Why I Would Rather be Lucky than Smart.

Netflix could have been anything: personalized shampoo, custom dog food, one-of-a-kind baseball bats. I pitched all these ideas to my co-founder Reed Hastings on our daily commutes to work before we finally hit on the idea of video rental by mail.

The common theme for these ideas wasn’t movies, but e-commerce, personalization, and subscription—things that intrigued me and drew on my years of direct marketing experience. 

Reed, though, was less interested in what was intriguing than what made logical sense. He relentlessly challenged my assumptions and pulled on the loose threads of every concept. We had plenty of long debates about the pros and cons of different approaches.

The idea of going toe-to-toe with Blockbuster—without having a single brick-and-mortar store—seemed ludicrous on its face. But after hundreds of hours of debates and discussions, we’d developed a clear analytic framework for recognizing what kinds of e-commerce ideas actually had legs. Without that, Reed never would’ve said, “That just might work.” And Netflix never would’ve happened.

Maybe you’ve heard some version of this story before, but have you ever considered how it might have gone differently? Because I have plenty of times. 

What if I’d gotten stuck on shampoo? What if I’d fallen in love with the idea of a customized physical product, and shut myself off to the bigger idea of an online subscription-based marketplace? What if I’d just gotten annoyed with all of Reed’s questions and challenges?

It’s easy to look at entrepreneurial success stories as if they were destined to succeed. But for every Netflix story, there are hundreds—no, thousands – of other ideas that looked even more promising to their founders and failed. That’s why you’ve never heard of them.

What made this one different? A big part of it was luck, I’m not gonna lie: the right time, right place, right technology, right market, all coinciding. And a big part was a culture of experimenting and refining that let us turn an idea into a service that actually worked.

But underneath all that was a critical tension. Reed, applying relentless, unsentimental logic in evaluating every concept; and me, with an endless supply of new ideas and enthusiasm. And crucially, we were both OK with that. We debated, analyzed, revisited, and threw things out, and we still kept going.

Many ideas in this post were first discussed in the Neverland entrepreneurial community. Join us there!

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