s what I’ve learned: when it comes to making your dream a reality, one of the most powerful weapons at your disposal is dogged, bullheaded insistence. It pays to be the person who won’t take no for an answer, since in business, no doesn’t always mean no.
My dream coming out of college was to land a job in advertising. Quite a leap for someone who had graduated with a degree in geology, but I’m optimistic. And persistent. The only job in advertising accessible to an undergraduate with my nonexistent qualifications had been a position as an account manager, the “suit” who was the interface between the client and the advertising agency’s creative team. Although this was predominantly a job that went to MBA graduates, some agencies did extend their recruitment to undergraduates, so I jumped at the chance to interview when a representative of N. W. Ayer came to campus. To my surprise, I made the first cut and was invited with a dozen other students to come down to New York City to interview. After a full day of meeting with representatives from almost every department, I again got the news that I had made the cut, the only one from my school to do so. I was now one of only five students from throughout the Northeast, all of us competing for a single job. I didn’t get it. I bounce back quickly, so my disappointment in not having gotten this dream job quickly turned to confusion. What could I possibly be missing that some other candidate had? Ignorant of all the invisible criteria that were being applied to me (and that I would be especially aware of when it was later my turn to be on the hiring side of the table), I frankly couldn’t conceive of what I was missing. So I decided to ask. I wrote a long letter to every single person who had interviewed me, taking the opportunity to recap for them all of my positive traits. I explained that while I had concluded that I must be missing something important, I was hoping they might be able to explain to me exactly what that was. “You see,” I explained, “since there is a one hundred percent certainty that I will be applying for this job next year, I would like to take the time to work on whatever skills I am deficient in.” I’m cringing thinking about this now. But it worked. Just four days later, I got a call. One of the senior partners in the agency wanted to meet with me. This was the guy who ran the whole business side of the agency. Several days later, as we sat in a plush corner office forty-two stories above Sixth Avenue, he offered me the job. It turned out that none of the candidates had actually been offered the job the first time around. N. W. Ayer knew that being an account executive was a selling job. A turning-a-no-into-a-yes type of job. So they had said no to all of us. And I was the only one of the candidates who hadn’t taken no for an answer.
- “Everyone who’s ever been on a board says that they’re only interested in the success of the company,” I’d told Reed. “But you and I both know that ‘success’ means a slightly different thing to VCs than it does to a company’s founders.” This is true, by the way. It’s something I tell startup founders all the time now. VCs will always say that they’re aligned with your mission, that they want what’s best for the company. But what they really want is what’s best for their investment in the company. Which isn’t always the same thing.