When Marc Randolph started Netflix with cofounder Reed Hastings in 1997, he couldn’t have possibly imagined what the company would become in just 20 years.
Speaking at Ingram Micro’s 2017 Cloud Summit in Phoenix, AZ, on Apr. 20, Randolph walked the audience through the history of Netflix – from humble beginnings as a small startup selling and renting DVDs via mail to one that took down video behemoth Blockbuster just a few years later – and offered words of wisdowm to entrepreneurs and aspiring businesspeople.
“If you’re not prepared to disrupt yourself, you’re leaving the door open for someone to do it for you,” he explained. “There’s always going to be competition coming for your business, but most of the time, they won’t look anything like you. They won’t take you down with the stuff you’re doing, they’re going to take you down because of what you’re not doing.”
Randolph pointed to three attributes every successful entrepreneur needs to have: a tolerance for risk, plenty of ideas, and confidence in themselves.
“One of the most important ingredients of an entrepreneur is the ability to start down a path without knowing what’s around the corner, and without all the information you need. If you know all the answers to your questions, you’re already behind because that means someone has beaten you to the finish line,” he advised.
But having a good idea is only part of the battle, Randolph conceded. Truth be told, entrepreneurs need the capacity to come up with hundreds of ideas – which don’t need to be big, complex or even original – and sift through the bad to find the one goldmine.
“Success is proportionate to how many ideas are tried,” he said, while following this wisdom by quoting American screenwriter and novelist William Goldman: “nobody knows anything.”
“When I first told my wife the idea of Netflix, she thought it was stupid,” he laughed. “But nobody really knows how to determine a good and a bad idea, so it’s up to us dreamers to take that first step, that first risk, to test it out and see.”
He told the crowd that ideas should get out of their own heads and collide with reality as soon as possible.
“You’ll learn more in one hour of actually testing an idea out in real life, than in one month of thinking about it,” he continued. “If it’s a bad idea, it won’t matter how polished your presentation or testing is. But if it’s a good idea, people will fight to make it happen.”
Coming up with the idea is easier said than done, however. According to Randolph, the best ideas aren’t usually “eureka moments,” but come from viewing the world as something that can be fixed.
“Sure, you can look at the newest trends going on, but when I’m looking for a new idea I look for pain,” he said. “Entrepreneurs see the world as an imperfect place and ask themselves ‘what’s wrong?’ ‘where are the problems?’ and ‘how do I fix that?’ They’re not trying to go global and solve world issues, they’re trying to alleviate problems in our everyday lives.”
He pointed to his own former company as an example. Netflix was born when Randolph believed he could improve the video rental system. It took two years of hundreds of failed ideas and many failed tests – including the first day the website went live when its servers crashed within 10 minutes – but he remained optimistic and confident he could crack the market.
That confidence paid off, with Netflix now ranking the 10th largest internet company in the world and boasting more than 100 million subscribers across 190 different countries globally.