Reed Hastings and Netflix are one of the greatest underdog success stories in the technology business. What started as a mail-order DVD rental company has grown into an international streaming business that accounts for 37% of the internet bandwidth used in North America.
And through it all, Hastings has drawn praise for helping craft a unique culture at Netflix and taking down industry heavyweights like Blockbuster at the same time.
But that doesn’t mean Hastings hasn’t been prone to mistakes — serious ones in fact. He infamously tried to split Netflix into two separate services in 2011, with the DVD service being renamed “Qwikster.” The entire world freaked out and Hastings was forced to quickly retreat, but not before Netflix’s stock was severely thrashed.
However through all his blunders (and his many triumphs), Hastings has always been the first one to criticize himself. And nowhere is that more apparent than in a story he recently told Kleiner Perkins general partner John Doerr during a workshop for the firm’s portfolio company CEOs.
Before Netflix, Hastings founded Pure Software, which merged with Atria and then sold to a competitor in 1997 for around $489 million. At the time, Hastings thought of himself as a product guy — which for Pure was a debugging tool for software engineers. That’s what he was good at, and he felt under water most the time as CEO.
What Hastings felt he was bad at was hiring, particularly hiring VPs of sales. Hastings says Pure changed VP of sales every single year for 5 years, even as it doubled its sales every year. He felt like a failure as a CEO. He had this great product and wasn’t optimizing it, at least in his mind, because he couldn’t find the right people.
Hastings got so down on himself that he actually asked the board to fire him, not once, but twice. And twice they refused.
They said they would rather have the mistakes Hastings was making than take another set of risks getting someone else. They believed in him.
“That gave me absolution or resolution,” Hastings says. “They were my confessor.”
And when they forgave him, he could forgive himself, and get back to the business of leading a company.
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