Business

That Will Never Work: 8 key ideas

by Marc Randolph

The core ideas of That Will Never Work, each in under a minute, written in our own words. Want the full depth? Get the book.

1. IDEA 1 OF 8

   An unlikely idea became Netflix

   Randolph, Netflix's co-founder and first chief executive, tells how the company began with an idea many people doubted: renting films through the post.

   Friends and investors told him it would never work, but he kept testing it.

2. IDEA 2 OF 8

   A test with a single disc

   Randolph describes mailing a single music CD to himself to see if a disc would survive the post.

   When it arrived safely, the idea of renting DVDs by mail seemed possible.

3. IDEA 3 OF 8

   No one knows anything

   Randolph argues that nobody can predict which ideas will succeed.

   The only way to find out is to test ideas quickly and cheaply. In his view, even experts guess wrong, so small, quick tests teach more than confident predictions.

4. IDEA 4 OF 8

   A partnership shaped the company

   Randolph describes working with Reed Hastings, who invested and later became chief executive.

   Their partnership combined Randolph's creativity with Hastings's strategic thinking. He suggests that each partner covered what the other lacked, which helped the young company in its early years.

5. IDEA 5 OF 8

   Early failures taught lessons

   Randolph describes many early experiments that failed, from pricing to features.

   Each failure taught them something. In his view, trying things that did not work was a normal part of finding what did, rather than a reason to quit.

6. IDEA 6 OF 8

   Subscriptions changed everything

   Netflix eventually adopted a subscription model with no late fees.

   This became central to its success. In his telling, the change gave customers a simple, predictable offer without the annoyance of penalties.

7. IDEA 7 OF 8

   Blockbuster turned them down

   Randolph describes meeting Blockbuster's leaders and offering to sell Netflix.

   Blockbuster declined, a decision that later looked like a historic mistake. The story shows how a company can miss the importance of a small rival that later changes the whole industry.

8. IDEA 8 OF 8

   Founders must let go

   Randolph describes stepping aside as Netflix grew, recognising that the company needed different leadership.

   Letting go was hard but necessary. In his telling, a person who is good at starting something may not be the best person to run it at a large scale.