How did Netflix come about? We have two protagonists who made this story unfold. They made Netflix a success, one as an investor and the other as a manager.
Netflix has made one of the biggest transformations the television world has seen in recent years. Netflix, which started its life as a DVD rental company, now delivers millions of hours of content to its viewers by producing award-winning television series and special films. So how did Netflix come about? We have two protagonists who made this story unfold. They made Netflix a success, one as an investor and the other as a manager.
One of our heroes is Reed Hastings.
Who is Reed Hastings?
Reed Hastings, co-founder and current CEO of Netflix, was born in 1960 in Boston, USA. The son of a lawyer father, Hastings studied mathematics at Bowdoin College. He also served as an officer in the navy for a while. After graduating from school in 1983, he went to Swaziland through the Peace Corps, where he taught mathematics until 1985. Reed Hastings says his experience in Africa has developed his entrepreneurial and risk-taking skills.
After two years in Swaziland, Hastings entered Stanford University and earned a master's degree in computer engineering in 1988. Hastings got a job as a software engineer at a company called Adaptive Technology, where he worked closely with the company's CEO, Audrey MacLean, where he learned the importance of focus. He left his job there in 1991.
Hastings, who has a love of entrepreneurship, wanted very much to start his own business. With his friends Mark Box and Raymond Peck, he founded a software company called Pure Software in the fall of 1991. The company, which developed software that solves problems on computers, started to grow at a great pace. But this success also posed a problem for Hastings. Because he was not yet ready to manage such a fast growing company. Because it was engineer-based, he found the responsibilities of the CEO to be very difficult. The company went public in 1995 and Pure Software merged with Atria in 1996. In 1997, Rational Software bought this company.
Reed Hastings states that his experience here has trained him in the field of entrepreneurship. In the next period, he merged with our other hero, Marc Randolph, who made Netflix Netflix, and founded Netflix in 1997. Netflix, which started out as a movie rental company, rented movies to its customers across the USA by cargo.
The rental period was originally 7 days, but in 1999 this business model was changed. Customers could now rent an unlimited number of DVDs for a monthly fee.
The company grew steadily during this period. Reed Hastings, on the other hand, had a great share in this success of the company with his innovative management. The salaries and employee benefits offered by the company led the most talented people in the market to work at Netflix. Likewise, the ways were parted with people with low performance within the company.
Reed Hastings, who expanded Netflix with an aggressive growth strategy, shipped his 1 billionth DVD in 2007.
But Netflix's breaking point was 2007. Netflix, which started to serve online that year, reached 16 million members in 2010. Hastings, who implemented the wrong strategy of dividing DVD rental and online broadcasting departments within the company in 2011, quickly reversed this mistake.
In 2013, Netflix released its original television series, House of Cards, for the first time. So now, besides buying series from Netflix production companies, it has also started to shoot its own series. At the end of 2013, Netflix's stocks tripled in value with the influence of House of Cards, which received numerous awards.
In August 2015, Netflix employees were granted unlimited paternity leave. In addition, the company, which offers unlimited vacation opportunities to its employees, has taken an exemplary move in terms of considering the happiness of its employees as the basis for the success of the company. Of course, there is Reed Hastings behind this strategy.
Hastings is said to have no room in the Netflix building in California. Instead, Hastings is known as a hard-working and relaxed person, walking around the tables and sipping his coffee in the cafeteria on the roof of the building when necessary.
Reed Hastings, who joined the Giving Pledge in 2012, started by Bill Gates and Melinda Gates, made a commitment to donate most of his wealth before he died.
Netflix, which has more than 108 million members as of 2018, has transformed from an ordinary DVD rental company into a classic brand such as Google, Facebook, Coca Cola and Adidas in 20 years. As of 2020, the number of members of the company approached 200 million. In 2022, they managed to exceed 200 million members.
Artificial Intelligence and Netflix
Famous US investor Jim Cramer states that Netflix is currently using the best artificial intelligence in the world. Of course, it should be noted that Hastings has a master's degree in artificial intelligence from Stanford University.
Netflix's success in AI isn't about recommending people what to watch. Netflix analyzes the elements that people like in the TV shows and movies they watch and makes recommendations accordingly. The company is trying to figure out how the human brain works with deep learning and artificial intelligence technologies.
In addition to machine learning, Netflix's Dynamic Optimizer algorithm compresses the image without sacrificing quality when the user's internet slows down. Thus, even if your internet speed is low, you can watch Netflix content in high quality.